Today’s case is a two fer. We explore two questions. First, if a complaint as originally drafted does not meet Iqbal/Twombly standards, whatever that is:-), does the plaintiff get the right to amend? Second, just what must be alleged in order to survive a motion to dismiss with respect to alleging that a private entity’s entire operations are subject to the Rehabilitation Act. The case is Runnion ex rel. Runnion v. Girl Scouts of Greater Chicago and Northwest Indiana, a Seventh Circuit decision decided May 8, 2015. As is typical, I have divided the blog entries into categories: facts; court’s reasoning with respect to the proper approach for motion for leave to amend complaints; court’s reasoning with respect to just what must be alleged to bring entire operations of a private entity within the scope of the Rehabilitation Act; and takeaways. The reader is free to concentrate on any or all of the categories.


Plaintiff, who is deaf, was active in a Girl Scout troop run by defendant Girl Scouts of Greater Chicago and Northwest Indiana, the largest regional Girl Scout organization in the United States. For several years the plaintiff benefited from sign language interpreters provided by the Girl Scouts enabling her to participate fully in the troop’s activities. The Girl Scouts then stopped providing interpreters. When her mother complained, the Girl Scouts disbanded the entire troop. The plaintiff alleged that the Girl Scouts violated the Rehabilitation Act by refusing to provide her with sign language services and then by disbanding her troop because her mother complained. The District Court dismissed the case under Rule 12(b)(6) finding that the plaintiff had failed to allege that the Girl Scouts was subject to the Rehabilitation Act. Further, thinking that amendment would be futile under its interpretation of the Rehabilitation Act, the District Court dismissed the case without leave to amend. For the reasons that follow below, the Seventh Circuit reverses.

Court’s Reasoning (Proper Approach for Motion for Leave to Amend Complaints)

1. The District Court erred in saying that the plaintiff needed to allege in their complaint facts supporting specific legal theories. Neither Twombly nor Iqbal has such a requirement. That is, a complaint need contain only factual allegations giving the defendant fair notice of the claim for relief and showing that the claim has substantive plausibility. Further, the federal Rules of Civil Procedure do not require complaints to specify the legal theory or statute supporting the claim for relief.

2. Denying a plaintiff the opportunity to amend carries with it a high risk of being deemed an abuse of discretion by the appellate court. While the District Court said that amending the complaint would be futile, that conclusion was based on a novel and erroneous interpretation of the Rehabilitation Act.

3. It has been repeatedly said in the Seventh Circuit that ordinarily a plaintiff whose original complaint has been dismissed under Rule 12(b)(6), should be given at least one opportunity to try to amend her complaint before the entire action is dismissed.

4. A denial by a District Court of giving a plaintiff the opportunity to amend a complaint will be reviewed rigorously on appeal. Such a rigorous review is appropriate because except in unusual circumstances, it is unlikely that the court will be able to determine conclusively on the face of a defective pleading whether plaintiff actually can state a claim. Those unusual circumstances, “clear futility at the outset,” are a very rare occurrence, which is not present in this case. Further, having a liberal standard for amendment is even more important where the law is not clear. That is, the Seventh Circuit specifically notes that Twombly and Iqbal have created considerable uncertainty and variation among the lower court’s as to just how demanding pleading standards have become. Accordingly, in the face of that uncertainty, applying a liberal standard for amending pleadings, especially in the early stages of the lawsuit, represents the best way to ensure the cases will be decided justly and on their merits.

5. In this case, the District Court took the unusual step of entering judgment at the same time it dismissed the complaint. In that situation, it is not necessary for an appellate court to find other extraordinary circumstances before allowing a pleading to be amended and instead the liberal standard for amending pleadings applies. In other words, it is not possible for District Court to nullify the liberal right to amend under Rule 15(a)(2)- Rule 15(a)(2) covers post dismissal leave to amend requests-by entering judgment prematurely at the same time it dismisses the complaint that would be amended.

6. It is true, that an absolute right to amend per Rule 15(a)(1) expires 21 days after serving it or if the pleading is one where responsive pleading is required, 21 days after service of a responsive pleading for 21 days after service of a motion under Rule 12(b),(e), or (f) whichever is earlier. However, just because a right is guaranteed at that point does not mean in light of how uncertain Twombly and Iqbal are, that if a motion to dismiss is granted the liberal right to amend does not exist.

7. It was perfectly reasonable for the plaintiff to stand on her original complaint because of the uncertainty of just when the Rehabilitation Act applies to the entire operations of a private entity and because of the uncertainty of the Iqbal/Twombly standards. Further, considering the uncertainties, it was reasonable for the plaintiff to avoid the considerable expense of further litigation, which would involve exploring all of the Girl Scouts’ activities, until she was sure that she failed to survive a motion to dismiss leaving her with no choice but to pursue leave to amend under Rule 15(a)(2).

Court’s Reasoning (Just What Must Be Alleged to Bring Entire Operations of a Private Entity within the Scope of the Rehabilitation Act)

1. There are two ways per 29 U.S.C. § 794 for a private entity to be subject to the Rehabilitation Act with respect to its entire operations. First, the private entity could receive federal funds as a whole (a hard thing to show). Second, showing that the private entity is principally engaged in the business of providing education, healthcare, housing, social services, or parks and recreation.

