Indiana Law Update Blog - Price Waicukauski & Riley Legal Blog

Posner on Plausability

January 17, 2011

Anyone who follows this blog is familiar with the U.S. Supreme Court's decisions in Twombly and Iqbal (discussed here and here), so I won't rehash the impact that these cases had on civil procedure in federal courts. On December 29, 2010, the Seventh Circuit, in a decision written by Judge Posner, described with greater clarity what it considered as "enough" for the purposes of Rule 12(b)(6) in In re Text Messaging Antitrust Litig., 630 F.3d 622 (7th Cir. 2010), Case No. 10-8037.

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In this case, the defendants in an MDL sought to dismiss a class action antitrust lawsuit pursuant to Rule 12(b)(6). The district court denied that motion to dismiss and the defendants sought to appeal that decision. Much of the Court's decision deals with whether it can hear this interlocutory appeal. After deciding that it could, the Court addressed whether the district court erred when denying that motion. As part of this discussion, the Court addressed what is meant by "plausable" by Twombly and Iqbal.

We need not decide whether the circumstantial evidence that we have summarized is sufficient to compel an inference of conspiracy; the case is just at the complaint stage and the test for whether to dismiss a case at that stage turns on the complaint’s "plausibility."

The Court said in Iqbal that the "plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." This is a little unclear because plausibility, probability, and possibility overlap. Probability runs the gamut from a zero likelihood to a certainty. What is impossible has a zero likelihood of occurring and what is plausible has a moderately high likelihood of occurring. The fact that the allegations undergirding a claim could be true is no longer enough to save a complaint from being dismissed; the complaint must establish a nonnegligible probability that the claim is valid; but the probability need not be as great as such terms as "preponderance of the evidence" connote.

The Court ultimately found the complaint in this case "provides a sufficiently plausible case of price fixing to warrant allowing the plaintiffs to proceed to discovery."

This case may turn out to be heavily cited by Indiana civil litigators practicing in federal court, simply due to its clarification of how the Seventh Circuit will assess whether a claim is "plausible," based on the allegations in the complaint -- i.e., that there is a "nonnegligible probability that the claim is valid."

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