A PROPORTIONAL APPROACH TO RULE 8
IN THE WAKE OF BELL ATLANTIC CORP. V. TWOMBLY
Bell Atlantic Corp. v. Twombly may represent a judicial attempt to
reconcile the many seemingly inapposite interpretations of Federal Rule of
Civil Procedure Eight (“FRCP 8”) that have been perpetuated since its
inception. If this is so, Justice David Souter and his divided court have
failed. In the past, the courts have followed a rule-based approach to the
pleadings, asserting that one rule applies to every pleading in every
situation. The certainty touted by this rule-based pleading system is, at best,
illusory. Certainty in outcome is unattainable, as multiple standards for
judging the pleadings have always existed even if they are usually applied
only in the shadows. However, each of these standards serve important
functions within our legal system, and an approach is needed that explicitly
permits these standards to exist in the same procedural universe.
This Note proposes an amendment to FRCP 8 that requires plaintiffs
to plead varying degrees of factual particularity, proportional to the dangers
of overrestriction and abuse in a given situation. A transparent pleading
system that articulates when each standard is appropriate provides
practitioners and courts with specific, quantifiable criteria to apply and
argue. By providing transparency in reasoning, a transactional standard
achieves the more attainable goal of ensuring certainty in process.
I. Background.......................................................... 1017
A. From Jarndyce to Clark: Evolution of the Pleadings .... 1017
B. Justification and Application of Notice Pleading ......... 1021
C. Justification and Application of the Restrictive Standard 1025
II. Bell Atlantic Corp. v. Twombly ................................. 1031
III. Transactional Pleading: A Proposed Amendment to FRCP 8 1035
A. Benefits of Transactional Pleading.......................... 1036
B. Application of the Transactional Standard................. 1037
1. Strike-Suit Probability.................................... 1038
a. Defendant’s Incentive to Settle..................... 1039
b. Incentive for Plaintiffs to Bring Strike Suits ..... 1041
c. Cost of Discovery.................................... 1042
2. Underlying Substantive Law ............................ 1045
∗ JD expected, University of Wisconsin, 2009.
1014 WISCONSIN LAW REVIEW
3. Accessibility of Evidence and Knowledge
4. Specific, Overriding Public Policies ................... 1046
Michael Lanier must have been confident when he appealed the
United States District Court for the District of South Carolina’s
dismissal of his negligence claim.1 A toxic spill and the ensuing damage
disrupted the production line where he worked, resulting in layoffs of
hundreds of employees, including Lanier.2 In his complaint, Lanier
presented specific factual evidence that the defendant violated the duty
of care.3 His pleading was surely “a short plain statement of the claim
showing that the pleader is entitled to relief,” as required by Rule 8 of
the Federal Rules of Civil Procedure (FRCP).4 After all, his lawyer
certainly provided more details than the example provided by the FRCP
itself.5 Although he will never know, Lanier might have won if he filed
his appeal four months earlier, before Bell Atlantic Corp. v. Twombly 6
threw a wrench into modern pleading jurisprudence. Instead, his claim
may have been an early victim of Twombly ’s ambiguous implication
that the pleadings should be judged under a new standard.7
If Justice John Paul Stevens’s dissent in Twombly is taken to heart,
the American legal system is spiraling back in time toward the
byzantine world of fact pleading, where the merits of a case and access
to justice take a back seat to a lawyer’s ability to navigate a labyrinth of
hypertechnical rules.8 This eulogy for notice pleading is poorly timed.
With regard to some types of claims, notice pleading was laid to rest
long ago, and with regard to others, it is nowhere near the grave.
For decades, law students in Civil Procedure classrooms across the
nation have recited the notice-pleading mantra of Conley v. Gibson 9—
that a claim should be dismissed only when it is apparent that the
plaintiffs are unable to prove any set of facts in support of their
1. See Lanier v. Norfolk S. Corp., F. App’x 629, 630 (4th Cir. 2007).
2. Id. at 630–31.
3. Complaint ¶ 11, Lanier, F. App’x 629 (No. 05-CP.02.1625).
4. FED. R. CIV. P. 8(a)(2).
5. Compare Complaint supra note 3,with FED. R. CIV. P. FORM 11.
6. 127 S. Ct. 1955 (2007).
7. See id. at 1974.
8. Id. at 1975–76 (Stevens, J., dissenting).
9. 355 U.S. 41 (1957).
2008:1013 Transactional Pleading 1015
complaint.10 The pleading paradigm is necessarily simplified for law
students; in practice, a single, cogent rule does not exist and has not
existed during the seventy-year history of the FRCP. Despite their
assertions to the contrary, federal courts have applied two distinctly
different interpretations of the requirement that a complaint include a
short and plain statement of the claim showing that the pleader is
entitled to relief.11
At the least restrictive end of the spectrum, Conley lets all but the
most threadbare complaints survive dismissal to face summary
judgment.12 At the other end, the court is a gatekeeper and requires a
higher degree of particularity before allowing a claim across the
pleading threshold.13 It is not surprising that this divergence exists;
complete consistency within the judicial system is rare.14 What is
surprising is the level of discord that exists within each circuit and
within the United States Supreme Court itself.15
This divergence is not characterized by distinct circuit splits, but
the dichotomy exits within each federal court. On one day, a court may
permit a malpractice plaintiff to plead conclusions in lieu of facts,16
ensuring only that the pleadings are sufficiently particular to prevent
surprise.17 This court’s discretion at the pleading stage is limited and it
relies primarily on summary judgment to eliminate meritless claims.18
On the next day, the same judge may require an antitrust plaintiff to
provide specific, detailed facts in support of her allegation.19 A court
applying this standard exercises considerable discretion in deciding
whether the plaintiff has set forth sufficient facts to open the floodgates
10. Id. at 45–46; see also FED. R. CIV. P. 8(a)(2).
11. Although overly general, the characterization of two distinct standards is
helpful to simplify the problem for the purposes of this Note. Inevitably there are
numerous variations in the application of each standard presented here.
12. See 355 U.S. at 45–46.
13. See Cash Energy, Inc. v. Weiner, 768 F. Supp. 892, 898 (D. Mass.
14. See David M. Roberts, Fact Pleading, Notice Pleading, and Standing, 65
CORNELL L. REV. 390, 401 (1980).
15. See id.
16. See, e.g., Jackson v. Marion County, 66 F.3d 151, 153 (7th Cir. 1995)
(“[A] plaintiff in a suit in federal court need not plead facts; he can plead
17. Swierkiewicz v. Sorema, N.A., 534 U.S. 506, 512 (2002); Tang v. App.
Div. of N.Y. Supreme Ct., 487 F.2d 138, 145 (2d Cir. 1973) (noting that the purpose
of FRCP 8 is to prevent surprise).
18. Swierkiewicz, 534 U.S. at 512; see also FED. R. CIV. P. 56(c).
19. See, e.g., Sutliff, Inc. v. Donovan Co., 727 F.2d 648, 654 (7th Cir.
1984); Cash Energy, Inc. v. Weiner, 768 F. Supp. 892, 894 (D. Mass. 1991).
1016 WISCONSIN LAW REVIEW
Although these standards appear inapposite, not only are they
consistent with the plain language of FRCP 8, they can and should
coexist within the same courtroom, albeit on different days. The
problem, which this Note attempts to address, lies in the courts’ failure
to acknowledge this possibility, much less to articulate it. Instead, the
courts have maintained that the pleadings are governed by a single,
definitive, rule-based system while applying both standards in practice.
The Supreme Court has only contributed to the quandary by failing to
take notice of the disparity. The opportunity is ripe for a legislative or
judicial revision of the pleading standard that recognizes and addresses
If Twombly represents an attempt at such a revision of FRCP 8,
Justice David Souter and his divided court have failed. Justice Souter
initially came out swinging, unequivocally stating that notice pleading is
the law of the land, yet in the same breath, he repudiated the “no set of
facts” foundation that the Court articulated in Conley.20 Regardless
whether the Twombly court intended to redefine the role of the
pleadings, its Janus-like opinion and its refusal to articulate a new
standard have only contributed to the uncertainty. In its apparent
endorsement of both standards21 and its failure to provide guidance for
the application of either, the Court opened the proverbial Pandora’s
Box. While the lower courts attempt to make sense out of Twombly,
litigants are left floundering in a sea of inter- and intra-circuit
inconsistency and uncertainty for the foreseeable future.22
Regardless of the standard actually applied, the courts have
consistently articulated a rule-based approach to the pleadings, asserting
that one pleading standard governs every situation.23 This Note
recognizes that multiple standards for judging the pleadings have
always existed and offers a recommendation that permits each to exist
in the same procedural universe. Obviously, any approach that creates
standards rather than rules must articulate—at least on a policy basis—
when each standard should be applied. Otherwise, filing a complaint
will become at best an educated gamble on the idiosyncrasies of a
20. Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1969 (2007).
21. Id. at 1964, 1969.
22. Since Twombly, both lawyers and judges have seized its language to
impose or advocate for a higher standard in a particular case. See, e.g., Ass’n of
Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007);
Anderson v. Sara Lee Corp., 508 F.3d 181, 188 n.7 (4th Cir. 2007); Choyce v. Saylor,
No. C 07-2394 PJH (PR), 2007 WL 3035406, at *1 (N.D. Cal. Oct. 16, 2007).
23. Charles E. Clark, Special Pleading in the “Big Case,” 21 F.R.D. 45, 48
(1958) (“[I]n federal pleading no special exceptions have been created for the ‘Big
Case’ or for any other particular type of action.”).
2008:1013 Transactional Pleading 1017
district court judge,24 or at worst an exercise in forum shopping.25 Part
II of this Note summarizes the existing standards within their historical
contexts. Part III examines the courts’ applications of the liberal and
restrictive standards, evaluating the tacit and express policy
justifications for each. Finally, this Note recognizes that both pleading
standards serve important functions, concluding that in some situations,
the court must serve a gate-keeping role, justifiably requiring a higher
degree of particularity. In others, the pleadings must only provide
enough detail to prevent surprise and a requirement for increased
particularity would be unnecessary and inequitable. This Note contends
that the certainty attributed to the rule-based pleading system is at best
illusory because, as long as the court retains some level of discretion,
certainty in outcome is unattainable. Instead, a transparent pleading
system that articulates when each standard should be applied provides
practitioners and courts with specific, quantifiable criteria to apply and
to argue. By providing transparency in reasoning, the transactional
standard achieves the more attainable goal of ensuring certainty in
process. This Note proposes a change to FRCP 8 requiring plaintiffs to
plead a degree of factual particularity that is proportional to the dangers
of both overrestriction and abusive litigation in a given situation.
A. From Jarndyce to Clark: Evolution of the Pleadings
[M]embers of the High Court . . . mistily engaged in one of
the ten thousand stages of an endless cause, tripping one
another up on slippery precedents, groping knee-deep in
technicalities, . . . making a pretence of equity with serious
faces . . . . there is not an honorable man among [them] who
would not give . . . the warning, “Suffer any wrong . . .
rather than come here!” 26
24. See Roberts, supra note 14, at 414 (noting that pleading may become “a
game of forecasting the idiosyncratic predilections” of a given judge).
25. If different pleading standards are allowed to evolve separately within the
circuits, when personal jurisdiction exists in multiple venues plaintiffs will naturally
choose courts that judge the pleadings liberally, while defendants will seek transfer to a
venue that applies a more restrictive standard. Cf. Guaranty Trust Co. v. York, 326
U.S. 99, 109 (1945) (considering the perils of forum shopping).
