In Iannacchino v. Ford Motor Company, 451 Mass. 623 (2008), the Massachusetts Supreme Judicial Court, refined the standard for granting a motion to dismiss. It retired the familiar directive that “a complaint should not be dismissed for failure to state a claim 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,” Nader v. Citron, 372 Mass. 96, 98 (1977) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)), instead adopting a new federal approach under which a complaint must contain, “factual ‘allegations plausibly suggesting (not merely consistent with)’ an entitlement to relief.” Iannacchino, 451 Mass. at 636, quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 1966, 167 L.Ed.2d 929 (2007). See also Galiastro v. Mortgage Electronic Registration Systems, Inc., 467 Mass. 160, 165 (2014); Lopez v. Com., 463 Mass. 696, 700-01 (2012).
While the “plausibility” requirement is easily stated, its practical application is less obvious than the prior “prove no set of facts” standard. Indeed, “the precise parameters of the plausibility standard are still a work in progress.” Gianfrancesco v. Town of Wrentham, 712 F.3d 634, 638-39 (1st Cir. 2013) (internal quotation marks omitted). Just how much factual detail is required to make a claim plausible? What separates a valid factual allegation from a mere legal conclusion insufficient to withstand a motion to dismiss? This article considers those questions, among others. Because Iannacchino adopted the federal standard, and because Massachusetts courts interpreting the Massachusetts Rules of Civil Procedure routinely look to, “the construction given to the cognate Federal rules,” Chavoor v. Lewis, 383 Mass. 801, 806 n.5 (1981), I refer to both federal and Massachusetts case law.
In order to determine whether a complaint states a plausible claim for relief, which will survive a motion to dismiss, a court must apply a two-stage test. First, although all factual allegations contained in the complaint must be assumed to be true for purposes of a motion to dismiss, this tenet does not apply to legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). Therefore, the court must begin by, “identifying the allegations of the complaint that are not entitled to the assumption of truth” because they are merely legal conclusions. Id. at 1951. Second, the court must, “consider the [remaining] factual allegations in [the] complaint to determine if they plausibly suggest an entitlement to relief.” Id. See also Cardigan Mountain School v. New Hampshire Ins. Co., 787 F.3d 82, 84 (1st Cir. 2015).
Distinguishing factual allegations from mere legal conclusions.
A court determining whether a complaint states a plausible claim to relief must ignore allegations which are not factual but, instead, amount to mere legal conclusions. Such conclusory allegations include both rote recitation of the elements of a cause of action and allegations which, while clothed as factual statements, are really just unsupported speculation by the plaintiff. In A.G. ex rel. Maddox v. v. Elsevier, Inc., 732 F.3d 77 (1st Cir. 2013), the Court of Appeals for the First Circuit explained,
We follow this unbroken line of cases and hold that the rote recital of the elements of a cause of action is not enough, by itself, to nudge a case past the plausibility threshold.
This remains true even where, as here, plaintiffs attempt to camouflage conclusory statements as allegations of fact. When allegations, though disguised as factual, are so threadbare that they omit any meaningful factual content, we will treat them as what they are: naked conclusions.
Id. at 80-81, citing Iqbal, 129 S.Ct. at 1949; Artuso v. Vertex Pharm., Inc., 637 F.3d 1, 9 (1st Cir.2011) (explaining that even though an averment may be couched as a factual allegation, it can be “so subjective that it fails to cross ‘the line between the conclusory and the factual’ ”). Similarly the court in Rodriguez-Vives v. Puerto Rico Firefighters Corps of Puerto Rico, 743 F.3d 278, 286 (1st Cir. 2014) stated,
A conclusory allegation, however, is one which simply asserts a legal conclusion, such as “I was retaliated against,” not a specific factual allegation, such as “my supervisor threw a book at me,” that merely lacks some surrounding context. We have held that some factual allegations may be so “threadbare” that they are in essence conclusory even if they include more than an assertion that an element of a cause of action was satisfied. But this is only the case where the bareness of the factual allegations makes clear that the plaintiff is merely speculating about the fact alleged and therefore has not shown that it is plausible that the allegation is true.
Id. at 286. (Internal citations omitted).
The distinction between factual allegations and legal conclusions was discussed in detail in Cardigan Mountain School, where the issue was whether the plaintiff had alleged a plausible claim that the defendant insurer had issued an insurance policy to the plaintiff school. The court looked to the Supreme Court’s opinions in Twombly and Iqbal for guidance. In Iqbal, the plaintiff, who had been arrested and detained after the 9/11 attacks but was eventually released, brought civil rights claims against federal officials including John Ashcroft, who had been the United States Attorney General at the time, and Robert Mueller, then the Director of the FBI. The court found that although the complaint contained some factual assertions which were entitled to an assumption of truth, it was also rife with legal conclusions.
