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Nichols v. Markell

United States District Court, D. Delaware

April 17, 2014

JOHN A. NICHOLS and FUELCELL ENERGY, INC., a Delaware Corporation, Plaintiffs,
v.
JACK MARKELL, in his official capacity as the Governor of Delaware; WILLIAM O'BRIEN, in his official capacity as Executive Director of the Delaware Public Service Commission; JAYMES B. LESTER, in his official capacity as Commissioner of the Delaware Public Service Commission; JOANN CONAWAY, in her official capacity as Commissioner of the Delaware Public Service Commission; DALLAS WINSLOW, in his official capacity as Commissioner of the Delaware Public Service Commission; and JEFFREY CLARK, in his official capacity as Commissioner of the Delaware Public Service Commission, Defendants.

Vernon R. Proctor, Esquire, Kurt M. Heyman, Esquire, and Meghan A. Adams, Esquire, of PROCTOR HEYMAN LLP, Wilmington, DE.

Of Counsel: Michael D. Pepson, Esquire, of CAUSE OF ACTION, INC., Washington, D.C. Attorneys for Plaintiffs.

David C. McBride, Esquire, Martin S. Lessner, Esquire, and Adam W. Poff, Esquire, of YOUNG CONAWAY STARGATT & TAYLOR, LLP, Wilmington, DE and James McC. Geddes, Esquire, Stephen E. Jenkins, Esquire, and F. Tropue Mickler IV, Esquire, of ASHBY & GEDDES, Wilmington, DE., Attorneys for Defendants.

MEMORANDUM OPINION

CHRISTOPHER J. BURKE, Magistrate Judge.

In this action filed pursuant to 28 U.S.C. § 2201 and 42 U.S.C. § 1983, Plaintiffs John A. Nichols ("Nichols") and FuelCell Energy, Inc. ("FuelCell") (collectively, "Plaintiffs"), brought suit against Defendants Governor Jack Markell, William O'Brien, Jaymes B. Lester, Joann Conaway, Dallas Winslow, and Jeffrey Clark, all in their official capacities (collectively, "Defendants"). Presently pending before the Court is Defendants' Motion to Dismiss For Lack of Subject Matter Jurisdiction and Failure to State a Claim ("Motion"). (D.I. 19) For the reasons that follow, the Court orders that the Motion be GRANTED-IN-PART and DENIED-IN-PART.

I. BACKGROUND

A. The Parties

Nichols is a Middletown, Delaware resident who purchases electricity from Delmarva Power & Light Co. ("Delmarva"), which is used to provide electricity to his home. (D.I. 1 at ¶ 5; D.I. 23 (hereinafter "Nichols Affidavit") at ¶¶ 2-3) Plaintiff FuelCell is a Delaware corporation with its principal place of business in Danbury, Connecticut. (D.I. 1 at ¶ 9) It manufactures ultra-clean stationary fuel cells in Torrington, Connecticut, ( id. ), and the nature of its business is further described below.

Defendant Governor Jack Markell, named in his official capacity, is the Governor of Delaware. ( Id. at 11) Governor Markell oversees, inter alia, the Delaware Public Service Commission ("DPSC"). ( Id. ) Defendant William O'Brien, named in his official capacity, is the Executive Director of the DPSC. ( Id. at 12) The remaining Defendants, all sued in their official capacities, are Commissioners of the DPSC. ( Id. at ¶¶ 13-16)

B. REPSA and the 2011 Amendments to REPSA

The Delaware Renewable Energy Portfolio Standards Act ("REPSA"), codified at DEL. ANN. tit. 26, §§ 351 et seq., was enacted in 2005. In enacting and subsequently amending this law, the Delaware General Assembly found that the "benefits of electricity from renewable energy resources accrue to the public at large, and that electric suppliers and consumers share an obligation to develop a minimum level of these resources in the electricity supply portfolio of the state." DEL. CODE ANN. tit. 26, § 351(b). The General Assembly noted that among the benefits of this kind of electricity were "improved regional and local air quality, improved public health, increased electric supply diversity, increased protection against price volatility and supply disruption, improved transmission and distribution performance, and new economic development opportunities." Id. Accordingly, the law's purpose and intent was "to establish a market for electricity from [renewable energy] resources in Delaware, and to lower the cost to consumers of electricity from these resources." Id. at § 351(c).

