In 2007, the United States Supreme Court applied a new, stricter standard to motions to dismiss, and extended and further explained that standard in 2009. While some state courts have followed suit, others have reaffirmed the older, more forgiving standard. Until now, the Colorado Supreme Court had not taken a position on this question, but just recently decided in Warne v. Hall, 2016 CO 50, that Colorado would adopt the federal standard and require a greater factual showing before a case can proceed in Colorado state court.
The Case
In 2006, Bill Hall entered into an agreement to sell land he owned to Ensign United States Drilling Company, Inc. (Ensign) for Ensign to enter into a land-use plan and development agreement with the town of Gilcrest, Colorado. After the development deal with the town stalled and Ensign terminated its agreement with Hall, he brought various claims, including one for intentional interference with contract against Gilcrest’s then-Mayor, Menda Warne. Warne moved to dismiss, and the District Court granted the motion. The Court of Appeals reversed, holding that under Colorado’s “no set of facts” standard, Hall stated a claim for relief. Warne then sought the Supreme Court’s intervention, arguing that Colorado should adopt the stricter federal standard, which Warne believed would result in dismissal of the claim against her.
The Issue
The Colorado Rules of Civil Procedure “are patterned on the federal rules,” and it is for that reason the Colorado Supreme Court has long said that state courts are to “look to the federal rules and federal decisions interpreting those rules for guidance”[1]—guidance our state’s high court has called “highly persuasive.”[2] For decades, Colorado federal courts applied the same standard to motions to dismiss for failure to state a claim: a complaint should not be dismissed “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief.”[3] That standard, expressed in the United States Supreme Court’s 1957 decision in Conley v. Gibson and adopted by the Colorado Supreme Court 15 years later in Davidson v. Dill[4], is undoubtedly a lenient one, allowing a plaintiff to pursue discovery unless the claims asserted were legally barred.
In 2007, however, federal and state practice diverged. The United States Supreme Court in Bell Atlantic Corp. v. Twombly expressly abandoned the Conley “no set of facts” test: “The phrase is best forgotten as an incomplete, negative gloss on an accepted pleading standard.”[5] Instead, the Court held that in order to state a claim under Fed. R. Civ. P. 8, a complaint cannot merely offer “labels and conclusions, and a formulaic recitation of a cause of action’s elements will not do,” but must contain sufficient factual allegations to present a “plausible entitlement to relief.”[6] Two years later, in Ashcroft v. Iqbal, the high court directed courts to apply Twombly to all federal cases and to identify conclusions masquerading as factual allegations and decline to assume the truth of such allegations.[7]
Following Twombly and Iqbal, state courts have faced a choice: continue to apply the long-used “no set of facts” standard or continue practicing deference to federal interpretations of similar federal rules and thereby abandon the old standard. Prior to the Colorado Supreme Court’s decision, 13 state high courts squarely addressed this same question and divided over the answer. Eight of them—Arizona, Delaware, Iowa, Minnesota, Tennessee, Vermont, Washington and West Virginia—continued to apply the “no set of facts” standard, either expressly rejecting the federal “plausibility” standard or holding that any change in the applicable standard ought to come through changing the language of the rule itself rather than reinterpreting the rule.[8] The other five, however—Massachusetts, Nebraska, South Dakota and Wisconsin, as well as the District of Columbia—adopted the “plausibility” standard and discarded the “no set of facts” test.[9]
The Colorado Supreme Court’s Decision
In Warne v. Hall, a divided Colorado Supreme Court decided, on a 4-3 vote, that it would follow the federal standard and require complaints to “state a plausible claim for relief” in order to survive a motion to dismiss.[10]
Instead of deciding whether it would “abandon the Conley standard,” the court, in an opinion authored by Justice Coats, described the question it faced as “whether our pleading standard has always...
