Tremors of Things To Come: The Great Split Between Federal and State Pleading Standards
On June 24, 2010, the Washington Supreme Court issued its opinion in McCurry v. Chevy Chase Bank, declining to follow nonmandatory but highly persuasive federal pleading standards. In doing so, Washington State became the first state supreme court post-Iqbal to abandon the ideal of national procedural uniformity over the contentious issue of plausibility pleading. Other states will have to decide the same issue in the months and years to come. This Essay explains the history and stakes of this development.
McCurry provides an opportunity to pause and reconsider the relationship between state and federal pleading regimes and the value of national procedural uniformity compared to local variation. It allows us to do so not based on theory alone but grounded in a record that reveals which rationales actually mattered to a state supreme court.
Petitioners in McCurry had asked the court to consider abandoning the pleading standard currently applicable in Washington State. Developments in federal courts prompted this request: one year ago the Supreme Court decided Ashcroft v. Iqbal, a case that radically transformed federal civil litigation by abolishing notice pleading in favor of plausibility pleading.
Though state courts are not bound by the Federal Rules of Civil Procedure or by federal courts’ interpretations of those rules, many have followed the rules and interpretations in a bid for national procedural uniformity. The petitioners in McCurry therefore asked the Washington Supreme Court to revise Washington’s pleading standards to bring them into conformity with the new federal pleading standards. The Washington Supreme Court declined to do so. As such, McCurry entrenches a significant split between federal and state pleading standards.
The twenty-six state courts that have modeled their pleading standards after the federal rule will begin to diverge in their approaches to Iqbal, shattering any remaining semblance of national procedural uniformity. McCurry, for now, settled Washington’s approach to this question. Similar cases are working their way through other state court systems. Pleading standards in state courts are beginning to splinter into a wide spectrum of pleading standards, with some jurisdictions endorsing Iqbal,others citing Iqbal approvingly but falling short of outright adoption, some observing approvingly that the federal rule is moving closer to their state court practice, others simply noting the importance of Iqbal but declining to adopt or reject it, some citing Justice Souter’s dissent in Iqbal approvingly, and others still, like Washington State, rejecting the use of heightened pleading standards in their state courts. At least one state jurisdiction is split internally over Iqbal.
There has been procedural variation before, but the splintering of pleading standards in the wake of Iqbal has the potential to usher in a new era of procedural diversity. Pleading standards are the lynchpin of the common law procedural regime. Pleading comes early in the life cycle of a case, shapes litigation strategy, reveals valuable information to the opposing party (that can be used to encourage settlements), and is the gateway to all subsequent procedural devices. Variation among pleading standards thus has a more significant impact on the shape of litigation than variation in other procedural rules.
Part I of this Essay situates the current debate over pleading standards in the context of the long-sought ideal of national procedural uniformity. Part II explains the developments in federal jurisprudence that replaced notice pleading, long the standard in federal andstate courts, with plausibility pleading. Part III explains how these developments have created a dilemma for the Washington Supreme Court, one that other state courts will soon face as well. Part IV assesses the implications of this developing split between federal and state civil procedure.
I. The Rise and Fall of National Procedural Uniformity
In 1938, Congress enacted the Rules Enabling Act (REA) and adopted the Federal Rules of Civil Procedure. This “transformed civil litigation . . . . [and] reshaped civil procedure.” It remains “surely the single most substantial procedural reform in U.S. history.” Prior to 1938, civil practice in federal district courts was governed by a “hodgepodge of federal practice” under the tame Conformity Act of 1872. The Federal Rules of Civil Procedure replaced this diversity of procedural rules with a single uniform code of federal procedure that governed civil proceedings in every federal district court. It was “a triumph of uniformity over localism.” The new uniformity among the federal district courts adhered to the ideal that procedure should be simple and promote adjudication on the merits. Under a uniform procedural regime “any lawyer could go to any federal court, and be secure that she could understand and master the procedure required, since that procedure would be at once uniform and simple.”
Initially, the adoption of the Federal Rules of Civil Procedure was marked by the hope and belief that states would replicate these procedures in state courts. Simplicity was to be the new guiding principle for civil litigation within the United States. It should not matter, so the argument went, in which state a suit was brought or whether it ended up in federal court. The merits of the case should settle the dispute, not procedural variation.
At first, the ideal of procedural uniformity between state and federal courts seemed to become reality. By 1975, twenty-three states had replicated the Federal Rules of Civil Procedure in their state courts (they are thus called “replica jurisdictions”). Many other states closely patterned their civil rules after the Federal Rules. Complete national procedural unity seemed to be just a matter of time.
