Twombly/Iqbal Stay of Litigation

judge-gavel.gifUnder Twombly/Iqbal pleading standards, defendants who are named in a poorly drafted lawsuit should not have to bear the expense of defending frivolous claims before the court can evaluate the plaintiff’s claims. As the Supreme Court noted in Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), a plaintiff who fails to adequately allege a viable complaint is not entitled to “unlock the doors of discovery.” 129 S. Ct. at 1950. The purpose of a Motion to Dismiss is to streamline litigation by testing the legal sufficiency of a claim without extensive and costly discovery.  See Mann v. Brenner, 375 Fed. Appx. 232, 239 (3rd Cir. 2010). Therefore, “[i]n certain circumstances it may be appropriate to stay discovery while evaluating a motion to dismiss where, if the motion is granted, discovery would be futile.” Id. (citing and quoting Iqbal, 129 S. Ct. at 1954 (“Because respondent’s complaint is deficient under Rule 8, he is not entitled to discovery.”)).

Although courts may be reluctant to allow cases to languish on their dockets, the Supreme Court was clear that civil cases should not proceed on complaints that do not meet the pleading standards of Rule 8. Also, the Court specifically noted that limitations on discovery will not be sufficient to allow litigation to proceed on a defective complaint.

Recently, we successfully stayed a shareholder dispute in federal court pending the court’s resolution of our Rule 12(b)(6) motion to dismiss the plaintiffs’ amended complaint. The court previously dismissed their original complaint and allowed to the plaintiffs another attempt.

About dkochersberger:

Don Kochersberger is an attorney and partner of Slingshot, LLC, the parent company of Business Law Southwest, LLC, and Law 4 Small Business, P.C. He is licensed to practice law in New Mexico and Texas, and leads the firm's litigation practice.

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