Académique Documents
Professionnel Documents
Culture Documents
John R. Cavanaugh
and Lynch,
Brew
________________
_________________
____________
Hoffman & Sands were on brief for appellant.
_______________
Sydelle Pittas with whom Powers & Hall, P.C. was on brief
______________
____________________
appellee.
____________________
December 29, 1993
____________________
______________________
*Of the District of New Hampshire, sitting by designation.
pain-killing drug
Miles,
Inc., invented
called Xorphanol.
In
and
1984,
in
return for
which
Pars
promised
royalty and
to use reasonable efforts directly or
through its subcontractors to develop
one or more compounds . . . to the point
of [obtaining] . . . government . . .
approval
for .
. .
[Xorphanol's]
to pay
therapeutic use . . . .
In 1988,
Pars sublicensed
Maruho, Inc., to
the plaintiff
in this
lawsuit,
to sell
them in Japan.
According to
sublicense
Maruho,
negotiations.
Pars misled
Although
negative study
Research Unit
Glaxo,
Inc.,
Maruho asked
2)
conducted by the
less
the
Pars
to
of a well-known British
and
it during
Charterhouse
pharmaceutical firm,
important
negative
study
Both
also caused
adverse side
effects, such
as
Maruho says
-22
that, had
it seen these
the sublicense.
have bought
from Pars,
proceedings.
Maruho
Xorphanol's
based)
for Pars
original
is
in the
instead
seeks
licensor;
to get its
midst of
money
bankruptcy
recovery from
and,
in this
Miles,
(diversity-
state law.
proffered by
Miles.
the
Maruho
parties,
appeals.
granted
We
summary
affirm the
judgment
for
district court's
judgment.
I
Maruho's Procedural Argument
____________________________
At
It
says
that
the district
court
improperly
converted a
P.
12(b)(6), into
a motion
Fed. R.
for
pleading" are
treat motion
summary
for judgment
judgment
presented to
where
on pleadings
"matters outside
and accepted
-33
P. 12(b)
by the
as a
the
court and
"reasonable opportunity" to
"given").
The
claim.
risk
record,
Miles' motion
however, does
gave Maruho
not
adequate notice
Dismiss
or,
support Maruho's
of the
entitled it "Motion to
(emphasis added).
immediately told
the
requested summary
court that it
12
and
[summary
original).
of
judgment
rule]
56"
Fed. R. Civ.
(emphasis
in
documents, which it
Record."
all
___
In
argument,
that it had
titled "Plaintiff
Summary Judgment
court at oral
of evidence
Given these
on all counts by
presenting pertinent
material outside the pleadings; and Maruho not only had, but
also
took
advantage
of,
"reasonable
material.
opportunity"
to
Inc., 770 F.2d 288, 294-95 (2d Cir. 1985), cert. denied, 475
____
____________
-44
U.S.
1015 (1986).
on all counts.
II
Miles' Participation in the Fraud
_________________________________
Maruho
participant
Pars'
is liable as
an actual
fraud, by
engaging in an
acting
"in
concert"
with
Pars,
or
practice."
by
See
___
876(a),
(b) (1979)
It
is sufficient to trigger
as an actual participant.
Miles' liability
Actual knowledge.
__________________
argument's sake,
about
Pars'
that a
fraud
We
finding that
would
trigger
shall
assume,
Miles actually
Miles'
finding.
-55
knew
liability.
for
the
was willing
Miles
Xorphanol
to pay $3
must have
known
that
million for
some kind
of
Pars hid
the sublicense,
the
negative
propositional
link,
such
as,
"a
b.
c.
The record,
however,
also
shows
the
following
b.
Miles,
after
receiving
"updated
IND
information on Xorphanol," (which Maruho says
included the
Stanford, as well
as the
Charterhouse, studies), wrote Pars a letter
in which it basically accepted the fact that
the Charterhouse study was negative, but
nonetheless pointed
to other,
positive,
studies; urged
Pars to
perform further
studies; noted the large sales of combination
and other pain killers; and concluded, in
reference to Xorphanol, that "there is still
a place for a moderate to strong, orally
active,
non-dependence
producing"
pain
killer.
c.
d.
The experts
2)
"There is nothing
in this
report, in my opinion, that
would call for
a halt to
clinical testing of Xorphanol
at doses up to (and including)
2 mg."
3)
The upshot is
Maruho's
favor, shows
great deal of
product
when viewed in
potentially worth
a
of
developing;
but (4)
Xorphanol
a respected
expert
who thought
that
-88
favorable
expert
testimony
on
the
relevant
question --
reasonable
pharmaceutical executive
would
have thought
Xorphanol had little or no value --- the jury might have had
a basis for reaching a favorable conclusion about what Miles
knew.
our
of
the
including
the
the conclusion
And,
relevant
studies,
leads inexorably
differed
that experts
That fact, in
million payment,
must have
that Pars
hidden the
studies.
liable as
fraud.
have known"
about Pars'
to Maruho, supports
the point
where a
should have
factual
it "should
been suspicious --
finding does
find that
and no further.
not provide
claim only to
sufficient
Miles
And, that
basis for
in the fraud.