However, national procedural unity increasingly came under attack from four sides beginning in the 1980s. First, federal judges, who had previously exercised considerable restraint, began to rely increasingly on local rules. This fragmented uniformity among the federal district courts. As national uniformity was already in doubt, states considered abdication of their own state procedures less desirable.
Second, recognition of the power of procedure to advance substantive agendas has led to increased political pressures. Interest groups lobby rulemakers and legislators to create or preserve procedural advantages. The political successes of these interest groups further undermined national procedural uniformity.
Third, states increasingly asserted their own rulemaking independence. Commentators have cited a long list of potential causes for this development, including “discovery abuse, expense and delay, excessive judicial power and discretion, excessive court rulemaking, unpredictability, litigiousness, an overly adversarial atmosphere, unequal resources of the parties, lack of focus, and formal adjudication itself.” Others have speculated that the reinvigorated role for the states in crafting rules of state civil procedure is related to “the resurgence of state government authority in substantive law and constitutional rights promoted by the Rehnquist Court’s ‘new federalism’ jurisprudence.”
Whatever the reasons, national procedural uniformity currently seems extremely unlikely. In fact, the “trend toward state conformity to the federal rules . . . has substantially reversed itself.”
Fourth, some jurisdictions followed federal rules to achieve uniformity with federal courts in their state. Other jurisdictions hoped for uniformity with other states. Iqbal thus creates a tension between the desire of some states to achieve uniformity with federal courts and the desire to follow the same standard as other states. Uniformity with the federal rules is likely to lose in at least some states while others will continue to value state-federal uniformity over interstate uniformity.
In short, the procedural landscape is now increasingly complex as more and more state courts diverge from the Federal Rules. Many states are experimenting with procedural innovations that depart significantly from the federal regime. For example, the great majority of states, including many former replica jurisdictions, have declined to adopt the amendment to Federal Rule of Civil Procedure 26(b), which limited the scope of discovery from subject-matter relevance to claims-and-defenses relevance. We are left with an “increasingly byzantine world of civil procedure.”
II. The New Federal Plausibility-Pleading Standard
Twombly and Iqbal, two recent Supreme Court decisions concerning pleading, further complicate this picture. Rule 12(b)(6) of the Federal Rules of Civil Procedure requires dismissal of a complaint that fails to state a claim upon which relief may be granted.
Until May of 2009, the sufficiency of a complaint was judged by the standard the Supreme Court had first announced more than fifty years ago in Conley v. Gibson. Under Conley, pleadings withstood 12(b)(6) motions under “the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley’s liberal notice-pleading formulation became a cornerstone of federal civil procedure. It also had a significant impact on state pleading standards as many states, including Washington, incorporated Conley into their local practice.
At the federal level, Iqbal and Twombly together abrogated the prior standard for judging the sufficiency of pleading first stated fifty years ago in Conley. Twombly replaced Conley’s old notice-pleading standard with a new plausibility-pleading standard. Under this standard, a complaint must now allege “enough facts to state a claim to relief that is plausible on its face” or risk dismissal. To avoid dismissal at the pleading stage, post-Iqbal plantiffs must plead sufficient facts to “nudge their claims across the line from conceivable to plausible.”
Twombly arose in the context of an allegation of “antitrust conspiracy through . . . parallel conduct.” Commentators speculated briefly whether the new plausibility-pleading standard would only apply to Sherman Act cases. On May 18, 2009, the Supreme Court settled this question when it issued its opinion in Ashcroft v. Iqbal, holding that the Twombly plausibility standard applies to all civil cases in federal courts.
The Court elaborated that determining whether a complaint states a plausible claim for relief will be a “context-specific task.” The Court went on to say that “judicial experience and common sense” should inform the plausibility standard. Under Iqbal, courts are instructed to follow a “two-pronged” approach to 12(b)(6) motions. First, courts must identify pleadings that are “no more than conclusions” and deny them the “assumption of truth.” Second, courts must apply the plausibility standard to any remaining well-pleaded factual allegations to “determine whether they plausibly give rise to an entitlement to relief.”
Federal pleading has now become “a significant veto-gate through which all claims must pass.” Supporters of Iqbal and Twombly point out that notice pleading under Conley was a low barrier of entry into federal courts. Once plaintiffs had passed this bar, they were able to utilize the full power of court sanctioned pretrial discovery. This created high costs for defendants, even if they were eventually granted a favorable summary judgment motion. In the meantime, litigious plaintiffs, so the argument goes, were able to harass defendants through extensive discovery and use pretrial litigation costs as a bargaining chip to settle nonexistent grievances.
