Swanson v. Citibank, N.A.

=== Lead Opinion ===

WOOD, Circuit Judge.
Gloria Swanson sued Citibank, Andre Lanier, and Lanier’s employer, PCI Appraisal Services, because she believed that all three had discriminated against her on the basis of her race (African-American) when Citibank turned down her application for a home-equity loan. Swanson also named her husband, Charles Routen, as a co-plaintiff and a co-appellant but since Swanson is proceeding
pro se,
she may not represent her husband. See Fed.R.CivP. 11(a);
Malone v. Nielson,
474 F.3d 934
, 937 (7th Cix.2007). We have therefore dismissed Routen as a party on appeal; we proceed solely with respect to Swanson’s part of the case. She was unsuccessful in the district court, which dismissed in response to the defendants’ motion under Fed.R.Civ.P. 12(b)(6).
Swanson based her complaint on the following set of events, which we accept as true for purposes of this appeal.
Hemi Group, LLC v. City of New York, N.Y.
, — U.S. -,
130 S.Ct. 983, 986-87
, — L.Ed.2d - (2010). In February 2009 Citibank announced a plan to make loans using funds that it had received from the federal government’s Troubled Assets Relief Program. Encouraged by this prospect, Swanson went to a Citibank branch to apply for a home-equity loan. A representative named Skertich told Swanson that she could not apply alone, because she owned her home jointly with her husband; he had to be present as well. Swanson was skeptical, suspecting that Skertich’s demand was a ploy to discourage loan applications from African-Americans. She therefore asked to speak to a manager. When the manager joined the group, Swanson disclosed to both Skertich and the manager that Washington Mutual Bank previously had denied her a home-equity loan. The manager warned Swanson that, although she did not want to discourage Swanson from applying for the loan, Citibank’s loan criteria were more stringent than those of other banks.
Still interested, Swanson took a loan application home and returned the next day with the necessary information. She was again assisted by Skertich, who entered the information that Swanson had furnished into the computer. When he reached a question regarding race, Skertich told Swanson that she was not required to respond. At some point during this exchange, Skertich pointed to a photo
*403
graph on his desk and commented that his wife and son were part African-American.
A few days later Citibank conditionally approved Swanson for a home-equity loan of $50,000. It hired Andre Lanier, who worked for PCI Appraisal Services, to visit Swanson’s home for an onsite appraisal. Although Swanson had estimated in her loan application that her house was worth $270,000, Lanier appraised it at only $170,000. The difference was critical: Citibank turned down the loan and explained that its conditional approval had been based on the higher valuation. Two months later Swanson paid for and obtained an appraisal from Midwest Valuations, which thought her home was worth $240,000.
Swanson saw coordinated action in this chain of events, and so she filed a complaint (later amended) charging that Citibank, Lanier, and PCI disfavor providing home-equity loans to African-Americans, and so they deliberately lowered the appraised value of her home far below its actual market value, so that they would have an excuse to deny her the loan. She charges that in so doing, they violated the Fair Housing Act,
42 U.S.C. § 3605
, and the Equal Credit Opportunity Act,
15 U.S.C. § 1691
(a)(1). The district court granted the defendants’ motions to dismiss both theories. It relied heavily on
Latimore v. Citibank Fed. Savings Bank,
151 F.3d 712
(7th Cir.1998), a case in which this court described the evidence required to defeat a defense motion for summary judgment on a credit discrimination claim. Initially, the court liberally construed Swanson’s complaint to include a common-law fraud claim and declined to dismiss that aspect of the case. Later, however, the defendants moved to dismiss the fraud claim as well, and the district court granted the motion on the grounds that the statements on which Swanson relied were too indefinite and her reliance was unreasonable. This appeal followed.
Before turning to the particulars of Swanson’s case, a brief review of the standards that apply to dismissals for failure to state a claim is in order. It is by now well established that a plaintiff must do better than putting a few words on paper that, in the hands of an imaginative reader,
might
suggest that something has happened to her that
might
be redressed by the law.
Cf. Conley v. Gibson,
355 U.S. 41, 45-46
,
78 S.Ct. 99
,
2 L.Ed.2d 80
(1957), disapproved by
Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 563
,
127 S.Ct. 1955
,
167 L.Ed.2d 929
(2007) (“after puzzling the profession for 50 years, this famous observation [the ‘no set of facts’ language] has earned its retirement”). The question with which courts are still struggling is how much higher the Supreme Court meant to set the bar, when it decided not only
Twombly
,
but also
Erickson v. Pardus,
551 U.S. 89
,
127 S.Ct. 2197
,
167 L.Ed.2d 1081
(2007), and
Ashcroft v. Iqbal,
— U.S.-,
129 S.Ct. 1937
,
173 L.Ed.2d 868
(2009). This is not an easy question to answer, as the thoughtful dissent from this opinion demonstrates. On the one hand, the Supreme Court has adopted a “plausibility” standard, but on the other hand, it has insisted that it is not requiring fact pleading, nor is it adopting a single pleading standard to replace Rule 8, Rule 9, and specialized regimes like the one in the Private Securities Litigation Reform Act (“PSLRA”), 15 U.S.C. § 78u-4(b)(2).
Critically, in none of the three recent
decisions
— Twombly,
Erickson
,
or Iqbal— did the Court cast any doubt on the validity of Rule 8 of the Federal Rules of Civil Procedure. To the contrary: at all times it has said that it is interpreting Rule 8, not tossing it out the window. It is therefore useful to begin with a look at the language of the rule:
*404
(a) Claim for Relief. A pleading that states a claim for relief must contain:
(2) a short and plain statement of the claim showing that the pleader is entitled to relief....
Fed.R.CivP. 8(a)(2). As one respected treatise put it in 2004,
all that is necessary is that the claim for relief be stated with brevity, conciseness, and clarity.... [T]his portion of Rule 8 indicates that a basic objective of the rules is to avoid civil cases turning on technicalities and to require that the pleading discharge the function of giving the opposing party fair notice of the nature and basis or grounds of the pleader’s claim and a general indication of the type of litigation that is involved. ...
5 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1215 at 165-173 (3d ed. 2004).
Nothing in the recent trio of cases has undermined these broad principles. As
Erickson
underscored, “[sjpecific facts are not necessary.”
551 U.S. at 93
,
127 S.Ct. 2197
. The Court was not engaged in a
sub rosa
campaign to reinstate the old fact-pleading system called for by the Field Code or even more modern codes. We know that because it said so in
Erickson
:
“the statement need only give the defendant fair notice of what the ... claim is and the grounds upon which it rests.”
Id.
Instead, the Court has called for more careful attention to be given to several key questions: what, exactly, does it take to give the opposing party “fair notice”; how much detail realistically can be given, and should be given, about the nature and basis or grounds of the claim; and in what way is the pleader expected to signal the type of litigation that is being put before the court?
This is the light in which the Court’s references in
Twombly
,
repeated in
Iqbal
,
to the pleader’s responsibility to “state a claim to relief that is plausible on its face” must be understood. See
Twombly,
550 U.S. at 570
,
127 S.Ct. 1955
;
Iqbal,
129 S.Ct. at 1949
. “Plausibility” in this context does not imply that the district court should decide whose version to believe, or which version is more likely than not. Indeed, the Court expressly distanced itself from the latter approach in
Iqbal
,
“the plausibility standard is not akin to a probability requirement.”
129 S.Ct. at 1949
(quotation marks omitted). As we understand it, the Court is saying instead that the plaintiff must give enough details about the subject-matter of the case to present a story that holds together. In other words, the court will ask itself
could
these things have happened, not
did
