Federal courts cannot always expect plaintiffs to provide robust evidentiary support for their allegations at the pleading stage, according to the Eighth Circuit Court of Appeals.
“If allegations are based on information that's within the possession and control of the defendant, or supported by sufficient factual material that makes the inference of culpability plausible, they're permissible,” wrote Judge Bobby E. Shepherd in an Eighth Circuit Court of Appeals opinion last month.
Judges Steven M. Colloton and L. Steven Grasz concurred in issuing a ruling in Ahern Rentals Inc. v. EquipmentShare.com Inc. et al that touched upon what happens when a plaintiff doesn't have actual personal knowledge of the specific facts that would state a claim.
“In some contexts that information may not be available to them before discovery,” Shepherd further stated in the Feb. 7 ruling. “We adopt this prevailing standard today and hold that allegations pled on information and belief are not categorically insufficient to state a claim for relief where the proof supporting the allegation is within the sole possession and control of the defendant or where the belief is based on sufficient factual material that makes the inference of culpability plausible.”
Ahern Rentals sued EquipmentShare.com and EZ Equipment Zone in Missouri federal court alleging they had colluded to gain trade secrets that would give them an unfair competitive advantage.
“The Eighth Circuit said that in this instance, those particular facts which are alleged on information and belief are not publicly available and are not things the plaintiff would have knowledge of and under those circumstances pleading upon information and belief is permissible to state a claim,” said David Eisenberg, an attorney with Baker Sterchi and editor of the firm's Missouri Law Blog.
The decision reversed Western District Chief Judge Beth Phillips’ opinion that the allegations of EZ’s conspiratorial actions all were based merely upon information and belief and weren’t enough to demonstrate that the claims were plausible, rather than just conceivable.
“Either those facts are completely within the peculiar knowledge of the defendants and the plaintiff won't be able to get to the bottom of them without reasonable discovery, or where the belief that the plaintiff has is based on facts that make an inference of culpability plausible,” Eisenberg told the St. Louis Record.
Ahern’s lawsuit was reinstated last month.
The Eighth Circuit Court of Appeals' interpretation of information and belief could be applied to other types of lawsuits including divorce, personal injury, and medical malpractice where information is not publicly available, according to Eisenberg.
“Financial information may not be publicly available and in a negligence case, if there's evidence that somebody was driving recklessly and, upon information and belief, the driver had consumed unusual amounts of alcohol, there may be other facts found in a police report that that car was swerving or things like that,” Eisenberg added.