Meridian Med. Sys., LLC v. Epix Therapeutics, Inc.

• Decision Date: 27 April 2021
• Docket Number: Docket: BCD-20-164
• Citation: 250 A.3d 122
• Parties: MERIDIAN MEDICAL SYSTEMS, LLC, et al. v. EPIX THERAPEUTICS, INC., et al.
• Court: Maine Supreme Court

250 A.3d 122

MERIDIAN MEDICAL SYSTEMS, LLC, et al.

v.EPIX THERAPEUTICS, INC., et al.

Docket: BCD-20-164

Supreme Judicial Court of Maine.

Argued: February 11, 2021

Decided: April 27, 2021

Randy J. Creswell, Esq., CreswellLaw, Portland, and Barry S. Pollack, Esq. (orally), and Ashly Scheufele, Esq., Pollack Solomon Duffy LLP, Boston, Massachusetts, for appellants Meridian Medical Systems, LLC, and Kenneth L. Carr

Courtney Worcester, Esq. (orally), and Roger A. Lane, Esq., Holland & Knight LLP, Boston, Massachusetts, for appellee New Enterprise Associates, Inc.

Clifford H. Ruprecht, Esq., Roach Ruprecht Sanchez & Bischoff, P.C., Portland, and Joseph T. Dixon, Esq. (orally), and Anupama D. Sreekanth, Esq., Fredrikson & Byron, P.A., Minneapolis, Minnesota, for appellees Epix Therapeutics, Inc., and Medtronic, Inc.

Panel: MEAD, GORMAN, JABAR, HUMPHREY, and CONNORS, JJ.

CONNORS, J.

[¶1] In this business dispute asserting various tort claims, Kenneth Carr, in his capacity as assignee of claims of Meridian Medical Systems, LLC (MMS), appeals the dismissal for failure to state a claim, see M.R. Civ. P. 12(b)(6), of his first amended complaint (FAC) in the Business and Consumer Docket (Murphy, J. ). We affirm.

I. BACKGROUND

A. Standard of Review

[¶2] We review the legal sufficiency of a complaint de novo, examining the complaint "in the light most favorable to the plaintiff to determine whether it sets forth elements of a cause of action or alleges facts that would entitle the plaintiff to relief pursuant to some legal theory." Nadeau v. Frydrych , 2014 ME 154, ¶ 5, 108 A.3d 1254 (quotation marks omitted). The complaint "must allege facts with sufficient particularity so that, if true, they give rise to a cause of action; merely reciting the elements of a claim is not enough." America v. Sunspray Condo. Ass'n , 2013 ME 19, ¶ 13, 61 A.3d 1249 ; see also Seacoast Hangar Condo. II Ass'n v. Martel , 2001 ME 112, ¶ 16, 775 A.2d 1166 ("We are not bound to accept the complaint's legal conclusions." (quotation marks omitted)).

[¶3] Although this standard is forgiving, it must still "give fair notice of the cause of action by providing a short and plain statement of the claim showing that the pleader is entitled to relief." Howe v. MMG Ins. Co ., 2014 ME 78, ¶ 9, 95 A.3d 79 (quotation marks omitted). The complaint "must describe the essence of the claim and allege facts sufficient to demonstrate that the complaining party has been injured in a way that entitles him or her to relief." Id.

[¶4] The FAC, 32 pages and 126 paragraphs long, is not a "short and plain statement." M.R. Civ. P. 8(a). It includes vocabulary lacking legal significance. For example, throughout the FAC, Carr claims that the defendants "corrupted" the co-managers of MMS. While the word "corrupt" may own literary value,¹ it adds no substance to a legal cause of action. Hence, like the trial court, we must parse a verbal jungle and the FAC's time- and topic-shifting recitation of facts to determine whether its allegations meet the elements of a viable claim under Maine law. Like the trial court, we conclude that they do not.

B. The Allegations

1. The Parties

[¶5] The plaintiff, MMS, was a Maine LLC founded by Carr in 2001 to develop microwave technologies. Carr was MMS's chairman and CEO until he was removed from those positions in 2013 by MMS's co-managers. MMS initially filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code and eventually liquidated under Chapter 7 in 2015, with Carr purchasing certain of MMS's claims from the bankruptcy estate.

[¶6] Notably, the instant suit does not include any claim asserted by Carr personally, nor any claim by MMS against its co-managers.²

[¶7] There are three defendants: Epix Therapeutics, Inc., f/k/a Advanced Cardiac Therapeutics, Inc. (ACT); New Enterprise Associates, Inc. (NEA); and Medtronic Inc. All are Delaware corporations.

[¶8] ACT licensed technology from MMS starting at some point in or before 2013. NEA became a controlling shareholder in ACT in 2014. Medtronic acquired ACT in 2019. The only relationship any defendant had with MMS was the licensing agreement between MMS and ACT. Neither the content nor the duration of that agreement is set forth in the FAC.

2. The Claims

[¶9] The gist of the FAC is that the value of MMS-owned technology was not maximized due to its co-managers’ conduct, which ACT and NEA encouraged. The FAC contains three counts: (1) aiding and abetting breaches of fiduciary duty, (2) "tortious interference," and (3) "conspiracy." The factual allegations supporting these claims are discussed in more detail below.