26. CHARLES DICKENS, BLEAK HOUSE 5–6 (Duane DeVries ed., Thomas Y.
Crowell Co. 1971) (1853). For additional satire of the perils of fact pleading, see
GEORGE HAYES, CROGATE’S CASE: A DIALOGUE IN YE SHADES, ON SPECIAL PLEADING
1018 WISCONSIN LAW REVIEW
Although written a century ago, Charles Dickens’s satire of
Jarndyce v. Jarndyce aptly characterized today’s perceptions of the
pleading system before the FRCP were conceived. While no jurist
would advocate a resurrection of the common-law writ,27 the ghosts of
pleading’s past are not confined to literary satire, and an evaluation of
the pleadings must recognize the influence that the past bears on the
standards that the courts are currently applying.28
At common law, the pleadings served the dual purposes of
providing notice and disposing of apparently deficient claims, with the
latter eventually eclipsing the former.29 The courts were accessible only
to the plaintiff who could wedge his claim into one of the recognized,
formal writs.30 Failure to do so was fatal, and a plaintiff who selected
the wrong writ was left without a remedy.31 A scientific process, the
common-law pleading system was designed to distill even the most
complex claim to its basic elements.32 The parties proceeded through a
rigid maze of prolific pleading stages until, at least in theory, the claim
was reduced to a single, dispositive issue of fact for the judge or jury to
decide.33 Trial on the merits became a virtual afterthought; cases were
more often disposed of on a technical slip of the tongue somewhere in
the pleading labyrinth.34 In practice, successful plaintiffs created legal
fictions to shoehorn the facts of their particular claim into an accepted
writ, leaving defendants in the dark to be surprised at trial.35 In general,
the common-law pleading system proved more effective at vindicating
the process rather than vindicating the merits of a particular claim.36
REFORM (1854) and SIR FREDERICK POLLACK, THE GENIUS OF THE COMMON LAW 27–37
27. See Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1975–76 (2007).
28. In comparison to fact pleading, the liberal interpretation of FRCP 8
represents a reaction against it, while the restrictive standard is similar in some
29. 5 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND
PROCEDURE § 1202 (3d ed. 2004).
30. Charles E. Clark, The Handmaid of Justice, 23 WASH. U. L.Q. 297
(1938), reprinted in PROCEDURE—THE HANDMAID OF JUSTICE: ESSAYS OF JUDGE
CHARLES E. CLARK 77 (Charles Alan Wright & Harry M. Reasoner eds., 1965).
32. Richard L. Marcus, The Revival of Fact Pleading under the Federal Rules
of Civil Procedure, 86 COLUM. L. REV. 433, 437 (1986).
33. Frazier v. S.E. Penn. Transp. Auth., 785 F.2d 65, 66 (3d Cir. 1986); see
also 5 WRIGHT & MILLER, supra note 29, § 1202.
34. Clark, supra note 30, at 77.
35. Marcus, supra note 32, at 437.
36. See Frazier, 785 F.2d at 66.
2008:1013 Transactional Pleading 1019
America’s initial answer to the inequities of common-law pleading
met a similar fate.37 The Field Code of the mid-nineteenth century
abandoned stylized writs in favor of a “plain and concise statement of
the facts.”38 Like its predecessor, the relatively simple premise of code
pleading evolved into hypertechnical, linguistic distinctions that
subsumed the merits of a particular case.39
Although fact pleading40 has become an academic four-letter word,
it should not be dismissed as a best-forgotten result of judicial naiveté.
The ultimate migration of common-law and code pleading toward an
increasingly dispositive role41 exposes a natural, judicial inclination to
make the system more efficient.42 Thus, not only is there considerable
inertia behind two centuries of restrictive pleading,43 the instinctive
pursuit of efficiency may create a tendency to view any liberal pleading
standard with suspicion, at least once the memories of fact pleading’s
faults begin to fade. Furthermore, the hypertechnical distinctions of
common-law and code pleading are not inherent, inseparable
characteristics of every restrictive pleading standard. It is conceivable
that a more restrictive standard could operate equitably without leaving
plaintiffs out in the cold and defendants in the dark.
FRCP 8 scrupulously avoided the vestiges of its predecessors by
eliminating any references to “facts,” “conclusions,” or “cause of
action.”44 FRCP 8’s minimalist requirement of a short, plain statement
showing that the pleader is entitled to relief has been interpreted to
allow conclusions and even “bare allegations” in place of detailed
facts.45 During the infancy of the FRCP, it was clear that a claim
37. Authored by David Dudley Field, the Field Code was adopted by New
York in 1848 and was adopted by most states within ten years. Roberts, supra note 14,
at 395 & n.32.
38. Id. at 395.
39. Id. at 396.
40. Fact pleading is the moniker associated with common-law and code
pleading. See id. at 390–96.
41. Common-law pleading began as a simple, oral process; the Field Code
was intended to be similarly simple and concise, and we know what happened to both.
Richard L. Marcus, The Puzzling Persistence of Pleading Practice, 76 TEX. L. REV.
1749, 1750–55 (1998).
42. In this context, efficiency refers to the ability of the system to dispose of
claims at the earliest possible stage of the legal process allowing the courts to
concentrate on other matters.
43. As the United States inherited its pleading practice from the English
courts, the roots of our current system can actually be traced beyond two centuries. See
Marcus, supra note 41, at 1752–53.
44. Cf. id. at 1749 (noting that the principal drafter of FRCP 8, Judge Charles
Clark, originally intended to eliminate pleading motions completely).
45. Swierkiewicz v. Sorema, 534 U.S. 506, 510 (2002) (noting there is no
requirement that the facts in the complaint constitute a “prima facie” case); Jackson v.
1020 WISCONSIN LAW REVIEW
should not be dismissed unless it appeared “beyond doubt that the
plaintiff [could] prove no set of facts . . . which would entitle him to
relief.”46 Under the notice-pleading standard, the purpose of the
complaint is simply to provide fair notice to the defendant of the claim
and the grounds upon which it rests, and facilitate a decision on the
merits.47 The FRCP even provide a cheat sheet to allay the concerns of
neophyte lawyers or pro se litigants.48 According to the Rules, a litigant
injured in a car accident need only trace the text of Form Eleven and
allege that “the defendant negligently drove a motor vehicle against the
plaintiff.”49 FRCP 8 does not require the plaintiff to allege that the
defendant was drinking, talking on his cell phone or changing the radio
station; it permits a complaint that pled only that the defendant was
negligent to survive a motion to dismiss. 50
Under this standard, the judges surrender a majority of their
discretion at the pleading stage, relying on summary judgment to
address perceived factual deficiencies in the complaint.51 While motions
to dismiss are certainly capable of, and suited for, eliminating
complaints that fail to properly allege an element of a legal claim,52
Marion County, 66 F.3d 151, 153 (7th Cir. 1995) (plaintiffs can plead conclusions);
Karim-Panahi v. L.A. Police Dept., 839 F.2d 621, 624 (9th Cir. 1988) (plaintiffs can
plead “bare allegation[s]”); see Clark, supra note 23, at 47 (“The . . . effect and intent
of the rules is to permit the claim to be stated in general terms . . . .”). But see
Chongris v. Andover, 811 F.2d 36, 37 (1st Cir. 1987) (holding that plaintiffs cannot
rely on “bald assertions, unsupportable conclusions, and opprobrious epithets”(internal
46. Conley v. Gibson, 355 U.S. 41, 45–46 (1957).
47. Swierkiewicz, 534 U.S. at 514.
48. FED. R. CIV. P. FORM 11. The forms are intended to be examples of
pleadings sufficient to survive a motion to dismiss. See FED. R. CIV. P. 84. While
Form Eleven replaced Form Nine with the 2007 amendment to the Rules, the changes
to the form are semantic and have no effect on the minimalist standard represented by
the form. Compare FED. R. CIV. P. FORM 11 with FED. R. CIV. P. FORM 9 (2007).
49. FED. R. CIV. P. FORM 11.
50. Cf. 5 WRIGHT & MILLER, supra note 29, § 1202 (noting that some have
said under the FRCP “a sixteen year old” should be capable of drafting a pleading
sufficient to survive a motion to dismiss).
51. Swierkiewic, 534 U.S. at 512. In 1984, Professor Arthur Miller
commented that the motion to dismiss had last been effectively used under the
McKinley administration. ARTHUR MILLER, THE AUGUST 1983 AMENDMENTS TO THE
FEDERAL RULES OF CIVIL PROCEDURE: PROMOTING EFFECTIVE CASE MANAGEMENT AND
LAWYER RESPONSIBILITY 8 (1984).
52. See Educadores Puertorriqueños en Acción v. Hernández, 367 F.3d 61,
67 (1st Cir. 2004) (noting that although courts applying this standard have set the
pleading threshold low, notice pleading is not a “toothless tiger” (quoting Dartmouth
Review v. Dartmouth Coll., 889 F.2d 13, 16 (1st Cir. 1989))). Even Judge Clark
conceded that there is a limit to the liberal standard. Anderson v. United States, 182
F.2d 296, 297 (1st Cir. 1950).
2008:1013 Transactional Pleading 1021
under the notice-pleading standard, FRCP 8 acts as more of a guide and
less of a gatekeeper.53 Thus, the issue for a judge deciding a motion to
dismiss is only whether the plaintiff should be permitted to proceed
with discovery.54 This limits judicial discretion by allowing plaintiffs
through to face summary judgment even if their chances for recovery
appear to be remote.55
B. Justification and Application of Notice Pleading
On a normative level, the notice-pleading standard is consistent
with the overriding principle that a case should be decided on its merits
and a fear that restrictive-pleading practice casts the net too widely,
dooming an unacceptable percentage of legitimate claims before they
reach the finder of fact.56 This normative belief stems from concerns (1)
that the courts are ill-equipped to make merit-based dispositions at the
pleading stage,57 (2) that the system favors trial as the dispositive
vehicle,58 (3) for judicial efficiency,59 and (4) for the effects of unduly
limiting plaintiffs’ options early in litigation.60
First, a court applying the notice-pleading standard questions its
ability to exercise its discretion when little or no evidence has been
presented.61 The pleadings should be used only for the purposes to
53. Marcus, supra note 32, at 460. Other commentators have gone further to
suggest that the pleadings are only intended to generally indicate the type of litigation
and address procedural questions such as the statute of limitations. Yoichiro Hamabe,
Functions of Rule 12(b)(6) in the Federal Rules of Civil Procedure: A Categorization
Approach, 15 CAMPBELL L. REV. 119, 125 (1993).
54. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974).
56. The fear of the hypertechnical vestiges of fact pleading is a brooding
omnipresence over the liberal interpretation of FRCP 8. See Bell Atl. Corp. v.
Twombly, 127 S. Ct. 1955, 1976 (Stevens, J., dissenting). These normative policies
make sense provided that the role they create for the procedural system as a whole is
what we want the system to look like.
57. Hickman v. Taylor, 329 U.S. 495, 500 n.2 (1947) (quoting Edson R.
Sunderland, The Theory and Practice of Pre-Trial Procedure, 36 MICH. L. REV. 215,
58. See Clark, supra note 30, at 83.
59. See Marcus, supra note 41, at 1770 (“Subjecting most of the docket to
active pleading practice would compound the work required . . . .”).
