Civil Claims for Aiding and Abetting Tortious Conduct: Recent Developments
| Publication year | 2023 |
| Citation | Vol. 38 No. 4 Pg. 0146 |
| Pages | 0146 |
FEATURE | KYLE M. NOONAN
KYLE NOONAN is a partner in Pierce Atwood's Litigation Practice Group. He represents clients - from national companies to family-owned businesses - facing complex commercial litigation in state and federal courts and investigations by regulatory agencies. Kyle specializes in disputes involving intellectual property, including trade secrets and trademarks, control and contested decision-making in small businesses, and business torts. He can be reached at knoonan@pierceatwood.com.
In April 2021, Maine joined most states and expressly recognized the civil claim of aiding and abetting a breach of a fiduciary duty. See Meridian Medical Systems, LLC, et al. v. Epix Therapeutics, Inc., et al., 2021 ME 24.[1] Meridian imposed heightened pleading requirements for these claims, which may nonetheless saddle businesses and individuals that do not themselves owe fiduciary duties, but work with fiduciaries, with litigation costs and liability. Case law in Maine and elsewhere has developed since Meridian, but important legal issues remain unresolved two years later.
Pleading an Aiding and Abetting Claim
Meridian holds that a claim for aiding and abetting a breach of fiduciary duty must allege with specificity that:
1. A fiduciary breached an underlying fiduciary duty[2] to the plaintiff, causing the plaintiff damages;
2. The defendant had actual knowledge that the fiduciary was committing a breach of fiduciary duty; and
3. The defendant provided substantial assistance i n the commission of that tort.[3]
4.
In recognizing this expansion of tort liability, the Court was careful to include several limitations widely adopted in other jurisdictions. First, the aider and abettor must have actual knowledge of the conduct constituting the underlying tort. Constructive knowledge is not enough. Mere constructive knowledge, the Meridian court explained, would cast too wide a net, making defendants out of parties involved in routine business transactions. Second, the aider and abettor must provide substantial assistance in the commission of the underlying tort. Third, a claim for aiding and abetting a breach of fiduciary duty must be pled with particularity. The Meridian court explained that "the factual foundations of an alleged fiduciary relationship must be pled with specificity," and "[t]he same logic extends to allegations of aiding and abetting a breach of those duties."[4] Finally, of course, the complaint must allege a breach of an underlying fiduciary duty and resulting damages.
The Meridian court affirmed the dismissal for failure to state a claim for aiding and abetting a breach of fiduciary duty by the managers of a limited liability company, which had licensed technologies to the defendant. The plaintiff (assignee of the claims of the company) alleged that the defendant licensee engaged in misconduct that induced the company's managers to breach their fiduciary duties to the company. The court found that none of the allegations stated a claim because (1) there was nothing inherently wrongful about the alleged conduct and (2) the plaintiff failed to make specific factual allegations of substantial and knowing assistance in committing the underlying alleged breaches of fiduciary duty.
This Civil Claim Has 'Teeth'
What is the impact of the Meridian decision? Few decisions apply Meridian as of September 2023, but claims for aiding and abetting a breach of fiduciary duty have teeth.
Klinges v. Pomerleau — U.S. District Court for the District of Maine
In Klinges v. Pomerleau, et al.,[5] the plaintiff was a minority shareholder in a set of companies that had collapsed. She sued, among other parties, (1) her estranged brother, the majority shareholder of each company, and (2) the law firm that represented both her brother individually and the companies. The plaintiff asserted an aiding and abetting claim against the law firm based on its assistance to her estranged brother in allegedly (a) creating a new company in which plaintiff had no interest and (b) using the existing companies' lending facilities to fund the new company. On cross-motions for summary judgment, the court (Torreson, J.) found that the estranged brother breached his fiduciary duties to the plaintiff as a matter of law by engaging in a "directors' conflicting-interest transaction" under the Maine Business Corporation Act. See 13-C M.R.S. §§ 871-874.[6] Thus, an underlying breach of fiduciary duty was established.
The law firm also moved for summary judgment on both the "actual knowledge" and "substantial assistance" elements of the aiding and abetting claim. The court ruled against the law firm on both elements. The court found a dispute of fact regarding the law firm's actual knowledge of the underlying breach by...
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