In a split decision, the Wisconsin Supreme Court has adopted the plausibility pleading standard set forth by the U.S. Supreme Court in Bell Atlantic Corp. v. Twombly and reversed an intermediate appellate court ruling that reinstated a dismissed complaint alleging breach of fiduciary duty to minority shareholders in the sale of a company. Data Key Partners v. Permira Advisers LLC, No. 2014 WI 86 (Wis., decided July 23, 2014). The court found that the federal and state pleading rules applicable to the cause of action were the same and that the plaintiffs had failed to plead sufficient facts to support their legal conclusions.
The three dissenting justices would have affirmed the lower court ruling. In their view, the plaintiffs set forth sufficient facts to plead around the business judgment rule and “provide notice to the defendants of the claim being alleged.” They also asserted that “[n]o one is sure what Twombly means,” it has “created confusion and chaos in the federal courts,” it has not previously been adopted in the state, and it was not argued or briefed here. Thus, they concluded, the majority should not have relied on the “heightened pleading standard without any briefing or argument.”