Failure to State a Claim

Failure to State a Claim

A defendant with a preliminary objection to the suit need not answer the complaint at once; the defendant may move to dismiss instead.¹ One objection Rule 12(b) recognizes is “failure to state a claim upon which relief can be granted.”² The defendant who raises it does not deny what the complaint says. She argues that even if the plaintiff proves every fact alleged, governing substantive law gives no relief.³ Nothing the plaintiff proves later can rescue a claim the law does not recognize, so a trial would accomplish nothing.

The motion exists for exactly that situation. When the claim is legally empty, the court can short-circuit the process and dismiss at the outset; that is what Rule 12(b)(6) is designed to do.⁴ The motion can also be selective: a defendant may move under Rule 12(b)(6) against some claims and under Rule 12(e) against others without any logical inconsistency.⁵

The subsections below follow the order in which a court works. The court reads the complaint under settled conventions, asks how much factual detail the complaint must supply, looks for defects that justify dismissal on the face of the pleading, and finally decides whether the plaintiff may try again, because a Rule 12(b)(6) ruling often does not end the suit.

Assumed Truth and Four Corners

The defense of failure to state a claim tests one thing: the legal sufficiency of the complaint.⁶ To test it without trying the case, courts read the complaint under two conventions. First, as Erickson v. Pardus put it, a judge ruling on a motion to dismiss “must accept as true all of the factual allegations contained in the complaint,” and the court draws all reasonable inferences for the non-moving plaintiff.⁷ Second, the court stays inside the complaint.

The first convention follows from what the movant argues. A defendant who says the law gives no relief even if every allegation is proved does not dispute the allegations, so the court has no need to decide whether they are true.⁸ A judge who weighed how believable the story sounds would be finding facts before discovery. The court therefore may not consider the likelihood that the plaintiff can prove the allegations; it must assume the plaintiff will prove them.⁹ The allegations earn that credit “even if doubtful in fact,” and the plausibility standard that followed kept the credit.¹⁰

The inference convention matters because few complaints state every link. The court asks whether the complaint contains “either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory.”¹¹ The inference must be reasonable: courts do not conjure up unpleaded facts that might turn a frivolous claim into a substantial one.¹²

The second convention keeps the motion from becoming a trial on paper. A Rule 12(b)(6) motion, like the demurrer before it, may neither allege new facts nor contest the facts the plaintiff asserts; it challenges only the legal sufficiency of the facts alleged.¹³ The movant’s own account of events belongs in the answer and, later, in evidence. If the movant hands the court material outside the pleadings and the court does not exclude it, the motion must be treated as one for summary judgment under Rule 56, and all parties must be given a reasonable opportunity to present the pertinent material.¹⁴ A later section takes up that conversion.

The whole motion turns on the line between legal sufficiency and truth. Suppose a plaintiff sues because the defendant frowned at her and she suffered emotional pain. A motion to dismiss for failure to state a claim in effect admits the frown and the pain and denies only that the behavior is actionable, that it amounts to a tort.¹⁵

A defendant who argues that the story is false has chosen the wrong stage. Suppose a detainee dies by suicide in a county jail, and the estate alleges that the officers had reason to know of the risk. The county answers that they had no such reason. That answer disputes an allegation; it does not say the law bars recovery if the allegation is true. Because the motion may not contest the plaintiff’s facts, the court cannot dismiss on that ground, and the dispute goes forward to discovery and, if warranted, to summary judgment or trial.¹⁶

Legal conclusions earn no such credit. A plaintiff’s obligation to show an entitlement to relief “requires more than labels and conclusions, and a formulaic recitation of a cause of action’s elements will not do.”¹⁷ The court’s first step is to disregard purely conclusory allegations.¹⁸ The four corners confine the facts, not the law. Whether a set of facts amounts to a claim the law recognizes is the very question the motion presents, and the court answers it from governing substantive law whether or not the complaint quotes it.¹⁹

The Plausibility Standard

Rule 12(b)(6) names the defense but says nothing about how much factual detail a complaint must carry.²¹ Two Supreme Court decisions filled that gap. In Bell Atlantic Corp. v. Twombly, decided in 2007, the Court reread Rule 8 to require that the facts in a complaint, assumed true, add up to a “plausible” claim; it reached heightened pleading that way rather than by extending Rule 9(b).²² Ashcroft v. Iqbal then supplied the method for applying the standard.²³

Before Twombly, courts quoted a sentence from Conley v. Gibson: a case should not be dismissed “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”²⁴ Under that test a court was not to inquire whether the plaintiff might be unable to prove the facts alleged. It construed the claim in the light most favorable to the plaintiff and assumed he would prove them.²⁵ Read for all it was worth, the sentence let a bare conclusion survive so long as some imaginable set of facts could support it.