60. See Clark, supra note 30, at 80 (noting that detailed pleading requirements
prevent lawyers from taking advantage of favorable evidence that develops later).
61. Hickman, 329 U.S. at 500 n.2 (quoting Sunderland, supra note 57, at
216); Paul D. Carrington, Making Rules to Dispose of Manifestly Unfounded
Assertions: An Exorcism of the Bogy of Non-Trans-Substantive Rules of Civil
Procedure, 137 PA. L. REV. 2067 (1989). It is important to note that some evidence can
be presented at the pleadings stage in the form of exhibits attached to the complaint.
FED. R. CIV. P. 10(c).
1022 WISCONSIN LAW REVIEW
which they are suited—providing notice and channeling the subsequent
litigation.62 At the pleading stage, the court’s familiarity with the case is
defined by the untested facts in the complaint. It follows that before
more facts are presented and tested, the court is generally incapable of
knowing whether the case has merit.63 It is only at summary judgment
that the nonmoving party is required to educate the court by presenting
factual evidence that specifically rebuts a showing by the opposition.64
Even under the liberal standard, the pleading may properly serve a
dispositive role in a limited category of cases without contravening the
policy above. The substantive law of certain types of claims is
particularly amenable to prediscovery, merit-based dispositions. When
the elements of a claim have been judicially or legislatively reduced to
objectively discernable and easily quantifiable subelements, dismissal
may be proper without further examination of the facts.65 On the other
hand, when the law is less precise and the outcome ultimately depends
on subjective policy judgments, the pleadings are unlikely to yield a
clear answer.66 When an element of a claim requires a determination of
degree rather than simple existence of an element,67 notice pleaders
contend that such a claim cannot be decided on the pleadings without
incurring an unacceptable level of risk.68 The migration of the law away
62. Charles E. Clark, Simplified Pleading, 2 F.R.D. 456, 461–62 (1943).
63. This problem is apparent in the difficulty that courts have had in
controlling discovery. See Frank H. Easterbrook, Discovery as Abuse, 69 B.U. L.
REV. 635, 638 (1989). At least early in the discovery process, courts are no more
informed than they are when deciding a motion to dismiss. See id. As a result, it is
difficult for courts to determine whether a given request is legitimate or abusive. See
id. If courts are ill equipped to control discovery then, on the same logic, they are
incapable of making an informed decision on the merits of the case.
64. See FED. R. CIV. P. 56(e)(2); see also Bias v. Advantage Int’l, Inc., 905
F.2d 1558, 1561 (D.C. Cir. 1990) (quoting Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986)).
65. See Marcus, supra note 32, at 454, 460. Marcus gives the example of
plaintiffs’ failure to allege their status as “purchasers or sellers,” which is an element of
a securities-fraud claim. Id. at 460. The court is similarly equipped when the plaintiff
pleads himself out the door by including enough detail to allow the court to conclude
that a legal wrong could not have occurred. See Jackson v. Marion County, 66 F.3d
151, 154 (9th Cir. 1995) (“[N]othing in the federal rules forbids the filing of prolix
complaints. If plaintiffs’ lawyers want to live dangerously . . . they can.”).
66. Marcus, supra note 32, at 459. Examples of these types of claims include
those involving motive or intent, where the court should be wary of disposition without
trial or even without discovery. See Poller v. Colombia Broad. Sys., Inc., 368 U.S.
464, 473 (1962). Compare this to a requirement that the plaintiff is a buyer or seller of
stock. See Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 341 (2005).
67. A common-sense analog would be asking (1) Is the light on or off?, or (2)
How bright is the light?
68. Marcus, supra note 32, at 471 (“The risks associated with heightened
scrutiny . . . are not . . . permissible as part of the trial court’s discretion.”).
2008:1013 Transactional Pleading 1023
from precise, quantifiable rules has made a larger class of claims less
amenable to disposition before discovery, and has rendered the
restrictive-pleading standard more difficult to justify in many
Second, despite the judicial migration toward arbitration and
mediation,70 an ideological predisposition exists within the American
legal system in the preeminence of trial, and the idea that disposition
outside of the courtroom is inherently suspect.71 After all, “[t]rial by
affidavit is no substitute for trial by jury which so long has been the
hallmark of ‘even handed justice.’”72 If a trial exposing all relevant
evidence to the adversarial process is the most desirable means of
resolving disputes, then, under the liberal standard, a decision before
any facts are presented should be an infrequent aberration rather than
Third, although both sides claim the efficiency high ground, the
notice-pleading standard may operate to reduce burdens on the federal
courts.74 The restrictive standard claims to slim the docket when
complaints are dismissed without leave to amend. However, notice
pleaders answer that complaints are rarely dismissed without leave to
amend, and dismissals are not always preclusive.75 Therefore, non-
merit-based dispositions simply result in refiling at the expense of all
involved.76 Furthermore, accepting the premise that settlement is a
desirable and efficient solution, the restrictive standard may imbue
defendants with confidence that they are more likely to prevail on a
69. Id. at 459.
70. Rex R. Perschbacher & Debra Lynn Basset, The End of Law, 84 B.U. L.
REV. 1, 16 (2004).
71. See Nagler v. Admiral Corp., 248 F.2d 319, 322 (2d Cir. 1957); Atwood
v. Humble Oil & Ref. Co., 243 F.2d 885, 888–89 (5th Cir. 1957); Rennie & Laughlin,
Inc. v. Chrysler Corp., 242 F.2d 208, 213 (9th Cir. 1957); Cooper v. R. J. Reynolds
Tobacco Co., 234 F.2d 170, 173 (1st Cir. 1956).
72. Poller v. Colombia Broad. Sys. Inc., 368 U.S. 464, 491 (1962) (“It is
only when the witnesses are present and subject to cross-examination that their
credibility and the weight to be given their testimony can be appraised.”).
73. See id.
74. Marcus, supra note 32, at 493 (characterizing pleading practice as “little
better than an expensive waste of time”); see also Carrington, supra note 61, at 2070.
75. See MILLER supra note 51, at 8. Dismissal resulting in a final judgment
has been cited as occurring in as little as 2 percent of cases and as much as 6 percent.
See THOMAS E. WILLGING, FED. JUDICIAL CTR.,USE OF RULE 12(B)(6) IN TWO FEDERAL
DISTRICT COURTS 9 (1989). As discussed later, proponents of the restrictive standard
would contend that efficiency would be achieved if this percentage was (and should be)
76. See Clark, supra note 62, at 458; see also Dioguardi v. Durning, 139 F.2d
774, 775 (2d Cir. 1944).
1024 WISCONSIN LAW REVIEW
pleading motion and logically less likely to settle early.77 Similarly, it
follows that a plaintiff who survives a motion to dismiss under a
restrictive-pleading standard may gain false confidence and be less
likely to settle before summary judgment.78
Finally, notice pleading is also founded on the conviction that
plaintiffs who may be incapable of pleading specifics early in litigation
should not be forced to limit themselves to a particular theory that may
or may not be the ultimate basis for their claim.79 When the complaint
is filed, the facts of the case are not always clear, especially to the
plaintiff.80 For example, a plaintiff in a vehicle accident would naturally
be reticent about committing himself to a particular theory of
negligence when the only facts he may know when filing the complaint
are that he was driving carefully, was struck by the defendant’s vehicle,
and he is now in the hospital.81 The plaintiff is unlikely to know
whether the defendant was drinking, had maintained his car poorly, or
was text messaging a friend immediately before the accident.
This problem applies with even more force in actions against
corporations or against multiple defendants where, absent unique access
to confidential information, the plaintiff may be left completely in the
dark without discovery.82 For example, a plaintiff in a RICO antitrust
action is unlikely to know exactly when and how the defendants
conspired against him.83 Similarly, in a Title VII employment-
discrimination case, the plaintiff is unlikely to have any direct evidence
of the employer’s motives prior to discovery.84 Thus, the liberal
standard may be particularly justified when the necessary facts are
77. See Marcus, supra note 41, at 1767 (“[D]efendants . . . are more likely to
profit from specifics in complaints and more likely to look on pleading motions as
78. Christine Hurt, Counselor, Gatekeeper, Shareholder, Thief: Why
Attorneys Who Invest in Their Clients in a Post-Enron World Are “Selling Out,” Not
“Buying In,” 64 OHIO ST. L.J. 897, 949 (2003) (“If the plaintiff’s cause of action
against the attorney survives a motion to dismiss, then expensive discovery will
commence and the settlement value of the case increases.”).
79. This may stem from beliefs in the American legal system that the plaintiff
is the master of his claim. See, e.g., The Fair v. Kohler Die & Specialty Co., 228 U.S.
22, 25 (1913); Pinney v. Nokia, Inc., 402 F.3d 430, 442, (4th Cir. 2005) (“The
general rule, of course, is that a plaintiff is the ‘master of the claim.’” (quoting
Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987))).
80. See, e.g., Jackson v. Marion County, 66 F.3d 151, 154 (7th Cir. 1995).
81. Clark, supra note 62, at 457; Marcus, supra note 41, at 1769.
82. See New England Data Servs. v. Becher, 829 F.2d 286, 290–91 (1st Cir.
83. See id.
84. See Walker v. Mortham, 158 F.3d 1177, 1192 (11th Cir. 1998).
2008:1013 Transactional Pleading 1025
peculiarly within the defendant’s control.85 Forcing plaintiffs to decide
on a specific factual basis for their claims at the pleading stage may, at
least in some situations, produce overly restrictive, Jarndyce -like
C. Justification and Application of the Restrictive Standard
Like Mark Twain’s premature obituary in 1907,86 the reports of
fact pleading’s death have been greatly exaggerated. Since the
enactment of FRCP 8 in 1938, a war of attrition has been waged in the
procedural trenches over the role of the pleadings and ultimately the
degree of factual particularity that should be required.87 What is
remarkable about this conflict is not its existence, but rather the silence
with which it has been fought.88 Until recently, courts challenging the
notice-pleading standard have done so through interpretations of the
rule that effectively limited or distinguished Conley rather than
admitting any deviation from the established standard.89 However, even
before Twombly, some district courts openly declared war on skeleton
complaints.90 Regardless whether the courts challenging the status quo
85. Cash Energy, Inc. v. Weiner, 768 F. Supp. 892, 900 (D. Mass. 1991)
(“Where there are multiple defendants . . . and where the plaintiff was not directly
involved in the alleged transaction, the burden on the plaintiff to [plead facts] is not
realistic.”(quoting Becher, 829 F.2d at 291)); FDIC v. Kerr, 637 F. Supp. 828, 834
(W.D.N.C. 1986); Chambers Dev. Co. v. Browning-Ferris Indus., 590 F. Supp. 1528,
1538 (W.D. Pa. 1984); Rich-Taubman Assocs. v. Stamford Rest. Operating Co., 587
F. Supp. 875, 880 (S.D.N.Y. 1984); Merrit v. Libby, McNeill & Libby, 510 F. Supp.
366, 373 (S.D.N.Y. 1981). These cases address the application of the more stringent
requirements of FRCP 9—the logic applies to FRCP 8 with even more force. Cf. Poller
v. Colombia Broad. Sys., Inc., 368 U.S. 464, 473 (1962) (applying this theory to all
summary procedures). Of course not all courts share this concern. See, e.g., Wayne
Inv., Inc. v. Gulf Oil Corp., 739 F.2d 11, 14 (1st Cir. 1984); Schlick v. Penn-Dixie
Cement Corp., 507 F.2d 374, 379 (2d Cir. 1974).