they happen. For cases governed only by Rule 8, it is not necessary to stack up inferences side by side and allow the case to go forward only if the plaintiffs inferences seem more compelling than the opposing inferences. Compare
Makor Issues & Rights, Ltd. v. Tellabs Inc.,
513 F.3d 702, 705
(7th Cir.2008) (applying PSLRA standards).
The Supreme Court’s explicit decision to reaffirm the validity of
Swierkiewicz v. Sorema N.A.,
534 U.S. 506
,
122 S.Ct. 992
,
152 L.Ed.2d 1
(2002), which was cited with approval in
Twombly,
550 U.S. at 556
,
127 S.Ct. 1955
, indicates that in many straightforward cases, it will not be any more difficult today for a plaintiff to meet that burden than it was before the Court’s recent decisions. A plaintiff who believes that she has been passed over for a promotion because of her sex will be able to plead that she was employed by Company X, that a promotion was offered, that she applied and was qualified for it, and that the job went to someone else. That is an
*405
entirely plausible scenario, whether or not it describes what “really” went on in this plaintiffs case. A more complex case involving financial derivatives, or tax fraud that the parties tried hard to conceal, or antitrust violations, will require more detail, both to give the opposing party notice of what the case is all about and to show how, in the plaintiffs mind at least, the dots should be connected. Finally, as the Supreme Court warned in
Iqbal
and as we acknowledged later in
Brooks v. Ross,
578 F.3d 574
(7th Cir.2009), “abstract recitations of the elements of a cause of action or conclusory legal statements,”
578 F.3d at 581
, do nothing to distinguish the particular case that is before the court from every other hypothetically possible case in that field of law. Such statements therefore do not add to the notice that Rule 8 demands.
We realize that one powerful reason that lies behind the Supreme Court’s concern about pleading standards is the cost of the discovery that will follow in any case that survives a motion to dismiss on the pleadings. The costs of discovery are often asymmetric, as the dissent points out, and one way to rein them in would be to make it more difficult to earn the right to engage in discovery. That is just what the Court did, by interring the rule that a complaint could go forward if any set of facts at all could be imagined, consistent with the statements in the complaint, that would permit the pleader to obtain relief. Too much chaff was moving ahead with the wheat. But, in other contexts, the Supreme Court has drawn a careful line between those things that can be accomplished by judicial interpretation and those that should be handled through the procedures set up in the Rules Enabling Act,
28 U.S.C. § 2071
et seq.
See
Mohawk Indus., Inc. v. Carpenter,
— U.S.-,
130 S.Ct. 599, 609
,
175 L.Ed.2d 458
(2009). In fact, the Judicial Conference’s Advisory Committee on Civil Rules is engaged in an intensive study of pleading rules, discovery practice, and the costs of litigation, as its recent 2010 Civil Litigation Conference, held at Duke Law School May 10-11, 2010, demonstrates. See Summary of 2010 Conference on Civil Litigation at Duke Law School, University of Denver Institute for the Advancement of the American Legal System, at http://www.du.edu/legalinstitute/pdf/DukeConference.pdf (last visited July 28, 2010).
Returning to Swanson’s case, we must analyze her allegations defendant-by-defendant. We begin with Citibank. On appeal, Swanson challenges only the dismissal of her Fair Housing Act and fraud claims. The Fair Housing Act prohibits businesses engaged in residential real estate transactions, including “[t]he making ... of loans or providing other financial assistance ... secured by residential real estate,” from discriminating against any person on account of race.
42 U.S.C. § 3605
(a), (b)(1)(B). Swanson’s complaint identifies the type of discrimination that she thinks occurs (racial), by whom (Citibank, through Skertich, the manager, and the outside appraisers it used), and when (in connection with her effort in early 2009 to obtain a home-equity loan). This is all that she needed to put in the complaint. See
Swierkiewicz,
534 U.S. at 511-12
,
122 S.Ct. 992
(employment discrimination); see also
Fritz v. Charter Twp. of Comstock,
592 F.3d 718, 723-24
(6th Cir.2010);
Comm. Concerning Cmty. Improvement v. City of Modesto,
583 F.3d 690, 715
(9th Cir.2009).
The fact that Swanson included other, largely extraneous facts in her complaint does not undermine the soundness of her pleading. She points to Citibank’s announced plan to use federal money to make more loans, its refusal to follow
*406
through in her case, and Skertich’s comment that he has a mixed-race family. She has not pleaded herself out of court by mentioning these facts; whether they are particularly helpful for proving her case or not is another matter that can safely be put off for another day. It was therefore error for the district court to dismiss Swanson’s Fair Housing Act claim against Citibank.
Her fraud claim against Citibank stands on a different footing. Rule 9(b) of the Federal Rules of Civil Procedure provides that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Of special relevance here, a plaintiff must plead actual damages arising from her reliance on a fraudulent statement.
Tricontinental Indus., Ltd. v. PricewaterhouseCoopers, LLP,
475 F.3d 824, 841
(7th Cir.2007). Without a contract, only out-of-pocket losses allegedly arising from the fraud are recoverable.
Roboserve, Inc. v. Koto Kagaku Co., Ltd.,
78 F.3d 266, 274
(7th Cir.1996) (applying Illinois law). Swanson asserts that Citibank falsely announced plans to make federal funds available in the form of loans to all customers, when it actually intended to exclude African-American customers from those who would be eligible for the loans. Swanson relied, she says, on that false information when she applied for her home-equity loan. But she never alleged that she lost anything from the process of applying for the loan. We do not know, for example, whether there was a loan application fee, or if Citibank or she covered the cost of the appraisal. This is the kind of particular information that Rule 9 requires, and its absence means that the district court was entitled to dismiss the claim.
We now turn to Swanson’s claims against Lanier and PCI. Here again, she pursues only her Fair Housing Act and fraud claims. (The appraisal defendants point out that they do not extend credit, and thus their actions are not covered in any event by the Equal Credit Opportunity Act, 15 U.S.C. § 1691a(e).) The Fair Housing Act makes it “unlawful for any person or other entity whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race....”
42 U.S.C. § 3605
(a). The statute goes on to define the term “residential real estate-related transaction” to include “the selling, brokering, or appraising of residential real property.”
42 U.S.C. § 3605
(b)(2). There is an appraisal exemption also, found in § 4605(c), but it provides only that nothing in the statute prohibits appraisers from taking into consideration factors other than race or the other protected characteristics.
Swanson accuses the appraisal defendants of skewing their assessment of her home because of her race. It is unclear whether she believes that they did so as part of a conspiracy with Citibank, or if she thinks that they deliberately undervalued her property on their own initiative. Once again, we find that she has pleaded enough to survive a motion under Rule 12(b)(6). The appraisal defendants knew her race, and she accuses them of discriminating against her in the specific business transaction that they had with her. When it comes to proving her case, she will need to come up with more evidence than the mere fact that PCI (through Lanier) placed a far lower value on her house than Midwest Valuations did. See
Latimore,
151 F.3d at 715
(need more at the summary judgment stage than evidence of a
*407
discrepancy between appraisals). All we hold now is that she is entitled to take the next step in this litigation.
This does not, however, save her common-law fraud claim against Lanier and PCI. She has not adequately alleged that she relied on their appraisal, nor has she pointed to any out-of-pocket losses that she suffered because of it.
We therefore Reverse the judgment of the district court insofar as it dismissed Swanson’s Fair Housing Act claims against all three defendants, and we Affirm insofar as it dismissed the common-law fraud claims against all three. Each side will bear its own costs on appeal.

