Activist judges

Heard the one about one of the most significant US Supreme Court decisions that, it seemed, almost no one paid any attention to?

Yeah, me neither. But it gives Federal judges enormous power to determine what's "plausible" and what's not.

For more than half a century, it has been clear that all a plaintiff had to do to start a lawsuit was to file what the rules call “a short and plain statement of the claim” in a document called a complaint. Having filed such a bare-bones complaint, plaintiffs were entitled to force defendants to open their files and submit to questioning under oath.

This approach, particularly when coupled with the American requirement that each side pay its own lawyers no matter who wins, gave plaintiffs settlement leverage. Just by filing a lawsuit, a plaintiff could subject a defendant to great cost and inconvenience during the pre-trial fact-finding process called discovery.

Mark Herrmann, a corporate defense lawyer with Jones Day in Chicago, said the Iqbal decision will allow for the dismissal of cases that would otherwise have subjected defendants to millions of dollars in discovery costs. On the other hand, information about wrongdoing is often secret. Plaintiffs claiming they were the victims of employment discrimination, a defective product, an antitrust conspiracy or a policy of harsh treatment in detention may not know exactly who harmed them and how before filing suit. But plaintiffs can learn valuable information during discovery.

The Iqbal decision now requires plaintiffs to come forward with concrete facts at the outset, and it instructs lower court judges to dismiss lawsuits that strike them as implausible.

“Determining whether a complaint states a plausible claim for relief,” Justice Anthony M. Kennedy wrote for the five-justice majority, “requires the reviewing court to draw on its judicial experience and common sense.”

Note those words: Plausible. Common sense.

The old world was mechanical. A lawsuit that mouthed the required words was off and running. As the Supreme Court said in 1957 in Conley v. Gibson, a lawsuit should be allowed to go forward “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.” Things started to change two years ago, when the Supreme Court found a complaint in an antitrust suit implausible.

In the new world, after Iqbal, a lawsuit has to satisfy a skeptical judicial gatekeeper.

“It obviously licenses highly subjective judgments,” said Stephen B. Burbank, an authority on civil procedure at the University of Pennsylvania Law School. “This is a blank check for federal judges to get rid of cases they disfavor.”

And while few in the press paid much attention to the case, Federal judges have and they've been exceptionally busy throwing out cases they don't much care for.