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The Federal Judicial Center today released a study of the use and granting of 12(b)(6) motions under Twiqbal, comparing the years 2006 (the year before Twombly) and 2010 (the year after Iqbal). The Executive Summary put forth the following:

?    There was a general increase from 2006 to 2010 in the rate of filing of motions to dismiss for failure to state a claim (see infra section III.A).

?    In general, there was no increase in the rate of grants of motions to dismiss without leave to amend. There was, in particular, no increase in the rate of grants of motions to dismiss without leave to amend in civil rights cases and employment discrimination cases (see infra section III.B.1).

?    Only in cases challenging mortgage loans on both federal and state law grounds did we find an increase in the rate of grants of motions to dismiss without leave to amend. Many of these cases were removed from state to federal court. This category of cases tripled in number during the relevant period in response to events in the housing market (see infra section III.B.1). There is no reason to believe that the rate of dismissals without leave to amend would have been lower in 2006 had such cases existed then.

?    There was no increase from 2006 to 2010 in the rate at which a grant of a motion to dismiss terminated the case (see infra section III.B.1).

The increase in overall 12(b)(6) activity might reflect some effects of Twiqbal. Defendants now seem to have a new weapon to at least try to wield agains a complaint, even if unsuccessfully. That is particularly true of § 1983 actions, which did show a statistically significant increase in 12(b)(6) activity even though the overall category of "Civil Rights" did not. That the motions are not being granted at meaningfully greater rates does not mean the decisions are not having an effect. One explanation for the lack of increased success in those motions might be that Twiqbal is doing its work on the drafting process--plaintiffs are putting more information into their complaints out of an excess of Twiqbal-imposed caution. In addition, there was a 7% increase in overall case filings, suggesting that perhaps Twiqbal is not having the over-deterrent effect many feared.

It is unsurprising that the study found an increase in 12(b)(6) motions granted with leave to amend. Courts dismiss with leave in cases of factual insufficiency, where the plaintiff has not pled enough facts or with enough detail. The whole point of Twiqbal was that plaintiffs must plead more facts and factual detail (even if it is not clear how much more), enough to convince the court the claim is plausible. Follow-up studies will explore what happens after these dismissals with leave to amend: Does the plaintiff replead? Does the defendant move to dismiss the amended complaint? We might expect an indirect effect here--Twiqbal leads to more dismissals with leave to amend, followed by a subsequent 12(b)(6) challenging the amended complaint eventually being granted, this time without leave to amend on the ground that the plaintiff already had multiple opportunities to amend and still had not made factually sufficient allegations. In fact, the study did find that more 12(b)(6) motions in 2010 were challenging amended complaints--this suggests that more amended complaints are being filed, perhaps in response to dismissals with leave to amend, perhaps in general response by plaintiffs to Twiqbal.

On the other hand, I am not surprised that there has been no increase in 12(b)(6) motions granted without leave to amend, at least not in direct response to Twiqbal. Legal insufficiency is about substantive legal standards and whether legal claims of right do not exist. Neither Twombly nor Iqbal changed the applicable substantive law in their respective areas (except perhaps for the law of supervisory liability in § 1983/Bivens actions), the only thing that would directly cause an increase in dismissals without leave. The increase in such dismissals occurred only on federal and state claims arising out of mortgages and other financial instruments. These cases were relatively unknown in 2006 and increased dramatically between 2006 and 2010 for obvious reasons. In any event, these dismissals result not from Twiqbal, but from the state of laws such as the Truth in Lending Act and the Real Estate Settlement Procedures Act, which did not reach much of the conduct about which foreclosed-on homeowners were complaining. Many of these claims were unique and legally creative or innovative--precisely the kinds of cases in which courts may find the claim to be legally non-existent and thus the pleading legally insufficient.

All in all, the report continues to suggest that we still do not know much about Twiqbal's real effects. There is certainly more 12(b)(6) activity, but plaintiffs are not routinely being tossed out of court at the early stages, at least not in significantly greater numbers than under pre-Twiqbal pleading rules (whatever they really were). Maybe some of the Twiqbal scholarship suggesting this is much ado about nothing is turning out to be correct. It is going to take a while to find out for sure.

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