REP SA attempts to accomplish these goals by requiring that an increasing percentage of retail sales of electricity "delivered to Delaware end-use customers by a retail electricity supplier or municipal electric company... include a minimum percentage of electrical energy sales with eligible energy resources and solar photovoltaics[.]" Id. at § 354(a). This requirement is referred to as the "[r]enewable energy portfolio standard" or "RPS[.]" Id. at § 352(19). Pursuant to REPSA, there were two ways in which a retail electricity supplier[1] could satisfy its RPS obligations. (D.I. 1 at ¶ 21) The first is by delivering electricity produced by eligible energy resources.[2] DEL. CODE ANN. tit. 26, § 354(a). The second is by purchasing tradable instruments, referred to as Renewable Energy Credits ("RECs") and Solar Renewable Energy Credits ("SRECs"). Id. at §§ 352(18), (25). Each purchased REC or SREC is treated, respectively, as the equivalent of one megawatt-hour of retail electricity sales in the State from eligible energy resources or from solar photovoltaic energy resources. Id. at §§ 352(18), (25) & 354.

Delmarva is one of the retail electricity suppliers that must comply with REPS A, and a significant one. It is the sole DPSC-regulated utility in Delaware, and, as of 2011, it provided electrical power to approximately half of Delaware's residents. (D.I. 1 at ¶ 2; D.I. 21, ex. A (hereinafter, "Consultant Report") at 27) And so, like any other retail electricity supplier (or municipal electricity company), Delmarva could satisfy its RPS obligations under REPSA in either of the two ways referenced above.

In July 2011, however, REPS A was amended (hereinafter referred to as the "2011 Amendments" or the "Amendments"). See S.B. No. 124, 146th General Assembly, 1st Reg. Sess. (Del. 2011); (D.I. 20 at 2-3; Consultant Report at 1). These 2011 Amendments, inter alia, provided another method by which Delmarva could satisfy its RPS obligations.

Pursuant to the Amendments, a "commission-regulated electric company" (i.e., Delmarva-again, the only DPSC-regulated utility in the State) could use energy generated by a "qualified fuel cell provider project[, ]" to fulfill a portion of its "state-mandated REC and SREC requirements." DEL. CODE ANN. tit. 26, § 353(d). A "[q]ualified fuel cell provider project" ("QFCPP"), according to the 2011 Amendments, is "a fuel cell power generation project located in Delaware" which is "owned and/or operated by a qualified fuel cell provider" and operates "under a tariff approved by the [DPSC.]" Id. at§ 352(17) (emphasis added). A "[q]ualified fuel cell provider" ("QFCP"), in turn, is an entity that: (1) "manufactures fuel cells in Delaware that are capable of being powered by renewable fuels[;]" and (2) "is designated by the Director of the Delaware Economic Development Office and the Secretary of [the Delaware Department of Natural Resources and Environmental Control ("DNREC")] as an economic development opportunity." Id. at§ 352(16) (emphasis added). Thus, pursuant to the 2011 Amendments, REPSA now allowed "Delmarva to use the energy output from a Qualified Fuel Cell Provider Project... to fulfill'-technically, to reduce-a portion of [Delmarva's] [REC and SREC requirements]." (Consultant Report at 4; see also D.I. 1 at ¶ 30)

C. Bloom Energy, Inc. and its Relationship to FuelCell

The 2011 Amendments were enacted to "provide for a regulatory framework pursuant to which" Bloom Energy, Inc. ("Bloom"), a fuel cell manufacturer, "would build a manufacturing facility in Newark, Delaware... to produce fuel cells[.]" (Consultant Report at 1, 14; D.I. 1 at ¶ 3)[3] In consideration of the "associated employment and other economic benefits" that were likely to accrue to Delaware if Bloom built this in-state facility-and pursuant to the terms of the later-enacted 2011 Amendments-Delmarva's ratepayers would in turn "pay over a [20-plus]-year period charges for the output of 30 MWs of fuel cells under [the] tariff[.]" (Consultant Report at 1)

