By Kevin Meyer
Sometimes you really have to wonder…
A U.S. Supreme Court ruling focused on national security may end up
as the most significant decision for business in the court's
about-to-conclude 2008-2009 term. Ashcroft v. Iqbal, released in May, will make it harder to bring a
lawsuit without specific factual evidence, raising the threshold for
moving a case into expensive litigation and possibly saving companies
millions of dollars in legal fees. The case was overshadowed by other business rulings on consumer
lawsuits, environmental and employment law and other matters in a term
set to end Monday, but legal experts said it may be the most important.
"It's the case that will be cited more than any other by a factor of
100," said Tom Goldstein, partner at Akin Gump Strauss Hauer & Feld
LLP and founder of the Scotusblog Web site. He called the ruling "an
unexpected gift for the business community."
Ah yes, facts. Such pesky things.
"While legal conclusions can provide the framework of a complaint,
they must be supported by factual allegations," Justice Anthony Kennedy
wrote in the 5-4 opinion.
As a result of the Iqbal ruling, businesses may find it easier to
fend off lawsuits by persuading courts to dismiss complaints early in
"Lawyers were citing it within days and putting it in their motions
to dismiss," said Jane Willis, partner with Ropes & Gray LLP.
"Everyone saw it's a new touchstone."
A lawsuit must be supported by factual allegations? What a novel idea! Maybe they're on to something. Perhaps projects, plans, capital expenditures, hiring decisions, root cause analyses… also supported by facts? Perhaps you're already doing that, or think you are? Really?