The U.S. Court of Appeals for the Seventh Circuit ruled earlier this week that a lower federal court judge correctly held that a complaint alleging a conspiracy to fix prices of text message services was plausible enough for litigation to proceed.
Verizon Wireless and other providers of text messaging services, citing the Supreme Court’s decision in Bell Atlantic Corp. v. Twombly, had urged the federal court in Chicago to find that the litigation’s underlying complaints against the wireless communications companies were insufficient and therefore should be dismissed.
Seventh Circuit Judge Richard A. Posner concluded that the “district judge was right to rule that the second amended complaint provides a sufficiently plausible case of price fixing to warrant allowing the plaintiffs to proceed to discovery.”
Although the plaintiffs’ second complaint survived a Twombly challenge, Posner noted that Twombly was “designed to spare defendants the expense of responding to bulky, burdensome discovery unless the complaint provides enough information to enable an inference that the suit has sufficient merit to warrant putting the defendant to the burden of responding to at least a limited discovery demand.”
Twombly and its successor, Ashcroft v. Iqbal, have been criticized by civil rights attorneys, law makers, and legal scholars as creating much more stringent pleading standards than intended by Congress. In its Iqbal decision, the Supreme Court held that for lawsuits to survive motions to dismiss, plaintiffs must provide much more specific factual information. The high court in Iqbal also stated that judges have greater discretion in dismissing complaints before the discovery stage of litigation. The Federal Rules of Civil Procedure created in 1938 had only required that plaintiffs file a complaint including a “short and plain” statement about why they were entitled to relief.
Earlier this year, two civil rights attorneys argued in an ACS Issue Brief that the Supreme Court decisions in Twombly and Iqbal have undermined the “deliberative and inclusive process” that Congress established. For more discussion of the ramifications of Twombly and Iqbal, watch video of an ACS symposium, available here.