The State of Delaware had negotiated with Bloom, prior to the passage of the 2011 Amendments, with regard to this manufacturing plan.[4] Bloom, in turn, had agreed that it would only build the manufacturing facility in question in Delaware if the DPSC first approved the tariff called for by the 2011 Amendments. (Consultant Report at 6, 28) Bloom also agreed to enter into a termination agreement with the State of Delaware, by which Bloom agreed to pay the State certain monies in the event that Bloom did not meet its fuel cell manufacturing obligations called for in the Amendments. (D.I. 21, ex. B ("DPSC Order No. 8079") at 19; see also Consultant Report at 31)

Prior to its negotiations with the State of Delaware, all of the Bloom fuel cell projects that had been built had been installed in California. (Consultant Report at 14) For the proposed Delaware manufacturing facility, however, Bloom's "target market area" for the sale of the energy it would produce was "(at least, initially)... primarily the northeastern United States [targeting] similar types of large-end use consumers as [Bloom had in] California." ( Id. at 15, see also id. at 35) In a report authored by a DPSC consultant, which was hired to evaluate whether a proposed tariff met the goals set out by the 2011 Amendments (the "Consultant Report"), it was noted that Bloom "has indicated that New York, Connecticut, New Jersey and Pennsylvania have forms of subsidy programs, providing a combination of rebates or RECs, tax credits or tax exemptions for fuel cells operating on natural gas." ( Id. at 35) The Consultant Report also explained that "the market demand created by the [QFCPP set out in the 2011 Amendments] coupled with the new manufacturing facility could help Bloom in improving its products and lowering its costs, which [the Secretary of the DNREC] stated (in a somewhat different context) could help accelerate Bloom['s] overall success.'" ( Id. at 38)

In the Consultant Report, Bloom is repeatedly described as having "two major competitors" for "fuel cells in the size range and type of application": FuelCell, and UTC Power, Inc., another Connecticut company. ( Id. at 14; see also id. at 35) FuelCell and Bloom were described as using different technology to produce fuel cells (the former via a "molten carbonate technology" and the latter via a "solid oxide fuel cell technology"). ( Id. at 14)

FuelCell, for its part, has a varied customer base, including electric utility companies, municipalities, universities, government entities, and businesses. (D.I. 1 at ¶ 9; D.I. 24 (hereinafter, "Wolak Affidavit") at ¶ 10) It manufactures and sells power plants in various states, including New Jersey, New York, Connecticut and Virginia, and sells power to utility customers located in various parts of the United States, including those in the East Coast or mid-Atlantic area. (Wolak Affidavit at ¶ 10)

D. The Tariff's Structure and Function

As noted above, the QFCPP that was to be operated by Bloom was to operate "under a tariff approved by the [DPSC]"-the tariff being the mechanism that would, inter alia, provide funds for Bloom's energy output called for by the 2011 Amendments. Before that tariff could go into effect, the 2011 Amendments required that the DPSC must approve it. And before doing that, pursuant to the Amendments, the DPSC was obligated to ensure that the "[t]ariff provisions[, ]" which were to be proposed jointly by "the electric company [i.e., Delmarva] and the [QFCP, i.e., Bloom]" should "at a minimum, provide for[, ]" inter alia : (1) that the fuel cell project would be of a certain size; (2) at least a 20-year term of service; (3) that the cost to Delmarva customers not exceed a specific price "cap"; and (4) that the project maintain a certain average efficiency level. DEL. CODE ANN. tit. 26, at §§ 364(d)(1)(a)-(m). With regard to the size of the fuel cell project, the Amendments stated that the tariff provisions should provide for "[a] project of 30MW [mega-watt] nominal nameplate, and future potential additions of up to an additional 20MW[.]" Id. at§ 364(d)(1)(a); (Consultant Report at 45). The law required, however, that any "additional MW beyond the 30 MW project made pursuant to [the Act] must be reviewed and approved by the [DPSC]." DEL. CODE ANN. tit. 26, at§ 364(d)(l)(a).

When considering whether to approve a proposed tariff in whole as proposed, the DPSC was also required to "consider the incremental cost of the [QFCPP] to customers, applying at least the following factors:" (a) "[w]hether the [QFCPP] utilizes innovative baseload technologies"; (b) "[w]hether the [QFCPP] offers environmental benefits to the State relative to conventional baseload generation technologies"; (c) "[w]hether the [QFCPP] promotes economic development in the State"; and (d) "[w]hether the tariff as filed promotes price stability over the project term." Id. at §§ 364(d)(2)(a)-(d).