The Supreme Court explained that the complaint’s “bald allegations” that Ashcroft and Mueller were personally involved in unconstitutional conduct were “conclusory” and thus should have been disregarded by the district court. Id. at 681, 129 S.Ct. 1937. In particular, the Supreme Court held that statements that Ashcroft and Mueller “ ‘knew of, condoned, and willfully and maliciously agreed to subject [the plaintiff]’ to harsh conditions of confinement” based on his “ ‘religion, race, and/or national origin’ ” were not factual allegations that must be taken as true. Id. at 680, 129 S.Ct. 1937. And the Court ruled the same with respect to Iqbal’s allegations that “Ashcroft was the ‘principal architect’ ” of the policy and that “Mueller was ‘instrumental’ in adopting and executing it.” Id. at 680–81, 129 S.Ct. 1937.
These sorts of allegations, the Court explained, were “nothing more than a ‘formulaic recitation of the elements’ of a constitutional discrimination claim.” Id. at 681, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955). In contrast, Iqbal did credit as factual those allegations in the complaint that made reference to specific events. See id. (crediting allegations including “that ‘the [FBI], under the direction of Defendant MUELLER, arrested and detained thousands of Arab Muslim men’ ”).
Cardigan Mountain School, 787 F.3d at 86, quoting Iqbal.
In Twombly, an antitrust case alleging price fixing, the Supreme Court held that allegations that the defendants had engaged in parallel conduct were factual and entitled to an assumption of truth, while also ruling that the portions of the complaint which directly alleged a conspiratorial agreement among the defendants were nothing more than legal conclusions.
In particular, the allegation that the defendants “have entered into a contract, combination or conspiracy … and have agreed not to compete with one another” was, the Supreme Court held, no more than a legal conclusion based on the allegations of parallel conduct. Id. at 564–65, 127 S.Ct. 1955. And thus, the Supreme Court held that this direct allegation of agreement did not need to be taken as true. See id.
Cardigan Mountain School, 787 F.3d at 86, quoting Twombly.
Based on its reading of Iqbal and Twombly, the Cardigan Mountain School court held that the school’s complaint set forth valid factual allegations concerning the existence of the insurance policy and was not based solely on legal conclusions. It stressed that the complaint alleged specific events based on the personal knowledge of specific individuals, who plausibly could have known of those events. According to the court,
The allegations in the school’s complaint described above are specific and factual. The complaint refers to individuals with relevant knowledge who are recalling facts plausibly known to them. Those allegations are thus like the allegations of actual events in Iqbal and of parallel conduct in Twombly that the Supreme Court took as true; they are specific and appear to be based on the knowledge of particular individuals. They are not bare recitations of the legal conclusion the suit seeks to prove. We thus conclude that the school’s allegations set forth above are entitled to the presumption of truth at the motion to dismiss stage.
Cardigan Mountain School, 787 F.3d at 87. See also Rodriguez-Vives, 743 F.3d at 286 (“Here, in contrast, Rodríguez–Vives’s complaint described actions of which she had personal knowledge in sufficient detail to make them plausible.”).
Do the factual allegations suggest a plausible entitlement to relief?
After separating the true factual allegations from mere legal conclusions, the court must determine whether those allegations suggest a plausible claim to relief. In conducting this “context specific” inquiry, “the reviewing court [must] draw on its judicial experience and common sense.” Garcia-Catalan v. United States, 734 F.3d 100, 103 (1st Cir. 2013), quoting Iqbal,129 S.Ct. 1940. See also Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012). “In performing [its] review, [the court] … can consider (a) implications from documents attached to or fairly incorporated into the complaint, (b) facts susceptible to judicial notice, and (c) concessions in plaintiff’s response to the motion to dismiss.” Schatz, 669 F.3d at 55-56. (Internal quotation marks and footnotes omitted).
“Plausible … means something more than merely possible.” Schatz, 669 F.3d at 55. See also Carrero-Ojeda v. Autoridad de Energia Electrica, 755 F.3d 711, 717 (1st Cir. 2014). “And a complaint that ‘pleads facts that are “merely consistent with” a defendant’s liability … “stops short of the line between possibility and plausibility.” ’ ” Ocasio–Hernández, 640 F.3d at 12, quoting Iqbal, 129 S.Ct. at 1949. “The factual allegations must ‘raise a right to relief above the speculative level … [based] on the assumption that all the allegations in the complaint are true….’ ” Galiastro, 467 Mass. at 165.
However, although the plausibility standard is more demanding than the former “prove no set of facts” approach, the bar remains fairly low. All that is required is that the, “plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S. Ct. at 1949. Even if such an inference is “plausible but inconclusive,” the claim survives. Rodriguez-Vives, 743 F.3d at 286. See also Decotiis v. Whittemore, 635 F.3d 22, 35 (1st Cir. 2011).