86. Twain and Yacht Disappear at Sea, N.Y. TIMES, May 4, 1907, at A1.
87. See generally Leland Locke Tolman, Advisory Committee’s Proposals to
Amend the Federal Rules of Civil Procedure, 40 A.B.A. J. 843, 844 (1954); Leon R.
Yankwich, “Short Cuts” in Long Cases: A Commentary on the Report Entitled
Procedure in Anti-Trust and Other Protracted Cases Adopted by the Judicial
Conference of the United States, Sept. 26, 1951, 13 F.R.D. 41 (1953). An attempt to
resurrect fact pleading by amending FRCP 8’s “a short and plain statement” with “the
facts constituting the cause of action” was made less than ten years after the FRCP
were adopted. Tolman, supra, at 844. This attempted amendment has been labeled as a
“guerrilla attack” on notice pleading. RICHARD H. FIELD ET AL., MATERIALS FOR A
BASIC COURSE IN CIVIL PROCEDURE 439 (5th ed. 1984).
88. See Roberts, supra note 14, at 420.
90. See Cash Energy, 768 F. Supp. at 895–900; Warth v. Seldin, 422 U.S.
490, 500 (1975).
1026 WISCONSIN LAW REVIEW
are articulating their reasoning or disguising it behind the “teeth” of
notice pleading,91 there is no doubt that the fact-pleading boogeyman
exists, and he is not always confined to the shadows.92
Federal courts expanding the dispositive role of the pleadings
require a greater degree of factual particularity than their more liberal
counterparts before granting discovery.93 Although the restrictive
standard defies efforts to define the quantum of facts required to
survive a motion to dismiss, courts applying it have made a few of its
parameters clear. First, the restrictive standard definitively rejects
complaints based on conclusory allegations.94 Second, the level of
factual detail required has been characterized as “events which . . .
give rise to a strong inference” of liability,95 a requirement of “specific,
concrete facts”96 or, in the extreme case, “particularized allegations.”97
Although a legislative rather than judicial restriction, the pleading
standard created by the Private Securities Litigation Reform Act of
199598 offers further insight. The Act requires plaintiffs to “state with
particularity all facts on which [the] belief is formed.”99 Simply stated,
the primary difference between notice pleading and the more restrictive
standard is the level of factual detail required by the courts.100
The federal bench has been criticized for its failure to provide any
reasoned analysis or justification for the “revival” of fact pleading.101
Even if this allegation were true at one point, it is less applicable today,
as explicit and tacit justifications for the restrictive standard are steadily
emerging.102 Over the past seventy years, the courts have expressly and
91. See Educadores Puertorriqueños en Acción v. Hernández, 367 F.3d 61,
67 (1st Cir. 2004) (emphasizing that notice pleading is not a “toothless tiger”).
92. See, e.g., Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 345–46 (2005);
Cash Energy, 768 F. Supp. at 897; Estelle v. Gamble, 429 U.S. 97 (1976).
93. Cash Energy, 768 F. Supp. at 899.
94. Dura Pharm., 544 U.S. at 343; Cash Energy, 768 F. Supp. at 899;
Warth, 422 U.S. at 500.
95. Ross v. A. H. Robins Co., 607 F.2d 545, 558 (2d Cir. 1979).
96. Warth, 422 U.S. at 491.
97. Id. at 501.
98. Private Securities Litigation Reform Act of 1995, Pub. L. No. 104-67, §
101, 109 Stat. 737, 744.
99. Id. § 101, 109 Stat. at 747. The statute also requires that allegations of
state of mind be supported with facts sufficient to show a “strong inference” that the
requisite state of mind existed. Id.
100. See Sutliff, Inc. v. Donovan Cos., 727 F.2d 648, 654 (7th Cir. 1984).
101. Roberts, supra note 14, at 420.
102. Cash Energy, Inc. v. Weiner, 768 F. Supp. 892, 899 (D. Mass. 1991).
Even Judge Clark, the principal drafter of FRCP 8, admitted that a more stringent
standard should be applied in some situations, regardless of the language of the rules.
See Clark, supra note 62, at 463 (“[FRCP 9] states only what the courts would do
2008:1013 Transactional Pleading 1027
implicitly carved out exceptions to the notice-pleading standard where
the reasons for requiring factual particularity are “especially
compelling.”103 These exceptions include: (1) a general concern for
judicial efficiency in the face of the growing cost of litigation,104 (2)
cases where the risk of abusive strike suits is high,105 and (3) cases
where other public-policy interests simply outweigh the plaintiff’s
interest in merit-based disposition.106
The restrictive standard is based first on a belief that, given the
realities of twentieth-century litigation, notice pleading is impractical.107
In the half century since the Court’s endorsement of notice pleading in
Conley, litigation has increased exponentially—significantly outpacing
the growth of the federal judicial system.108 This pressure on the federal
courts has continued despite the liberalization of summary judgment109
and increased pressure for settlements.110 Under the restrictive standard,
courts have come to the conclusion that the pleadings must serve an
increasingly dispositive role to ease the pressure on crowded dockets.111
By forcing plaintiffs to plead facts up front, it naturally follows
that the restrictive standard ferrets out losing arguments before the
court is bogged down in the dismal swamp of discovery. Courts
applying this standard refute criticisms that dismissal following failure
to plead with particularity is a draconian measure.112 The federal rules
allow plaintiffs considerable discretion to amend their pleadings.113
103. Cash Energy, 768 F. Supp. at 897. Although a district-court case, Cash
Energy is cited frequently within this Note and other scholarship. Its continued
relevance is due at least in part to the brazen language used by the court.
104. Joseph Miester, Securities Issuer Liability for Third Party Misstatements:
Refining the Entanglement Standard, 53 VAND. L. REV. 947, 969–70 (2000).
105. See, e.g., Ross v. Bolton, 904 F.2d 819, 823 (2d Cir. 1990); Franchise
Realty Interstate Corp. v. S.F. Local Joint Exec. Bd. of Culinary Workers, 542 F.2d
1076, 1083 (9th Cir. 1976) (“We believe that the concern expressed for the danger of
vexatious litigation . . . under Rule 10b-5 is . . . more substantial than the common
complaint.”); Segal v. Gordon, 467 F.2d 602, 607 (2d Cir. 1972); Decker v. Massey-
Ferguson, Ltd., 534 F. Supp. 873, 877 (S.D.N.Y 1981).
106. See, e.g., Rotolo v. Charleroi, 532 F.2d 920, 921–22 (3d Cir. 1976).
107. See generally Yankwich, supra note 87.
108. See Roberts, supra note 14, at 417.
109. Samuel Issacharoff & George Loewenstein, Second Thoughts About
Summary Judgment, 100 YALE L.J. 73, 73 (1990).
110. For two examples where the court acted as a coercive mediator, see Fla.
Power & Light Co. v. Westinghouse Elec. Corp., 517 F. Supp. 440 (E.D. Va. 1981)
and Aluminum Co. of Am. v. Essex Group, Inc., 499 F. Supp. 53 (W.D. Pa. 1980).
111. See Marcus, supra note 32, at 449.
112. See, e.g., Poller v. Colombia Broad. Sys., Inc., 368 U.S. 464, 472–73
113. See, e.g., Mitsui Foods, Inc. v. United States, 867 F.2d 1401, 1403 (Fed.
Cir. 1989) (“It is well established that the grant or denial of an opportunity to amend
1028 WISCONSIN LAW REVIEW
Thus, in theory, a dismissal on the pleadings would only occur after a
plaintiff has been given significant opportunities to provide facts if they
actually exist.114 A plaintiff who has been given the opportunity to
amend, yet still fails to provide facts, must not have a valid claim.115
These courts rarely admit the likelihood that a given claim will
survive summary judgment factors into their judgment.116 However, the
use of the pleadings to make such merit-based judgments is at least
suggested by the correlation between the increase in private civil rights
actions and the increase in the required pleading particularity in nearly
every circuit during the 1970s.117
Courts applying the restrictive standard also justify their approach
as a necessary measure to quell abusive litigation.118 The quintessential
strike suit involves a claim of questionable merit against a deep-
pocketed defendant.119 The abusive plaintiff relies on the high personal
and economic cost of litigation in hopes of forcing an in terrorem
settlement beyond any prospective jury verdict.120 The in terrorem value
of a particular claim is grounded in the economic cost of litigation and
the noneconomic, personal effects of the litigation on the defendant.121
pleadings is within the discretion of the trial court.”). Under FRCP 15, a plaintiff may
amend the complaint without leave of the court once within twenty days of filing and if
leave is required by the court, leave should be granted freely. FED. R. CIV. P. 15(a);
see also Foman v. Davis, 371 U.S. 178, 182 (1962).
114. This also provides justification for the preclusive effect given to successful
motions to dismiss under FRCP 12.
115. When used as a justification for a more restrictive pleading standard, this
argument fails in cases where the facts are uniquely within the defendant’s control. See
infra Part III(B)(3). Even if the plaintiff wanted to plead facts, she lacks knowledge and
access before discovery. Id.
116. See, e.g., Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 347–48 (2005)
(criticizing a plaintiff’s “groundless” claim). In Blue Chip Stamps v. Manor Drug
Stores, the court noted that when the liberal standard was applied to 10b-5 securities
complaints, a large number of bad complaints with little prospect for success survived
motions to dismiss. 421 U.S. 723, 740 (1975).
117. Roberts, supra note 14, at 417–18; see also Rotolo v. Charleroi, 532 F.2d
920, 922 (3d Cir. 1976); WILLGING, supra note 75, at 13 (noting that this correlation is
supported by the finding of the Federal Judicial Center that motions to dismiss civil-
rights claims were 10 percent more likely to be granted, and such claims were 9 percent
more likely to terminate the case completely).
118. See, e.g., Franchise Realty Interstate Corp. v. S.F. Local Joint Exec. Bd.
of Culinary Workers, 542 F.2d 1076, 1083 (9th Cir. 1976); Decker v. Massey-
Ferguson, Ltd., 534 F. Supp. 873, 877 (S.D.N.Y 1981).
119. Jeremy T. Grabill, Southland Securities Corp. v. INSpire Insurance
Solutions: The Fifth Circuit Brusquely Rejects the Group Pleading Doctrine in Light of
the Private Securities Litigation Reform Act, 79 TUL. L. REV. 1101, 1103 (2005).
120. Franchise Realty, 542 F.2d at 1083–84. Judge Easterbrook characterizes
such lawsuits as “impositional.” Easterbrook, supra note 63, at 640.