The 2011 Amendments also explained that the customers of "a commission regulated-electric company" (i.e., Delmarva) would fund the costs of this fuel cell project. The Amendments stated that "[a]ll costs arising out of the contracts entered into by [Delmarva]" relating to the QFCPP were to be "distributed among the entire Delaware customer base of' Delmarva. Id. at§ 364(a). The Amendments also stated that all funds dispersed to and arising out of a QFCPP were to be "collected from the entire Delaware customer base of [Delmarva] through an adjustable nonbypassable charge which shall be established by the [DPSC]." Id. at § 364(b); see also id. at§ 364(c). Pursuant to the 2011 Amendments, "[Delmarva] shall collect and disburse [these] funds solely as the agent for the collection and disbursement of funds for the project and shall have no liability except to comply with the tariff provisions" set by the Amendments. Id. at § 364(b).

The funds that Delmarva was to collect from its customers (i.e., the "nonbypassable charges" described above)[5] were to amount to the "positive difference" between (A) the sum of (1) the $/MWh charge to be paid to Bloom for the energy it was to produce under the QFCPP; (2) the cost of fuel needed to produce that output of energy; and (3) any costs that Delmarva itself incurred arising out of the project; minus (B) the amount Bloom actually received for the later market sale of this energy output. (Consultant Report at 10) If the net amount from this calculus ended up being a "negative amount"-i.e., if Bloom generated an amount from the market sale of the energy output that was greater than the total amount of the other charges and costs set out above, that net amount was to be distributed to Delmarva's customers. ( Id. ; DPSC Order No. 8079 at 4, 7) At the time of the 2011 Amendments' adoption, however, it was not anticipated that there would ultimately be a "negative" net amount. (Consultant Report at 52-53)

Instead, the DPSC's consultant estimated that when these respective charges/costs and energy sales were ultimately tallied up (and when other financial benefits to Delmarva from the Bloom transaction were factored in, such as Delmarva's ability to reduce its REC or SREC purchase obligations and thus its costs), the net result would be a charge to "Delmarva's average residential customers on a levelized $/Mwh basis" of $1.34-$1.40 per month, or a total charge of approximately $113 million over a 20-plus-year term. ( Id. at 17-18, 67-68; DPSC Order No. 8079 at 17-18) (Delmarva itself estimated a $1.00 per month/per residential customer charge; others suggested that the cost to Delmarva customers could be far higher.) (DPSC Order No. 8079 at 14, 20) The DPSC's consultant also estimated the potential for several hundreds of millions of dollars of economic benefits associated with the building of the Bloom manufacturing facility, and the hundreds of attendant jobs it was expected to produce-benefits that would flow to all Delawareans, including Delmarva customers. (Consultant Report at 27, 67-68; DPSC Order No. 8079 at 17) The Consultant Report also highlighted possible "equity issues associated with the fact that Delmarva distribution customers-approximately half of the State's population-would be paying the great bulk of the costs to attract Bloom, but [that] the economic benefits of the manufacturing project, if built, would [be] diffused statewide." (Consultant Report at 27; see also DPSC Order No. 8079 at 18)

E. Delmarva's Role

As noted above, Delmarva's role in the QFCPP was to negotiate and jointly propose with Bloom the tariff provisions, and, upon approval of the tariff, to serve thereafter as a "collection agent" of Bloom "for collection of funds and dispersement of such collected funds to [Bloom] and to its customers." (Consultant Report at 53 (emphasis omitted)) In fact, Delmarva had specifically proposed the use of the tariff mechanism required by REPS A "as a means to charge ratepayers for long-term sales of energy and capacity from a power plant rather than [enter into a] traditional utility [power purchase agreement ("PPA")]" with Bloom. ( Id. at 60) Delmarva took this path because it was concerned that were it to have entered into a PPA with Bloom, there would be a "risk that the [credit] rating agencies will impute debt on Delmarva's balance sheet as the result of the transaction, which, in turn, could, at least at some point, require incremental equity to be issued, which would increase Delmarva's cost of capital." ( Id. ) This risk, "in turn, could produce an indirect cost to be ultimately borne by Delmarva's ratepayers." ( Id. )

