Twombly-Iqbal, step-by-step

STEP ONE: Separate well-pleaded facts from legal conclusions.

What is a legal conclusion (LC)?

  • Read carefully. You may have to go through the pleadings word by word.
  • Easy. Easy example of LC: threadbare elements of a cause of action are LCs.
  • Hard. Harder example of LC: some allegations may arguably be fact or LC.
  • Prepare to counterargue. You may need to argue in the alternative.

How do we treat facts?

  • Facts are true. Assume well-pleaded facts to be true.
  • But not fantasy. But make no such assumption for allegations that “sufficiently fantastic to defy reality as we know it,” such as claims about little green men and time travel.

STEP TWO: Determine whether claim is plausible.

Look to the well-pleaded facts.

  • Cause of action. Look to the elements of the cause of action to provide a framework/checklist to see if pleading provides all needed facts.
  • All facts there? Are facts provided for all required elements? If so, then claim plausible.
  • Facts missing? Make inferences. If facts missing for some elements, then you need to make inferences:
    • What are holes in the pleaded facts?
    • Determine inferences that can be made from the pleaded facts.
    • Use inferences to fill the holes.
    • Since multiple inferences can be made to fill the holes, you’ll end up with multiple versions of the claim.
    • One version of the claim will create liability and the other will not.
    • Unlike Conley, claimant does not get the benefit of inferences in its favor.
    • Instead, we turn to the next step below to determine which version is more likely.

Is claim plausible?

  • Possible vs. plausible vs. probable:
    • Possibility is no longer enough.
    • Plausibility is required.
    • Probability is not required.
    • The line between each is fuzzy. This is a standard, not a rule.
  • The determination of plausibility requires a weighing of the competing inferences to determine which is more plausible, i.e., believable.
  • Use “judicial experience and common sense” in making this determination.
  • Which is more likely: facts + favorable inferences (i.e., “liability“), or facts + unfavorable inferences (i.e., “no liability“)?
    • If liability is less likely than no liability, then claim is not plausible.
    • If liability equals likelihood of no liability, then the claim is not plausible.
    • If liability is a greater likelihood than no liability, then the claim is plausible.

Posted Nov. 14, 2015 (beta)