Twombly and Iqbal changed this, though it is not clear whether the change was for the better. What is clear is that under Twombly and Iqbal, more claims are dismissed at the pleading stage. Predictably, plausibility pleading makes it particularly hard to plead cases that involve the state of mind of the defendant. There, plaintiffs often cannot know or plead essential information with particularity at the beginning of a case without the benefit of discovery. It is precisely this discovery that Iqbal denies to plaintiffs who fail to plead with the necessary factual detail. Early evidence suggests that civil rights, antitrust, consumer protection, and employment discrimination suits are disproportionally affected by the new heightened pleading standard.
Commentators and legislators are now pondering whether the reduced discovery burdens justify the reduced access to federal courts.
III. The Dilemma of the Washington Supreme Court
Developments in federal pleading jurisprudence through Iqbal and Twombly were bound to make an appearance in state courts. Given longstanding ideals of uniform national civil procedures, it was only a matter of time before defendants would invoke Iqbal and Twombly outside of federal courts. McCurry v. Chevy Chase Bank is the first case in which a state supreme court has ruled on this issue.
In doing so, the Washington Supreme Court faced a formidable dilemma. It had to weigh the value of uniformity against congruence with the rest of the local rules. The Washington Civil Rules are based on the federal rules. Their wording and numbering also reflects the federal rules. For example, Washington Civil Rule 8(a)(1) contains identical language to Federal Rule of Civil Procedure 8(a)(1) that a pleading setting forth a claim for relief shall contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” As the respondent in McCurry reminded the court, procedural uniformity has long allowed Washington courts to look “to federal court interpretations of the Federal Rules of Civil Procedure for guidance in construing the Civil Rules.”
Washington courts have also declared repeatedly that federal court interpretations of the federal rules are “highly persuasive in determining the effect of Washington’s rules.” For example, the Washington Supreme Court has previously held that “when the language of a Washington Rule and its federal counterpart are the same, courts should look to decisions interpreting the Federal Rule for guidance.” Petitioners therefore urged the Washington court to construe the local Rule 12(b)(6) along the lines that the Supreme Court had construed Federal Rule of Civil Procedure 12(b)(6). The respondents countered by stressing local autonomy and citing only Washington State cases reflecting the old pleading standard from Conley v. Gibson.
The Washington Supreme Court weighed these considerations and declined to follow the new federal plausibility-pleading standard. As a result, the pleading standard in Washington State will begin to diverge significantly from the federal pleading standard.
The court was willing to depart from the uniform civil procedure regime because it perceived that Twombly and Iqbal had relied on “policy determinations specific to the federal courts.” According to the Washington Supreme Court, Twombly had reformed federal pleading standards because the Court considered federal trial courts incapable of adequately preventing discovery abuses. This inability makes federal discovery expensive and encourages defendants to settle “largely groundless” claims. The Washington Supreme Court declared that there had been no showing that these factors were significant in Washington State. Absent such a showing, the Washington Supreme Court abandoned conformity with the Federal Rules of Civil Procedure.
The Washington Supreme Court also stressed policy considerations that counseled against following the new federal plausibility-pleading regime. For example, the court highlighted the danger that plausibility pleading denies many plaintiffs access to necessary discovery and leads to the early dismissal of meritorious suits. The Washington Supreme Court also wondered whether “runaway discovery expenses [could] be addressed by better means—perhaps involving more court oversight of the discovery process or a change in the discovery rules.” Finally, the Washington Supreme Court stressed that the formal rulemaking process is the appropriate forum to consider sweeping changes in pleading standards, as courts are ill equipped to analyze systematically perceived discovery abuses.
In the months and years to come, other state courts will face the same dilemma that the Washington Supreme Court faced: is it better to be uniform with federal rules or consistent with local rules?
IV. Implications and Evaluations
The Washington Supreme Court’s decision to depart from the federal civil procedure regime presents both problems and opportunities. Uniformity, in some ways, is highly desirable. State-federal procedural uniformity is advantageous for the same reason that interdistrict federal uniformity is advantageous: both simplify litigation, allow lawyers to practice in a number of jurisdictions, and discourage forum-shopping.
Pleading standards, at issue in Twombly, Iqbal, and McCurry, illustrate this point. Heightened pleading standards affect which cases can benefit from discovery and which cases are dismissed at an earlier stage. Predictably this affects substantive rights, litigation outcomes, and the enforcement of rights. This is particularly true in cases where plaintiffs observe questionable behavior by the defendant but lack detailed factual information. For example, the greater factual details demanded by Iqbal cannot be satisfied in many civil-rights and employment-discrimination cases. There, plaintiffs often do not or cannot plead information with the particularity demanded by Iqbal without the benefit of discovery.