In contrast, under "the proposed tariff, Delmarva does not purchase energy, capacity or environmental attributes (RECs/SRECs)." ( Id. ) Rather, "ratepayers pay Delmarva, as collection agent, on a $/MWh basis for the output of the plant, which is then sent on to [Bloom], minus the revenues received by [Bloom] for the sale of the energy and capacity into the [Eastern power] _ market" with "Delmarva's RPS obligations [being] reduced according to a specified formula." ( Id. )

The Consultant Report noted that the implementation of this type of approach "removes the utility [i.e., Delmarva] from the risk, even if remote, that it pays costs to the project seller but does not recover the costs from its ratepayers." ( Id. at 61) The consultant also noted its view that other than the "impact on utility credit ratings, " the "effect from a utility customer standpoint of a utility using a tariff for a long-term power transaction rather than a PPA" was hard to gauge; it suggested, however, that since "the tariff is the equivalent of a contract for which the [DPSC] is responsible for overseeing, it is likely that the [DPSC would] have to directly address issues of tariff interpretation of the type that a utility usually addresses with a generator [under a PPA]." ( Id. )

F. Approval of the Tariff

On August 19, 2011, Delmarva "filed an application for approval of a new electric tariff' (the "Bloom-Delmarva Tariff Application"), pursuant to which Bloom, as the QFCP, "would sell the energy, capacity and other products from a 30 MW natural gas-fueled fuel cell project" into the electric grid for all or part of Delaware and other Eastern states (hereinafter the "30 MW contract" or "30 MW fuel cell project"). (DPSC Order No. 8079 at 7; see also Consultant Report at 15, 35) On October 18, 2011, the DPSC issued Order No. 8062 which approved the tariff filing. (D.I. 23, ex. D at 1; see also D.I. 1 at ¶ 41)

On December 1, 2011, after receiving extensive public comment and testimony, the DPSC issued its final Findings, Opinion and Order (Order No. 8079) approving and adopting the tariff. (DPSC Order No. 8079 at 28; see also D.I. 1 at ¶ 42) In doing so, the DPSC found that (1) the requirements in the 2011 Amendments regarding the tariff had been met by the Bloom-Delmarva Tariff Application; and (2) that certain risks to Delmarva's customers that had been identified by the DPSC's consultant, were the Bloom manufacturing facility not to be built, had been addressed thereafter by additional financial protections negotiated between the State and Bloom. (DPSC Order No. 8079 at 21-28)

G. Procedural Background Regarding This Litigation

On June 20, 2012, Plaintiffs filed a two-count Complaint against Defendants. (D.I. 1) In Count One, Plaintiffs allege that REPSA, facially and as applied, violates the dormant Commerce Clause. ( Id. at ¶ 46) In Count Two, Nichols alleges that REPSA, facially and as applied, violates the Equal Protection Clause of the Fourteenth Amendment. ( Id. at ¶ 48; D.I. 22 at 18) Accordingly, Plaintiffs seek a: (1) "declaratory judgment... declaring unconstitutional and unenforceable the provisions of REPS A and the rules implementing it that, facially or as applied, violate the dormant Commerce Clause or Equal Protection Clause of the U.S. Constitution, including but not limited to [DEL. CODE ANN. tit. 26, §§ 352(16)-(17), 353(d) & 364]"; (2) "declaratory judgment... declaring invalid all Orders of the DPSC implementing these REPS A provisions, including without limitation Orders 8062 and 8079"; (3) "permanent injunction barring enforcement of the unconstitutional provisions in REPS A and the rules implementing them" and (4) "[s]uch other and further relief as the Court may deem just and proper." ( Id. at 10)

On August 21, 2012, the parties jointly consented to the Court's authority to conduct all proceedings in this case, including trial, the entry of final judgment, and all post-trial proceedings. (D.I. 18) Shortly thereafter, in lieu of answering the Complaint, Defendants filed the instant Motion, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (D.I. 19) The Motion was fully briefed on September 28, 2012. (D.I. 20, 22, 28) On November 14, 2012, the Court heard oral argument regarding the Motion. (D.I. 33 (hereinafter "Tr.")) Thereafter, on March 13, 2013 and June 26, 2013, Defendants and Plaintiffs, respectively, submitted letters informing the Court of recently issued precedent potentially relevant to the resolution of the Motion. (D.I. 34, 37) The Court has considered the parties' arguments, as well as this additional precedent submitted by the parties.

