Walsh v. U.S. — Twombly and Iqbal in Minnesota?

The Minnesota Supreme Court has decided.

Karen R. Cole

In two cases decided in the last few years – Twombly and Iqbal – the U.S. Supreme Court tightened pleading standards. Federal complaints that don’t pass muster under the new standards can be dismissed.

State courts around the country have been deciding whether the new federal standards apply in interpreting similar or identical state rules. The Minnesota Supreme Court just handed down its decision for our state last month.

In Walsh v. U.S. Bank, the Minnesota Court decided that our traditional pleading standards apply, not the Twombly/Iqbal standards.

The long-time federal test was set out in the Conley case. That case held that a complaint should be dismissed unless it appears beyond doubt that a plaintiff can prove no set of facts in support of his claim entitling him to relief.

In Twombly and Iqbal (T/I here), the U.S. Supreme Court rejected Conley and set out these two tests instead:

• Legal conclusions must be disregarded in evaluating whether sufficient facts are pled. (“[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.”)
• The complaint must allege “enough facts to state a claim to relief that is plausible on its face.” The claim must be more than “possible”; it must be “plausible.”

The Walsh Court rejected the second test – the plausibility standard. And held fast to the standards which had been in effect.
Clearly, “legal conclusions” do not need to be accepted as true in evaluating a complaint. It’s often not entirely clear, though, what a legal conclusion is in the context of a complaint, at least under federal law. But the Minnesota Supreme Court seems to be viewing “legal conclusions” more narrowly than the U.S. Supreme Court.

The U.S. Supreme Court and our state Supreme Court have used the key terms in different ways. The T/I Courts used the terms “conclusory allegations” and similar verbiage in addition to the term “legal conclusions.” In contrast, the Minnesota Supreme Court stuck to the more narrow term “legal conclusions.” In addition, the Minnesota Supreme Court indicated it was reaffirming “traditional pleading standards,” using that term five times in the majority opinion.

The Walsh majority noted in a footnote that a pleading term may have both a legal and nonlegal meaning (in Walsh, the term “served”) and should be viewed as factual in that case. The Walsh dissent agreed that the key language in the Walsh case was factual, and not legal conclusions, so that the complaint was sufficient.

The Walsh dissent had a different concern. It contended that the Court should not have reached the second test under Twombly/Iqbal: the plausibility standard. The dissent contended that the majority should not have reached whether the plausibility standard applied or should be rejected, because the key complaint language was not “legal conclusions” that should have been excluded in evaluating the sufficiency of the facts alleged, and because the claims made were plausible.

So, the Walsh Court rejected the plausibility test, and interpreted the first test – eliminating legal conclusions – narrowly.

Will the language under the first test of T/I have any special application in Minnesota? Time will tell, but it looks unlikely.

About me:
I do appellate and motion work for other lawyers.
My background is here: http://tinyurl.com/AboutKarenCole
Contact me if you need help with anything. Or if you want cites for cases in this post.

Karen R. Cole

karen@premiumlegalwriting.com