12(b)(6) Motions — Documents That May Be Considered - Joseph Hage Aaronson

Commercial Litigation and Arbitration

Commercial Litigation and Arbitration

12(b)(6) Motions — Documents That May Be Considered

The critical issue on many motions to dismiss concerns just what extra-complaint documents the court may properly consider. Perhaps the most expansive formulation is employed in securities actions. The following is taken from Securities and Exchange Commission v. Power, 2007 U.S. Dist. LEXIS 87632 (S.D.N.Y. Nov. 27, 2007):

On a motion to dismiss, the complaint is properly deemed to include “any statements or documents it corporate by reference, public disclosures filed by law with the [Securities and Exchange] Commission, and documents the plaintiff either possessed or knew about and upon which the plaintiff relied in bringing suit." Harrison v. Rubenstein, No. 02 Civ. 9356 (DAB), 2007 WL 582955 at *10 (S.D.N.Y. Feb. 26, 2007) (citing Rothman v. Gregor, 220 F.3d 81, 88-89 (2d Cir. 2000)).

That is a very broad formulation and it is not, by its terms, limited to securities cases, although those are somewhat unique in that the fact of disclosure — i.e., the fact that a statement was made — is generally of paramount importance, obviating hearsay issues that might convert the 12(b)(6) motion into a summary judgment motion (were the substance of the statement critical). What does it mean to say that the court may consider “documents the plaintiff either possessed or knew about and upon which the plaintiff relied?” How does anyone other than the plaintiff know what documents, for example, the plaintiff merely knew about and yet relied on? Or what documents the plaintiff possessed? Under Bell Atl. v. Twombly, does the plaintiff have to say so? Can the defendant simply argue and can the court make an educated guess?

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