II. STANDARD OF REVIEW

A. Rule 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) authorizes dismissal of a complaint for lack of subject matter jurisdiction. "Under Rule 12(b)(1), the court's jurisdiction may be challenged either facially (based on the legal sufficiency of the claim) or factually (based on the sufficiency of jurisdictional fact)." Kuhn Constr. Co. v. Diamond State Port Corp., Civ. No. 10-637-SLR, 2011 WL 1576691, at *2 (D. Del. Apr. 26, 2011). Normally, once a challenge to subject matter jurisdiction is made, the plaintiff bears the burden of establishing that it exists. Id. (citing Carpet Grp. Int'l v. Oriental Rug Importers Ass'n, Inc., 227 F.3d 62, 69 (3d Cir. 2000)).

"In reviewing a facial attack, the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff." Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000); see also Kuhn, 2011 WL 1576691, at *2. Dismissals on this basis are only proper "where the alleged claim under the Constitution or federal statutes clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction or where such a claim is wholly insubstantial and frivolous." Bell v. Hood, 327 U.S. 678, 682-83 (1946); see also Kuhn, 2011 WL 1576691, at *2.

On the other hand, "[i]n reviewing a factual challenge to the Court's subject matter jurisdiction, " as the Court does here, it "is not confined to the allegations of the complaint, and the presumption of truthfulness does not attach to the allegations in the [c]omplaint." Shahin v. Del. Dep't of Fin., Civ. No. 10-188-LPS, 2012 WL 1133730, at *3 (D. Del. Mar. 30, 2012) (citing Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977)). "Instead, the Court may consider evidence outside the pleadings, including affidavits, depositions and testimony, to resolve any factual issues bearing on jurisdiction." Id. (citing Gotha v. United States, 115 F.3d 176, 179 (3d Cir. 1997)); see also Reybold Venture Grp., XI-A LLC v. Del. Dep't of Educ., 947 F.Supp.2d 430, 434 (D. Del. 2013).

A "motion to dismiss for want of standing is also properly brought [under this rubric], because standing is a jurisdictional matter." Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007). Thus, the Court must assess Defendants' factual attack on standing here in light of the requirements for such jurisdictional challenges set out above. US. Bank Nat'l Assoc. v. La Mar Gunn, ___ F.Supp.2d ___, 2014 WL 1247085, at *2 (D. Del. Mar. 25, 2014). To achieve standing, a plaintiff must not only satisfy the case and controversy requirements of Article III as of the time the complaint is filed, but also must satisfy certain prudential requirements. UPS Worldwide Forwarding, Inc. v. US. Postal Serv., 66 F.3d 621, 625 (3d Cir. 1995); Wheeler v. Travelers Ins. Co., 22 F.3d 534, 537 (3d Cir. 1994).

B. Rule 12(b)(6)

The sufficiency of pleadings for non-fraud cases is governed by Federal Rule of Civil Procedure 8, which requires "a short and plain statement of the claim showing that the pleader is entitled to relief[.]" Fed.R.Civ.P. 8(a)(2). When presented with a Rule 12(b)(6) motion to dismiss for failure to state a claim, the Court conducts a two-part analysis. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). First, the Court separates the factual and legal elements of a claim, accepting "all of the complaint's well-pleaded facts as true, but [disregarding] any legal conclusions." Id. at 210-11. Second, the Court determines "whether the facts alleged in the complaint are sufficient to show that the plaintiff has a plausible claim for relief.'" Id. at 211 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). Thus, although a non-fraud claim need not be pled with particularity or specificity, that claim must "give the defendant fair notice of what the... claim is and the grounds upon which it rests[.]" Bell At/. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks and citation omitted).

Determining whether a claim is plausible is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679. A plausible claim does more than merely allege entitlement to relief; it must also demonstrate the basis for that "entitlement with its facts." Fowler, 578 F.3d at 211 (citation omitted). Thus, a claimant's "obligation to provide the grounds' of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do[.]" Twombly, 550 U.S. at 555; accord Iqbal, 556 U.S. at 678 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). In other words, "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). In assessing the plausibility of a claim, the court must "construe ...


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