-99
First,
theories
rest
insofar as
upon a
Maruho's "actual
tortfeasor's
participant"
intentional action,
___________
a finding
defines
of an
that "intent"
broadly,
as
substantially
certain
to
8A (1965).
that
Massachusetts courts
one
"purpose" or,
more
the
result
consequences
from
[the
are
act]."
supporting
Kyte, 556
____
intent, whether
a
and abets" a
substantial,
enterprise."
terms of
a defendant "aids
if, at the
"its
in
"belie[f]
Restatement (2d)
________________
only
actual unlawful
N.E.2d
have held
tortfeasor
role
in
at 1028.
that a
an
unlawful
Similarly,
the
defendant acts
"in
have
Pars was
known
of Pars
unlawful
Without actual
tests, Miles
(i.e.,
can
fraudulent)
insofar
as
Maruho
tries
to
predicate
nothing more
than a
negligent failure
_______
the
to act
To
-1010
special
relationship,
a duty upon
steps to protect
291
aid
and
the defendant to
take
the plaintiff.
& comments a, c
defendant
See Restatement
___ ___________
for
between
or
situations in which
protection
requires a
(1965) (stating
another
is
action
limited
to
special relationship
between the
parties).
suggesting
that
"licensor/sublicensee"
___
such a duty.
The
We are not
the
simple
automatically,
of
any authority
relationship
by
itself,
creates
aware of
non-liability, none
of which encompasses
sublicensee relationship).
Finally,
the licensor-
that might
necessary
duty.
support the
argued
existence of
the
of the
"unfair or
Laws by
practice."
engaging in
Mass. Gen.
an
L. ch.
-1111
95,
11.
But,
to prove
a violation,
Maruho must
show
authority that
licensor
would
has only
justify such
suspicion, not
to
act
Cir. 1991).
to
protect
Tagliente
_________
finding where
actual
knowledge, of
potential
victim.
Miles'
part.
We
therefore
do
has no
not
The
behavior
believe
the
nonetheless "vicariously"
caused, either
because Pars
The
had
the
See, e.g.,
___ ____
27
Cir.
(1st
1988)
of the
agent, or
Pars
because
vicarious
to
liability that
Maruho
control
to show
(joint
enterprise
-1212
F.2d 22,
exists
other[s] concerning
that
Pars' negotiating
participants "'ha[ve] an
the conduct
the harm
all require
legal right
activity.
was Miles'
theories of
argues, however,
liable for
acts or
where
and control
omissions
which
cause, or contribute
(quoting Adams
_____
Payton v.
______
equal]
the
v. Dunton,
______
Abbott Labs,
___________
1981) (joint
to the causation
187 N.E.
512 F. Supp.
venture requires
means
of
achieving
(Second) of Agency
__________________
90, 92
those
(Mass. 1933));
1031, 1036
"joint [but
of, injury.'"
not necessarily
objectives");
Restatement
___________
1 comments a, b (1958); W.
Page Keeton
(D. Mass.
72, at 519-
of control).
no
negotiation and
provides
to participate in or
granting of
no evidence of any
sublicenses.
control the
And the
record
that
suggests
activity.
any
We concede
evidence
of
was no actual
Maruho
to
control
Pars'
that, sometimes,
actual control
existence of a
and
right
as a
control.
were
Miles did
negotiating
jury might
basis for
negotiating
But
use
inferring the
here, there
sublicense
Pars
until
the
and it
the fee
nevertheless
grant, or deny,
argues
that
Miles'
legal
of the
of, or
the
simple, unexercised,
practical power
to
or joint
venture
(or
enterprise),
for
otherwise,
every
negotiator
with,
of the
any
negotiations.
many
persons
We are not
the simple
sublicense
(through
Miles/Pars
license
vicariously
joint
proposition.
the royalty-sharing
agreement)
does
conduct.
central to
not
joint control, a
-1414
Miles
e.g., Payton,
____ ______
IV
in the
make
find no
from the
provision
See,
___
the
We add that
at 1036 (recognizing
control are
influence
512 F. Supp.
who might
and
___
Stock v.
_____
Unjust Enrichment
_________________
Maruho argues
"unjustly enriched"
it must
therefore "return"
the share
to Maruho.
Did Miles
half.
Miles
to some of
of Xorphanol development
entitled to nothing.
Miles and
Miles was
and retain
The
the remainder.
escrow agreement
either reach
as to . .
b. A final
decision
arbitration . . .; or,
is
-15-
reached
a
.
by
account
provided
15
to bring a
legal proceeding
at a minimum,
other
interest
Restitution
___________
possession
absence
in"
comment
of the money.
of an
agreement
this
money.
Restatement of
_______________
b.
But
The
from
Pars
Miles
of or
as
never
to
did
have
distribution)
only to
And,
the money
from
interest -- at best
analogous to an
might support
a suit
for restitution.
This
that Miles
-1616
the escrow.
by
development work
Pars to
otherwise
Miles, for
engage in
have undertaken.)
no "promise"
that it
record
would not
shows only
that
The
(It shows
whether or not
to sue.
money in escrow
(If
Maruho at least
there was
had the
so.)
no authority supporting
"interest"
falls
description
of
within
the scope
"enrichment,"
while
of
the
we
such an
Restatement's
found
contrary
917
by money that he
does "possess"
____
these reasons
violates by later
court is
-1717
judgment of
the district
Affirmed.
________
-18-
18