Removed Complaint Must Comply With Iqbal, Twombly

It's a question that has plagued mankind (assuming lawyers are human) for centuries. And by centuries, we mean since the great Civil Procedure shakeup of 2007-2009.

If a complaint is filed in a state court under notice pleading requirements, then removed to federal court on diversity grounds, does it have to comply with Iqbal and Twombly standards?

Pardon us while we desperately call our old Civil Procedure professors. Oh wait, never mind. The Ninth Circuit just answered the question for us.

Mr. Faulkner, not to be confused with the greatest writer of all time, called up ADT Security Services to dispute a bill. He heard beeping, asked about it, and was told that he was being recorded. He tried to discuss the matter with customer service only to be told that if he didn't want to be recorded, he could simply hang up (and never have his matter addressed.)

Incensed by the violation of his dear, dear privacy, he filed a class action lawsuit on behalf of all similarly aggrieved Californians, alleging violations of a state privacy law. This law prohibits recording where circumstances indicate that any party may desire it to be confidential. His complaint alleges two main things:

• He called to dispute the bill;
• The conversation was carried on in circumstances as may reasonably indicate that any party to the communication desires it to be confined thereto.

Notice anything missing? He did not allege what circumstances would support an expectation of privacy in such a call. The court gave examples of possible pleaded facts, such as the use of a social security number, which might give rise to such an expectation.

And yes, his second allegation is exactly the sort of "threadbare recital" of a statute that Iqbal disapproved of.

He got 12(b)(6)'d. Under Iqbal, he deserved it. But does Iqbal apply when the case originated in a California court with its own pleading standard?

Per Kearns v. Ford Motor Court, "[i]t is well-settled that the Federal Rules of Civil Procedure apply in federal court, irrespective of the source of the subject matter jurisdiction, and irrespective of whether the substantive law at issue is state or federal."

That means if your properly pleaded state case gets removed to federal court, you should seek leave to amend the complaint as the interests of justice require.

The good news for Faulkner and his merry band of aggrieved class plaintiffs is that the Ninth Circuit, with an "overabundance of caution," showed mercy and remanded the case to allow him to amend his pleading, just in case he can allege sufficient facts to satisfy federal pleading standards.

Related Resources:

• Faulkner v. ADT Security Services, Inc. (FindLaw Case Law)
• The Supreme Court Wreaks Havoc in the Lower Federal Courts--Again (FindLaw's Writ)
• Battle of Atlanta Passes Through 11th With a Whimper, Twombly Citing (FindLaw's Eleventh Circuit Blog)