121. Franchise Realty, 542 F.2d at 1083.
2008:1013 Transactional Pleading 1029
While the cost of a potential trial plays a role in forcing
impositional settlements, the cost of discovery weighs most heavily on
defendants.122 A plaintiff who survives a motion to dismiss is entitled to
discovery.123 The FRCP induce lawyers to make extensive and
aggressive discovery requests.124 This provides cover for lawyers who
abuse the process,125 and gives plaintiffs the power to intimidate with
claims of marginal value.126 Further, the threat of discovery, rather than
process itself, is what intimidates defendants into settling.127 Thus, the
fact that most cases settle without significant discovery does not
indicate that the problem is of marginal significance.128
Proponents of the restrictive standard assume an unhappy but
inevitable marriage between notice pleading and virtually unlimited
discovery.129 They contend that the courts are incapable of controlling
discovery and filtering abusive discovery practices.130 The capability
problem stems primarily from three factors. First, the process itself is
not amenable to a rule-based limitation, such as a cap on the number of
interrogatories or the length of depositions.131 Each claim requires a
different level of fact finding; while a concrete limitation may work for
some claims, it will unduly limit legitimate discovery requirements in
others.132 Second, proponents contend that courts lack detailed
knowledge of the claim at the discovery stage and thus are unable to
recognize an abusive request when it arises.133 Finally, FRCP 26
discourages judicial involvement in the process by providing a
122. Steve Weinberg, Hardball Discovery, A.B.A. J., Nov. 1995, at 66.
123. See FED. R. CIV. P. 26.
124. The discovery rules, FED R. CIV. P. 26–36, give lawyers the tools to
further their clients’ cases; thus, a zealous advocate will take full advantage. A lawyer
may be perceived as less than diligent if he fails to use them aggressively. See MODEL
RULES OF PROF’L CONDUCT R. 1.3 (2008).
125. Easterbrook, supra note 63, at 640.
126. Id. at 640–41.
127. Id. at 637; see generally Weinberg, supra note 122.
128. Easterbrook, supra note 63, at 637 (“It is the (credible) threat rather than
the reality of discovery that affects the settlement of cases; and when there is some
discovery, the threat is ‘more of the same.’”).
129. See Archie O. Dawson, The Place of the Pleading in a Proper Definition
of the Issues in the “Big Case,” 23 F.R.D. 430, 431 (“[T]he ‘big case’ almost
necessarily presupposes ‘big’ discovery.”).
130. See Easterbrook, supra note 63, at 640.
131. Id. at 641. A limit on the number of depositions may have no impact on a
vehicular-negligence claim, while it would unfairly impede the parties to complex
132. Id. The converse also appears to be true, as a rule that properly limits
discovery in multiparty corporate litigation may still leave room for abuse in a less
133. Id. at 640.
1030 WISCONSIN LAW REVIEW
mechanism for resolving discovery disputes informally.134 This may
naturally influence already overworked judges to keep their distance
and intervene only when required. Even when judges have chosen to
involve themselves in the process, they have been reluctant to exercise
their FRCP 26 power to sanction abuses by the parties.135
The restrictive standard is also justified on the premise that
lawsuits may exert an in terrorem influence independent of economic
considerations.136 Even when the defendant is a faceless multi-billion-
dollar international corporation, defending a lawsuit is ultimately a
personal process and is unquestionably unpleasant. The lawsuit affects
individuals as well as the entities they represent.137 Thus, the costs of
litigation are not measured in economic terms alone.138 Being deposed
is a process that often proves to be even more unpleasant than cross-
examination because the noticing lawyer is not inhibited by the
presence of the fact finder.139 Furthermore, the simple fact that filing
some claims is enough to independently subject defendants to severe
reputational damage, “vexation . . . and notoriety” provides an impetus
to apply a higher standard.140
Courts applying the restrictive-pleading standard have also placed
specific public policies above the interest in reserving merit-based
dispositions for a better-informed fact finder.141 For example, courts
may be more likely to apply a higher standard when a claim threatens
the exercise of a defendant’s First Amendment rights.142 In Franchise
Realty v. San Francisco Local Joint Executive Board of Culinary
Workers,143 the United States Court of Appeals for the Ninth Circuit
134. FED. R. CIV. P. 26(f)(2).
135. See, e.g., Franchise Realty Interstate Corp. v. S.F. Local Joint Exec. Bd.
of Culinary Workers, 542 F.2d 1076, 1084 (9th Cir. 1976).
136. See id.; see also Ross v. Bolton, 904 F.2d 819, 823 (2d Cir. 1990); Ross
v. A.H. Robbins Co., 607 F.2d 545, 557 (2d Cir. 1979); Easterbrook, supra note 63,
137. A corporate officer must surrender corporate documents even if they
incriminate the officer personally. Curcio v. United States, 354 U.S. 118, 125 (1957).
138. See Easterbrook, supra note 63, at 640.
140. United States v. City of Philadelphia, 482 F. Supp. 1274, 1277–78 (E.D.
141. This Section presents two policies: (1) protecting the exercise of free
speech, and (2) encouraging effective, efficient public service. These policies are two
examples of where the courts have subordinated litigants’ interests in merit-based
dispositions. Other such policies undoubtedly exist but have yet to be articulated by the
142. Rotolo v. Charleroi, 532 F.2d 920, 921–22 (3d Cir. 1976); Franchise
Realty Interstate Corp. v. S.F. Local Joint Exec. Bd. of Culinary Workers, 542 F.2d
1076, 1084 (9th Cir. 1976).
143. 542 F.2d 1076 (9th Cir. 1976).
2008:1013 Transactional Pleading 1031
applied a higher standard of particularity to a complaint seeking to
enjoin the defendants from exercising their First Amendment rights to
associate and petition an administrative agency.144 The court generalized
that “where a plaintiff seeks damages or injunctive relief, or both, for
conduct which is prima facie protected by the First Amendment, the
danger that the mere pendency of the action will chill the exercise of
First Amendment rights requires more specific allegations than would
otherwise be required.”145
Second, courts are also more likely to apply a restrictive-pleading
standard when public officials are charged with civil-rights violations.146
In cases such as Crawford-El v. Briton,147 the courts have expressed
concern that claims involving motive and intent are “easy to allege and
hard to disprove.”148 This, combined with the concern for diverting
governmental focus from pressing public issues, deterring the citizens
from entering public service, and “dampen[ing] the ardor of all but the
most resolute . . . in the unflinching discharge of their duties,”149
creates a policy compelling enough to justify the application of a more
restrictive pleading standard. Although this public-policy exception has
been applied to a relatively small class of claims and litigants, its logic
may apply beyond the limited factual circumstances of Crawford-El.
II. BELL ATLANTIC CORP. V. TWOMBLY
The Twombly plaintiffs represented a class of telephone
subscribers claiming that the defendant communications companies had
conspired to prevent competition and to set artificially high prices for
telephone services in violation of section one of the Sherman Act.150
Section one prohibits unreasonable restraints on trade that occur as a
144. Id. at 1082–83.
146. See, e.g., Crawford-El v. Britton, 523 U.S. 574, 597–98 (1998); Harlow
v. Fitzgerald, 457 U.S. 800, 815 (1982); Gregoire v. Biddle, 177 F.2d 579, 580–81
(2d Cir. 1949). Although these cases primarily addressed the defense of qualified
immunity, the courts held that plaintiffs may properly be required to plead with
particularity in the situations discussed, regardless whether the defense was raised. In
the civil-rights context, it is likely that the standard discussed is also influenced by the
increased prevalence of such complaints filed. See supra text accompanying note 117.
147. 523 U.S. 574 (1998).
148. Id. The application of a higher standard to such claims appears to
contravene the express language of the rules, as FRCP 9 states that claims involving
motive and intent may be alleged generally. FED. R. CIV. P. 9(b).
149. Crawford-El, 523 U.S. at 590 n.12 (quoting Gregoire, 177 F.2d at 581).
150. Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1961 (2007).
1032 WISCONSIN LAW REVIEW
result of a conspiracy.151 Thus, only anticompetitive conduct that is the
result of a tacit or express agreement is prohibited,152 and similar
conduct by competitors that inhibits competition but does not stem from
an agreement is permissible.153
The plaintiffs supported their claim with evidence that the
defendants’ parallel conduct was not the result of happenstance.154
Although obviously unable to obtain an internal smoking-gun memo or
other direct evidence of agreement among the defendants, the plaintiffs
cited specific evidence of conspiracy. Beyond the conclusion that a
meeting or some sort of conscious agreement must have taken place,
the complaint noted that: (1) specific market conditions existed that
would have encouraged the defendants to encroach on each others’
territory absent an agreement among them,155 (2) independent
investigations indicated that a conspiracy existed,156 (3) one of the
defendants was willing to absorb enormous losses rather than compete
with the other parties,157 and (4) that numerous forums existed where
the defendants could have entered the agreement.158
The Court could have applied the liberal pleading standard it
established seventy years earlier and held that the plaintiffs were only
required to plead that a conspiracy existed.159 Judging by the Court’s
recent affirmation of its commitment to Conley,160 this may have been
what plaintiff Michael Twombly expected. On the other hand, the
defendant’s confidence was equally well placed. Defendant Bell
Atlantic likely expected the Court to view Twombly’s claim with
suspicion and impose a higher standard of factual particularity,
endorsing the tacit exception to the notice-pleading standard that has
existed for thirty years—especially in the antitrust realm.161 Justice
151. 15 U.S.C. § 1 (2006); see also Copperweld Corp. v. Independence Tube
Corp., 467 U.S. 752, 775 (1984).
152. Theatre Enters., Inc. v. Paramount Film Distrib. Corp., 346 U.S. 537,
153. See Twombly, 127 S. Ct. at 1960.
154. Complaint ¶¶ 40–46, Twombly v. Bell Atl. Corp., 313 F. Supp. 2d 174
(S.D.N.Y. 2003) (No. 02 Civ. 10220 (GEL)).
155. Id. ¶¶ 40–41.
156. Id. ¶ 45.
157. Id. ¶¶ 42–43.
158. Id. ¶ 46.
159. The United States Court of Appeals for the Second Circuit found this to be
sufficient. Twombly v. Bell Atl. Corp, 425 F.3d 99, 106–07 (2d Cir. 2005), rev’d, 127
S. Ct. 1955 (2007).
160. See Swierkiewicz v. Sorema, 534 U.S. 506, 512 (2002).
161. See, e.g., Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 346–48 (2005);
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 582 (1985); Blue
Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 741 (1975); Theatre Enters., Inc.
2008:1013 Transactional Pleading 1033
Souter, who authored the 7–2 majority, chose neither of these
Affirming the United States District Court for the Southern District
of New York’s dismissal of Twombly’s claim,163 the Court started with
a frontal attack on the liberal standard. It rejected “formulaic
recitation[s] of the elements of a cause of action,”164 “bare
assertion[s],”165 and “conclusory allegation[s]”.166 Most surprisingly,
the Court unceremoniously retired Conley ’s “no set of facts” language
that has stood for fifty years as a “best forgotten . . . negative gloss on
an accepted pleading standard.”167 In its place, the Court endorsed a
requirement that plaintiffs must plead enough facts to show
“plausibility.”168 Simply put, the complaint must contain enough factual
matter to cross “the line between the conclusory and the factual . . . .
[and] between the factually neutral and the factually suggestive.”169 As
a result, Souter has restored the district courts’ power to exercise their
discretion when faced with a motion to dismiss.170
In support of its decision, the Court listed each of the policies
commonly cited in support of the restrictive standard.171 It expressed
concern for the prevalence of strike suits, the high cost of litigation,
and the court’s inability to control the discovery process.172 Most
importantly, the Court noted that in the interests of all involved,
“deficien[cies] should be exposed [with a] minimum expenditure of
time and money by the parties and the court.”173
Yet in the Court’s last breath, in anticipation of the bellicose
dissent to follow, it carefully endorsed the notice-pleading ethos. It
maintained that the core holding of Conley and its progeny are still
good law, and the opinion did not impermissibly tread on legislative
territory by extending the reach of FRCP 9, or require “heightened fact
v. Paramount Film Distrib. Corp., 346 U.S. 537, 539 (1954). This was exactly what
the district court did. Twombly v. Bell Atl. Corp., 313 F. Supp. 2d 174, 188–89
(S.D.N.Y 2003), rev’d, 425 F.3d 99 (2d Cir. 2005), aff’d, 127 S. Ct. 506 (2007). The
circumstances of Twombly fit well within the justifications for the application of the
restrictive standard discussed supra Part I.C.