Twombly shows the risk. The plaintiffs alleged that the regional telephone companies that emerged from the break-up of the AT&T monopoly had conspired to restrain competition in violation of the Sherman Act, among other ways by refusing to compete in one another’s markets.²⁶ A complaint that stops at asserting an agreement, with no fact suggesting one, leaves the court asking what the plaintiff hopes to find. The Court observed that a pleading approach demanding no “reasonably founded hope” of making a case would let “Mr. Micawber’s optimism” suffice.²⁷

So the Court retired the phrase rather than refining it. The “no set of facts” language, it explained, is an incomplete, negative gloss on an accepted pleading standard: it describes what a plaintiff may show once a claim has been stated adequately, not how much a complaint must allege to state one.²⁸ The accepted standard requires direct or inferential allegations about every material element needed for recovery under some viable legal theory, and when a plaintiff supplies facts, courts do not conjure up unpleaded ones.²⁹ Because the older test dismissed only when the plaintiff could prove nothing, the plausibility requirement is a heightened one.³⁰

The Court’s reason was the cost of discovery. It rejected the idea that groundless claims can be weeded out later through careful case management, scrutiny at summary judgment, or lucid jury instructions, because judicial supervision has had only modest success checking discovery abuse and because the threat of discovery expense pushes cost-conscious defendants to settle even anemic cases before those later proceedings arrive.³¹ A screen that works after discovery protects the defendant from an unjustified judgment but not from the bill. Only an early screen can do both, and that is what plausibility review supplies.

Iqbal described the review as a two-step process. In step one, the court disregards purely conclusory allegations. In step two, it grants the motion if no plausible set of facts the plaintiff could prove would warrant relief.³² The Court applied that method to a complaint against senior federal officials, so the standard is no antitrust specialty.³³ Plausibility is also a legal question, not a forecast. It is not enough that the judge thinks the plaintiff very unlikely to prove the allegations; the question is whether liability is legally plausible assuming the alleged facts are all true.³⁴

A complaint with concrete facts clears the screen without difficulty. In Matos v. Nextran, the plaintiff alleged that the defendant designed, manufactured, and sold a truck, mounted a cement mixer on it, and was responsible for checking it for defects. Those allegations let the court infer a duty and a breach, so the negligence claim survived even though the pleading was inartful.³⁵ The plaintiff pleaded who built the truck, who mounted the mixer, and who was responsible for inspection, and a court can turn those facts into an inference of fault without guessing at anyone’s state of mind.

The standard has critics, and the older view explains why. Courts have long viewed a motion to dismiss with disfavor, partly because the primary objective of the law is a decision on the merits and a case should be tried on the proofs rather than the pleadings.³⁶ On that view, the later stages of a case sift claims against evidence, and the pleadings need not do the work. The Court answered with the cost argument above. A cost the standard does impose is that plaintiffs must plead facts before discovery has given them access to the defendant’s records, and plaintiffs who meet that burden do so by pleading concretely the facts they know.

Defects Visible on the Face

Rule 12(b)(6) permits dismissal for “failure to state a claim upon which relief can be granted,” and a complaint can fail that test in three recognizable ways.⁴¹ A defect shows on the face of the complaint when its own allegations, assumed true, establish that the suit cannot end in relief, so the court needs nothing outside the pleading to see it. The three defects are a wrong the law does not recognize, an element the claim requires that the complaint omits, and a complete defense that the complaint itself reveals. Each makes further litigation pointless for a different reason, and the reason decides whether the plaintiff gets a second chance, a question the next subsection takes up.

The first defect is a claimed wrong that the law does not treat as a violation of any right. Even complete proof of the complaint would leave the court with no relief to give.⁴² Suppose Ferraro sues Gramm for voting Republican after Gramm promised not to. The law does not recognize a right to have promises performed unless consideration, estoppel, or some other act makes the promise binding, so Ferraro could prove the promise and the broken vote and still recover nothing; proceeding would only burden the court and the parties.⁴³ The flaw lies in the law, and no rewording of the complaint can repair it.

