You Mean Leegin's Not the Only SCOTUS Antitrust Case?

Josh Wright —  28 March 2007

While we have been going on and on and on about Leegin here at TOTM, Manfred Gabriel offers a detailed analysis and a prediction on Twombly, the pending SCOTUS case which may provide some important guidance on 12(b)(6) standards.  Gabriel predicts that the Court will neither embrace the District Court’s ruling that plus-factors must be pleaded in a complaint to survive a motion to dismiss nor adopt the Second Circuit’s holding.  Instead, Gabriel predicts that the Court will:

at least reformulate the rule that naked allegations are insufficient, and that under Rule 8(a) the standard is that there must be “no set of facts” under which a claim is stated.

Gabriel expands a bit on how he expects the Court to articulate the pleading standards:

I expect to see three categories of pleadings emerge. The first is one where parallel conduct is in itself so suspicious that it states the claim, as in Scalia’s example. The second category is the allegation of facts relating to the formation or maintenance of the conspiracy: who participated in the conspiracy, where were conspiratorial meetings held, and when (the plaintiffs in Twombly only pleaded that the alleged conspirators had ample opportunity to meet and conspire). In such an instance, the courts will not be required to ask about the plausibility of a conspiracy. In the third category of cases, the Supreme Court will require more than a naked allegation of conspiracy, but less than plus factors, which are meant to show that the alleged parallel conduct “tends to exclude the possibility of normal competitive behavior.” If such a pleading were required to survive 12(b)(6), the district courts would find themselves embroiled in economic theories before the facts of the case had been sufficiently developed, a result the Supreme Court will shy away from. What is left then, is that complaints must allege how the conspiracy was not normal competitive behavior and what normal competition would have looked like but for the conspiracy.

Very interesting.  Definitely worth reading the whole thing.

See also Randy Picker’s view of the Twombly tea leaves here.