=== Dissent ===

POSNER, Circuit Judge,
dissenting in part.
I join the majority opinion except with respect to reversing the dismissal of the plaintiffs claim of housing discrimination. I have difficulty squaring that reversal with
Ashcroft v. Iqbal,
—— U.S.-,
129 S.Ct. 1937
,
173 L.Ed.2d 868
(2009), unless
Iqbal
is limited to cases in which there is a defense of official immunity — especially if as in that case it is asserted by very high-ranking officials (the Attorney General of the United States and the Director of the FBI) — because the defense is compromised if the defendants have to respond to discovery demands in a case unlikely to have merit.
Smith v. Duffey,
576 F.3d 336, 340
(7th Cir.2009); Robert G. Bone, “Plausibility Pleading Revisited and Revised: A Comment on
Ashcroft v. Iqbal,"
85
Notre Dame L.Rev.
849, 882 (2010); Howard M. Wasserman,
“Iqbal,
Procedural Mismatches, and Civil Rights Litigation,” 14
Lewis & Clark L.Rev.
157, 172-73 (2010).
The majority opinion does not suggest that the Supreme Court would limit
Iqbal
to immunity cases. The Court said that “our decision in
Twombly [Bell Atlantic Corp. v. Twombly,
550 U.S. 544
,
127 S.Ct. 1955
,
167 L.Ed.2d 929
(2007), the forerunner of
Iqbal
] expounded the pleading standard for ‘all civil actions.’ ”
129 S.Ct. at 1953
. It did add that a district judge’s promise of minimally intrusive discovery “provides especially cold comfort in this pleading context, where we are impelled to give real content to the concept of qualified immunity for high-level officials who must be neither deterred nor detracted from the vigorous performance of their duties.”
Id.
at 1954
. But this seems just to mean that the Court thought
Iqbal
a strong case for application of the
Twombly
standard, rather than thinking it the only type of discrimination case to which the standard applies.
There is language in my colleagues’ opinion to suggest that discrimination cases are outside the scope of
Iqbal
,
itself a discrimination case. The opinion says that “a plaintiff who believes that she has been passed over for a promotion because of her sex will be able to plead that she was employed by Company X, that a promotion was offered, that she applied and was qualified for it, and that the job went to someone else.” Though this is not a promotion case, the opinion goes on to say that “Swanson’s complaint identifies the type of discrimination that she thinks occurs (racial), by whom (Citibank, through Skertich, the manager, and the outside appraisers it used), and when (in connection with her effort in early 2009 to obtain a home equity loan). This is all that she needed to put in the complaint.” In contrast, “a more complex case involving financial derivatives, or tax fraud that the parties tried hard to conceal, or antitrust violations, will require more detail, both to give the opposing party notice of what the case is all about and to show how, in the plaintiffs mind at least, the dots should be connected.” The “more complex” case
*408
to which this passage is referring is
Twombly
,
an antitrust case. But
Iqbal
,
which charged the defendants with having subjected Pakistani Muslims to harsh conditions of confinement because of their religion and national origin, was a discrimination case, as is the present case, and was not especially complex.
Suppose this
were
a promotion case, and several people were vying for a promotion, all were qualified, several were men and one was a woman, and one of the men received the promotion. No complexity; yet the district court would “draw on its judicial experience and common sense,”
Ashcroft v. Iqbal, supra,
129 S.Ct. at 1950
, to conclude that discrimination would not be a plausible explanation of the hiring decision, without additional allegations.
This case is even stronger for dismissal because it lacks the competitive situation'— man and woman, or white and black, vying for the same job and the man, or the white, getting it. We had emphasized this distinction, long before
Twombly
and
Iqbal
,
in
Latimore v. Citibank Federal Savings Bank,
151 F.3d 712
(7th Cir.1998), like this a case of credit discrimination rather than promotion. “Latimore was not competing with a white person for a $51,000 loan. A bank does not announce, We are making a $51,000 real estate loan today; please submit your applications, and we’ll choose the application that we like best and give that applicant the loan.’ ”
Id.
at 714
. We held that there was no basis for an inference of discrimination.
Noland v. Commerce Mortgage Corp.,
122 F.3d 551, 553
(8th Cir.1997), and
Simms v. First Gibraltar Bank,
83 F.3d 1546, 1558
(5th Cir.1996), rejected credit-discrimination claims because there was no evidence that similar applicants were treated better, and
Boykin v. Bank of America Corp.,
162 Fed.Appx. 837, 840
(11th Cir.2005) (per curiam), rejected such a claim because “absent direct evidence of discrimination, there is no basis for a trier of fact to assume that a decision to deny a loan was motivated by discriminatory animus unless the plaintiff makes a showing that a pattern of lending suggests the existence of discrimination.”
There is no allegation that the plaintiff in this case was competing with a white person for a loan. It was the low appraisal of her home that killed her chances for the $50,000 loan that she was seeking. The appraiser thought her home worth only $170,000, and she already owed $146,000 on it (a first mortgage of $121,000 and a home-equity loan of $25,000). A further loan of $50,000 would thus have been undersecured. We must assume that the appraisal was a mistake, and the house worth considerably more, as she alleges. But errors in appraising a house are common because “real estate appraisal is not an exact science,”
Latimore v. Citibank Federal Savings Bank, supra,
151 F.3d at 715
— common enough to have created a market for “Real Estate Appraisers Errors & Omissions” insurance policies. See, e.g., OREP (Organization of Real Estate Professionals), “E&O Insurance,” www.orep.org/appraisers-e&o.htm (visited July 11, 2010). The Supreme Court would consider error the plausible inference in this case, rather than discrimination, for it said in
Iqbal
that “as between that ‘obvious alternative explanation’ for the [injury of which the plaintiff is complaining] and the purposeful, invidious discrimination [the plaintiff] asks us to infer, discrimination is not a plausible conclusion.”
Ashcroft v. Iqbal, supra,
129 S.Ct. at 1951-52
, quoting
Twombly,
550 U.S. at 567
,
127 S.Ct. 1955
.
Even before
Twombly
and
Iqbal
,
complaints were dismissed when they alleged facts that refuted the plaintiffs’ claims. See, e.g.,
Tierney v. Vahle,
304 F.3d 734, 740
(7th Cir.2002);
Thomas v. Farley,
31
*409
F.3d 557
(7th Cir.1994);
Lightner v. City of Wilmington,
545 F.3d 260, 262
(4th Cir.2008). Under the new regime, it should be enough that the allegations render a claim implausible. The complaint alleges that Citibank was the second bank to turn down the plaintiffs application for a home-equity loan. This reinforces the inference that she was not qualified. We further learn that, subject to the appraisal, which had not yet been conducted, Citibank had approved the $50,000 home-equity loan that the plaintiff was seeking on the basis of her representation that her house was worth $270,000. But she didn’t think it was worth that much when she applied for the loan. The house had been appraised at $260,000 in 2004, and the complaint alleges that home values had fallen by “only” 16 to 20 percent since. This implies that when she applied for the home-equity loan her house was worth between $208,000 and $218,400 — much less than what she told Citibank it was worth.
If the house was worth $208,000, she would have owed a total of $196,000 had she gotten the loan, or just a shade under the market value of the house. If the bank had insisted that she have a 20 percent equity in the house, which would be $41,600, it would have lent her only $20,400 ($166,400 — -80 percent of $208,000 — minus the $146,000 that she already owed on the house). The loan figure rises to $28,720 if the house was worth $218,400 rather than $208,000. In either case a $50,000 loan would have been out of the question, especially in the wake of the financial crash of September 2008, when credit, including home-equity credit, became extremely tight. E.g., Bob Tedeschi, “Opening the Tap on Home Equity,”
N.Y. Times,
Nov. 7, 2008, p. RE9, www.nytimes.com/2008/11/02/realestate/02mort.html. For it was a home-equity loan that the plaintiff was seeking in early February of 2009, at the nadir of the economic collapse — and seeking it from troubled Citibank, one of the banks that required a federal bailout in the wake of the crash. Financial reports in the weeks surrounding the plaintiffs application make clear the difficulty of obtaining credit from Citibank during that period. See Binyamin Appelbaum, “Despite Federal Aid, Many Banks Fail to Revive Lending,”
Wash. Post,
Feb. 3, 2009, www.washingtonpost.com/wp-dyn/content/article/2009/02/02/AR2009020203338_pf. html (“some of the first banks to get funding, such as Citigroup and J.P. Morgan Chase, have reported the sharpest drops in lending”); Liz Moyer, “Banks Promise Loans but Hoard Cash,”
Forbes.com,
Feb. 3, 2009, www.forbes.com/2009/02/03/ banking-federal-reserve-business-wall-street-0203_loans.html (“ ‘banks and other lenders have tightened access to credit and are conserving capital in order to absorb the losses that occur when borrowers default,’ the company [Citibank] said: ‘Citi will not and cannot take excessive risk with the capital the American public and other investors have entrusted to the company’ ”); Mara Der Hovanesian & David Henry, “Citi: The Losses Keep Coming,”
Bloomberg BusinessWeek,
Jan. 12, 2009, www.businessweek.com/bwdaily/dnflash/content/jan2009/db20090112_136301.htm? campaign-id=rss_daily (“banks are not lending. They are using every opportunity to pull loans and force liquidations”). (All web sites were visited on July 11, 2010.)
In
Erickson v. Pardus,
551 U.S. 89
,
127 S.Ct. 2197
,
167 L.Ed.2d 1081
(2007) (per curiam), decided two weeks after
Twombly
,
the Supreme Court, without citing
Twombly
,
reinstated a prisoner’s civil rights suit that had been dismissed on the ground that the allegations of the complaint were “conclusory.” The suit had charged deliberate indifference to the plaintiffs need for medical treatment. In
*410
