Commercial Litigation

High Standard to Plead, Low Standard to Grant Leave: Ashcroft v. Iqbal’s Limited Impact

In 2009, the U.S. Supreme Court in Ashcroft v. Iqbal adopted a new standard for pleading a cause of action in federal court. The two-step inquiry first identifies allegations that are mere conclusions in order to disregard them. Courts then determine whether the remaining non-conclusory allegations, accepted as true, plausibly suggest an entitlement to relief.

At first blush, the plausibility prong appears to hold plaintiffs to a heightened pleading standard: in order to survive a motion to dismiss, a plaintiff must plead sufficient factual allegations not just to show that it is “possible” that he is entitled to relief, but further that it is “plausible.”

Yet a recent study by the Judicial Conference Committee on Rules of Practice and Procedure reveals that since Iqbal, there has been no dramatic change in the pleading standard. On the contrary, dismissals have increased only slightly, lower courts are eager to grant leave to amend, and it’s impossible to tell how many of the initially dismissed cases were reinstated following a second (and even third) chance at stating a “plausible” claim.

Impact on Pleadings

As noted by Judge Mark Kravitz, Chair of the Judicial Conference, Iqbal has not proven to be “a blockbuster that gets rid of any case that is filed.” In fact, even under Iqbal, courts have denied motions to dismiss in a wide range of cases from civil rights to commercial litigation, and even claims involving government actions taken to defend the nation against terrorism.

Part of the reason behind this result is that Iqbal simply reaffirmed the importance of notice pleading. In other words, any assertion without some factual allegation would have been unlikely to satisfy Fed. R. Civ. P. 8(a)(2)’s “short and plain statement” standard anyway. It should come as no surprise then that Iqbal has become one of the most cited Supreme Court decisions of all time. The case essentially clarified well-settled law.

Another reason for Iqbal’s limited impact is how lower courts have responded to it. Rather than dismissing a complaint outright, it is now four times more likely that a court will allow a plaintiff to cure his defective pleading by amending it. In one instance, a district judge granted the plaintiff leave to amend his complaint three times, even though he had already dismissed it two times before. Consequently, even if the Supreme Court did raise the bar on the plaintiff’s pleading standard, lower courts have been reluctant to hold them hostage to it.


Ashcroft v. Iqbalcertainly had the potential to arm defense attorneys with a more effective tool against unmeritorious claims prior to the summary judgment stage. But lower courts’ quick resort to a liberal standard for granting leave to amend a complaint has limited the case’s impact.

Nevertheless, defendants should generally consider an Iqbal motion. Courts may use them to narrow the scope of the case, even if they do not dismiss entire claims. Or they may repeatedly grant leave to amend until the plaintiff can meet the plausibility standard. And this, in turn, may place a burden on the plaintiff equal to the one attempted by the Supreme Court.

By:   J. Allen Smith with significant contribution to this article by Kristina A. Kiik.

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