## Facts

- Subscribers to local telephone and high-speed internet services filed a putative class action against several incumbent local exchange carriers (regional “Baby Bells” and successors).
- After the Telecommunications Act of 1996 imposed duties on incumbents to facilitate competitive entry, plaintiffs alleged the incumbents engaged in parallel conduct to inhibit competitive local exchange carriers.
- Plaintiffs also alleged the incumbents agreed not to compete in one another’s geographic territories, pointing to their failure to enter adjacent markets and an executive remark suggesting such entry “did not seem right.”
- Plaintiffs claimed the conduct allowed each incumbent to maintain monopoly power in its local market and charge supracompetitive prices.
- The district court dismissed under Rule 12(b)(6), holding parallel conduct alone does not plausibly allege a § 1 agreement.
- The court of appeals reversed under Conley’s “no set of facts” formulation.
- The Supreme Court granted review.

## Issues

1. Whether allegations of parallel conduct, coupled with a conclusory allegation of agreement, state a claim for conspiracy under § 1 of the Sherman Act.
2. What Rule 8(a)(2) requires to plead entitlement to relief, and whether Conley’s “no set of facts” language states the governing standard.

## Decision

- The Supreme Court reversed the court of appeals and reinstated dismissal of the complaint.
- The Court held that parallel business conduct, without factual allegations that plausibly suggest an agreement, does not state a § 1 claim.
- The Court rejected Conley’s “no set of facts” language as an incomplete statement of the Rule 8 pleading standard.
- The Court required enough factual matter to make the claim “plausible on its face,” not merely possible or consistent with liability.
- Applying that standard, the Court found the alleged conduct at least as consistent with lawful, independent business behavior as with conspiracy, and the cited supporting details too ambiguous to bridge the gap.

## Legal Principles

- Rule 8 demands more than labels, conclusions, or a formulaic recitation of elements; factual allegations must raise the right to relief above speculation.
- A complaint must contain sufficient factual matter, accepted as true, to state a claim that is plausible on its face.
- In § 1 Sherman Act cases, pleading must include enough factual context to suggest an agreement; parallel conduct alone, plus a bare assertion of conspiracy, is insufficient because § 1 targets concerted, not unilateral, action.
- Courts may consider the costs and burdens of discovery in assessing whether a complaint plausibly shows entitlement to proceed past the pleading stage.

## Conclusion

The Court required plaintiffs alleging a § 1 conspiracy to plead facts that plausibly suggest an agreement, holding that parallel conduct consistent with independent self-interest, combined with conclusory assertions of conspiracy, fails to state a claim under Rule 8 and warrants dismissal under Rule 12(b)(6).


Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)