II. DISCUSSION

A. Conspiracy and Successor Liability

[¶10] Two components of the FAC may be disposed of succinctly. First, under Maine law, there is no tort for "conspiracy." See Cohen v. Bowdoin , 288 A.2d 106, 109-10 (Me. 1972) ; see also Siegemund v. Shapland , 324 F. Supp. 2d 176, 192 (D. Me. 2004) ("Conspiracy itself is not a cause of action under Maine law."). Second, Carr claims that Medtronic is liable only vicariously through ACT, so for simplification purposes, we will refer to Medtronic and ACT collectively as "ACT."³

[¶11] This leaves two claims based on the actions of ACT and NEA: (1) aiding and abetting breaches of fiduciary duty, and (2) "tortious interference." We address them seriatim.

B. Aiding and Abetting a Breach of Fiduciary Duty

1. Elements of the Underlying Tort

[¶12] As a threshold matter, there must be a breach of fiduciary duty by someone, here alleged to be MMS's co-managers, Jeff Carr (Ken Carr's son) and Robert Allison. Under Maine common law, the elements of a breach of fiduciary claim are (1) a fiduciary relationship between the plaintiff and another person, (2) a breach of the other person's fiduciary duty toward the plaintiff, and (3) damages incurred by the plaintiff proximately caused by the breach. See Steeves v. Bernstein, Shur, Sawyer & Nelson, P.C. , 1998 ME 210, ¶ 10 n.8, 718 A.2d 186 ; Moulton v. Moulton , 1998 ME 31, ¶ 5, 707 A.2d 74 ; Leighton v. Fleet Bank of Me. , 634 A.2d 453, 457-58 (Me. 1993) ; Ruebsamen v. Maddocks , 340 A.2d 31, 35 (Me. 1975).

2. Civil Liability for Aiding and Abetting a Breach of Fiduciary Duty

[¶13] Once a plaintiff has adequately pleaded the breach of a fiduciary duty owed to it by another, whether the plaintiff has adequately pleaded facts upon which a third party to that fiduciary relationship can be held liable for aiding and abetting the fiduciary's breach of its duty to the plaintiff is not a simple question. We have never squarely addressed this question.

a. Aiding and Abetting Liability for Torts in General

[¶14] While aiding and abetting is an "ancient criminal law doctrine," the application of the doctrine "has been at best uncertain" in the civil context. Cent. Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A ., 511 U.S. 164, 181, 114 S.Ct. 1439, 128 L.Ed.2d 119 (1994) (citing FDIC v. S. Prawer & Co. , 829 F. Supp. 453, 457 (D. Me. 1993) ("It is clear ... that aiding and abetting liability [for certain tortious conduct] did not exist under the common law [in Maine], but was entirely a creature of statute.")).

[¶15] In Barnes v. McGough , 623 A.2d 144 (Me. 1993), we rejected a Rule 12(b)(6) dismissal of various tort claims against lawyers who had assisted other defendants in a business transaction. We stated:

The plaintiffs seek to impose on the lawyer defendants direct liability for their own conduct and liability for substantially assisting and encouraging the tortious actions of the [other defendants]. See Restatement (Second) of Torts § 876 .... [W]e are compelled to agree with the plaintiffs that their complaint states a claim against the lawyer defendants for fraud, interference with advantageous relations, and intentional infliction of severe emotional distress. The complaint avers every element of each of these torts.

Id. at 145-46. It is unclear whether this language adopted the Restatement (Second) of Torts § 876 (Am. L. Inst. 1979), which sets forth elements of liability for "persons acting in concert," or whether the ruling was based on allegations of the defendants’ own direct commission of the torts, or a mixture of both.

[¶16] In a subsequent appeal based on a summary judgment in favor of the same defendants, we noted that we had held in the previous appeal that the plaintiffs "had stated a cause of action against the [l]awyer [d]efendants for fraud, aiding and abetting fraud, interference with advantageous relationship, aiding and abetting interference with advantageous relationship, and intentional infliction of emotional distress." Barnes v. Zappia , 658 A.2d 1086, 1089 (Me. 1995). We then affirmed the summary judgment because the plaintiffs had not shown a dispute of material fact indicating that the defendants had committed the underlying torts. See id. at 1090 (stating that in order to support a claim for intentional infliction of emotional distress, the plaintiff must establish that the defendants inflicted the distress and that the record generated no genuine issue that the defendants’ conduct met that standard).

[¶17] In sum, it is not entirely clear whether we recognized an aiding and abetting theory for the torts alleged in Barnes , and, if we did, whether we adopted the elements for imposing aiding and abetting liability set forth in section 876 of the Second Restatement. Maine case law regarding liability for aiding and abetting the commission of other common law torts is equally sparse.⁴

[¶18] If we were to recognize civil liability for aiding and abetting tortious conduct by others, the Second Restatement requires that the aider and abettor "know[ ] that the other's conduct constitutes a breach of duty and give[ ] substantial assistance or encouragement to the other so to conduct himself." Restatement (Second) of Torts § 876(b). This requirement has been refined by courts to mean that "(1) the party whom the defendant aids must perform a wrongful act that causes an injury;...