In the U.S. Court of Appeals for the Second Circuit, federal courts often will apply the stringent fraud pleading standards set forth in Federal Rule of Civil Procedure 9(b) to non-fraud causes of action if the factual allegations of the complaint resemble fraud. This article addresses the extent to which practitioners may be able to invoke or avoid these strict standards—of particularity and a strong inference of fraudulent intent—to negligence, fiduciary breach, and other non-fraud claims.

‘Sound in Fraud’

In Rombach v. Chang, 355 F.3d 164 (2d Cir. 2004), the U.S. Court of Appeals for the Second Circuit held that Federal Rule of Civil Procedure 9(b) applies to claims under Section 11 and Section 12(a)(2) of the Securities Act where the claims sound in fraud, even though fraud is not an element of those causes of action. The court reasoned that because Rule 9(b) is “cast in terms of the conduct alleged,” rather than “expressed in terms of the constituent elements of a fraud cause of action,” a court deciding a motion to dismiss on 9(b) grounds properly focuses on the nature of the conduct alleged rather than on the elements of the claim.

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