162. Twombly, 127 S. Ct. at 1965–66.
163. Id. at 1974.
164. Id. at 1965.
165. Id. at 1966.
167. Id. at 1969.
168. Id. at 1965, 1970.
169. Id. at 1966 & n.5.
170. See id. at 1967.
171. Id. at 1965–67.
172. Id. at 1966–67.
173. Id. at 1967 (quoting 5 WRIGHT & MILLER, supra note 29, § 1216, 233–34).
1034 WISCONSIN LAW REVIEW
pleading of specifics.”174 Furthermore, it tacitly endorsed the bare
bones negligence-pleading template of Form Eleven by ignoring its use
by the dissenting justices.175
In its tacit endorsement of a more restrictive standard without
definitively rejecting notice pleading, the Court has sent a cryptic
message to the lower courts that a restrictive standard is appropriate in
some cases, and it has granted them the power to apply it.176 The Court
appears to suggest a more flexible, complaint-based standard that
addresses the concerns that face modern-day litigation.
The Supreme Court is ill equipped to articulate specific rules that
apply to a wide variety of situations beyond the facts at hand.177 It deals
with such situations by providing general guidance to the lower courts
and relies on their decisions in individual cases to create a cogent
standard over time.178 In Twombly, the Court’s reasoning suggests an
attempt to prod the lower courts into fleshing out these details.
Even if the Court did not intend such a result, the impact of the
opinion will be measured by its effect rather than its language.179
However, considering the history of the pleadings, it is not a given that
the lower courts will take the hint. It is entirely possible that instead of
applying the restrictive standard judiciously to certain situations, the
courts may ignore Twombly ’s reasoning and continue their all-or-
nothing approach. What the Court seems to want is a pleading standard
that is proportional to the circumstances of the claim. If this is the case,
it appears that the Twombly Court has attempted a task that is beyond
174. Id. at 1973–74.
175. Id. at 1970–71 & n.10; see also id. at 1977 (Stevens, J., dissenting).
176. The Supreme Court is not suited for creating detailed rules for when
higher and lower standards should be applied. This is the job of district courts as they
confront each of these situations over time. William E. Marsh & Andrea K. Marsh,
Judicial Federalism In the Southern District, 37 IND. L. REV. 629, 629 (2004).
177. See id.
178. See infra Part III.A.
179. Since Twombly, both lawyers and judges have seized its language to
impose, or at least advocate for, a higher standard in a particular case. See, e.g.,
Ass’n. of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548, 550 (6th
Cir. 2007); In re Elevator Antitrust Litig., 502 F.3d 47, 50 & n.3 (2d Cir. 2007);
Brown v. Kerkhoff, 504 F. Supp. 2d 464, 519–22 (S.D. Iowa 2007). As of April of
2008, a KeyCite of the 5,300 cases that have cited Twombly revealed that only seven
have distinguished it.
2008:1013 Transactional Pleading 1035
III. TRANSACTIONAL PLEADING:
A PROPOSED AMENDMENT TO FRCP 8
A pleading which sets forth a claim for relief shall
contain . . . (2) a short plain statement of the claim showing
that the pleader is entitled to relief, (3) a factual basis
proportional to the suitability of the claim for disposition
— Author’s Proposed Amendment to FRCP 8
Twombly is a passive attempt to nudge the pleading standard from
today’s quasi-rule-based system into a transactional case-type-by-case-
type approach. However, given that the Twombly court declined to
definitively articulate a new standard, the desired transactional endstate
will not be achieved by maintaining the status quo.180 Leaving the
achievement of this endstate to the status quo would require the
assumption that: (1) the courts will recognize Twombly ’s implied
endorsement of a transactional standard, and (2) the courts are capable
of applying the standard in a consistent, cogent manner. Considering
the courts’ failure to create and apply a reasonably consistent
interpretation of FRCP 8’s short plain statement in the past seventy
years,181 neither assumption is a given. There is little reason to believe
that the status quo after Twombly will somehow evolve into a coherent
case-by-case application of the Court’s reasoning on its own.182
Even if these assumptions were valid, judicial evolution of the
pleading standard would take a substantial amount of time.183 In the
meantime, both courts and litigants would struggle. Without
interpretive guidance for determining how to properly address the
180. Less than a year after the decision, just over half of the circuits have
discussed the controversial aspects of Twombly ’s holding in depth, and it appears that
confusion is already emerging. See, e.g., Iqbal v. Hasty, 490 F.3d 143, 150 (2d Cir.
2007); In re Netflix Antitrust Litig., 506 F. Supp. 2d 308, 313–14 (N.D. Cal. 2007);
In re Hypodermic Prod. Antitrust Litig., No. 05-CV-1602, 2007 WL 1874344, at *6
(D.N.J. June 29, 2007).
181. See supra Part I.C (noting the coexistence of a more restrictive standard).
182. Furthermore, the court is the wrong branch of government to be changing
FRCP 8. Although in the past the courts have stated their reticence to usurp the
legislative function by changing the rules, the existence of multiple standards makes
that assertion questionable at best. See, e.g., Marsh v. Butler County, 268 F.3d 1014,
1060 (11th Cir. 2001). Thus, from a separation of powers perspective, a formal
amendment is the proper approach.
183. Considering the fact that a cogent standard has not materialized in the
decades since the FRCP was enacted, see supra Part I.C, it is doubtful that the courts
would quickly flesh out a workable interpretation of a change to FRCP 8.
1036 WISCONSIN LAW REVIEW
policy concerns expressed in Twombly, courts will chart their own
distinct course for the foreseeable future. This result will make filing a
complaint at best a gamble, and at worst an exercise in forum shopping.
To ensure that the flexible approach implied by the Twombly
Court is applied consistently, amendments to FRCP 8 and its
interpretive notes are required. The text of FRCP 8 should be amended
to require plaintiffs to plead a “factual basis proportional to the
suitability of the claim for disposition without discovery.” Additionally,
the interpretative notes should include specific considerations to help
courts determine when a claim is suitable for disposition on the merits.
This will channel judicial discretion, and provide transparency in
judicial reasoning. Thus, articulating parameters for the courts’
exercise of their newfound (or at least newly legitimized) discretion
provides certainty in process. It will allow practitioners to shape their
arguments to the merits of the case, force judges to openly weigh the
pleading policies in a given situation, and eliminate gambles on a
particular judge’s private pleading idiosyncrasies.
A. Benefits of Transactional Pleading
A system that determines the appropriate pleading standard by
applying specific criteria to a given complaint makes the previously
mysterious judicial-reasoning process transparent and relatively
predictable at the pleading stage. Liberal notice pleading and its
restrictive counterpart are best characterized as rule-based systems that
are purported to apply to every type of claim and every factual
situation;184 by relying on a single, all-encompassing standard, they
attempt to provide certainty in results. Theoretically, plaintiffs who
plead conclusions should know their complaint will survive under a
notice-pleading standard and it will fail under a restrictive standard.
Although perhaps cognizable at the extremes, in practice, obtaining
certainty in results from a single pleading rule is an unrealistic goal.
The considerations discussed in this Note invariably creep into parties’
briefs and into courts’ decision-making process. Thus, the current
system is only quasi-rule-based at best. Furthermore, by failing to
recognize that multiple standards exist, the courts logically fail to
articulate either one.185 Outside of civil procedure text books, the scope
of the current, unarticulated pleading standard begins with permissible
184. See Clark, supra note 30, at 6.
185. Under a rule-based system, the only way to determine the standard is to
scour the reporters to find a case decided by the presiding judge that approximates the
facts in issue.
2008:1013 Transactional Pleading 1037
conclusions, and ends with a requirement for increased factual
By articulating and channeling the considerations that justify both
standards, the transactional approach seeks the attainable goal of
ensuring transparency and predictability in the pleading process. Thus,
parties may not know if their claim will ultimately survive, but they
will know the standard that will be applied by the court. As a result,
litigants will be better able to shape their arguments and assess the
validity of clients’ claims based on the substantive law and the facts
Any transactional approach will naturally be criticized as
inefficient and vulnerable to judicial creativity; however, neither of
these criticisms applies with particular force in this case. First, although
the transactional standard may require increased judicial effort at the
pleading stage, it will necessarily eliminate more meritless claims that
would otherwise fail on summary judgment after protracted discovery.
Additionally, articulating when each standard will apply rather than
forcing lawyers to guess the outcome of a motion to dismiss will
enhance client counseling, further assisting the filtering process on both
ends. Second, the transactional approach acts as a constraint on courts
considering motions to dismiss. Under the current system, where a
judge makes a determination of whether a complaint constitutes a short
plain statement, the opportunity for judicial interpretation is
considerable. The judge is simply interpreting what a short plain
statement means to him. By forcing courts to consider complaints in
light of specific considerations, the opportunity to exercise judicial
discretion beyond the scope of the rule will be limited.
B. Application of the Transactional Standard
For the transactional standard to produce both equity and certainty
through transparency of process, additional interpretative guidance to
the language of the proposed rule is necessary. Otherwise, the language
of the rule would meet the same chaotic fate as the current pleading
standard.186 The good news is that the guidance for the application of a
transactional-pleading standard already exists in rough, unarticulated
form. The courts have already considered many of the policies that
186. In a diverse federal judicial system, consisting of thousands of judges
reviewing tens of thousands of complaints per year, use of the term facts in the
proposed standard creates a potential problem. Left uninterpreted, the language raises
the specter of a return, at least in some respects, to the problems of common-law
pleading. See supra Part I.A. This danger dictates that the scope of the rule be carefully
1038 WISCONSIN LAW REVIEW
dictate whether a claim is, or is not, suited for prediscovery disposition
in the express and implied justifications offered for different standards
in the past.187 These policies simply need to be articulated and refined
as interpretive notes to the proposed amendment.
To determine the degree to which a particular claim is suitable for
disposition without discovery, the courts must consider the following
criteria: (1) the probability that the claim was brought as a strike suit,
(2) whether the substantive law of the claim permits the court to
identify meritless claims with minimal risk, (3) whether the nature of
the claim places critical evidence disproportionately in the defendant’s
control and out of the plaintiff’s reach, and (4) whether specific public
policies justify the imposition of a certain standard, regardless of any
inequities it may produce.
1. STRIKE-SUIT PROBABILITY
In the past, courts applying the restrictive standard routinely
justified FRCP 12(b)(6) dismissals on the concern that the complaint
was filed for its in terrorem effect without further explanation.188 To
these courts, the term strike suit is indivisible and self-explanatory, and
that, like obscenity, they will know it when they see it.189 They fail to
explain why the danger exists in a particular case and how the danger
can be identified.190 Although the overarching purpose of these courts is
187. See supra Parts I.B–C. Furthermore, balancing specific criteria is not a
foreign concept to the FRCP. Rules such as FRCP 24(b) and FRCP 19(b) require the
court to balance specific criteria in deciding whether to allow intervention or require
joinder. FED. R. CIV. P. 19(b), 24(b).
