Class-action lawyers are no strangers to conspiracy. It forms the basis of many antitrust claims, as well as providing plaintiffs with a way of leveraging evidence against a poorer defendant into a case against defendants with deeper pockets.
Defending conspiracy class actions can be frustrating: savvy plaintiffs will often use any evidence of parallel conduct as evidence of conspiracy, and any lack of evidence as evidence of a coverup. Or, they could until the Supreme Court rendered its decision in Bell Atlantic Co. v. Twombly (as well as its companion case, Ashcroft v. Iqbal.) These two cases have provoked plenty of discussion among legal bloggers and academics. But a two-year old working paper by Cass Sunstein and Adrian Vermuele on Conspiracy Theories provides some context to the Twombly/Iqbal debate.
Sunstein and Vermuele define a conspiracy theory as
an effort to explain some event or practice by reference to the machinations of powerful people, who have also managed to conceal their role.
(Emphasis in original.) The definition, as they concede, embraces conspiracy theories that have turned out to be true (like Watergate), as well as some that are purely benign (like Santa Claus). Sunstein and Vermuele are more interested in the false, harmful theories, which
have some distinctive features, above all because of their self-sealing quality; the very arguments that give rise to them, and account for their plausibility, make it more difficult for outsiders to rebut or even to question them.
(Emphasis added.) More specifically:
Those who accept such theories believe that the agents of the conspiracy have unusual powers, so that apparently contrary evidence can usually be shown to be a product of the conspiracy itself. Conspiracy theories display the characteristic features of a “degenerating research program” in which contrary evidence is explained away by adding epicycles and resisting falsification of key tenets.
(Emphasis added.) So what does this have to do with Twombly? In that case, the Supreme Court required the plaintiffs to plead a conspiracy that was "plausible," and to do so using specific facts. Doing so filters out the worst aspects of a self-sealing conspiracy theory. Because the plaintiff must plead specific facts, logical contradictions in her conspiracy theory will be clearer, and those can justify dismissal. So can pleading a conspiracy with no obvious benefit to the defendant.
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Today marks the end of the first year of Class Action Countermeasures. From my perspective, this experiment in blogging has been a rousing success. The blog has has gained more readers than I expected, thanks to the generosity of the legal blogosphere. I've gotten to virtually "meet" a number of really interesting class-action bloggers. And I got to announce my first book, on class-action stratgegy. (It makes an excellent holiday gift!)
I'm hoping for another good year in 2011. The Supreme Court seems intent on keeping class-action practice interesting. And, despite one tragic loss, there is a thriving, diverse set of academics studying Rule 23. I also have a new project to keep me scouring SSRN and law review sites: I've contracted to co-author another book (with an old friend, Andrew Deguire). It has the working title Complex Negotiation Strategy: A Business and Law Perspective, and should be due out in late 2012/early 2013. The blog won't change, although I may venture more into some more general strategic discussions--including a few on negotiations--on Thursdays. (I will always bring it back to class-action practice, the blog title is there for a reason.)
Anyway, I wanted to thank those of you who've been reading so far. I hope you've found this even a tenth as much fun as I have.