Texas’ Fair-Notice Pleadings Standard May Be In Trouble

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In Texas, the lax “fair-notice” pleading requirement has resulted in the widespread practice of plaintiffs’ attorneys simply cutting and pasting from a previous pleading when filing suit. However, the recent enactment of Texas Rule of Civil Procedure 91a, which allows courts to dismiss unfounded causes of action, may result in a more heightened pleading standard that will force plaintiffs’ counsel to include more factual allegations to avoid dismissal.

Texas and Federal Pleading Requirements

“Texas follows a ‘fair notice’ standard for pleading, which looks to whether the opposing party can ascertain from the pleading the nature and basic issues of the controversy and what testimony will be relevant.”[1] A state court petition is to be liberally construed and is adequately pleaded if one can reasonably infer a cause of action from what is stated in the petition, even if the pleading party fails to allege specifically one of the elements of a claim.[2]

In contrast, the federal pleading standard is more stringent than the Texas pleading standard. Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a cause of action can be dismissed if the plaintiff has failed to plead “enough facts to state a claim to relief that is plausible on its face.”[3]

The plausibility test is satisfied “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.”[4]

A complaint must set forth “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”[5] When a pleading does not contain factual allegations sufficient to allow the court to infer more than the mere possibility of misconduct, the pleading falls short of showing that the pleader is entitled to relief.[6]

Rule 91a

Until recently, the Texas Rules of Civil Procedure did not have a similar mechanism to Rule 12(b)(6). However, in 2011, the Texas Legislature instructed the Supreme Court of Texas to “adopt rules to provide for the dismissal of causes of action that have no basis in law or fact on motion and without evidence.”[7] As a result, on March 1, 2013, Rule 91a of the Texas Rules of Civil Procedure became effective. That rule reads, in pertinent part:

[A] party may move to dismiss a cause of action on the grounds that it has no basis in law or fact. A cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. A cause of action has no basis in fact if no reasonable person could believe the facts pleaded.[8]

Courts applying Texas law are now struggling with the impact that Rule 91a will have on the “fair-notice” pleading standard in Texas.

Bart Turner & Associates v. Krenke

In Bart Turner & Associates v. Krenke, a Northern District of Texas court specifically discussed Rule 91a’s impact on the state pleading requirements.[9] In Bart Turner, the plaintiffs alleged claims of conspiracy and tortious interference “with employment and agency contracts” between plaintiffs and their employees. The defendants removed to federal court based on diversity jurisdiction. Defendants claimed that the one nondiverse defendant was fraudulently joined.

In considering the plaintiffs’ motion to remand, the court noted that it could conduct a Rule 12(b)(6)-type analysis to determine whether the plaintiff properly stated a claim against the nondiverse defendant.

As an initial matter, the court found that because the case was originally filed in state court, the state court pleading requirements would govern in a motion to dismiss analysis.[10] The court noted that although the standard for pleading in Texas is still fair notice, “fair notice must now be judged in the context of Rule 91a.”[11]

Examining the pleading at issue, the Bart Turner court found that the allegations in the petition were “bare-bone” or “threadbare.”[12] Accordingly, since they were wholly conclusory, the court found that the allegations against the nondiverse defendant did not meet the “fair-notice” standard that governs in the Texas court system.[13]

The question is whether the court, based on the allegations of the pleadings at the time of removal, has a reasonable basis to predict that plaintiffs might recover against Gibson, the nondiverse defendant, on the claims asserted. There are simply no underlying facts to support the conclusory statements that Gibson “conspired” or “tortiously interfered” with a party's contractual relationship. At a minimum, a claim or cause of action must assert basic facts as a starting point on which to build. Here, there are not even minimal facts for a reasonable person to understand the factual bases for plaintiffs' claims against Gibson. Consequently, there are no allegations upon which to draw a reasonable inference that plaintiffs are entitled to relief from Gibson. The court determines that the allegations are woefully inadequate for it to predict that plaintiffs might be able to recover against Gibson on the claims asserted. Accordingly, the court concludes that Gibson was improperly joined to defeat diversity jurisdiction, and thus denies the motion to remand.[14]

While the allegations at issue would not have satisfied either pleading standard, the takeaway from the Bart Turner decision is that the “fair-notice” pleading standard is now being judged in the context of Rule 91a. To avoid being dismissed, plaintiffs need to ensure that their petition contains sufficient factual allegations to support their causes of action. In other words, simply pleading the elements of a cause of action without supporting factual allegations is no longer sufficient in the state of Texas.

GoDaddy.com LLC v. Toups

In GoDaddy.com v. Toups, the plaintiffs filed suit against GoDaddy seeking to hold it liable for the content on two websites that were hosted by GoDaddy.[15] GoDaddy filed a Rule 91a motion to dismiss on the basis that it was immune from liability based on Section 230 of the Communications Decency Act (CDA).[16] The trial court denied the motion and GoDaddy was granted leave to file an interlocutory appeal.

On appeal, the Beaumont Court of Appeals noted that Rule 91a is analogous to Federal Rule 12(b)(6) and cited solely to case law applying Rule 12(b)(6) to set forth the standard for a motion to dismiss.[17] Since the court of appeals found that GoDaddy was immune from suit as a matter of law, the pleading standard that applied was largely irrelevant. However, it is noteworthy that without mention of the “fair-notice” pleading requirement, a Texas state court appeared ready to apply the federal pleading standard in its consideration of the Rule 91a motion to dismiss.

In light of the Bart Turner court’s acknowledgement that the “fair-notice” standard is now judged in the context of Rule 91a and the GoDaddy court only referencing federal case law in ruling on a Rule 91a motion, it would not be surprising if, over time, the pleading requirements in Texas state courts begin to look more like the federal pleading standards.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 896 (Tex. 2000).

[2] Boyles v. Kerr, 855 S.W.2d 593, 601 (Tex. 1993).

[3] Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); Reliable Consultants, Inc. v. Earle, 517 F.3d 738, 742 (5th Cir.2008).

[4] Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal citations omitted).

[5] Twombly, 550 U.S. at 555 (citation omitted).

[6] Iqbal, 556 U.S. at 679.

[7] See Tex. Gov't Code Ann. § 22.004(g) (West 2013).

[8] Tex.R. Civ. P. 91a.1.

[9] No. 3:13-cv-2921-L, 2014 WL 1315896 (N.D.Tex. Mar. 31, 2014).

[10] Id. at *5.

[11] Id.

[12] Id.

[13] Id.

[14] Id. at *6.

[15] No. 09-13-00285-CV, 2014 WL 1389776 (Tex.App.-Beaumont Apr. 10, 2014) (unpublished).

[16] Section 230 of the CDA provides, “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” 47 U.S.C. § 230(c)(1).

[17] Id. at *2. 

Texas Law360 - June 2, 2014

 

 

Topics:  Fair Notice, Pleading Standards, Pleadings

Published In: Business Torts Updates, Civil Procedure Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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