Yesterday, May 18th, the United States Supreme Court issued Ashcroft, Former Attorney General v. Iqbal, and confirmed the pleading standards it announced in Bell Atlantic Corp. V. Twombly, 550 U. S. 544 (2007), an anti-trust case. Although Ashcroft also dealt with other significant legal issues, it is quite possible that its broadest impact will come from its pronouncements regarding pleading standards in federal court.
As Ashcroft explains:
Two working principles underlie our decision in Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. [Twombly, 550 U.S. at 555] (Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we “are not bound to accept as true a legal conclusion couched as a factual allegation” (internal quotation marks omitted)). Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id., at 556. Determining whether a complaint states a plausible claim for relief will, as theCourt of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. 490 F. 3d, at 157–158. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not “show[n]”—“that the pleader is entitled to relief.” Fed. Rule Civ. Proc. 8(a)(2)."
Slip Op. at 14-15.
Formulaic recitations of the elements of a cause of action do not suffice. Slip Op. at 17. Legal conclusions in a complaint -- an allegation that an agreement was "unlawful" is one example; that a drug or device manufacturer "violated FDA regulations" would be another -- are not entitled to an assumption of truth when a defendant moves to dismiss. Slip Op. at 16. In other words, Ashcroft is a nice addition to any federal court defendant's arsenal.