the key passage in the Court’s opinion, we learn that “the complaint stated that Dr. Bloor’s decision to remove the petitioner [that is, the plaintiff] from his prescribed hepatitis C medication was ‘endangering [his] life.’ It alleged this medication was withheld ‘shortly after’ petitioner had commenced a treatment program that would take one year, that he was ‘still in need of treatment for this disease,’ and that the prison officials were in the meantime refusing to provide treatment.
This alone was enough to satisfy Rule 8(a)(2).
Petitioner, in addition, bolstered his claim by making more specific allegations in documents attached to the complaint and in later filings” (emphasis added, record citations omitted). It was reasonable to infer from these allegations, assuming their truth, that the defendants (who included Dr. Bloor, a prison doctor) had acted with deliberate indifference to the petitioner’s serious medical need by refusing to provide him with any medical treatment after taking away his medication. Indeed it’s difficult (again assuming the truth of the allegations) to imagine an alternative interpretation. Hepatitis C is a serious disease and the prisoner had been put in a treatment program expected to last a year. To refuse him any treatment whatsoever seemed (as the other allegations to which the Court referred confirmed) to be punitive. I think
Erickson
is good law even after
Iqbal
,
but I also think it’s miles away from a case in which all that’s alleged (besides pure speculation about the defendants’ motive) is that someone was denied a loan because her house was mistakenly appraised for less than its market value.
The majority opinion relies heavily on
Swierkiewicz v. Sorema N.A.,
534 U.S. 506
,
122 S.Ct. 992
,
152 L.Ed.2d 1
(2002), cited with approval in
Twombly
,
see
550 U.S. at 556
,
127 S.Ct. 1955
(though not cited in
Iqbal)
and not overruled. Although it is regarded in some quarters as dead after
Iqbal, e.g., Fowler v. UPMC Shadyside,
578 F.3d 203, 211
(3d Cir.2009); Suja A. Thomas, “The New Summary Judgment Motion: The Motion to Dismiss Under
Iqbal
and
Twombly,”
14
Lewis & Clark L.Rev.
15, 35 (2010), lower-court judges are not to deem a Supreme Court decision overruled even if it is plainly inconsistent with a subsequent decision.
State Oil Co. v. Khan,
522 U.S. 3
,
118 S.Ct. 275
,
139 L.Ed.2d 199
(1997);
Agostini v. Felton,
521 U.S. 203, 237
,
117 S.Ct. 1997
,
138 L.Ed.2d 391
(1997);
Rodriguez de Quijas v. Shearson/American Express, Inc.,
490 U.S. 477, 484
,
109 S.Ct. 1917
,
104 L.Ed.2d 526
(1989);
National Rifle Ass’n v. City of Chicago,
567 F.3d 856, 857-58
(7th Cir.2009), reversed under the name
McDonald v. City of Chicago,
—- U.S. -,
130 S.Ct. 3020
,
177 L.Ed.2d 894
(2010). But that principle is not applicable here;
Swierkiewicz
is distinguishable.
The Court rejected a rule that the Second Circuit had created which required “heightened pleading” in Title VII cases. The basic requirement for a complaint (“a short and plain statement of the claim showing that the pleader is entitled to relief’) is set forth in Rule 8(a)(2) of the Federal Rules of Civil Procedure. Rule 9 requires heightened pleading (that is, a specific allegation) of certain elements in particular cases, such as fraud and special damages. There is no reference to heightened pleading of discrimination claims, however, and
Swierkiewicz
holds that the judiciary is not authorized to amend Rule 9 without complying with the procedures in the Rules Enabling Act.
534 U.S. at 513-15
,
122 S.Ct. 992
;
Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit,
507 U.S. 163, 168-69
,
113 S.Ct. 1160
,
122 L.Ed.2d 517
(1993); Saritha Komatireddy Tice, Note, “A ‘Plausible’ Explanation of Pleading Standards:
Bell Atlantic Corp. v. Twombly,”
31
Harv. J.L.
*411
& Pub. Pol’y
827, 832 n. 49 (2008). As the Court explained in
Twombly, “Sivierkiewicz
did not change the law of pleading, but simply re-emphasized ... that the Second Circuit’s use of a heightened pleading standard for Title VII cases was contrary to the Federal Rules.”
550 U.S. at 570
,
127 S.Ct. 1955
. But Title VII cases are not exempted by
Sivierkieioicz
from the doctrine of the
Iqbal
case.
Iqbal
establishes a general requirement of “plausibility” applicable to all civil cases in federal courts.
It does so, however, in opaque language: “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.”
129 S.Ct. at 1949
. In statistics the range of probabilities is from 0 to 1, and therefore encompasses “sheer possibility” along with “plausibility.” It seems (no stronger word is possible) that what the Court was driving at was that even if the district judge doesn’t think a plaintiffs case is more likely than not to be a winner (that is, doesn’t think p > .5), as long as it is substantially justified that’s enough to avert dismissal. Cf. Equal Access to Justice Act,
28 U.S.C. § 2412
(d)(1)(A). But when a bank turns down a loan applicant because the appraisal of the security for the loan indicates that the loan would not be adequately secured, the alternative hypothesis of racial discrimination does not have substantial merit; it is implausible.
Behind both
Twombly
and
Iqbal
lurks a concern with asymmetric discovery burdens and the potential for extortionate litigation (similar to that created by class actions, to which Rule 23(f) of the civil rules was a response,
Isaacs v. Sprint Corp.,
261 F.3d 679, 681
(7th Cir.2001);
Blair v. Equifax Check Services, Inc.,
181 F.3d 832, 834-35
(7th Cir.1999);
Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
259 F.3d 154
, 162-65 (3d Cir.2001);
Vallario v. Vandehey,
554 F.3d 1259, 1263
(10th Cir.2009); Fed.R.Civ.P. 23(f) Committee Note) that such an asymmetry creates.
Ashcroft v. Iqbal, supra,
129 S.Ct. at 1953
;
Bell Atlantic Corp. v.
Twombly, supra,
550 U.S. at 557-59
,
127 S.Ct. 1955
;
Cooney v. Rossiter,
583 F.3d 967, 971
(7th Cir.2009);
Beck v. Dobrowski,
559 F.3d 680, 682
(7th Cir.2009);
Kendall v. Visa U.S.A, Inc.,
518 F.3d 1042, 1046-47
(9th Cir.2008). In most suits against corporations or other institutions, and in both
Twombly
and
Iqbal
— but also in the present case — the plaintiff wants or needs more discovery of the defendant than the defendant wants or needs of the plaintiff, because the plaintiff has to search the defendant’s records (and, through depositions, the minds of the defendant’s employees) to obtain evidence of wrongdoing. With the electronic archives of large corporations or other large organizations holding millions of emails and other electronic communications, the cost of discovery to a defendant has become in many cases astronomical. And the cost is not only monetary; it can include, as well, the disruption of the defendant’s operations. If no similar costs are borne by the plaintiff in complying with the defendant’s discovery demands, the costs to the defendant may induce it to agree early in the litigation to a settlement favorable to the plaintiff.
It is true, as critics of
Twombly
and
Iqbal
point out, that district courts have authority to limit discovery. E.g.,
Griffin v. Foley,
542 F.3d 209, 223
(7th Cir.2008);
Searls v. Glasser,
64 F.3d 1061, 1068
(7th Cir.1995);
Deitchman v. E.R. Squibb & Sons, Inc.,
740 F.2d 556, 563
(7th Cir.1984);
Mwani v. bin Laden,
417 F.3d 1, 17
(D.C.Cir.2005). But especially in busy districts, which is where complex litigation is concentrated, the judges tend to delegate that authority to magistrate judges. And because the magistrate judge to whom a
*412
case is delegated for discovery only is not responsible for the trial or the decision and can have only an imperfect sense of how widely the district judge would want the factual inquiry in the case to roam to enable him to decide it, the magistrate judge is likely to err on the permissive side. “One common form of unnecessary discovery (and therefore a ready source of threatened discovery) is delving into ten issues when one will be dispositive. A magistrate lacks the authority to carve off the nine unnecessary issues; for all the magistrate knows, the judge may want evidence on any one of them. So the magistrate stands back and lets the parties have at it. Pursuit of factual and legal issues that will not matter to the outcome of the case is a source of enormous unnecessary costs, yet it is one hard to conquer in a system of notice pleading and even harder to limit when an officer lacking the power to decide the case supervises discovery.” Frank H. Easterbrook, “Discovery as Abuse,” 69
B.U. L.Rev.
635, 639 (1989); see also Milton Pollack, “Discovery — Its Abuse and Correction,”
80 F.R.D. 219
, 223 (1979); Virginia E. Hench, “Mandatory Disclosure and Equal Access to Justice: The 1993 Federal Discovery Rules Amendments and the Just, Speedy and Inexpensive Determination of Every Action,” 67
Temple L.Rev.
179, 232 (1994).
This structural flaw helps to explain and justify the Supreme Court’s new approach. It requires the plaintiff to conduct a more extensive precomplaint investigation than used to be required and so creates greater symmetry between the plaintiffs and the defendant’s litigation costs, and by doing so reduces the scope for extortionate discovery. If the plaintiff shows that he can’t conduct an even minimally adequate investigation without limited discovery, the judge presumably can allow that discovery, meanwhile deferring ruling on the defendant’s motion to dismiss.
Miller v. Gammie,
335 F.3d 889
, 899 (9th Cir.2003) (en banc);
Coss v. Playtex Products, LLC,
No. 08 C 50222,
2009 WL 1455358
(N.D.Ill. May 21, 2009); Edward A. Hartnett, “Taming
Twombly
,
Even After
Iqbal,”
158
U. Pa. L.Rev.
473, 507-14 (2010); Suzette M. Malveaux, “Front Loading and Heavy Lifting: How Pre-Dismissal Discovery Can Address the Detrimental Effect of Iqbal on Civil Rights Cases,” 14
Lewis & Clark L.Rev.
65 (2010). No one has suggested such a resolution for this case.
The plaintiff has an implausible case of discrimination, but she will now be permitted to serve discovery demands that will compel elaborate document review by Citibank and require its executives to sit for many hours of depositions. (Not that the plaintiff is capable of conducting such proceedings as a pro se, but on remand she may' — indeed she would be well advised to — ask the judge to help her And a lawyer.) The threat of such an imposition will induce Citibank to consider settlement even if the suit has no merit at all. That is the pattern that the Supreme Court’s recent decisions are aimed at disrupting.
We should affirm the dismissal of the suit in its entirety.

