Here is a question that this year's class should be able to take a stab at even now:
Essay Question 2 (14 points)
Assume for the purposes of this question that the federal court in Florida entertaining Smith v. Insurer Corp. & Jones should use the plausibility pleading standard in Twombly and Iqbal. Has the standard been satisfied (particularly concerning paragraphs 9-15)?
This question concerns following complaint [sorry if the formatting is off here]
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
- - - - - - - - - - - - - - - - - - - - - - - - - -x
JOE SMITH, :
Plaintiff, : 00 Civ. 1001
- against - :
INSURER CORP., :
Defendant, : JURY TRIAL DEMANDED
- and – :
JANE JONES, :
- - - - - - - - - - - - - - - - - - - - - - - - - -x
Plaintiff, Joe Smith, by his attorney, alleges as follows:
1. Insurer Corp. is incorporated in Delaware.
2. Insurer Corp. provides term life insurance to hundreds of thousands of individuals in New York, New Jersey, and Connecticut. Joe Smith is Insurer Corp.’s only customer in Florida.
3. Insurer Corp. has sales offices and agents in New York, New Jersey, and Connecticut.
4. Insurer Corp.’s claims processing office, and 2/3 of its employees, are located at 100 1st St., Greenwich, Connecticut, in the District of Connecticut.
5. Around 1/10 of Insurer Corp.’s employees work at an office at 1000 5th Ave., New York, New York, in the Southern District of New York. The Chief Executive Officer and most of the other high-level officers work at this office. The board of directors meets there as well.
6. Jane Jones, an employee of Insurer Corp., lives at 100 North St., Greenwich, Connecticut, in the District of Connecticut.
7. Jane Jones’s office is at the Insurer Corp.’s offices at 1000 5th Ave., New York, New York.
8. Since June 30, 2010, Joe Smith has been living at 10 7th St., Miami, Florida, in the Southern District of Florida.
9. Joe Smith entered into his term life insurance contract with Insurer Corp. at Insurer Corp.’s Greenwich Connecticut office, while he was living in Connecticut. On June 30, 2010, he moved to Miami, Florida and continued to pay his premiums from there.
10. On January 12, 2011, Jane Jones, who was updating Joe Smith’s files, negligently left her laptop computer on a bench outside her office building at 1000 5th Ave., New York, New York.
11. Sensitive financial information concerning Joe Smith, including his Social Security Number and credit card numbers, were negligently left unencrypted on Jane Jones’s laptop.
12 Joe Smith is himself careful with his financial information.
13. Six weeks after the loss of the laptop, Joe Smith was the victim of identity theft, perpetrated by someone as yet unknown, in which a fake credit card was created under his name.
14. Joe Smith’s damages from the identity theft has been $78,000.
15. Joe Smith’s damages were proximately caused by the defendants’ negligence.
JURISDICTION AND VENUE
16. This Court has jurisdiction over the subject matter of this Complaint pursuant to 28 U.S.C. § 1332.
17. Venue in this District is proper under 28 U.S.C. § 1391.
STATEMENT OF CLAIM
18. By reason of the foregoing, Insurer Corp. is liable for negligence to Joe Smith.
19. By reason of the foregoing, Jane Jones is liable for negligence to Joe Smith.
PRAYER FOR RELIEF
Wherefore, plaintiff respectfully requests that this Court award
a. $78,000 in compensatory damages to Joe Smith
b. $100,000 in punitive damages to Joe Smith and
c. any further relief that this court deems appropriate.
Dated: Miami, Florida
January 6, 2012
Stivith & Gardner,
Paul Stivith (PS-2001)
Attorney for the Plaintiff,
200 2nd St.
The following (in italics) would be an ideal answer:
There is clearly no TwIqbal problem with the allegations of negligent conduct. The plaintiff does not engage in “a formulaic recitation of the elements of a cause of action.” He describes concrete acts that plausibly constitute negligence – leaving a laptop on a bench outside an office building with sensitive information unencrypted.
The problem is the allegation of causation between the negligent acts and the plaintiff’s damages (from identity theft). One might argue that the allegation of causation suffers from the same problem that the allegation of an agreement did in Twombly. In Twombly the plaintiffs alleged an agreement between the Baby Bells, but at the time they had only parallel conduct as their evidence of an agreement. Since there was an alternative explanation of the parallel conduct besides an agreement (namely, that the Baby Bells each had their own independent economic justifications for engaging in acts they did), the complaint failed to plausibly allege an agreement. Here the plaintiff alleges causation, but all he has as evidence is that the damages occurred soon after the defendants’ negligent acts. Here too there is an alternative explanation, namely that the plaintiff’s information was obtained from a different source. The plaintiff does allege facts that seek to close off this alternative, however, by saying that he is careful with his information. And we must take this allegation as true for the purposes of judging the sufficiency of the complaint. But even careful people can have their personal information stolen.
[Here I would expect you to take a stand. This question is drawn from an actual case, Resnick v. AvMed, Inc., 693 F.3d 1317 (11th Cir. 2012), in which the majority found that the allegations of causation satisfied TwIqbal, but one member of the panel dissented. In Resnick, however, the identity theft was many months after the laptops were stolen. I personally think that TwIqbal is satisfied here. Indeed, in another case with a time gap more like ours, the 9th Circuit found that the temporal proximity between the two events, combined with the fact that the plaintiff was otherwise careful with his information, was sufficient to allow a reasonable jury to conclude that a causal relation existed. Stollenwerk v. Tri-West Health Care Alliance, 254 Fed.Appx. 664 (9th Cir. 2007). Even if we understand TwIqbal as requiring the plaintiff to allege evidence, it probably does not require the plaintiff to allege evidence sufficient to convince a reasonable jury. So the fact that a reasonable jury could find causation from the evidence alleged by the plaintiff in this complaint must mean that TwIqbal was satisfied. I did not demand that you come to this conclusion, however. What was most important was that you focused on the causation problem.
For those of you who worried that the allegation of negligence did not satisfy TwIqbal, it is helpful to consider what more, if anything, the defendants could possibly have expected from the plaintiff.]