188. See, e.g., Franchise Realty Interstate Corp. v. S.F. Local Joint Exec. Bd.
of Culinary Workers, 542 F.2d 1076, 1083–84 (9th Cir. 1976); Schwartz v. NCNB
Corp., 768 F. Supp. 164, 166 (W.D.N.C. 1991) (“The Court notes the possibility that
this case, as well as the others, may have been brought for its in terrorem value). The
generic concern for strike suits is also used as a patent justification for the particularity
requirements of FRCP 9. Decker v. Massey-Ferguson, Ltd., 534 F. Supp. 873, 877
(S.D.N.Y. 1981) (“[T]he specificity requirement of Rule 9(b) serves also the purpose
of discouraging ‘strike suits’ that might be brought by plaintiffs with largely groundless
claims, relying on their in terrorem effect to argument the suit’s settlement value.”).
189. Jacobellis v. Ohio, 378 U.S. 184, 197 (1964) (Stewart, J., concurring) (“I
shall not today attempt further to define the kinds of material I understand to be
embraced within [obscenity]; and perhaps I could never succeed in intelligibly doing so.
But I know it when I see it . . . .”). This also assumes, less logically, that lawyers will
do the same. Even when courts do consider some of the factors that produce a
likelihood of strike suits, they do so inconsistently, preventing the establishment of any
sort of cogent standard. See, e.g., Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1988
(2007) (Stevens, J., dissenting).
190. This may be an overgeneralization; many courts applying the restrictive
standard have considered the components of a strike suit. However, few have
2008:1013 Transactional Pleading 1039
correct191—a higher standard should be applied to complaints that are
more likely to be brought for their in terrorem effect—the justification
is overly general. Without parsing the general policy into its
components, a court runs the risk of erroneously applying the
restrictive standard to claims where the concern does not exist. This
will create a workable standard for courts to apply, and litigants to
argue, when a motion to dismiss is presented.192
Given the circumstances of a particular claim, a court applying the
transactional standard must determine the significance of the threat that
the claim was brought for its in terrorem value.193 The risk, and thus
the justification for additional particularity, can be evaluated under the
following criteria: (1) the incentive for a defendant to settle, (2) the
incentive for a plaintiff to bring an unmeritorious claim, and (3) the
potential cost of discovery.194 Some of these factors allow for a
dispositive determination that the claim was not brought for its in
terrorem effect, and permit the court to liberally construe the pleadings.
Other factors require the court to exercise its judgment based on the
arguments presented and demand increased particularity.
a. Defendants’ incentive to settle
The impositional value of a claim increases in proportion to the
amount of damages available under the substantive law.195 Although the
possibility of losing a verdict and incurring liability is somewhat
remote, especially if the claim really is a strike suit, the possibility of
liability remains a factor in the defendant’s decision to settle. Anytime a
claim is placed in the hands of a jury, uncertainty exists regardless of
the merits.196 This uncertainty increases when the plaintiff is
considered more than one or two, and none have attempted to define a workable
standard. See, e.g., Franchise Realty, 542 F.2d at 1083; Decker, 534 F. Supp. at 877.
191. This approach acknowledges that discovery and summary judgment are
not the complete panacea that Clark intended, and blind application of the liberal
standard has given rise to a significant threat of in terrorem strike suits. See supra Part
192. FED. R. CIV. P. 56.
193. The “significance” of a threat is a circumstantial determination made on a
194. See Twombly, 127 S. Ct. at 1967.
195. Russell Korobkin & Chris Guthrie, Psychological Barriers to Litigation
Settlement: An Experimental Approach, 93 MICH. L. REV. 107, 111 (1994) (discussing
the psychology behind settlement offers); see David A. Hoffman, The “Duty” to Be a
Rational Shareholder, 90 MINN. L. REV. 537, 571–72 n.152 (2006).
196. Daniel R. Cahoy, Medical Product Information Incentives and the
Transparency Paradox, 82 IND. L.J. 623, 647 (2007).
1040 WISCONSIN LAW REVIEW
particularly sympathetic.197 The greater the amount at stake, and the
greater the uncertainty of the outcome, the more likely a defendant will
be to accept a settlement offer that is out of proportion to the merits of
the case. Thus, under the transactional standard, the nature of the
remedies available to the plaintiff should be influential in determining
the level of particularity required from the complaint. In the past,
courts applying a restrictive standard have come to the same
conclusion.198 They have required greater particularity when a drastic
remedy was at stake.199 Although many of these instances involve
antitrust, RICO, or in rem actions, the concept logically extends to
other claims where drastic remedies are available.200
The significance of the remedy must be objectively measured for it
to be an effective tool to tailor the pleadings to detect and prevent strike
suits. Under the transactional standard, the significance of the remedy
in each claim should be examined in light of the defendant’s total
assets. From the defendant’s perspective, if the size of a potential
plaintiff’s verdict201 would have a significant effect on his assets or
business activities, the threat of abusive litigation increases and the
pleading standard should be proportionally restricted. A potential award
of millions of dollars means different things to a corporation with a
market capitalization in the billions and a small business with $300,000
of annual revenue. For example, in tobacco producer Phillip Morris’s
197. Id. The impositional threat of a jury verdict may also increase when the
case is one where the jury may be predisposed to find for a particularly sympathetic
plaintiff. Frank B. Cross, In Praise of Irrational Plaintiffs, 86 CORNELL L. REV. 1,
16 (2000) (noting that defendants may make large settlement offers to sympathetic
plaintiffs); Christopher A. Young, In Search of Consistency: Jury Instructions under
Rule 51 of the Federal Rules of Civil Procedure, 83 IOWA L. REV. 471, 475–76 (1998)
(“[J]uries may be prone to award a settlement to a sympathetic plaintiff . . . .”).
198. See, e.g., Franchise Realty Interstate Corp. v. S.F. Local Joint Exec. Bd.
of Culinary Workers, 542 F.2d 1076, 1082–84 (9th Cir. 1976). Cf. United States v.
Pole No. 3172, 852 F.2d 636, 640–41 (1st Cir. 1988) (considering a motion to dismiss
under Federal Supplemental Rule of Civil Procedure E(2)); United States v. $39,000 in
Canadian Currency, 801 F.2d 1210, 1216–18 (1986) (same).
199. See, e.g., Bache Halsey Stuart Shields, Inc. v. Tracy Collins Bank &
Trust Co., 558 F. Supp. 1042, 1045–47 (D. Utah 1983).
200. See, e.g., Franchise Realty, 542 F.2d at 1084 (antitrust); Pole No. 3172,
852 F.2d at 640–41 (in rem ); Canadian Currency, 801 F.2d at 1218 (in rem ); Shapiro
v. General Motors Corp., 472 F. Supp. 636, 660 (D. Md. 1979) (“Given the possibility
of treble damages should the plaintiff prevail, one can readily understand that even
from the outset, the in terrorem effect of an antitrust complaint has a settlement value to
the plaintiff ‘out of any proportion to its prospect of success at trial so long as he may
prevent the suit from being resolved against him by dismissal or summary judgment.’”
(quoting Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 740 (1975))).
201. Although the most pressing remedy in potential strike suits is monetary,
the courts must also consider the effect of proposed injunctive relief.
2008:1013 Transactional Pleading 1041
libel suit against ABC News, the incentive to settle was certainly
elevated when ABC, a corporation with less than $700 million in
annual net income, was confronted with a $10 billion demand for
damages.202 The converse is also true, and the standard should be
lowered when the remedy available is inconsequential in relation to the
Under the transactional standard, the court should be hesitant to
consider the second order, noneconomic effects of litigation on the
defendant’s willingness to accept an impositional settlement.203 All
litigation is personally taxing and most claims subject defendants to
some form of reputational damage. Using this as a justification for
requiring plaintiffs to plead with particularity would cast the net too
broadly, as nearly every claim would fall into this category.
b. Incentive for plaintiffs to bring strike suits
Under the transactional standard, if there is no incentive for a
plaintiff to bring a meritless claim in a particular case, the concern for
strike suits cannot justify any requirement for increased particularity. A
plaintiff has little incentive to bring a strike suit when he will not
receive a significant benefit beyond the cost of bringing the suit.204 To
determine whether the plaintiff has an incentive to bring a strike suit,
the circumstances surrounding each party must be considered.205
A plaintiff has little incentive to seek an impositional settlement
when the potential recovery under the substantive law is insignificant in
relation to the plaintiff’s total assets.206 For example, a wealthy plaintiff
has little incentive to bring a strike suit when his potential recovery is
less than his monthly mortgage payment. Thus, the pleading standard
applied should be correspondingly liberal. Even if the potential
recovery is significant in relation to the plaintiff’s financial situation,
the incentive to bring a claim of questionable merit only exists when the
potential recovery greatly exceeds the plaintiff’s litigation costs as well.
202. See Weinberg, supra note 122.
203. The noneconomic effects of litigation have been cited frequently as a
justification for the application of a higher standard in the past. Supra Part I.C.
204. Examinations of the pleadings often ignore the fact that litigation is
expensive for plaintiffs as well.
205. This approach deliberately ignores the possibility that a plaintiff may bring
a grudge suit solely out of animus towards the defendant that does not benefit him
financially or otherwise. See Korobkin & Guthrie, supra note 195, at 111.
206. This is a logical conclusion assuming the plaintiff is not irrational as
defined by Professor Cross. See Cross, supra note 197, at 1.
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A more restrictive standard is similarly inappropriate when the
defendant is essentially judgment proof.207 A plaintiff would have
minimal motivation to file a meritless claim when any potential verdict,
no matter how large, could not be satisfied.208 Although not articulated
by the courts in the past, this factor can be used to dispositively
eliminate the risk of a strike suit and apply a liberal standard to the
pleadings.209 When the financial situation of the defendant renders the
recovery of a large award impossible or unrealistic, the motive for
strike suits disappears and with it, the need for additional scrutiny.
c. Cost of discovery
We have thirty lawyers and paralegals working day, night,
[and] weekends without break, going through these 2.5
million documents. These people are… away from their
homes, they have not been back to their families on
There is no guarantee that a plaintiff who survives a motion to
dismiss will win at trial. However, every plaintiff who sufficiently
states a claim is entitled to at least some level of discovery.211 The
potential cost of discovery plays the predominant role in the continuing
viability of strike suits.212 However, under the transactional approach,
an unhappy marriage between liberal pleading and unlimited discovery
is not inevitable.213 Instead, courts must consider claims on a case-by-
207. For the purposes of this Note, judgment proof does not to refer a
defendant who is unable to pay at all, but rather a defendant who cannot pay enough to
make filing an impositional suit a financially viable venture for an abusive plaintiff.
208. See Korobkin & Guthrie, supra note 195, at 111.
209. Antitrust cases are commonly associated with the application of the
restrictive standard, and in nearly every case the defendant could be characterized as
“deep pockets.” See, e.g., Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S. Ct.
2499, 2507–09 (2007); Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 763–
64 (1984); Klebanow v. N.Y. Produce Exch., 344 F.2d 294, 299 (2d Cir. 1965); In re
Netflix Antitrust Litig., 506 F. Supp. 308, 314 (N.D. Cal. 2007); Hyland v.
Homeservices of Am., Inc., No. 3:05-CV-612-R, 2007 WL 2407233, at *1, 3 (W.D.
Ky. Aug 17, 2007). This also may be because plaintiffs simply do not bring strike suits
against judgment-proof defendants.