=== Opinion ===

                               In the

United States Court of Appeals
                For the Seventh Circuit

No. 10-1122

G LORIA E. S WANSON,
                                                   Plaintiff-Appellant,
                                   v.

C ITIBANK, N.A., et al.,
                                                Defendants-Appellees.


              Appeal from the United States District Court
         for the Northern District of Illinois, Eastern Division.
                 No. 09 C 2344—James B. Zagel, Judge.



      S UBMITTED M AY 26, 2010 Œ —D ECIDED JULY 30, 2010




 Before E ASTERBROOK, Chief Judge, and P OSNER and
W OOD , Circuit Judges.
 W OOD , Circuit Judge. Gloria Swanson sued Citibank,
Andre Lanier, and Lanier’s employer, PCI Appraisal



Œ
  After examining the briefs and the record, we have concluded
that oral argument is unnecessary. The appeal is therefore
submitted on the briefs and the record. F ED . R. A PP . P.
34(a)(2)(C).
2                                               No. 10-1122

Services, because she believed that all three had discrimi-
nated against her on the basis of her race (African-Ameri-
can) when Citibank turned down her application for a
home-equity loan. Swanson also named her husband,
Charles Routen, as a co-plaintiff and a co-appellant,
but since Swanson is proceeding pro se, she may not
represent her husband. See F ED . R. C IV. P. 11(a); Malone
v. Nielson, 474 F.3d 934, 937 (7th Cir. 2007). We have there-
fore dismissed Routen as a party on appeal; we proceed
solely with respect to Swanson’s part of the case. She
was unsuccessful in the district court, which dismissed
in response to the defendants’ motion under F ED. R.
C IV. P. 12(b)(6).
  Swanson based her complaint on the following set of
events, which we accept as true for purposes of this
appeal. Hemi Group, LLC v. City of New York, N.Y., 130 S.
Ct. 983, 986-87 (2010). In February 2009 Citibank an-
nounced a plan to make loans using funds that it had
received from the federal government’s Troubled Assets
Relief Program. Encouraged by this prospect, Swanson
went to a Citibank branch to apply for a home-equity
loan. A representative named Skertich told Swanson that
she could not apply alone, because she owned her home
jointly with her husband; he had to be present as well.
Swanson was skeptical, suspecting that Skertich’s demand
was a ploy to discourage loan applications from African-
Americans. She therefore asked to speak to a manager.
When the manager joined the group, Swanson disclosed
to both Skertich and the manager that Washington
Mutual Bank previously had denied her a home-equity
loan. The manager warned Swanson that, although she
No. 10-1122                                            3

did not want to discourage Swanson from applying for
the loan, Citibank’s loan criteria were more stringent
than those of other banks.
  Still interested, Swanson took a loan application home
and returned the next day with the necessary informa-
tion. She was again assisted by Skertich, who entered the
information that Swanson had furnished into the com-
puter. When he reached a question regarding race,
Skertich told Swanson that she was not required to re-
spond. At some point during this exchange, Skertich
pointed to a photograph on his desk and commented
that his wife and son were part African-American.
  A few days later Citibank conditionally approved
Swanson for a home-equity loan of $50,000. It hired
Andre Lanier, who worked for PCI Appraisal Services, to
visit Swanson’s home for an onsite appraisal. Although
Swanson had estimated in her loan application that her
house was worth $270,000, Lanier appraised it at only
$170,000. The difference was critical: Citibank turned
down the loan and explained that its conditional
approval had been based on the higher valuation. Two
months later Swanson paid for and obtained an ap-
praisal from Midwest Valuations, which thought her
home was worth $240,000.
  Swanson saw coordinated action in this chain of events,
and so she filed a complaint (later amended) charging
that Citibank, Lanier, and PCI disfavor providing home-
equity loans to African-Americans, and so they delib-
erately lowered the appraised value of her home far
below its actual market value, so that they would have
4                                               No. 10-1122

an excuse to deny her the loan. She charges that in so
doing, they violated the Fair Housing Act, 42 U.S.C.
§ 3605, and the Equal Credit Opportunity Act, 15
U.S.C. § 1691(a)(1). The district court granted the defen-
dants’ motions to dismiss both theories. It relied heavily on
Latimore v. Citibank Fed. Savings Bank, 151 F.3d 712 (7th
Cir. 1998), a case in which this court described the
evidence required to defeat a defense motion for sum-
mary judgment on a credit discrimination claim. Initially,
the court liberally construed Swanson’s complaint to
include a common-law fraud claim and declined to
dismiss that aspect of the case. Later, however, the defen-
dants moved to dismiss the fraud claim as well, and the
district court granted the motion on the grounds that
the statements on which Swanson relied were too indefi-
nite and her reliance was unreasonable. This appeal
followed.
  Before turning to the particulars of Swanson’s case, a
brief review of the standards that apply to dismissals
for failure to state a claim is in order. It is by now well
established that a plaintiff must do better than putting
a few words on paper that, in the hands of an imagina-
tive reader, might suggest that something has happened
to her that might be redressed by the law. Cf. Conley v.
Gibson, 355 U.S. 41, 45-46 (1957), disapproved by Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 563 (2007) (“after
puzzling the profession for 50 years, this famous observa-
tion [the ‘no set of facts’ language] has earned its retire-
ment”). The question with which courts are still strug-
gling is how much higher the Supreme Court meant to
set the bar, when it decided not only Twombly, but also
No. 10-1122                                                   5

Erickson v. Pardus, 551 U.S. 89 (2007), and Ashcroft v. Iqbal,
129 S. Ct. 1937 (2009). This is not an easy question to
answer, as the thoughtful dissent from this opinion
demonstrates. On the one hand, the Supreme Court
has adopted a “plausibility” standard, but on the other
hand, it has insisted that it is not requiring fact
pleading, nor is it adopting a single pleading standard
to replace Rule 8, Rule 9, and specialized regimes like
the one in the Private Securities Litigation Reform Act
(“PSLRA”), 15 U.S.C. § 78u-4(b)(2).
  Critically, in none of the three recent decisions—
Twombly, Erickson, or Iqbal—did the Court cast any
doubt on the validity of Rule 8 of the Federal Rules of
Civil Procedure. To the contrary: at all times it has said
that it is interpreting Rule 8, not tossing it out the win-
dow. It is therefore useful to begin with a look at the
language of the rule:
    (a) Claim for Relief. A pleading that states a claim
    for relief must contain:
        * * *
        (2) a short and plain statement of the claim show-
        ing that the pleader is entitled to relief . . . .
F ED. R. C IV. P. 8(a)(2). As one respected treatise put it
in 2004,
    all that is necessary is that the claim for relief be stated
    with brevity, conciseness, and clarity . . . . [T]his
    portion of Rule 8 indicates that a basic objective
    of the rules is to avoid civil cases turning on tech-
6                                                 No. 10-1122

    nicalities and to require that the pleading discharge
    the function of giving the opposing party fair notice of
    the nature and basis or grounds of the pleader’s
    claim and a general indication of the type of litiga-
    tion that is involved. . . .
5 C HARLES A LAN W RIGHT & A RTHUR R. M ILLER, F EDERAL
P RACTICE AND P ROCEDURE § 1215 at 165-173 (3d ed. 2004).
  Nothing in the recent trio of cases has undermined
these broad principles. As Erickson underscored, “[s]pecific
facts are not necessary.” 551 U.S. at 93. The Court was not
engaged in a sub rosa campaign to reinstate the old fact-
pleading system called for by the Field Code or even
more modern codes. We know that because it said so in
Erickson: “the statement need only give the defendant
fair notice of what the . . . claim is and the grounds upon
which it rests.” Id. Instead, the Court has called for more
careful attention to be given to several key questions:
what, exactly, does it take to give the opposing party “fair
notice”; how much detail realistically can be given, and
should be given, about the nature and basis or grounds
of the claim; and in what way is the pleader expected to
signal the type of litigation that is being put before the
court?
  This is the light in which the Court’s references in
Twombly, repeated in Iqbal, to the pleader’s responsibility
to “state a claim to relief that is plausible on its face” must
be understood. See Twombly, 550 U.S. at 570; Iqbal, 129
S. Ct. at 1949. “Plausibility” in this context does not imply
that the district court should decide whose version to
No. 10-1122                                                7

believe, or which version is more likely than not. Indeed,
the Court expressly distanced itself from the latter ap-
proach in Iqbal, “the plausibility standard is not akin to
a probability requirement.” 129 S. Ct. at 1949 (quotation
marks omitted). As we understand it, the Court is
saying instead that the plaintiff must give enough
details about the subject-matter of the case to present a
story that holds together. In other words, the court will
ask itself could these things have happened, not did they
happen. For cases governed only by Rule 8, it is not
necessary to stack up inferences side by side and allow
the case to go forward only if the plaintiff’s inferences
seem more compelling than the opposing inferences.
Compare Makor Issues & Rights, Ltd. v. Tellabs Inc., 513 F.3d
702, 705 (7th Cir. 2008) (applying PSLRA standards).
  The Supreme Court’s explicit decision to reaffirm the
validity of Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002),
which was cited with approval in Twombly, 550 U.S. at 556,
indicates that in many straightforward cases, it will not
be any more difficult today for a plaintiff to meet that
burden than it was before the Court’s recent decisions. A
plaintiff who believes that she has been passed over for
a promotion because of her sex will be able to plead that
she was employed by Company X, that a promotion
was offered, that she applied and was qualified for it,
and that the job went to someone else. That is an entirely
plausible scenario, whether or not it describes what
“really” went on in this plaintiff’s case. A more complex
case involving financial derivatives, or tax fraud that
the parties tried hard to conceal, or antitrust violations,
8                                              No. 10-1122

will require more detail, both to give the opposing
party notice of what the case is all about and to show
how, in the plaintiff’s mind at least, the dots should be
connected. Finally, as the Supreme Court warned in
Iqbal and as we acknowledged later in Brooks v. Ross, 578
F.3d 574 (7th Cir. 2009), “abstract recitations of the ele-
ments of a cause of action or conclusory legal state-
ments,” 578 F.3d at 581, do nothing to distinguish the
particular case that is before the court from every other
hypothetically possible case in that field of law. Such
statements therefore do not add to the notice that Rule 8
demands.
  We realize that one powerful reason that lies behind
the Supreme Court’s concern about pleading standards
is the cost of the discovery that will follow in any case
that survives a motion to dismiss on the pleadings.
The costs of discovery are often asymmetric, as the
dissent points out, and one way to rein them in would
be to make it more difficult to earn the right to engage
in discovery. That is just what the Court did, by interring
the rule that a complaint could go forward if any set
of facts at all could be imagined, consistent with the
statements in the complaint, that would permit the
pleader to obtain relief. Too much chaff was moving
ahead with the wheat. But, in other contexts, the
Supreme Court has drawn a careful line between those
things that can be accomplished by judicial interpreta-
tion and those that should be handled through the proce-
dures set up in the Rules Enabling Act, 28 U.S.C. §§ 2071
et seq. See Mohawk Indus., Inc. v. Carpenter, 130 S. Ct.
No. 10-1122                                                9

