In Walsh v. U.S. Bank, N.A., No. A13-0742, 2014 WL 3844201 (Minn. Aug. 6, 2014), the Minnesota Supreme Court addressed whether the federal plausibility standard set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), applied to civil pleadings brought in Minnesota state court. Under Twombly and Iqbal a complaint needs to contain “enough facts to state a claim to relief that is plausible on its face.” The Minnesota Supreme Court concluded that the federal plausibility standard does not apply in Minnesota state court civil actions, but rather Minnesota’s traditional pleadings standard found in Minn. R. Civ. P. 8.01 and analyzed in First Nat’l Bank of Henning v. Olson, 74 N.W.2d 123 (1955) and Northern States Power Co. v. Franklin, 122 N.W.2d 26 (1963) applies. Under Minnesota’s traditional pleadings standard, a pleading is sufficient to withstand a motion to dismiss if it is possible on any evidence which might be produced, consistent with the pleader’s theory, to grant the relief demanded. Franklin, 122 N.W.2d at 29.
Facts of Walsh
Plaintiff Laura L. Walsh defaulted on the mortgage for her home in Minneapolis and the mortgage holder, U.S. Bank, N.A., began a non-judicial foreclosure proceeding (foreclosure by advertisement). Accordingly, U.S. Bank attempted to serve a person at Walsh’s property, identified as “Jane Doe”, with a notice of the impending foreclosure sale. Jane Doe refused to open the door to accept service so the process server left the foreclosure-related documents in the door. After Walsh’s property was sold at a foreclosure sale, Walsh brought claims against U.S. Bank to vacate the sale due to ineffective service of the foreclosure-related documents in violation of Minn. Stat. § 580.03 (2013) and Minn. R. Civ. P. 4.03(a). Walsh alleged that neither she nor her roommate were served with the documents and they were the only persons living at her home when service was attempted.
The District Court’s Holding
In the litigation, U.S. Bank moved to dismiss Walsh’s complaint pursuant to Minn. R. Civ. P. 12.02(e) for failure to state a claim upon which relief can be granted. U.S. Bank’s motion relied upon the plausibility standard announced in Bell Atlantic Corp. v. Twombly, which requires that a complaint contain “enough facts to state a claim to relief that is plausible on its face.” 550 U.S. at 570. U.S. Bank argued that Walsh’s complaint failed to meet such standard. The district court used the Twombly plausibility standard and dismissed Walsh’s complaint with prejudice, reasoning that “Walsh has failed to establish any evidence or facts giving rise to a plausible claim for relief. All of the appropriately considered facts fail to establish improper service.” Walsh, 2014 WL 3844201, at *2. Walsh appealed.
The Court of Appeals’ Holding
On appeal, the Minnesota Court of Appeals reversed and remanded the district court’s holding explaining that the district court erred in dismissing Walsh’s complaint because it satisfied the traditional Minnesota pleading standard. Such standard is satisfied so long as “it is possible for Walsh to produce evidence consistent with [her legal] theory.” Walsh v. U.S. Bank, N.A., No. A13-0742, 2013 WL 6050427 (Minn. Ct. App. Nov. 18, 2013).
The Minnesota Supreme Court Holding
The Minnesota Supreme Court granted review to determine “whether the plausibility standard, applied by the district court, or the [Minnesota] traditional pleading standard, applied by the court of appeals governs civil pleadings in Minnesota. “ Walsh, 2014 WL 3844201, at *2. The court began its analysis by determining the appropriate interpretation of Minn. R. Civ. P. 8.01. The plain language of Rule 8.01 states that “[a] pleading which sets forth a claim for relief . . . shall contain a short and plain statement of the claim showing that the pleader is entitled to relief.” The Minnesota Supreme Court interpreted that language in First National Bank of Henning v. Olson, stating “there is no justification for dismissing a complaint for insufficiency . . . unless it appears to a certainty that the plaintiff would be entitled to no relief under any state of facts which could be proved in support of the claim.” 74 N.W.2d 123 (1955). The court expanded its explanation in Northern States Power Co. v. Franklin, stating “[t]he functions of a pleading today are simply to give fair notice to the adverse party of the incident giving rise to the suit . . . . A claim is sufficient against a motion to dismiss . . . if it is possible on any evidence which might be produced, consistent with the pleader’s theory, to grant the relief demanded.” 122 N.W.2d 26, 29 (1963) (emphasis added) (citations omitted).
