The Impact Of Twombly & Iqbal In Products Cases

The Toxic Tort Litigation Blog brings to the attention of defense practitioners weapons to add to their defense arsenal. An article in the Bloomberg BNA Toxics Law Reporter (6/14/02), titled "Making the Most of Twombly/Iqbal in Product Liabililty Cases", offers a valuable primer concerning how the pleading requirements under Rule 8(a) of the Federal Rules of Civil Procedure have been reinterpreted and reshaped by the U.S. Supreme Court in two landmark decisions, Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S 662,129 S. Ct. 1937 (2009).

In the article, Arnold & Porter’s Anand Agneshwar and Paige Sharpe review how these two decisions have been employed in product liability litigation either to win outright dismissals of complaints or to force plaintiffs to clearly state in their complaints – and not after discovery – precisely what they seek to prove. Motions brought under Twombly and Iqbal have come to be known as Twiqbal motions.

Prior to the Supreme Court’s publication of Twombly in 2007, federal trial courts were guided by the holding in Conley v. Gibson, a U.S. Supreme Court case decided in 1957. Pursuant to the holding of that case, “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.” As Mr. Agneshwar and Ms. Sharpe point out, Twombly retired the “no set of facts” language of Conley, and in its place issued a plausibility standard under which plaintiffs must provide “more than labels and conclusions, and a formulaic recitation of the elements of the cause of action will not do so.” Thus, in order to “nudge[] their claims across the line from conceivable to plausible,” plaintiffs must provide a complaint with “enough heft to show that the pleader is entitled to relief.”

The policy rationale for this holding is the avoidance of “potentially enormous expense of discovery in cases with no reasonably founded hope that the discovery process will reveal relevant evidence.” Twombly left unclear whether its pleading directives applied to all civil cases brought in federal court, or just antitrust cases. However, two years later, the Iqbal court made clear that the pleading requirements in Twombly were to be applied across-the-board.

How successful have Twiqbal motions been in product liability cases? A 2011 law review article by Professor William M. Janssen in the Louisiana Law Review, which focused on pharmaceutical and medical device litigation, found that some 21% of the 264 cases studied were dismissed on Iqbal grounds during the relevant time period. This statistic suggests that it would be imprudent to file a Twiqbal motion in every product liability case. Thankfully, Mr. Agneshwar and Ms. Sharpe provide a series of factors that should be considered prior to filing a Rule 8(a) motion.

As a general rule, defense counsel should carefully scrutinize their adversary’s pleadings in products cases to evaluate whether plaintiff has properly alleged facts to support an essential element of a claim, such as how a product is defectively designed (design defect claim) or how specifically defendants’ product labeling is insufficient (failure to warn claim). A complaint that contains only conclusory allegations is vulnerable to Twiqbal attack.

No Interlocutory Appeal To Protect Attorney-Client Privileged Documents

The United States Supreme Court yesterday held, in Mohawk Industries, Inc. v. Carpenter, No. 08-678, that a party may not immediately appeal court discovery orders that require the disclosure of documents and information covered by the attorney-client privilege.  This holding resolves a split in the circuits and will change the law in at least the DC and Ninth Circuits. The unanimous Court rejected the argument that attorney-client privilege disclosure rulings are different from other kinds of orders because once the privilege is lost, it cannot ever be restored. The Court (in Justice Sotomayor’s first opinion) noted that the ultimate remedy lies in reversal and a new trial at which the materials at issue would not be disclosed. Justice Sotomayor stated:

"The question before us is whether disclosure orders adverse to the attorney-client privilege qualify for immediate appeal under the collateral order doctrine. Agreeing with the Court of Appeals, we hold that they do not. Postjudgment appeals, together with other review mechanisms, suffice to protect the rights of litigants and preserve the vitality of the attorney-client privilege."

This is not a particularly revolutionary decision. After all, the Court has, for several terms, been narrowing interlocutory appellate rights as, at the same time, also requiring specific pleading (see, e.g.,Ashcroft v. Iqbal) in an effort to reduce expensive litigation proceedings. Moreover, at oral argument in the case, the primary issue came down to whether the attorney-client privilege was sufficiently important to warrant interlocutory appeal when balanced against the policy interests of the finality rule. Why, the justices asked, should the attorney-client privilege be given greater deference than trade secrets, for example?  My D.C. partner Stuart M. Gerson notes that for practitioners, both litigators and others who may be involved in investigations later subject to litigation, the significance of this holding is that heightened attention should be given to how privileged information is recorded to minimize the impact if that information is later disclosed. As a safeguard against disclosure, Stuart adds, experienced litigators and investigators tend to write cryptically and briefly, if at all, when they take notes. If one is inclined to take the formal statement of a witness to lock him or her into a particular rendition of fact, it should be done with the expectation that the statement very well may ultimately be disclosed, even if the statement is made in the context of an Upjohn investigation. Of course none of this changes the prevailing rule that attorney-client privilege can only be overcome upon a showing of critical necessity. However, courts dislike privilege and frequently misapply the law.  So, be careful out there.