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Ask any employer that has been hauled into court and forced to defend a discrimination or retaliation claim. It can be a costly and frustrating undertaking. Unfortunately for the employers who defend these suits, the majority of employment discrimination/retaliation cases are filed in federal court where historically plaintiffs have been allowed to make conclusory allegations in their initial pleadings regarding discrimination without alleging many (if any) specifics. As a result, employers have had no means of obtaining an early dismissal of frivolous lawsuits.
The primary benefit of early dismissal is obvious: diversion of a potential mountain of attorneys' fees incurred in the discovery process and invested in a motion for summary judgment. Thanks to the longstanding liberal pleading standard in federal court, however, employers and their attorneys often perceive motions to dismiss as fruitless endeavors that should not even be pursued. The result is a large number of cases with little or no substantive factual allegations to bolster ex-employees' claims of discriminatory or retaliatory treatment. Despite this abundance of weak or nonexistent claims, many cases still settle (to the employer's detriment) due to the cost of litigation.
Twombly and Iqbal: Supreme Court Takes Steps in the Right Direction
In the past few years, the United States Supreme Court has handed down two decisions that have helped (or attempted) to redefine the pleading standard under the Federal Rules. Although it has yet to be determined if these decisions will benefit defendants in discrimination cases, they do provide hope for employers that federal pleading standards will be reformed.
In Bell Atlantic v. Twombly, a 2007 anti-trust case, the Supreme Court (debatably) ruled that federal pleading requires more than just notice pleading. In other words, plaintiffs must allege facts not only to put defendants on notice of the nature of a claim but also to substantiate their claims. The Seventh Circuit, which includes federal courts in Illinois, did not interpret Twombly to redefine the existing pleading standard. Instead, it only applied a heightened pleading standard in anti-trust and certain other types of discovery-intensive cases, but not in employment discrimination cases.
In 2009, there appeared to be hope that the Supreme Court would settle the confusion surrounding the federal pleading standard as articulated by Twombly. In Ashcroft v. Iqbal, the Court held that in all types of cases, the plaintiff cannot rely on conclusory allegations, facts must rise above the level of "mere possibility" of wrongdoing and allegations in the complaint must be at least plausible. According to Iqbal, although the pleader's allegations are not required to be detailed (as is the case in fact-pleading jurisdictions, such as Illinois state courts), they must be more than "unadorned, the-defendant-unlawfully-harmed-me accusations." When applied in the discrimination context, the decision in Iqbal could allow federal courts to dismiss claims when the pleadings are conclusory and common sense suggests that no discrimination occurred. The standard would, in turn, force plaintiffs to allege facts in support of their discrimination claims, and if plaintiffs fail to do so, a motion to dismiss could be in order.
Applying Iqbal in the Northern District of Illinois
While it is not clear how the Seventh Circuit will apply Iqbal to employment discrimination and retaliation claims, several judges in the Northern District of Illinois have recently dismissed claims for failure to allege sufficient facts to give rise to a claim.
For example, in Savage v. Pepsi-Cola, a Title VII claim for sexual harassment, Judge Wayne Andersen dismissed the plaintiff's claims for failure to allege sufficient facts and cited Iqbal for the premise that "[t]hreadbare recitals of a cause of action, supported by mere conclusory statements do not suffice."
In Mounts v. United States Parcel Service of America, Judge Virginia Kendall applied Iqbal and noted that the "level of facts required varies with the type of claims asserted." In that case, while Judge Kendall allowed retaliation and age discrimination claims to survive the defendant's motion to dismiss, she held that under Iqbal, the disability claim could not survive because the plaintiff failed to allege sufficient facts to conclude that he suffered from a disability and was thus afforded protections under the Americans with Disabilities Act.
Finally, in Foster v. DeLuca, Judge James Zagel dismissed the plaintiff's Title VII claim for retaliation because under Iqbal "a complaint will not suffice if it makes naked assertions devoid of further factual enhancement." The Illinois court provided a detailed analysis of the facts that the plaintiff did include in her complaint and found that "the complete absence of specific allegations" did not rise above the level of "naked assertions admonished in Iqbal."
Bottom Line
While it is not a sure bet that Iqbal will require a heightened pleading standard in all discrimination and retaliation cases in the Seventh Circuit, the above-referenced decisions in the Northern District of Illinois are a good sign that the courts will be inclined to require more than they have in the past. This would be good news for employers, as they will finally have the option of having bare-bones complaints thrown out in the beginning of an action.
© 2012 Much Shelist, P.C.
