A recent Fourth Circuit cases demonstrates the inherently
subjective nature of the "plausibility" standard used to
evaluate a motion to dismiss under Rule 12(b)(6). This
standard, first articulated by the Supreme Court in Bell
Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), requires a
district court to look beyond the face value of allegations in a
complaint to determine if they are, in fact, "plausible."
The Supreme Court recognized that determining
"plausibility" would be a "context-specific task
that requires the reviewing court to draw on its own judicial
experience and common sense." The problem, however, is
that different judges have different "experiences" and
different notions of "common sense."
Those differences are on full display in the Fourth Circuit's
opinion in SD3, LLC v. Black & Decker (U.S.) Inc. et
al., 801 F.3d 412 (4th Cir 2015). The opinion
is worth reading both for its in-depth analysis of the
"plausibility" standard and for the pithy back-and-forth
attacks between the judges.
In this antitrust case, the plaintiff alleged that all of the major table-saw manufacturers conspired to boycott plaintiff's "SawStop" safety technology to keep it off the market. The district court granted defendants' motion to dismiss, finding that the complaint did not plausibly allege an "agreement" or "conspiracy," a necessary element under Section 1 of the Sherman Act.
On appeal, a two-judge majority of the Fourth Circuit reversed, finding that the complaint had adequately alleged a conspiracy because plaintiff had alleged parallel conduct among the defendants plus additional factors suggesting an agreement, thus meeting the "parallel plus" standard under Section 1. The majority criticized the district court for confusing the motion-to-dismiss standard with the standard for summary judgment and, in so doing, applying "a standard much closer to probability" than the "plausibility" standard from Twombly.
In a strongly worded dissenting opinion, Judge Wilkinson
attacked the majority for misapplying Twombly. The
vigor of the dissent prompted Judge Wynn, of the majority, to write
a separate and equally caustic concurring opinion taking shots back
at the dissent.
Apart from the entertaining back-and-forth between the judges, this
opinion displays the wide, yet hard to define, difference between
something being plausible and implausible. All three of the
judges on the panel read the same complaint, and they all agree as
to the elements of an antitrust claim and the standards for
analyzing a motion to dismiss. Although both sides quote the
same language from Twombly, the real difference
between the dissent and the majority/concurrence is how they apply
Twombly to the allegations in the complaint.
This appeal did not involve a legal issue or a disputed fact
so much as different perspectives or outlooks.
This case shows that "plausibility," like beauty, is in
the eye of the beholder. One judge looks at the allegations
and declares them implausible. Another looks at the same
allegations and sees them as plausible. When legal standards
turn on something as amorphous as "plausibility," it is
not surprising that there are such widely disparate opinions from
very smart and very well-meaning judges.
It is somewhat surprising, however, that the judges engaged in such
heated rhetoric when they all agree on the substantive and
procedural rules. This is not a case where the majority
believes in X and the dissent believes Y. Perhaps it is this
inability to precisely describe the difference between believing
something plausible and believing it implausible that gives rise to
the personal attacks in this case. One side cannot claim that
the other side applied the wrong rule, so they attack each
other's judgement, character or motives--sometimes in Latin and
sometimes IN ALL CAPITAL LETTERS!
Whatever the reason, the dissent and concurrence are littered with
caustic, sarcastic, and pithy attacks at each other. The
criticisms are so well written, that they need to be quoted at
length to be fully appreciated:
This does not sound like two judges who agree on both the
procedural and substantive law, yet they do. The difference
is one of perspective, which probably explains the heated
rhetoric.
Interestingly, the Fourth Circuit's panel opinion may not be
the last word on this case. A petition for certiorari is
currently pending with the the United States Supreme Court.
Will the Supreme Court want to weigh in on the proper way to
apply the "plausibility" standard it articulated in
Twombly? If so, will the Supreme Court be able to
clarify the standard to assist lower courts? Or is
"plausibility" really just a Rorschach test that reflects
back on the subjective beliefs of the judge? Is there an
objective standard here, or is "plausibility" merely in
the eye of the beholder? It will be interesting to watch how
this dispute over civil procedure develops...
Originally published February 2016
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