It isn’t every day that the Law Court addresses claims of civil conspiracy or aiding and abetting breaches of fiduciary duty, but that is exactly what the court did in Meridian Medical Systems, LLC v. Epix Therapeutics, Inc. – with a bit of literary allusion thrown in.
In Meridian, the Court clearly stated for the first time that
civil liability can attach for aiding and abetting another’s tortious conduct.
Meridian involved a business relationship gone bad. Ken Carr, in his capacity as assignee of the claims of Meridian, sued corporate defendants which had a relationship with Meridian as a result of a licensing agreement. The complaint asserted that the value of Meridian’s technology was not maximized due to the conduct of Ken Carr’s co-managers at Meridian, which allegedly was encouraged by the defendants. The complaint included counts for “conspiracy” and “aiding and abetting breaches of fiduciary duty.”
Reviewing the order granting the defendants’ motion to dismiss, the Court emphasized that it must carefully “parse” a complaint to determine whether “its allegations meet the elements of a viable claim.” Rhetoric and the sheer size of a complaint cannot alone carry the day. Citing The Picture of Dorian Gray, Oscar Wilde’s famous story of the price of moral corruption, Justice Connors noted that terms such as “corrupt” may “own literary value, [but] it adds no substance to a legal cause of action.”
Meridian stands for two propositions of particular note – there is no tort for “conspiracy” under Maine law, but there can be a claim for “aiding and abetting” in the civil context. The first was already settled under Maine law, but the second was not. Until Meridian Medical Systems, the status of the aiding and abetting doctrine has been “uncertain in the civil context.”
The Court ended that uncertainty, stating flatly that a party can be civilly liable for aiding and abetting tortious conduct. Unlike conspiracy, aiding and abetting focuses not on agreement but on “assistance in committing the underlying tort.” Proof of aiding and abetting in the civil context requires
(1) knowledge that the other’s conduct constitutes a breach of duty, and
(2) substantial assistance or encouragement to the other to so conduct himself.
Thus, “the party whom the defendant aids must perform a wrongful act that causes an injury,” and the defendant must “be generally aware of his role as part of . . . tortious activity at the time that he provides the assistance” and “must knowingly and substantially assist the principal violation.”
The Court, however, provided two important caveats. “First, the aider and abettor must have actual – and not merely constructive – knowledge that the principal tortfeasor is engaged in tortious conduct.” This provides an important limit on the scope of civil liability. “Second the defendant must commit acts constituting substantial assistance in the commission of the underlying tort.” Substantiality depends on a variety of factors, including the amount of assistance and the defendant’s state of mind.
The Law Court ultimately held that the plaintiff failed to allege knowing, substantial assistance in any breach of fiduciary duty. Nevertheless, after Meridian, it is clear that while there may be no liability for conspiracy – or even corruption on the scale of The Picture of Dorian Gray – a party may be liable for aiding and abetting tortious conduct.