Nov. 20, 2019 -- Earlier this year, the Wisconsin Supreme Court issued a per curiam decision in Cattau v. National Insurance Services of Wisconsin, Inc.1Cattau is an interesting commentary on Wisconsin’s pleading standards.
Background
The case involves a circuit court’s dismissal of claims brought by a group of retired teachers and administrators alleging mismanagement of their retirement funds. Applying applicable law, the circuit court held that the complaint failed to state a claim.
The court of appeals affirmed, relying upon the well-cited decision of Data Key Partners v. Permira Advisors LLC.2 The court of appeals noted that Data Key Partners had created a new heightened pleading standard in Wisconsin, and agreed with the circuit court that the plaintiffs’ complaint failed to state a claim.
Supreme Court Review
The Wisconsin Supreme Court granted review, and reversed the court of
appeals’ discussion of Data Key Partners (although it did not reverse the decision itself). The Supreme Court indicated that the pleading standard set out in Data Key Partners was not “heightened” but rather “consistent” with prior pleading standards law in Wisconsin, and specifically Strid v. Converse.3 The court went on to articulate that a complaint must allege facts that would satisfy each element of a cause of action, and that the substantive law that underlies the claim drives what facts must be pled.
Sarah A. Zylstra, U.W. 1998, is a partner with Boardman & Clark LLP, Madison, where she practices in all types of civil litigation in both state and federal court, including filing appellate briefs.
The defendants argued that by setting out the pleadings standard employed by the U.S. Supreme Court in Bell Atlantic Corp. v. Twombly,4 the Wisconsin Supreme Court in Data Key Partners had changed Wisconsin’s pleading standard to a heightened “plausibility” standard.
The court in Cattau, however, stated that the U.S. Supreme Court’s decision in Twombly was consistent with Wisconsin’s prior pleading standards in Strid. The Wisconsin Supreme Court suggests that Wisconsin has always required the heightened plausibility standard, at least since the court’s 1983 decision in Strid.
Puzzling Out Cattau
The Wisconsin Supreme Court’s comments are somewhat puzzling.
To explain, the U.S. Supreme Court in Twombly specifically overruled Conley v. Gibson.5 The phrase often quoted from the Conley decision was that a complaint should not be dismissed for failure to state a claim “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”6
In overruling Conley, the U.S. Supreme Court clarified in Twombly that this statement was not a correct statement of federal pleading requirements. Data Key Partners specifically acknowledged Twombly’s discussion overruling Conley.7
However, the Wisconsin Supreme Court, both in Strid and in cases cited after Strid, has included similar “no set of facts” language that appeared in Conley, and that the U.S. Supreme Court in Twombly overruled.8
Reinforcing a Standard
In any event and despite the puzzling comments in Cattau, the Wisconsin Supreme Court reinforced and made clear that the applicable standard for motions to dismiss a complaint is expressed correctly in Data Key Partners, and that a plaintiff must plead facts that would satisfy each element of a cause of action in order to survive a motion to dismiss.
Just don’t call it a “heightened” standard in your briefs.
For more discussion on this issue, see Kathy L. Nusslock’s article, “What Is Wisconsin's Pleading Standard?” in the September 2019 issue of Wisconsin Lawyer magazine.
This article was originally published on the State Bar of Wisconsin’s Litigation Section Blog. Visit the State Bar sections or the Litigation Section web pages to learn more about the benefits of section membership.
Endnotes
1Cattau v. National Ins. Servs. of Wis. Inc., 2019 WI 46, 386 Wis. 2d 515, 926 N.W.2d 756.
2Data Key Partners v. Permira Advisers LLC, 2014 WI 86, 356 Wis. 2d 665, 849 N.W.2d 693.
3Strid v. Converse, 111 Wis. 2d 418, 331 N.W.2d 350 (1983).
4Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).
5Conley v. Gibson, 355 U.S. 41 (1957).
6Conley, 355 U.S. at 45-46.
7 2014 WI 86, ¶¶ 28-29.
8See, e.g., Strid, 111 Wis. 2d at 422 (“… the complaint should be dismissed as legally insufficient only if it appears to a certainty that no relief can be granted under any set of facts that the plaintiff can prove in support of her allegations”); Northridge Co. v. W. R. Grace & Co., 162 Wis. 2d 918, 923, 471 N.W.2d 179 (1991) (“the facts set forth in the complaint must be taken as true and the complaint dismissed only if it appears certain that no relief can be granted under any set of facts that the plaintiffs might prove in support of their allegations.”).