In 2007 the United States Supreme Court announced a new pleading standard for civil actions in federal court—the plausibility standard. The standard was discussed in two paramount federal cases Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal. Under the plausibility standard, a pleading must contain “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570, 555. The court clarified the plausibility standard in Iqbal, stating that if the facts in a complaint do not permit a court to infer more than a mere possibility of misconduct the complaint has simply alleged, but not shown, that the pleader is entitled to relief. Iqbal, 556 U.S. at 679. The Minnesota Supreme Court cited Twombly three times, but never to adopt or reject the plausibility standard. However, in Walsh, the court announced for the first time that it was refusing to instill the federal plausibility standard into Minnesota’s interpretation of Minn. R. Civ. P. 8.01. The court reached its decision after analyzing: 1) the plain language of Rule 8.01; 2) the purpose and history of Rule 8.01; and 3) the context of Rule 8.01.
The Court found that the plain language of Rule 8.01 did not provide textual support for the plausibility standard. U.S. Bank argued that the words “showing” and “entitled” provide textual support for the plausibility standard, but the court rejected this argument, stating that there is no textual basis for converting such words into a plausibility standard and doing so would contradict Minnesota’s interpretation of Rule 8.01.
Analyzing the purpose and history of Rule 8.01, the court explained that the plausibility standard does not coincide with the history and intended purpose of the rule. Rule 8.01 was intended to create a preference for “non-technical, broad brush pleadings” and allow events to be plead through broad general statements that may express conclusions. Walsh, 2014 WL 3844201, at *5. The plausibility standard however, requires “factual enhancement” and raises the bar for claimants, thereby conflicting with Rule 8.01’s preference for non-technical, broad-brush pleadings.
The Court also found the context of Rule 8.01 to be inconsistent with the plausibility standard for five reasons. First, when Minn. R. Civ. P. require more factual specificity, the rules state so clearly. Second, the rules “express a strong preference for short statement[s] of fact in complaints.” Third, sample complaints appended to the rules clearly demonstrate that short, general statements are sufficient. Fourth, when a pleading is too vague, Minn. R. Civ. P. 12.05 provides a remedy by allowing a party to move “for a more definite statement.” Fifth, the rules already have safeguards to limit discovery expenses. For the reasons set forth above, the Court found that U.S. Bank failed to present a compelling reason to overrule Minnesota’s traditional interpretation of Rule 8.01 and accordingly, the Court declined to adopt the federal plausibility standard.
Therefore, in applying the traditional pleadings standard for civil action in Minnesota, the court analyzed Walsh’s complaint and determined that her complaint satisfied such standard. Walsh’s complaint was based on ineffective service under Minn. Stat. § 580.03 and Minn. R. Civ. P. 4.03(a). Walsh’s complaint set forth two factual assertions that adequately contest service. First, the fact that neither she nor her roommate were served with the documents, and second, that she and her roommate were the only residents of the property at the time of attempted service. Based on reasonable inferences arising from such statements, the court found that Walsh’s complaint satisfied the traditional pleading standard for civil actions in Minnesota.
In light of Walsh, it is now clear that a claim in Minnesota state court is sufficient if “it is possible on any evidence which might be produced, consistent with the pleader’s theory to grant the relief demanded.” If you have questions about the Walsh decision or need assistance commencing a lawsuit in Minnesota, contact any of the civil litigation attorneys of Trepanier MacGillis Battina P.A.
About the Author:
Minnesota litigation attorney Bryan R. Battina is a seasoned litigator and trial attorney with extensive experience in civil litigation, particularly commercial litigation, real estate litigation, and employment law matters. Bryan may be reached at 612.455.0505 or firstname.lastname@example.org. Trepanier MacGillis Battina P.A. is a Minnesota commercial litigation law firm located in Minneapolis, Minnesota.