Twombly and Iqbal Do Not Apply in Tennessee State Courts

The Tennessee Supreme Court has ruled that  Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v.Iqbal, ___ U.S. ___, 129 S. Ct. 1937 (2009) do not apply to cases filed in Tennessee state courts.  The extremely well-written opinion marshals the arguments against the application of the federal standard in state court proceedings and will be of benefit to lawyers around the nation who attempt to keep the federal standard out of state courts.

In Webb v. Nashville Area Habitat for Humanity, Inc.,  No. M2009-01552-SC-R11-CV (Tenn. July 21, 2011), plaintiff filed a retaliatory discharge case against a Nashville not-for -profit organization. Defendant filed a Rule 12.02(6) motion to dismiss for failure to state a claim upon which relief can be granted.  Habitat and amici curiae Tennessee Defense Lawyers Association and The Center for Individual Freedom asked the court  to adopt the Twombly/Iqbal standard, which “retired” the notice pleading regime recognized in Conley v. Gibson, 355 U.S. 41 (1957), and followed for fifty years, in favor of a new “plausibility” standard.  

Plaintiff argued that Tennessee should preserve its historic standard, which provides that a  Rule 12.02(6) motion challenges only the legal sufficiency of the complaint, not the strength of the plaintiff’s proof or evidence. Highwoods Props., Inc. v. City of Memphis, 297 S.W.3d 695, 700 (Tenn. 2009).  Plaintiff asked the Court to re-affirm Tennessee law which provided that "a complaint in a tort action need not contain in minute detail the facts that give rise to the claim, it must contain direct allegations on every material point necessary to sustain a recovery on any legal theory, even though it may not be the theory suggested . . . by the pleader, or contain allegations from which an inference may fairly be drawn that evidence on these material points will be introduced at trial.”  Leach v. Taylor, 124 S.W.3d 87, 92 (Tenn. 2004).

A unanimous Tennessee Supreme Court, speaking through Justice Sharon Lee, declined to adopt the new plausibility standard now used in the federal courts.    The Court gave the following reasons for its decision:

  1. The Twombly and Iqbal decisions reflect a significant and substantial departure from the United States Supreme Court’s prior interpretations of Fed. R. Civ. P. 8 and the seventy-year history of a liberal notice pleading standard as envisioned by the Federal Rules of Civil Procedure.  The result of this change has been a loss of clarity, stability, and predictability in federal pleadings practice.
  2. The plausibility pleading standard incorporates an evaluation and determination of likelihood of success on the merits – a judicial weighing of the facts pleaded to see if they “plausibly” present a claim for relief – at the earliest stage of the proceedings, before a sworn denial is even required.   Such "fact-weighing and merits-based determination aspect of the Twombly/Iqbal standard is at odds with the well-established principle in Tennessee that a Rule 12.02(6) motion challenges only the legal sufficiency of the complaint, not the strength of the plaintiff’s proof or evidence."  
  3. The  tests formulated by Twombly and Iqbal in attempting to guide courts that must now determine the plausibility of a claim on the pleading alone are problematic and "has granted virtually unbridled discretion to district judges."  Arthur R. Miller, From Conley to Twombly to Iqbal: A Double Play on the Federal Rules of Civil Procedure, 60 Duke L.J. 1, 24 (2010)
  4. There is a  possibility that the Twombly/Iqbal standard requiring a demonstration of plausibility at the pre-discovery phase of the case results in the disproportionate dismissal of certain types of potentially meritorious claims that require discovery to be proven, including actions for violations of civil rights, employment discrimination, antitrust, and conspiracy.   Justice Lee wrote that "although it may still be too soon to fully gauge the impact of the new plausibility standard, it is at least arguable that it has operated to deny access to justice in the federal courts to possibly meritorious claimants for civil rights violations and employment discrimination." 
  5. Neither Habitat nor amici curiae in the present case  presented evidence showing that the policy concerns cited by the Court in Twombly and Iqbal are present in Tennessee to the extent they exist in the federal judicial system.
 The Court summarized its views with the following language:
it must be remembered that we are addressing the standard in assessing the sufficiency of a single document filed at the very beginning of a case – the complaint.  Our motion-to-dismiss jurisprudence reflects the principle that this stage of the proceedings is particularly ill-suited for an evaluation of the likelihood of success on the merits or of the weight of the facts pleaded, or as a docket-clearing mechanism. Rule 8.01 has not been amended and still only requires “(1) a short and plain statement of the claim showing that the pleader is entitled to relief, and (2) a demand for judgment for the relief the pleader seeks.” We decline to reinterpret Rule 8 to require a pleader to demonstrate “plausibility” and continue to adhere to the well established standards set forth in section 1 of this opinion.
As mentioned above, this 20-page opinion does a wonderful job explaining why the federal standard of review of motions to dismiss for failure to state a claim should not be adopted by a state court.  Hopefully, this opinion can be used by my colleagues around the country as they attempt to limit the damage done by Twombly/Iqbal to cases that must be filed in federal court.