Fed. R. Civ. P.

Upjohn Co. manufactures and sells pharmaceuticals in the United States and abroad. In January 1976, independent accountants conducting an audit of one of Upjohn's foreign subsidiaries discovered that the subsidiary had made payments to or for the benefit of foreign government officials in order to secure government business. The accountants informed Gerard Thomas, Upjohn's Vice President, Secretary, and General Counsel. Thomas is a member of the Michigan and New York Bars and had served as General Counsel for twenty years. Thomas consulted with outside counsel and R. T. Parfet, Jr., Upjohn's Chairman of the Board. It was decided that the company would conduct an internal investigation of what were termed questionable payments. As part of this investigation, the attorneys prepared a letter containing a questionnaire that was sent to all foreign general and area managers over the Chairman's signature. The letter noted recent disclosures that several American companies had made possibly illegal payments to foreign government officials. It stated that Thomas had been asked to conduct an investigation to determine the nature and magnitude of any such payments. Managers were instructed to treat the investigation as highly confidential and to send responses directly to Thomas. Thomas and outside counsel also interviewed the recipients of the questionnaire and thirty-three other Upjohn officers or employees. On March 26, 1976, Upjohn voluntarily submitted a preliminary report to the Securities and Exchange Commission on Form 8-K disclosing the questionable payments. A copy of the report was simultaneously submitted to the Internal Revenue Service. The IRS immediately began an investigation to determine the tax consequences of the payments. On November 23, 1976, the Service issued a summons pursuant to 26 U.S.C. § 7602 demanding production of the records described in the summons. The records included written questionnaires sent to managers of the Upjohn Company's foreign affiliates. They also included memorandums or notes of the interviews conducted in the United States and abroad with officers and employees of the Upjohn Company and its subsidiaries. Upjohn declined to produce the documents specified in the summons on the grounds that they were protected by the attorney-client privilege and constituted attorneys' work product prepared in anticipation of litigation. On August 31, 1977, the United States filed a petition in the United States District Court for the Western District of Michigan seeking enforcement of the summons under 26 U.S.C. §§ 7402(b) and 7604(a). The district court adopted a magistrate's recommendation that the summons should be enforced. Upjohn appealed to the Court of Appeals for the Sixth Circuit. The Sixth Circuit rejected the magistrate's finding of a waiver of the attorney-client privilege. However, it held that the privilege did not apply to the extent the communications were made by officers and agents not responsible for directing Upjohn's actions in response to legal advice. The court remanded to the district court for a determination of who was within the control group. In a footnote, the court stated that the work-product doctrine is not applicable to administrative summonses issued under 26 U.S.C. § 7602. The Supreme Court granted certiorari.

In 1973 Congress enacted the Endangered Species Act to protect species of animals against threats to their continuing existence caused by man. In 1978 the Fish and Wildlife Service and National Marine Fisheries Service issued a joint regulation interpreting section 7(a)(2) to require federal agencies to consult with the Secretary of the Interior on actions taken in foreign nations. In 1986 the Secretary promulgated a revised regulation that limited the consultation obligation to actions within the United States or on the high seas. Shortly after the 1986 regulation took effect, Defenders of Wildlife and other environmental organizations filed suit in the United States District Court for the District of Minnesota against the Secretary of the Interior. The complaint sought a declaratory judgment that the regulation was invalid as to its geographic scope and an injunction requiring the Secretary to promulgate a new regulation mandating consultation for foreign projects. The complaint alleged that the absence of consultation would increase the rate of extinction of endangered and threatened species. The complaint further alleged that some of the organizations' members observed these species both domestically and abroad. Respondents supported their allegations with affidavits from two members. Joyce Kelly stated that she had traveled to Egypt in 1986, observed the habitat of the endangered Nile crocodile, and intended to return. Kelly further stated that she would suffer harm from the United States role in the rehabilitation of the Aswan High Dam. Amy Skilbred stated that she had traveled to Sri Lanka in 1981, observed the habitat of endangered species including the Asian elephant and leopard at the site of the Mahaweli project funded by the Agency for International Development, and intended to return. Skilbred admitted she had no current plans to return because of a civil war. The District Court dismissed the complaint for lack of standing. The Court of Appeals for the Eighth Circuit reversed. On remand the District Court denied the Secretary's motion for summary judgment on standing. The District Court granted respondents' motion for summary judgment on the merits and enjoined the Secretary from applying the regulation to foreign countries. The Eighth Circuit affirmed. The Supreme Court granted certiorari.

In 1984 the divestiture of AT&T's local telephone business created seven regional service monopolies known as Regional Bell Operating Companies or Incumbent Local Exchange Carriers. More than a decade later Congress enacted the Telecommunications Act of 1996 which restructured local telephone markets and imposed duties on the ILECs to facilitate entry by competitive local exchange carriers through resale of services at wholesale rates, leasing of unbundled network elements, or interconnection of facilities. William Twombly and Lawrence Marcus filed suit in the United States District Court for the Southern District of New York on behalf of a putative class of all subscribers of local telephone and high-speed internet services from February 8, 1996 to the present. They named as defendants four consolidated ILECs: BellSouth Corporation, Qwest Communications International Inc., SBC Communications Inc., and Verizon Communications Inc. The complaint alleged that these ILECs conspired to restrain trade by engaging in parallel conduct to inhibit CLECs, including unfair agreements for network access, inferior connections, overcharging, and billing practices designed to sabotage CLEC customer relations. The complaint further alleged that the ILECs agreed not to compete against one another in their respective territories. This agreement was inferred from their common failure to pursue business opportunities in contiguous markets and from a statement by Qwest CEO Richard Notebaert that competing in another ILEC's territory might be a good way to turn a quick dollar but that does not make it right. The complaint asserted that in light of the absence of meaningful competition among the ILECs and their parallel course of conduct the defendants had entered into a contract combination or conspiracy to prevent competitive entry and to allocate customers and markets. The district court dismissed the complaint for failure to state a claim. It concluded that the alleged parallel behavior was fully explained by each ILEC's independent interest in defending its own territory and that the complaint did not allege facts suggesting the decision to refrain from competing elsewhere was contrary to the ILECs' apparent economic interests. The Court of Appeals for the Second Circuit reversed, holding that plus factors need not be pleaded and that allegations of parallel conduct suffice if they leave open the possibility of collusion. The Supreme Court granted certiorari to address the proper standard for pleading an antitrust conspiracy through allegations of parallel conduct.

In 1953 the Textile Workers Union of America entered into a collective bargaining agreement with Lincoln Mills of Alabama. The agreement was to run for one year and from year to year thereafter unless terminated on specified notices. It contained a no-strike clause and established a multi-step grievance procedure whose final step, available to either party, was arbitration. Several grievances concerning work loads and work assignments arose under the agreement. The union processed the grievances through every step of the contractual procedure, after which the employer denied them. The union then requested arbitration, but the employer refused. The union filed suit in federal district court seeking an order compelling the employer to arbitrate the grievances. The district court held that it possessed jurisdiction and directed the employer to comply with the arbitration provisions of the agreement. On appeal the Court of Appeals reversed by a divided vote, concluding that the district court lacked authority under either federal or state law to grant the requested relief. The Supreme Court granted certiorari. After the Court of Appeals decision but before oral argument, Lincoln Mills terminated its operations, ceased all work at the mill in March 1957, and contracted to sell its mill properties. Some of the grievances sought back pay for increased workloads, and the collective bargaining agreement authorized the arbitration board to adjust compensation retroactively.