representations; the facts misrepresented; the identity of the person(s) making the
misrepresentation; and what that person(s) gained from making the misrepresentation123
exists in large measure so that defendants are not subjected to fraud claims simply
because business plans did not work out as hoped.124 The requirement of particularized
pleading ensures that a plaintiff must plead circumstances suggesting that the defendants
were positioned to know that they were making erroneous statements of material facts
and had an interest in doing so.125 That has not been done here.
Recognizing the deficiencies in its complaint, the Litigation Trust devoted much
of its briefing on its fraud claims to seeking an exemption from Rule 9(b) for itself. The
Litigation Trust argues that Rule 9(b) should be less stringently applied in the context
where a plaintiff is a third-party, such as a trustee, because third-parties generally have
less information on which to base their allegations. Accordingly, the Litigation Trust
maintains that as long as the defendants have notice that is “not vague or general,” the
complaint will meet the requirements of Rule 9(b).126 That is not a correct statement of
law and its logical premise is flawed. Most fraud plaintiffs possess less information than
the defendants who made the statements at issue. Protecting those who occupy that
vulnerable posture is the essential purpose of the law of fraud — to act as a safeguard
when there is reasonable, detrimental reliance on another’s statement of fact by someone
123 124 , 2005 WL 2130607, at *7. , 1999 WL 608850, at *3 (noting that one of Rule 9(b)’s purposes is to protect defendants from unfounded charges of wrongdoing that could injure their reputation and goodwill, and refusing to sustain a fraud claim based on general allegations by one joint venture partner that the other breached promises made going into the joint venture).
125 . at 11; 914265, at *4).
, 854 A.2d at 147 (citing
, 1998 WL
Trust Br. 43-44.