A smaller version appears in Matos, where the plaintiffs pleaded a separate count for punitive damages. The court dismissed it because there is no independent, free-standing claim for punitive damages; they are an element of damages on a claim, typically one of intentional or grossly reckless conduct, and a count for them alone is like pleading a count for $5,000 without pleading any basis for liability.⁴⁴ The dismissal was without prejudice to the plaintiffs’ request for punitive damages at the appropriate stage, should they prove a count that supports them.⁴⁵

The second defect arises when the law recognizes the claim but the complaint omits one of its elements. Suppose Berlin sues Porter for malicious prosecution, and the complaint does not allege that the earlier proceeding ended in Berlin’s favor. Porter may move to dismiss for failure to state a claim, because Berlin has not alleged all the necessary elements.⁴⁶ Unlike Ferraro, Berlin sued on a wrong the law recognizes, so the problem lies in his pleading, and whether it can be fixed depends on facts outside the complaint. If the earlier case did end in his favor and he merely left that out, amendment cures the defect. If it did not, no truthful amendment can supply the element.⁴⁷

The third defect is a complaint that reveals a conclusive affirmative defense, one that does not deny the plaintiff’s account but supplies an independent reason the plaintiff loses anyway. Such a complaint may be dismissed under Rule 12(b)(6).⁴⁸ The statute of limitations is the familiar example: if the plaintiff’s own allegations show that any cause of action would be time-barred, nothing remains to try. The qualifier is that the defense must be conclusive on the face of the pleading.

One situation resembles a defect and is not one. A complaint that does not name the legal duty the defendant violated will probably survive if its facts give the defendant an idea of what the suit is about. Neighbors who allege that a nuclear plant emitted heavy radiation for several days and physically injured them, and who ask for damages without naming the duty violated, have probably said enough, and the thin description of their damages is probably not fatal either.⁴⁹ The facts carry the weight in a pleading, and a legal label adds nothing a judge cannot supply. A pleading so garbled that the defendant cannot reasonably prepare a response presents a different problem, and the remedy there is a motion for a more definite statement under Rule 12(e).⁵⁰

The first two steps cause the most confusion between categories. The question is not how many facts the complaint contains but whether the missing piece belongs to the law or to the pleader.

Leave to Amend

A Rule 12(b)(6) motion attacks the pleading on its face, and a ruling that grants it usually leaves the plaintiff a way back into the case. The plaintiff may hold a good claim that the complaint simply failed to plead. Leave to amend, meaning permission to file a corrected complaint, is routine when the complaint merely lacks an allegation corresponding to an element of the claim, because the flaw may be a pleading oversight that amendment cures rather than an absence of facts that nothing cures.⁵² The exception follows from the reason for the practice: a chance to amend is worth giving only if an amended complaint could succeed.

In Matos, the court gave the plaintiffs leave to amend on its own initiative, or sua sponte, after dismissing a claim that lacked an allegation an element required.⁵³ Leave does not promise success. An amended complaint that cannot truthfully supply the missing allegation will fail in the same way when the court tests it again.

The punitive damages count in Matos shows a defect that amendment cannot reach. Repleading the same count with more detail would change nothing, because the complaint would still demand a remedy without any basis for liability.⁵⁴ No harm was done, however, since the dismissal left the plaintiffs free to ask for punitive damages if they proved a count that supports them.⁵⁵ A gap in the pleader’s work can be filled, and a gap in the law cannot.

Courts differ on the procedure. In other circuits the plaintiff must file a motion under Rule 15 to obtain leave. Courts also differ on whether the plaintiff has an absolute right to amend after the court grants a motion to dismiss for failure to state a claim, although the general rule seems to be to allow amendment liberally on motion.⁵⁶ A careful answer states the common ground, that the plaintiff will almost always get a chance, and does not assert one national rule on whether the chance arrives automatically or on request.

This practice softens the older regime. At common law, failure to comply with the pleading rules meant dismissal with no leave to replead,⁵⁷ and the pleadings truly acted as a screening device that kept many cases from going forward.⁵⁸ The general demurrer has disappeared from federal practice, but Rule 12(b)(6) kept its assumption that all the facts alleged are true.⁵⁹ It did not keep the demurrer’s severity. Where every drafting slip was once fatal, a complaint can now be corrected, and the early screen loses nothing by that, because a complaint that cannot truthfully be corrected fails again when the amended version is tested.