599, 609 (2009). In fact, the Judicial Conference’s
Advisory Committee on Civil Rules is engaged in an
intensive study of pleading rules, discovery practice, and
the costs of litigation, as its recent 2010 Civil Litigation
Conference, held at Duke Law School May 10-11, 2010,
demonstrates. See Summary of 2010 Conference on Civil
Litigation at Duke Law School, University of Denver
Institute for the Advancement of the American
Legal System, at http://www.du.edu/legalinstitute/pdf/
DukeConference.pdf (last visited July 28, 2010).
  Returning to Swanson’s case, we must analyze her
allegations defendant-by-defendant. We begin with
Citibank. On appeal, Swanson challenges only the dis-
missal of her Fair Housing Act and fraud claims.
The Fair Housing Act prohibits businesses engaged in
residential real estate transactions, including “[t]he
making . . . of loans or providing other financial assist-
ance . . . secured by residential real estate,” from discrim-
inating against any person on account of race. 42 U.S.C.
§ 3605(a), (b)(1)(B). Swanson’s complaint identifies the
type of discrimination that she thinks occurs (racial), by
whom (Citibank, through Skertich, the manager, and the
outside appraisers it used), and when (in connection
with her effort in early 2009 to obtain a home-equity
loan). This is all that she needed to put in the complaint.
See Swierkiewicz, 534 U.S. at 511-12 (employment discrimi-
nation); see also Fritz v. Charter Twp. of Comstock, 592
F.3d 718, 723-24 (6th Cir. 2010); Comm. Concerning Cmty.
Improvement v. City of Modesto, 583 F.3d 690, 715 (9th Cir.
2009).
10                                             No. 10-1122

  The fact that Swanson included other, largely extraneous
facts in her complaint does not undermine the sound-
ness of her pleading. She points to Citibank’s announced
plan to use federal money to make more loans, its refusal
to follow through in her case, and Skertich’s comment
that he has a mixed-race family. She has not pleaded
herself out of court by mentioning these facts; whether
they are particularly helpful for proving her case or not
is another matter that can safely be put off for another
day. It was therefore error for the district court to
dismiss Swanson’s Fair Housing Act claim against
Citibank.
  Her fraud claim against Citibank stands on a different
footing. Rule 9(b) of the Federal Rules of Civil Proce-
dure provides that “[i]n alleging fraud or mistake, a
party must state with particularity the circumstances con-
stituting fraud or mistake. Malice, intent, knowledge,
and other conditions of a person’s mind may be alleged
generally.” Of special relevance here, a plaintiff must
plead actual damages arising from her reliance on a
fraudulent statement. Tricontinental Indus., Ltd. v.
PricewaterhouseCoopers, LLP, 475 F.3d 824, 841 (7th Cir.
2007). Without a contract, only out-of-pocket losses alleg-
edly arising from the fraud are recoverable. Roboserve,
Inc. v. Kato Kagaku Co., Ltd., 78 F.3d 266, 274 (7th Cir.
1996) (applying Illinois law). Swanson asserts that
Citibank falsely announced plans to make federal funds
available in the form of loans to all customers, when it
actually intended to exclude African-American customers
from those who would be eligible for the loans. Swanson
No. 10-1122                                               11

relied, she says, on that false information when she
applied for her home-equity loan. But she never alleged
that she lost anything from the process of applying for
the loan. We do not know, for example, whether there
was a loan application fee, or if Citibank or she covered
the cost of the appraisal. This is the kind of particular
information that Rule 9 requires, and its absence means
that the district court was entitled to dismiss the claim.
  We now turn to Swanson’s claims against Lanier and
PCI. Here again, she pursues only her Fair Housing Act
and fraud claims. (The appraisal defendants point out
that they do not extend credit, and thus their actions
are not covered in any event by the Equal Credit Oppor-
tunity Act, 15 U.S.C. § 1691a(e).) The Fair Housing Act
makes it “unlawful for any person or other entity whose
business includes engaging in residential real estate-
related transactions to discriminate against any person in
making available such a transaction, or in the terms or
conditions of such a transaction, because of race . . . .” 42
U.S.C. § 3605(a). The statute goes on to define the term
“residential real estate-related transaction” to include “the
selling, brokering, or appraising of residential real prop-
erty.” 42 U.S.C. § 3605(b)(2). There is an appraisal exemp-
tion also, found in § 4605(c), but it provides only that
nothing in the statute prohibits appraisers from taking
into consideration factors other than race or the other
protected characteristics.
  Swanson accuses the appraisal defendants of skewing
their assessment of her home because of her race. It is
unclear whether she believes that they did so as part of
12                                            No. 10-1122

a conspiracy with Citibank, or if she thinks that they
deliberately undervalued her property on their own
initiative. Once again, we find that she has pleaded
enough to survive a motion under Rule 12(b)(6). The
appraisal defendants knew her race, and she accuses them
of discriminating against her in the specific business
transaction that they had with her. When it comes to
proving her case, she will need to come up with more
evidence than the mere fact that PCI (through Lanier)
placed a far lower value on her house than Midwest
Valuations did. See Latimore, 151 F.3d at 715 (need more
at the summary judgment stage than evidence of a dis-
crepancy between appraisals). All we hold now is that
she is entitled to take the next step in this litigation.
  This does not, however, save her common-law fraud
claim against Lanier and PCI. She has not adequately
alleged that she relied on their appraisal, nor has she
pointed to any out-of-pocket losses that she suffered
because of it.
  We therefore R EVERSE the judgment of the district court
insofar as it dismissed Swanson’s Fair Housing Act
claims against all three defendants, and we A FFIRM
insofar as it dismissed the common-law fraud claims
against all three. Each side will bear its own costs on
appeal.
No. 10-1122                                              13

  P OSNER, Circuit Judge, dissenting in part. I join the
majority opinion except with respect to reversing the
dismissal of the plaintiff’s claim of housing discrimina-
tion. I have difficulty squaring that reversal with
Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), unless Iqbal is
limited to cases in which there is a defense of official
immunity—especially if as in that case it is asserted by
very high-ranking officials (the Attorney General of the
United States and the Director of the FBI)—because the
defense is compromised if the defendants have to
respond to discovery demands in a case unlikely to have
merit. Smith v. Duffey, 576 F.3d 336, 340 (7th Cir. 2009);
Robert G. Bone, “Plausibility Pleading Revisited and
Revised: A Comment on Ashcroft v. Iqbal,” 85 Notre Dame L.
Rev. 849, 882 (2010); Howard M. Wasserman, “Iqbal,
Procedural Mismatches, and Civil Rights Litigation,” 14
Lewis & Clark L. Rev. 157, 172-73 (2010).
  The majority opinion does not suggest that the
Supreme Court would limit Iqbal to immunity cases. The
Court said that “our decision in Twombly [Bell Atlantic
Corp. v. Twombly, 550 U.S. 544 (2007), the forerunner of
Iqbal] expounded the pleading standard for ‘all civil
actions.’ ” 129 S. Ct. at 1953. It did add that a district
judge’s promise of minimally intrusive discovery “pro-
vides especially cold comfort in this pleading context,
where we are impelled to give real content to the
concept of qualified immunity for high-level officials
who must be neither deterred nor detracted from the
vigorous performance of their duties.” Id. at 1954. But this
seems just to mean that the Court thought Iqbal a strong
case for application of the Twombly standard, rather
14                                               No. 10-1122

than thinking it the only type of discrimination case
to which the standard applies.
   There is language in my colleagues’ opinion to suggest
that discrimination cases are outside the scope of Iqbal,
itself a discrimination case. The opinion says that “a
plaintiff who believes that she has been passed over for
a promotion because of her sex will be able to plead that
she was employed by Company X, that a promotion
was offered, that she applied and was qualified for it,
and that the job went to someone else.” Though this
is not a promotion case, the opinion goes on to say that
“Swanson’s complaint identifies the type of discrim-
ination that she thinks occurs (racial), by whom (Citibank,
through Skertich, the manager, and the outside ap-
praisers it used), and when (in connection with her
effort in early 2009 to obtain a home equity loan). This is
all that she needed to put in the complaint.” In contrast,
“a more complex case involving financial derivatives, or
tax fraud that the parties tried hard to conceal, or antitrust
violations, will require more detail, both to give the
opposing party notice of what the case is all about and
to show how, in the plaintiff’s mind at least, the dots
should be connected.” The “more complex” case to which
this passage is referring is Twombly, an antitrust case. But
Iqbal, which charged the defendants with having sub-
jected Pakistani Muslims to harsh conditions of confine-
ment because of their religion and national origin, was
a discrimination case, as is the present case, and was not
especially complex.
 Suppose this were a promotion case, and several people
were vying for a promotion, all were qualified, several
No. 10-1122                                               15