2. Private organizations are not categorically exempt from coverage under the Rehabilitation Act. If Congress wanted to categorically exempt private organizations from the scope of the Rehabilitation Act, they could have done so as they have done so with respect to other laws, and legislative history is not to the contrary.

3. Due to the grammatical structure of the list of activities contained in § 794(b)(3)(A)(ii), it will be up to the plaintiff to eventually show that the defendant engages in any one of those activities. In this particular case, the plaintiff chose to focus on education and social services provided by the Girl Scouts.

4. Since formal educational systems are covered by a separate provision of the Rehabilitation Act, being principally engaged in education would not be limited to the sort of instruction received in a traditional educational setting.

5. With respect to what might constitute social services, that would refer to an activity designed to promote social well-being, such as organized philanthropic assistance of the sick, destitute, or unfortunate.

6. In a footnote, the Seventh Circuit says that the plaintiff also pointed to some girl scout projects involving providing healthcare and parks and recreation.

7. With respect to what principally engaged might mean, in other situations, it has been interpreted to mean the primary activities of a business, excluding only incidental activities. Further, if any one of the designated activities are principal, that is sufficient to bring all of the operations of the private entity within coverage of the Rehabilitation Act.

8. A private organization also falls within the statute where it engages in a mix of the statutorily enumerated services where that mix in the aggregate makes up the primary activities of the private organization because there was no reason to think Congress laid out mutually exclusive conditions when it listed the activities it did. Such an interpretation also ensures that organization focusing on providing more than one of the activities without committing to just one are still covered. Such an interpretation also makes it unnecessary to engage in the classification of activities that are a hybrid of more than one activity.

9. Plaintiff’s complaint cited numerous instances where the defendant characterized itself and its programs as educational. The fact that she attached exhibits to the complaint indicating as such was perfectly okay and did not mandate that the court convert the motion into one for summary judgment.

10. In fact, the proposed amended complaint of the plaintiff listed several programs of the defendant that could be plausibly classified as providing education, healthcare, social services, or parks and recreation. Accordingly, the allegations in the complaint exceed what is needed to allege plausibly that the defendant was principally engaged in the business of providing the services listed in the Rehabilitation Act that would subject its entire operations to the Rehabilitation Act, and it would not have been futile to allow the plaintiff to amend.

11. The level of detail provided by the plaintiff’s proposed amended complaint is not the level of detail necessary (she went beyond what was necessary), for every plaintiff to withstand a motion to dismiss. Rather, plaintiff’s pleading burden need to be commensurate with the amount of information available to them at the time (publicly available).


1. I once heard a federal magistrate say that Iqbal/Twombly was a moving target and that it was very difficult to know when that target is satisfied. It is interesting to see that the Seventh Circuit acknowledges that fact. Since it is very unclear as to how there could ever be much clarity to the standard, the Seventh Circuit says that there needs to be a liberal amendment policy for when a complaint get dismissed under Rule 12(b)(6). That liberal amendment policy also applies to request for leave to amend made post judgment under Rule 15.

2. With respect to hitting the moving target that is Iqbal/Twombly, one approach that you might consider is alleging sufficient facts to put the defendant on notice as to what the nature of the claim is (the approach that has been used in Illinois for some time). Keep in mind, it is the facts that are important and not the theory of the case.

3. The decision should go a long way to discouraging District Court judges from dismissing complaints and then disallowing a leave to amend.

4. The decision brings a great deal of clarification as to when the entire operations of a private entity might be subject to the Rehabilitation Act and how the plaintiff can survive a motion to dismiss when making such allegations. The steps would be (the below assumes that the private entity takes federal funds and that it does not take federal funds as a whole):

A. Is the private entity engaged in any one of the following activities: education (includes education outside of the traditional educational setting), healthcare, housing, social services (an activity designed to promote social well-being), or parks and recreation or any combination thereof?

B. If the answer to paragraph IV(4)(A) is yes, are those activities or combination of those activities the primary activities of the business?

C. Research and then attach to the complaint as exhibits whatever information is publicly available to support IV(4)(A),(B)

D. If District Court still grants the motion to dismiss after you have done everything under IV(4), request a leave to amend and repeat the steps in IV(4) if leave to amend is granted. If leave to amend is not granted, then appeal and when the leave to amend is reversed, which under this decision could very well happen in most cases, repeat IV(4).

5. If you are a private entity taking federal funds, get prepared for a lot of litigation over whether the entire operations of your private entity are subject to the Rehabilitation Act. On a preventive level, you may want to consider acting as if that is already the case and proceed accordingly per the Rehabilitation Act provisions.

6. This case opens up a whole new realm of possibilities for private entities that would not be subject to title III of the ADA (to be subject to title III of the ADA, it must be a place of public accommodation), but under this decision, can now have all their operations subject to the Rehabilitation Act.

7. For those private entities receiving federal funds and already subject to the Title III of the ADA, this decision does lead to the possibility that such an entity could be subject to damages (though not punitives per this case), providing deliberate indifference could be shown, under the Rehabilitation Act when such damages would not be a possibility under title III of the ADA.

8. This is a case with a huge impact with respect to both pleading practice and the scope of the Rehabilitation Act (the panel was Easterbrook, Sykes, and Hamilton with Hamilton writing the decision). It definitely bears watching in terms of how it fares in other jurisdictions.