The Rules Rule

Submitted by patentadmin on Thu, 09/16/2010 - 11:24

What happens when decisions of the U.S. Supreme Court conflict with the Federal Rules of Civil Procedure (F.R.C.P.)? (Automated Transactions, LLC v. First Niagara Financial Group, Inc. et al.)

For the benefit of those readers who do not closely follow such matters, in recent years the Supreme Court has handed down two decisions, known as Twombly and Iqbal (we are not making this up), which, essentially, required a certain specificity in pleadings: “A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do … Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”

Automated sued First Niagara, alleging infringement of four patents directed to automated teller machines (ATMs). The complaint was closely patterned after F.R.C.P. Appendix Form 18, entitled “Complaint for Patent Infringement.” First Niagara moved to dismiss the complaint, arguing that it lacked the requisite specificity. The matter landed on the desk of the unlucky but brave Magistrate Judge Jeremiah J. McCarthy, who had the unenviable task of resolving the apparent conflict between the two Supreme Court decisions and the dictates of the F.R.C.P.

The Magistrate Judge began by noting that the F.R.C.P. states that “the forms contained in the Appendix of Forms are sufficient to withstand attack … and the practitioner may rely on them to that extent …” He then went on to hold that “reconciling the dictates of Twombly and Iqbal with the Appendix forms is not merely difficult, it is impossible.” What to do?

Courageously and forthrightly, he held, “[w]hen confronted with ‘an irreconcilable conflict in Supreme Court authority,’ I must apply that authority which ‘more closely adheres to the traditional view’.” He then went on to hold that the “traditional view” is that “courts are not free to amend a rule outside the process Congress ordered … [t]herefore, unless or until [the Rules are] amended, I conclude that the sufficiency of … the [complaint] allegations is governed by Appendix Form 18, not by the requirements of Twombly and Iqbal.

THE LESSON TO BE LEARNED: At least for the present, the Rules reign supreme.

Submitted by Anonymous (not verified) on Mon, 09/20/2010 - 17:31


Kudos to McCarthy, I suppose, for having the cajones to contradict TWO (2) SCOTUS rulings. Still, it sounds like some of those FRCP forms will probably be changing in the near future. And I'll bet McCarthy is off the Supremes' Christmas/Hannukah lists.

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