Antitrust Report Excerpt: Supreme Court Confirms Scope of Bell Atlantic Corp. v. Twombly in Ashcroft v. Iqbal

In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the U.S. Supreme Court clarified the standard applicable to a motion to dismiss, in the context of a Section 1 price fixing claim. In that case, the Court rejected the ‘‘no set of facts’’ articulated in Conley v. Gibson, 355 U.S. 41, 47 (1957) (finding ‘‘a complaint should not be dismissed for a failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts to support his claim which would entitle him to relief.’’). The Court articulated that although detailed factual allegations are not required, to survive a Federal Rule of Civil Procedure 12(b)(6) motion to dismiss, a complaint must contain factual allegations, accepted as true, that state a claim to relief beyond a speculative level. Specifically, a complaint must have enough facts to state a claim to relief that is ‘‘plausible on its face.’’ A claim is plausible on its face when the complaint contains factual allegations that allow a court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Accordingly, the Court explained, in order to state a claim under Section 1 of the Sherman Act a complaint must contain enough factual matter (taken as true) to plausibly suggest that an illegal agreement was reached. The plaintiff’s complaint in Twombly only alleged parallel conduct and made a ‘‘bare assertion’’ of conspiracy. The Court found that the allegations of parallel conduct did not plausibly suggest unlawful agreement and thus dismissed the plaintiffs’ complaint.

After Twombly, the federal appellate courts split on the reach and application of the Twombly standard. In a decision this term, however, the Court unambiguously confirmed that courts must take a significantly closer look at a case at the pleading stage.