were men and one was a woman, and one of the men
received the promotion. No complexity; yet the district
court would “draw on its judicial experience and common
sense,” Ashcroft v. Iqbal, supra, 129 S. Ct. at 1950, to con-
clude that discrimination would not be a plausible ex-
planation of the hiring decision, without additional
allegations.
  This case is even stronger for dismissal because it lacks
the competitive situation—man and woman, or white
and black, vying for the same job and the man, or the
white, getting it. We had emphasized this distinction, long
before Twombly and Iqbal, in Latimore v. Citibank Federal
Savings Bank, 151 F.3d 712 (7th Cir. 1998), like this a case
of credit discrimination rather than promotion.
“Latimore was not competing with a white person for a
$51,000 loan. A bank does not announce, ‘We are
making a $51,000 real estate loan today; please submit
your applications, and we’ll choose the application that
we like best and give that applicant the loan.’ ” Id. at
714. We held that there was no basis for an inference of
discrimination. Noland v. Commerce Mortgage Corp., 122
F.3d 551, 553 (8th Cir. 1997), and Simms v. First Gibraltar
Bank, 83 F.3d 1546, 1558 (5th Cir. 1996), rejected credit-
discrimination claims because there was no evidence
that similar applicants were treated better, and Boykin v.
Bank of America Corp., 162 Fed. App’x 837, 840 (11th Cir.
2005) (per curiam), rejected such a claim because “absent
direct evidence of discrimination, there is no basis for
a trier of fact to assume that a decision to deny a loan
was motivated by discriminatory animus unless the
16                                               No. 10-1122

plaintiff makes a showing that a pattern of lending sug-
gests the existence of discrimination.”
  There is no allegation that the plaintiff in this case
was competing with a white person for a loan. It was
the low appraisal of her home that killed her chances
for the $50,000 loan that she was seeking. The appraiser
thought her home worth only $170,000, and she already
owed $146,000 on it (a first mortgage of $121,000 and a
home-equity loan of $25,000). A further loan of $50,000
would thus have been undersecured. We must assume
that the appraisal was a mistake, and the house worth
considerably more, as she alleges. But errors in ap-
praising a house are common because “real estate
appraisal is not an exact science,” Latimore v. Citibank
Federal Savings Bank, supra, 151 F.3d at 715—common
enough to have created a market for “Real Estate Ap-
praisers Errors & Omissions” insurance policies. See,
e.g., OREP (Organization of Real Estate Professionals),
“E&O Insurance,” www.orep.org/appraisers-e&o.htm (vis-
ited July 11, 2010). The Supreme Court would consider
error the plausible inference in this case, rather than
discrimination, for it said in Iqbal that “as between that
‘obvious alternative explanation’ for the [injury of which
the plaintiff is complaining] and the purposeful, invidious
discrimination [the plaintiff] asks us to infer, discrimina-
tion is not a plausible conclusion.” Ashcroft v. Iqbal, supra,
129 S. Ct. at 1951-52, quoting Twombly, 550 U.S. at 567.
   Even before Twombly and Iqbal, complaints were dis-
missed when they alleged facts that refuted the plain-
tiffs’ claims. See, e.g., Tierney v. Vahle, 304 F.3d 734, 740
No. 10-1122                                               17

(7th Cir. 2002); Thomas v. Farley, 31 F.3d 557 (7th Cir.
1994); Lightner v. City of Wilmington, 545 F.3d 260, 262 (4th
Cir. 2008). Under the new regime, it should be enough
that the allegations render a claim implausible. The
complaint alleges that Citibank was the second bank to
turn down the plaintiff’s application for a home-equity
loan. This reinforces the inference that she was not quali-
fied. We further learn that, subject to the appraisal,
which had not yet been conducted, Citibank had
approved the $50,000 home-equity loan that the plaintiff
was seeking on the basis of her representation that her
house was worth $270,000. But she didn’t think it was
worth that much when she applied for the loan. The
house had been appraised at $260,000 in 2004, and the
complaint alleges that home values had fallen by “only”
16 to 20 percent since. This implies that when she
applied for the home-equity loan her house was worth
between $208,000 and $218,400—much less than what
she told Citibank it was worth.
  If the house was worth $208,000, she would have owed
a total of $196,000 had she gotten the loan, or just a shade
under the market value of the house. If the bank had
insisted that she have a 20 percent equity in the house,
which would be $41,600, it would have lent her only
$20,400 ($166,400—80 percent of $208,000—minus the
$146,000 that she already owed on the house). The loan
figure rises to $28,720 if the house was worth $218,400
rather than $208,000. In either case a $50,000 loan would
have been out of the question, especially in the wake of the
financial crash of September 2008, when credit, including
home-equity credit, became extremely tight. E.g., Bob
18                                                           No. 10-1122

Tedeschi, “Opening the Tap on Home Equity,” N.Y.
Times, Nov. 7, 2008, p. RE9, www.nytimes.com/2008/11/02/
realestate/02mort.html. For it was a home-equity loan
that the plaintiff was seeking in early February of 2009, at
the nadir of the economic collapse—and seeking it from
troubled Citibank, one of the banks that required a federal
bailout in the wake of the crash. Financial reports in the
weeks surrounding the plaintiff’s application make clear
the difficulty of obtaining credit from Citibank during that
period. See Binyamin Appelbaum, “Despite Federal Aid,
Many Banks Fail to Revive Lending,” Wash. Post, Feb. 3,
2009, www.washingtonpost.com/wp-dyn/content/article/
2009/02/02/AR2009020203338_pf.html (“some of the first
banks to get funding, such as Citigroup and J.P. Morgan
Chase, have reported the sharpest drops in lending”); Liz
Moyer, “Banks Promise Loans but Hoard Cash,”
Forbes.com, Feb. 3, 2009, www.forbes.com/2009/02/03/
b a n k in g -fe d e r al-reserve-bu sin ess-w all-s t re e t-0 2 0 3_
loans.html (“ ‘banks and other lenders have tightened
access to credit and are conserving capital in order to
absorb the losses that occur when borrowers default,’ the
company [Citibank] said: ‘Citi will not and cannot take ex-
cessive risk with the capital the American public and
other investors have entrusted to the company’ ”); Mara
Der Hovanesian & David Henry, “Citi: The Losses
Keep Coming,” Bloomberg BusinessWeek, Jan. 12, 2009,
w w w .b u sin es s w e e k.c om / b w d aily/d n f l a s h / c o n t e n t /
jan2009/db20090112_136301.htm?campaign_id=rss_daily
(“banks are not lending. They are using every opportunity
to pull loans and force liquidations”). (All web sites were
visited on July 11, 2010.)
No. 10-1122                                              19

  In Erickson v. Pardus, 551 U.S. 89 (2007) (per curiam),
decided two weeks after Twombly, the Supreme Court,
without citing Twombly, reinstated a prisoner’s civil rights
suit that had been dismissed on the ground that the
allegations of the complaint were “conclusory.” The suit
had charged deliberate indifference to the plaintiff’s need
for medical treatment. In the key passage in the Court’s
opinion, we learn that “the complaint stated that
Dr. Bloor’s decision to remove the petitioner [that is, the
plaintiff] from his prescribed hepatitis C medication was
‘endangering [his] life.’ It alleged this medication was
withheld ‘shortly after’ petitioner had commenced a
treatment program that would take one year, that he was
‘still in need of treatment for this disease,’ and that the
prison officials were in the meantime refusing to provide
treatment. This alone was enough to satisfy Rule 8(a)(2).
Petitioner, in addition, bolstered his claim by making
more specific allegations in documents attached to the
complaint and in later filings” (emphasis added, record
citations omitted). It was reasonable to infer from these
allegations, assuming their truth, that the defendants
(who included Dr. Bloor, a prison doctor) had acted with
deliberate indifference to the petitioner’s serious medical
need by refusing to provide him with any medical treat-
ment after taking away his medication. Indeed it’s
difficult (again assuming the truth of the allegations) to
imagine an alternative interpretation. Hepatitis C is a
serious disease and the prisoner had been put in a treat-
ment program expected to last a year. To refuse him
any treatment whatsoever seemed (as the other allega-
tions to which the Court referred confirmed) to be puni-
20                                                No. 10-1122