Given the impact of pleading regimes on the enforcement of rights, procedural variation among state courts and between state courts and federal courts encourages forum-shopping and the attendant risk that “similarly situated litigants may be treated differently and, as a result, unfairly.” A complaint’s chances of survival will vary from state to state depending on the local pleading standards with little or no relation to each other or to the federal pleading regime.
Under current Erie jurisprudence, federal courts in a diversity action would not be required to adopt state pleading standards. The rules regarding the specificity to be applied to federal pleadings, the allocation of burdens among parties, and special pleading requirements (under Federal Rule of Civil Procedure 9) are governed by federal rules and not state rules. Plaintiffs are thus likely to shift litigation to state courts when not constrained by the exclusive subject-matter jurisdiction of the federal courts. Similarly, some plaintiffs might reconfigure their complaints to avoid the diversity jurisdiction of the federal courts. Widening procedural diversity, in short, will constrain more plaintiffs in more jurisdictions in how they can structure complaints that will survive the pleading phase.
The same problem arises under a reverse-Erie analysis. State courts hearing federal subject-matter claims utilize state procedures unless the procedural rights are a “basic and fundamental” part of the federal right at issue. In such cases, states may not eliminate those rights. The Supreme Court, most notably in Brown v. Western Railway of Alabama, held that pleading standards can be integral to the enforcement of federal rights. However, under Western Railway, states may not apply more stringent pleading standards than would be applied to the case had it been brought in federal court. The cases are silent on whether states may apply less stringent pleading standards to federal claims. The main rationale cited in Western Railway was the protection of federal rights in state courts. Less stringent pleading standards do not threaten the enforcement of federal rights and will pass muster under currently existing reverse-Erie jurisprudence. The forum-shopping concern is thus present in Erie and reverse-Erie cases.
However, the Washington Supreme Court’s departure from conformity with the federal civil procedure regime does not only present problems; it also presents opportunities. States, like Washington, can fashion procedures that are attentive to local needs. As early opponents of a uniform procedural regime pointed out when the Federal Rules of Civil Procedure were first adopted, conditions around the country vary and different regions need different procedures. The Washington Supreme Court saw no evidence of discovery abuses in Washington State and thus found little reason to import heightened pleading standards to a system that did not need them.
Additionally, in this instance it was the federal system that moved away from long-standing pleading rules. Conley has governed pleading in federal court and in many states for more than fifty years. States that would like to adhere to Conley’s pleading standard can point to the value of settled expectations, predictability in litigation, a massive body of decisions that clarifies how Conley is to be applied, and a bench and bar familiar with the old pleading standard.
Finally, other states can learn by comparing the experience of states that continue to follow Conley and those that adopt the Iqbal plausibility standard. Variation among states allows them to evaluate what procedures are effective for their particular setting. In effect, each state that diverges from the federal pleading rules becomes another laboratory of experimentation with procedural mechanisms.
State and federal civil procedure have been diverging for a number of decades. The Washington Supreme Court’s decision in McCurry v. Chevy Chase Bank marks the beginning of further divergence. Pleading standards in many state courts will continue to follow, explicitly or implicitly, the old Conley notice-pleading standard. Federal pleading standards will follow the plausibility-pleading standard of Twombly and Iqbal. In many ways this lack of uniformity is lamentable. Civil procedure, already complicated, will become even more byzantine, unpredictable, and local.
On the positive side, however, procedural variation is creating opportunities to study which rules are best suited to advance given goals. Will states that follow Conley see more cases that lack merit and that were filed merely to extract an early settlement from defendants concerned with high discovery costs? Will states that follow Iqbal actually see lower discovery costs? Will they find that claims that turn out to be meritorious were dismissed prematurely under the new heightened pleading standard? Will different types of cases, say employment-discrimination suits or trade-secret suits, find it easier to prevail in a pre-Iqbal or post-Iqbal jurisdiction?
Only time will tell. In the meantime, lawyers should be alert to a rapidly changing civil procedure environment that lacks predictability and uniformity.
Roger Michalski received a Ph.D. in political science from the University of Michigan and will soon graduate from UC Berkeley Law. The author is grateful to Gabrielle Holburt and the staff of The Yale Law Journal for their thoughtfulness and care. He would also like to thank Melissa Mortazavi and Eliot Michalski for inspiration.
Preferred citation: Roger Michael Michalski, Tremors of Things To Come: The Great Split Between Federal and State Pleading Standards, 120 Yale L.J. Online 109 (2010), http://yalelawjournal.org/forum/tremors-of-things-to-come-the-great-split-between-federal-and-state-pleading-standards.