If you are working on a motion to dismiss in a federal case, you should stop right now and read the U.S. Supreme Court’s decision today in Ashcroft v. Iqbal.  The decision sharpens and refines the heightened standard for a Rule 12(b)(6) motion articulated by the Court  in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).

The decision today makes it clear that Twombly applies to all civil cases, not just antitrust cases, as the Plaintiff in Ashcroft had argued.  It also has an important point on the requirement for pleading intent in discrimination cases.

In Ashcroft, Iqbal, a Muslim, had been arrested and imprisoned following September 11th.  He claimed this was a result of discrimination against him based on his race, religion, and national origin. The Second Circuit had affirmed the denial of the Defendants’ motion to dismiss, but the Supreme Court reversed and dismissed the case.

Here’s the key quote from the opinion, which will undoubtedly be repeated often in Rule 12(b)(6) briefs:

Two working principles underlie our decision in Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inappli­cable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. (Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we ‘are not bound to accept as true a legal conclusion couched as a factual allegation’). Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged — but it has not ‘show[n]’ — that the pleader is entitled to relief.’

The decision also contains a gem for lawyers defending claims of discrimination.  Iqbal’s lawyers had argued, relying on FRCP 9, that that they were entitled to plead "generally" the Defendants’ discriminatory intent.  The Supreme Court majority disagreed:

It is true that Rule 9(b) requires particularity when pleading ‘fraud or mistake,’ while allowing ‘[m]alice, intent, knowledge, and other conditions of a person’s mind [to] be alleged generally.’  But ‘generally’ is a relative term.  In the context of Rule 9, it is to be compared to the particularity requirement applicable to fraud or mistake.  Rule 9 merely excuses a party from pleading discriminatory intent under an elevated pleading standard.  It does not give him license to evade the less rigid — though still operative — strictures of Rule 8.

The Court held that Iqbal’s rote allegation that he had been discriminated against "on account of [his] religion, race, and/or national origin and for no legitimate . . . interest" was insufficient to state a claim.

The Ashcroft decision provoked a vigorous dissent.  Justice Souter (joined by Justices Stevens, Ginsburg, and Breyer) said that a trial judge is bound to accept the allegations of a complaint as true, no matter how skeptical he or she may be.  He went on to say "[t]he sole exception to this rule lies with allegations that are sufficiently fantastic to defy reality as we know it: claims about little green men, or the plaintiff’s recent trip to Pluto, or experiences in time travel.  That is not what we have here."

Oh, if you’re in North Carolina state court, and want to argue the Twombly standard, you are out of luck, at least for now.  The Court of Appeals said late last year in Holleman v. Aiken that it didn’t have the power to adopt Twombly absent a ruling by the North Carolina Supreme Court.