210. See Weinberg, supra note 122, at 103 (statement of Phillip Morris
attorney, Herbert Wachtell).
211. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (“[T]he plain
language of Rule 56(c) mandates the entry of summary judgment, after adequate time
for discovery . . . .”).
212. Supra Part I.C. Unlike trial, discovery is an inevitable cost that
materializes once the plaintiff survives a motion to dismiss.
2008:1013 Transactional Pleading 1043
case basis to determine whether the threat of discovery actually exerts
an impositional effect. To answer this question the court must examine:
(1) the potential scope of discovery requests and the concomitant costs
incurred by the defendants in fulfilling them, and (2) the ability of the
court to control abusive discovery practices in a given situation.
Courts applying the transactional standard must consider whether
the potential scope of discovery is significant enough to impose costs
sufficient to extract an in terrorem settlement. When production of the
evidence required by a request of at least arguable validity would
impose a significant cost on the defendant in comparison to his total
assets, the risk of a strike suit increases and with it, the standard
applied to the pleadings. Although not limited to these situations, this is
a familiar situation in complex antitrust litigation and other similar
claims against large corporate defendants.214 On the other hand, when
the issues involved are relatively simple and require minimal production
or expense in comparison to the defendant’s assets, the concern for
impositional discovery logically decreases.
Under the transactional approach, even when the potential for
prohibitively expensive discovery exists, discovery is unlikely to force
an impositional settlement if the court is capable of controlling the
process. FRCP 26 provides mechanisms that, at least in some cases,
allow the court to narrowly tailor discovery to fit a particular
situation.215 The standard applied to the pleadings should therefore be
tailored to the courts’ apparent 216 ability to control discovery. When the
court is capable of preventing, or at least reducing abusive discovery
practices, the risk of an impositional settlement decreases and with it,
the particularity required from the pleadings.217 However, when the
214. See, e.g., Arista Records LLC v. Lime Group LLC, 532 F. Supp. 2d
556, 585 (S.D.N.Y. 2007) (electronic equivalent of 29 million pages of documents); In
re NextCard, Inc. Sec. Litig., No. C-01-21029-JF(RS), 2003 WL 23142199 (N.D. Cal.
Sept. 17, 2003) (16 million pages of documents).
215. FED. R. CIV. P. 26(b)–(g); see also Crawford-El v. Britton, 523 U.S. 574,
598 (1998). A court may take into account the burden or expense of the proposed
discovery in relation to its benefit. The tools available to the court include limiting the
number and length of depositions and interrogatories, and determining the scope and
sequence of the process in general. Id. at 598–99; Martin v. D.C. Metro. Police Dept.,
812 F.2d 1425, 1437 (D.C. Cir. 1987).
216. If the court is able to control discovery, but the defendant is unaware of its
capability, the danger still exists. This is because the threat of discovery, rather than the
cost of discovery itself, is the basis for impositional claims. See Easterbrook, supra
note 63, at 637.
217. Judge Easterbrook would likely contend that discovery can be tagged as
abusive only in retrospect, thus the courts are incapable of controlling the process. See
id. at 639–40. The transactional approach assumes that discovery abuse will continue,
but to a lesser extent.
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mechanisms in FRCP 26 are insufficient to enable judicial control of
discovery, and both parties are aware of this, strike suits become more
viable and the pleadings warrant closer scrutiny.
Because judges “cannot prevent what [they] cannot detect [and
they] cannot detect what [they] cannot define,”218 the courts are ill
equipped to control the discovery process when the issues involved in a
particular case are beyond the scope of a court’s substantive
knowledge.219 A judge who does not understand the particulars of a
factually complex claim cannot discern a frivolous fishing expedition
from a legitimate production request.220 Where the facts of a claim are
beyond the substantive knowledge of the court, it is unlikely that the
court will ever be equipped to regulate discovery without hiring an
independent expert to act as a special master.221 This may occur in
highly technical cases where the proof revolves around complex
scientific issues that a judge should not be expected to fully understand
until he is educated by the parties.222 If this situation exists, the court
may be justified in raising the level of particularity required in the
claim to ensure that it is properly educated prior to allowing discovery
218. See id. at 639.
219. Id. at 645; see also DM Research, Inc., v. Coll. of Am. Pathologists, 170
F.3d 53, 54–56 (1st Cir. 1999). Obviously different judges have different areas of
expertise. Certain judges may understand the complex economic and biological
concepts required to actively manage discovery in an antitrust dispute involving stem-
cell research, while others would be in the dark. Because the ability of the court to
control discovery must be objectively apparent to the parties to prevent strike suits, the
transactional standard rejects the relevance of subjective knowledge of the particular
judge in a particular situation and instead objectively considers the average judge.
220. Easterbrook, supra note 63, at 638–39 (“We cannot prevent what we
cannot detect; we cannot detect what we cannot define; we cannot define ‘abusive’
discovery except in theory, because in practice we lack essential information.”). Under
Judge Easterbrook’s view, notice pleading is the primary reason why the courts are
incapable of managing discovery. Id. at 639.
221. Research indicates that cases managed by magistrates are even less
efficient for a variety of reasons that are beyond the scope of this Note. Id. Even if
assisted discovery proved to be less prone to abuse, it is unlikely that the financial
resources exist to implement it outside of a minimal number of particularly complex
222. The courts deal with complex issues every day that are beyond the scope
of common knowledge; thus, the level of complexity must be one such that the court
could not be expected to know what a particular discovery request would entail from
the producing party.
2008:1013 Transactional Pleading 1045
2. UNDERLYING SUBSTANTIVE LAW
Professor Richard Marcus notes that, although courts are generally
ill suited to consider the merits at the pleading stage,223 merit-based
disposition is not only possible in limited situations, but desirable when
the substantive law has sharpened to the point where the court can
identify specific, missing elements of the claim.224
When the substantive law underlying a claim has been reduced to a
series of quantifiable and concrete elements, the court can definitively
find that one of the requirements has not been met, and the risk of
dismissing a legitimate claim is minimal.225 When this situation exists,
plaintiffs may logically and reasonably be required to include them in
the complaint, provided that the facts are not uniquely within the
defendant’s control.226 Marcus cites the judicial requirement for
securities-fraud plaintiffs to be purchasers or sellers as one such
example where the court can determine whether a claim has merit on
the face of the pleadings.227 Requiring a plaintiff to plead minimal
threshold facts that would definitively reveal whether a specific and
necessary element of a claim is satisfied imposes a small burden in
exchange for judicial efficiency.
On the contrary, the substantive law of many claims is general in
nature and eschews the application of specific, quantifiable criteria. As
the law becomes more general,228 the capability of the court to
accurately assess the merits of the case on the complaint decreases. For
example, in a negligence case, a few precise facts included in the
pleading would be of little assistance to a court in determining whether
the defendant acted within the common-law standard of care.229
3. ACCESSIBILITY OF EVIDENCE AND KNOWLEDGE DISPARITIES
Under the transactional standard, the level of factual particularity
required is also influenced by the comparative knowledge of the parties
223. Marcus, supra note 32, at 483.
224. Id. at 460. Professor Marcus also notes a second situation where a
plaintiff pleads himself out of court by including facts that allow the court to
definitively conclude the defendant has not violated the plaintiff’s rights. Id. at 462–63.
This avenue, while valid, will exist regardless of the standard the court applies to the
pleadings and thus is not discussed here.
225. See generally id. at 462–63.
226. See supra Part I.B.
227. Marcus, supra note 32, at 460.
228. Marcus notes that the law is migrating away from concrete subrules. Id. at
229. See, e.g., Hughes v. Boston, 51 A. 1070, 1070–71 (N.H. 1902).
1046 WISCONSIN LAW REVIEW
involved. When the plaintiff knows or should know all facts necessary
to state a claim with greater particularity, the court should naturally
apply a more restrictive standard. Such a requirement imposes a
minimal burden.230 On the other hand, when a claim is such that the
information is primarily in the hands of the defendant and can only be
obtained through discovery, the court should be more inclined to apply
the liberal standard. When the necessary facts are particularly within
the defendant’s control, a dismissal on the pleadings runs the risk of
terminating a claim that could be revealed to be legitimate after
minimal discovery.231 Furthermore, applying a more restrictive standard
even when the plaintiff is unable to independently obtain the
information would encourage defendants to engage in hardball
discovery by hiding documents and otherwise skirting the fringes of
FRCP 26.232 Considering the comparative knowledge of the parties at
the pleading stage will also collaterally serve to simplify some areas of
the law. For instance, an employee bringing a claim under Title VII is
often at a great informational disadvantage.233 Thus, the transactional
approach would permit a factually sparse complaint and eliminate the
need for the presumption accorded to a plaintiff’s prima facie showing
that discriminatory intent appears to be present.234
4. SPECIFIC, OVERRIDING PUBLIC POLICIES
Even when additional criteria for applying increased scrutiny to the
pleadings are absent, a certain standard may be justified when
comparing specific public policies to the risk of inadvertently
dismissing legitimate claims or permitting abusive litigation. This Note
discusses two such instances, civil-rights claims against public
officials235 and complaints which operate to independently chill
expressions protected under the First Amendment.236 The claims
230. Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 347 (2005) (“[I]t should not
prove burdensome for a plaintiff who has suffered an economic loss to provide a
defendant with some indication of the loss and the causal connection that the plaintiff
has in mind.”).
231. See supra note 85 and accompanying text. This is a situation where the
court could effectively allow brief discovery.
232. Charles Toutant, Candid Comments about Discovery Bring Lawyer
National Notoriety, LAW.COM, Sept. 21, 2004, http://www.law.com/jsp/law/LawArti
233. See Walker v. Mortham, 158 F.3d 1177, 1192 (11th Cir. 1998).
234. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973)
(discussing plaintiffs’ presumption).
235. See supra Part I.B.
2008:1013 Transactional Pleading 1047
discussed are examples of situations where a specific public policy
warrants a restrictive standard regardless of the danger of unwarranted
dismissal posed to legitimate plaintiffs. These policies are not
exclusive.237 For instance, the courts are generally in agreement that the
interest in protecting pro se litigants outweighs a concern for abusive
practices, and such plaintiffs should be entitled to plead with less
factual particularity than their well-represented counterparts.238
Twombly ’s reasoning has brought a standard that was applied
pervasively, but surreptitiously, out of the shadows. It has given federal
courts the power to articulate the discretion that many of them had
already seized decades ago. However, a quick glance at pleading’s past
reveals that unbridled judicial creativity can be a dangerous thing where
pleadings are concerned. The transactional standard channels judicial
discretion and provides transparency and certainty in process, while
simultaneously ensuring that courts retain the power to equitably cull
their ever-expanding dockets before discovery begins.
237. Statutory claims that depend on private enforcement provide one example.
See, e.g., Atl. Richfield Co. v. USA Petrol. Co., 495 U.S. 328, 345 (1990); Cargill,
Inc. v. Monfort of Colo., Inc., 479 U.S. 104, 112 (1986); Hill Richards, Inc. v.
Berner, 472 U.S. 299, 319 (1985).
238. See, e.g., Erickson v. Pardus, 127 S. Ct. 2197, 2200 (2007) (“[A] pro se
complaint, however inartfully pleaded must be held to less stringent standards than
formal pleadings drafted by lawyers.”); see also Hughes v. Rowe, 449 U.S. 5, 9
(1980); Haines v. Kerner, 404 U.S. 519, 520 (1972).