The plausibility standard “does not demand a high degree of factual specificity.” Garcia-Catalan, 734 F.3d 100, 103 (1st Cir. 2013). The “plaintiff need not show that its allegations … are more likely than not true.” Evergreen Partnering Grp., Inc. v. Pactiv Corp., 720 F.3d 33, 46 (1st Cir. 2013). See also Sepulveda-Villarini v. Dep’t of Educ. of Puerto Rico, 628 F.3d 25, 30 (1st Cir. 2010) (“Twombly cautioned against thinking of plausibility as a standard of likely success on the merits”).
The plaintiff also need not establish a prima facie case. According to the court in Carrero-Ojeda,
[A] complaint need not plead facts sufficient to establish a prima facie case or “allege every fact necessary to win at trial to make out a plausible claim. The prima facie standard is an evidentiary standard, not a pleading standard, and there is no need to set forth a detailed evidentiary proffer in a complaint.
755 F.3d at 718. (Internal quotation marks and citations omitted). However, the “elements of a prima face case remain relevant to [the] plausibility assessment, as [those] elements are part of the background against which a plausibility determination should be made.” Id. (Internal quotation marks omitted). “[R]eference to the prima facie elements can help a court determine whether the “cumulative effect of the complaint’s factual allegations” is a plausible claim for relief. Id.
Nor may the court disregard a properly pled factual allegation merely because the court disbelieves it, finds it doubtful or unlikely to be supported by evidence at trial. The court must assume factual allegations to be true “even if doubtful in fact” Galiastro, 467 Mass. at 165. “[T]he court may not disregard properly pled factual allegations, even if it strikes a savvy judge that actual proof of those facts is improbable. Indeed, a well-pleaded complaint may proceed even if … a recovery is very remote and unlikely. Ultimately, [t]he relevant inquiry focuses on the reasonableness of the inference of liability that the plaintiff is asking the court to draw from the facts alleged in the complaint. Medina-Velazquez v. Hernandez-Gregorat, 767 F.3d 103, 109 (1st Cir. 2014). (Internal quotation marks and citations omitted). See also Twombly, 127 S.Ct. at 1965 (“Rule 12(b)(6) does not countenance … dismissals based on a judge’s disbelief of a complaint’s factual allegations.” (Internal quotation marks omitted)); Evergreen, 720 F.3d 33, 45 (1st Cir. 2013).
Moreover, the court may not conclude that a plaintiff’s factual allegations fail to establish a plausible claim simply because the court deems a different factual scenario more plausible.
The question at the pleading stage is not whether there is a plausible alternative to the plaintiff’s theory; the question is whether there are sufficient factual allegations to make the complaint’s claim plausible…. [T]here may … be more than one plausible interpretation of the defendant’s words, gestures, or conduct. Consequently, although an innocuous interpretation of the defendants’ conduct may be plausible, that does not mean that the plaintiff’s allegation that that conduct was culpable is not also plausible…. [O]n a Rule 12(b)(6) motion it is not the province of the court to dismiss the complaint on the basis of the court’s choice among plausible alternatives. Assuming that [plaintiff] can adduce sufficient evidence to support its factual allegations, the choice between or among plausible interpretations of the evidence will be a task for the factfinder.
Evergreen, 720 F.3d at 45-46, quoting Anderson News, LLC v. American Media, Inc., 680 F.3d 162, 189-90 (2d Cir.2012).
Also relevant is whether, in the court’s view, any factual shortcomings of the complaint are reasonably likely to be remedied through discovery. An important purpose of a motion to dismiss is to save the defendant from incurring the costs of discovery before being able to dispose of the matter. The plausibility test “helps keep defendants from wasting time and money in discovery on largely groundless claims.” Schatz, 669 F.3d at 56. (Internal quotation marks omitted).
“[T]he plausibility inquiry properly takes into account whether discovery can reasonably be expected to fill any holes in the pleader’s case.” García–Catalán v. United States, 734 F.3d 100, 104 (1st Cir.2013). To clear the plausibility hurdle, a complaint must contain “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence” sufficient to flesh out a viable claim. Twombly, 550 U.S. at 556, 127 S.Ct. 1955.
Butler v. Balolia, 736 F.3d 609, 617-18 (1st Cir. 2013). Accordingly, the plausibility test may be applied less rigorously in certain cases where, “a material part of the information needed is likely to be within the defendant’s control” and can therefore be obtained only via discovery. Garcia-Catalan, 734 F.3d 100, 104 (1st Cir. 2013).
While the plausibility standard undoubtedly requires plaintiffs to offer greater factual support for their claims than was necessary under the prior standard, and while the concept of “plausibility” continues to evolve, it is clear that the bar remains relatively low. Nevertheless, plaintiffs would be well advised to state their claims with as much factual detail as possible and to avoid reliance on conclusory legal allegations.