If It Takes Two to Tango, Do They Conspire?: Twombly and Standards of Pleading

In a series of cases decided between 1939 and 1954, the Supreme Court grappled with the subject of parallel conduct by oligopolists. In the first two of these cases, Interstate Circuit and American Tobacco, the Supreme Court employed language implying that in some cases parallel conduct—standing alone—could be sufficient to prove conspiracy. In Theatre Enterprises the Supreme Court pulled back, decreeing that parallel action alone, even if undertaken with knowledge of the likely response of other market participants, does not violate Sherman Act Section 1.

During October Term 2006, in Bell Atlantic Corp v. Twombly, the Supreme Court returned to the subject of standards of pleading conspiracy in an oligopolistic setting—the market for local telephone and internet services. The Supreme Court granted certiorari in Twombly to review a decision of the United States Court of Appeals for the Second Circuit which held that a plaintiff asserting a conspiracy claim under Section 1 of the Sherman Act can survive a motion to dismiss by pleading only parallel conduct among the defendants.

The Supreme Court reversed the Second Circuit—holding that a complaint alleging a Section 1 claim based on parallel conduct and a bare assertion of conspiracy will not survive a motion to dismiss—and proceeded to articulate a new "plausibility" standard for pleading Section 1 claims. In articulating its new standard of "plausibility," the court expressly rejected the 50-year-old formulation of Justice Black in Conley v. Gibson that a complaint may only be dismissed if a plaintiff "can prove no set of facts in support of his claim."

This article reviews the facts and law that brought the Supreme Court to reaffirm the principal of Theatre Enterprises, to reject Conley v. Gibson, and to set a new course in reviewing the adequacy of pleading under the Federal Rules of Civil Procedure. Read more…

Republished with permission of The Sedona Conference Journal, Volume 8, Fall 2007.