tive. I think Erickson is good law even after Iqbal, but I also
think it’s miles away from a case in which all that’s
alleged (besides pure speculation about the defendants’
motive) is that someone was denied a loan because her
house is mistakenly appraised for less than its market
value.
   The majority opinion relies heavily on Swierkiewicz v.
Sorema N.A., 534 U.S. 506 (2002), cited with approval in
Twombly, see 550 U.S. at 556 (though not cited in Iqbal) and
not overruled. Although it is regarded in some quarters
as dead after Iqbal, e.g., Fowler v. UPMC Shadyside, 578
F.3d 203, 211 (3d Cir. 2009); Suja A. Thomas, “The
New Summary Judgment Motion: The Motion to
Dismiss Under Iqbal and Twombly,” 14 Lewis & Clark L.
Rev. 15, 35 (2010), lower-court judges are not to deem a
Supreme Court decision overruled even if it is plainly
inconsistent with a subsequent decision. State Oil Co. v.
Khan, 522 U.S. 320 (1997); Agostini v. Felton, 521 U.S. 203,
237 (1997); Rodriguez de Quijas v. Shearson/American
Express, Inc., 490 U.S. 477, 484 (1989); National Rifle Ass’n
v. City of Chicago, 567 F.3d 856, 857-58 (7th Cir. 2009),
reversed under the name McDonald v. City of Chicago,
2010 WL 2555188 (U.S. June 28, 2010). But that principle
is not applicable here; Swierkiewicz is distinguishable.
  The Court rejected a rule that the Second Circuit had
created which required “heightened pleading” in Title VII
cases. The basic requirement for a complaint (“a short
and plain statement of the claim showing that the pleader
is entitled to relief”) is set forth in Rule 8(a)(2) of the
Federal Rules of Civil Procedure. Rule 9 requires height-
No. 10-1122                                                 21

ened pleading (that is, a specific allegation) of certain
elements in particular cases, such as fraud and special
damages. There is no reference to heightened pleading of
discrimination claims, however, and Swierkiewicz holds
that the judiciary is not authorized to amend Rule 9
without complying with the procedures in the Rules
Enabling Act. 534 U.S. at 513-15; Leatherman v. Tarrant
County Narcotics Intelligence & Coordination Unit, 507 U.S.
163, 168-69 (1993); Saritha Komatireddy Tice, Note, “A
‘Plausible’ Explanation of Pleading Standards: Bell
Atlantic Corp. v. Twombly,” 31 Harv. J.L. & Pub. Pol’y 827,
832 n. 49 (2008). As the Court explained in Twombly,
“Swierkiewicz did not change the law of pleading, but
simply re-emphasized . . . that the Second Circuit’s use of
a heightened pleading standard for Title VII cases was
contrary to the Federal Rules.” 550 U.S. at 570. But Title VII
cases are not exempted by Swierkiewicz from the doctrine
of the Iqbal case. Iqbal establishes a general requirement of
“plausibility” applicable to all civil cases in federal courts.
  It does so, however, in opaque language: “The plausi-
bility standard is not akin to a ‘probability requirement,’
but it asks for more than a sheer possibility that a defen-
dant has acted unlawfully.” 129 S. Ct. at 1949. In
statistics the range of probabilities is from 0 to 1, and
therefore encompasses “sheer possibility” along with
“plausibility.” It seems (no stronger word is possible) that
what the Court was driving at was that even if the
district judge doesn’t think a plaintiff’s case is more
likely than not to be a winner (that is, doesn’t think p > .5),
as long as it is substantially justified that’s enough
to avert dismissal. Cf. Equal Access to Justice Act, 28
22                                                  No. 10-1122

U.S.C. § 2412(d)(1)(A). But when a bank turns down a
loan applicant because the appraisal of the security for
the loan indicates that the loan would not be adequately
secured, the alternative hypothesis of racial discrimina-
tion does not have substantial merit; it is implausible.
   Behind both Twombly and Iqbal lurks a concern with
asymmetric discovery burdens and the potential for
extortionate litigation (similar to that created by class
actions, to which Rule 23(f) of the civil rules was a re-
sponse, Isaacs v. Sprint Corp., 261 F.3d 679, 681 (7th Cir.
2001); Blair v. Equifax Check Services, Inc., 181 F.3d 832, 834-
35 (7th Cir. 1999); Newton v. Merrill Lynch, Pierce, Fenner &
Smith, Inc., 259 F.3d 154, 162-65 (3d Cir. 2001); Vallario v.
Vandehey, 554 F.3d 1259, 1263 (10th Cir. 2009); Fed. R. Civ.
P. 23(f) Committee Note) that such an asymmetry creates.
Ashcroft v. Iqbal, supra, 129 S. Ct. at 1953; Bell Atlantic Corp.
v. Twombly, supra, 550 U.S. at 557-59; Cooney v. Rossiter, 583
F.3d 967, 971 (7th Cir. 2009); Beck v. Dobrowski, 559 F.3d
680, 682 (7th Cir. 2009); Kendall v. Visa U.S.A., Inc., 518
F.3d 1042, 1046-47 (9th Cir. 2008). In most suits against
corporations or other institutions, and in both Twombly
and Iqbal—but also in the present case—the plaintiff
wants or needs more discovery of the defendant than
the defendant wants or needs of the plaintiff, because
the plaintiff has to search the defendant’s records (and,
through depositions, the minds of the defendant’s em-
ployees) to obtain evidence of wrongdoing. With the
electronic archives of large corporations or other large
organizations holding millions of emails and other elec-
tronic communications, the cost of discovery to a defen-
dant has become in many cases astronomical. And the cost
No. 10-1122                                                23

is not only monetary; it can include, as well, the disruption
of the defendant’s operations. If no similar costs are
borne by the plaintiff in complying with the defendant’s
discovery demands, the costs to the defendant may
induce it to agree early in the litigation to a settlement
favorable to the plaintiff.
  It is true, as critics of Twombly and Iqbal point out, that
district courts have authority to limit discovery. E.g.,
Griffin v. Foley, 542 F.3d 209, 223 (7th Cir. 2008); Searls v.
Glasser, 64 F.3d 1061, 1068 (7th Cir. 1995); Deitchman v. E.R.
Squibb & Sons, Inc., 740 F.2d 556, 563 (7th Cir. 1984); Mwani
v. Bin Laden, 417 F.3d 1, 17 (D.C. Cir. 2005). But especially
in busy districts, which is where complex litigation is
concentrated, the judges tend to delegate that authority
to magistrate judges. And because the magistrate judge
to whom a case is delegated for discovery only is not
responsible for the trial or the decision and can have
only an imperfect sense of how widely the district judge
would want the factual inquiry in the case to roam
to enable him to decide it, the magistrate judge is likely
to err on the permissive side. “One common form of
unnecessary discovery (and therefore a ready source
of threatened discovery) is delving into ten issues when
one will be dispositive. A magistrate lacks the authority
to carve off the nine unnecessary issues; for all the magis-
trate knows, the judge may want evidence on any one of
them. So the magistrate stands back and lets the parties
have at it. Pursuit of factual and legal issues that will not
matter to the outcome of the case is a source of enormous
unnecessary costs, yet it is one hard to conquer in a
system of notice pleading and even harder to limit when
24                                              No. 10-1122

an officer lacking the power to decide the case supervises
discovery.” Frank H. Easterbrook, “Discovery as Abuse,”
69 B.U. L. Rev. 635, 639 (1989); see also Milton Pollack,
“Discovery—Its Abuse and Correction,” 80 F.R.D. 219, 223
(1979); Virginia E. Hench, “Mandatory Disclosure and
Equal Access to Justice: The 1993 Federal Discovery Rules
Amendments and the Just, Speedy and Inexpensive
Determination of Every Action,” 67 Temple L. Rev. 179, 232
(1994).
   This structural flaw helps to explain and justify the
Supreme Court’s new approach. It requires the plaintiff
to conduct a more extensive precomplaint investigation
than used to be required and so creates greater
symmetry between the plaintiff’s and the defendant’s
litigation costs, and by doing so reduces the scope for
extortionate discovery. If the plaintiff shows that he
can’t conduct an even minimally adequate investigation
without limited discovery, the judge presumably can
allow that discovery, meanwhile deferring ruling on the
defendant’s motion to dismiss. Miller v. Gammie, 335 F.3d
889, 899 (9th Cir. 2003) (en banc); Coss v. Playtex Products,
LLC, No. 08 C 50222, 2009 WL 1455358 (N.D. Ill. May 21,
2009); Edward A. Hartnett, “Taming Twombly, Even After
Iqbal,” 158 U. Pa. L. Rev. 473, 507-14 (2010); Suzette M.
Malveaux, “Front Loading and Heavy Lifting: How Pre-
Dismissal Discovery Can Address the Detrimental Effect
of Iqbal on Civil Rights Cases,” 14 Lewis & Clark L. Rev. 65
(2010). No one has suggested such a resolution for
this case.
  The plaintiff has an implausible case of discrimination,
but she will now be permitted to serve discovery de-
No. 10-1122                                              25

mands that will compel elaborate document review by
Citibank and require its executives to sit for many hours
of depositions. (Not that the plaintiff is capable of con-
ducting such proceedings as a pro se, but on remand
she may—indeed she would be well advised to—ask the
judge to help her find a lawyer.) The threat of such an
imposition will induce Citibank to consider settlement
even if the suit has no merit at all. That is the pattern
that the Supreme Court’s recent decisions are aimed
at disrupting.
 We should affirm the dismissal of the suit in its entirety.




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