Opinion ID: 2461
Heading Depth: 2
Heading Rank: 4

Heading: Can Aventis Be Kept in the Case?

Text: The district court also granted Aventis's separate motion to dismiss, concluding that the plaintiffs had not alleged fraud with sufficient particularity to satisfy Rule 9 of the Federal Rules of Civil Procedure. Although Rule 9(b) permits knowledge to be averred generally, plaintiffs must still plead the events which they claim give rise to an inference of knowledge. Devaney v. Chester, 813 F.2d 566, 568 (2d Cir.1987). In a case involving multiple defendants, plaintiffs must plead circumstances providing a factual basis for scienter for each defendant; guilt by association is impermissible. See id. This can consist of allegations as to who possessed... knowledge of the fraud, when and how they obtained [that] knowledge, or even why they should have known of the fraud. Id. The district court concluded that the plaintiffs fell short of this standard. We disagree. In the district court's view, [t]hat Aventis would pay to license a patent which it knew to be unenforceable flies in the face of reason. In re DDAVP, slip op. at 15. However, we find the plaintiffs' allegations plausible, and sufficient to survive a motion to dismiss on the pleadings. At the time Aventis filed its NDA and listed DDAVP in the Orange Book, the '398 patent's validity was already in question with the patent having been rejected twice, and the PTO having raised concerns of bias. See Ferring I, 437 F.3d at 1190. Yet, the plaintiffs assert that Aventis apparently made no effort to independently investigate and attest to the validity of the '398 patent. Rule 9(b) requires only the circumstances of fraud to be stated with particularity; knowledge itself can be alleged generally. Especially considering the long-standing relationship between Aventis and Ferring, the plaintiffs have adequately stated circumstances that give rise to a plausible inference of knowledge and liability. At this early stage, the plaintiffs need only state a plausible claim of monopolization, and they have alleged enough for their suit against Aventis to proceed. Because the dismissal as to both Ferring and Aventis was in error, we have no cause to address the plaintiffs' claim that their due process rights were violated.