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Suzuki v. Abiomed, Inc.

United States District Court, D. Massachusetts

May 19, 2017

KEISUKE SUZUKI, Plaintiff,
v.
ABIOMED, INC., Defendant.

          MEMORANDUM AND ORDER

          Denise J. Casper, United States District Judge

         I. Introduction

         Plaintiff Keisuke Suzuki (“Suzuki”) has filed this lawsuit against Defendant Abiomed, Inc. (“Abiomed”) alleging a breach of the implied covenant of good faith and fair dealing and claims for promissory estoppel or quantum meruit. D. 1. Defendant has moved to dismiss. D. 10. For the reasons stated below, the Court DENIES the motion.

         II. Standard of Review

         To survive a Rule 12(b)(6) motion to dismiss, the factual allegations in a complaint must “possess enough heft” to state a claim to relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007). “A claim has ‘facial plausibility' when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). The court must “isolate and ignore statements in the complaint that simply offer legal labels and conclusions or merely rehash cause-of-action elements.” Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012). A complaint does not need detailed factual allegations, but “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. The court must then “take the complaint's well-[pleaded] (i.e., non-conclusory, non-speculative) facts as true, drawing all reasonable inferences in the pleader's favor, and see if they plausibly narrate a claim for relief.” Schatz, 669 F.3d at 55. “Plausible, of course, means something more than merely possible, and gauging a pleaded situation's plausibility is a ‘context-specific' job that compels [the Court] to draw on' [its] ‘judicial experience and common sense.” Id. (internal citations omitted).

         III. Factual Background

         Taking all factual allegations in the complaint as true, as required at this stage, the Court considers the following facts. Abiomed is a publicly traded company that is a leading provider of temporary mechanical circulatory support devices-also known as “heart pumps.” D. 1 ¶ 7. The specific line of heart pumps that Abiomed develops, manufactures and markets is called “Impella.” Id. In the years relevant to this complaint, Abiomed sought to expand the use of, and gain regulatory approval for, its Impella line of products and was particularly interested in obtaining regulatory approval for Impella's sale in Japan. Id. ¶ 8.

         Suzuki has worked as a manager or director in the medical device field since 1998. Id. ¶ 6. From 1998 until 2006, he worked in Japan at Guidant Japan, K.K. (“Guidant”), a Japanese subsidiary of a large medical device company. Id. In or about January 2007, Suzuki left Guidant and established Kaye Suzuki Device Consulting, LLC (“Suzuki Consulting”), which provided consulting services to companies seeking to introduce medical devices into the Japanese market. Id. ¶ 9. One of Suzuki Consulting's clients was Abiomed and Suzuki provided consultation services relating to its seeking approval in Japan of its Impella line of heart pumps. Id. ¶ 10. As the principal of Suzuki Consulting, Suzuki alleges that he earned approximately $500, 000 per year. Id. ¶ 12.

         In 2009, Suzuki and Abiomed's CEO Michael Minogue (“Minogue”) and its Vice President of Healthcare Solutions Andrew Greenfield (“Greenfield”) began discussing the possibility of Suzuki shutting down his consulting business and becoming a full-time employee at Abiomed. Id. ¶ 13. At the time, Abiomed was not particularly profitable and both Minogue and Greenfield had made clear that they wanted to minimize Abiomed's expenses. Id. Although Suzuki informed Minogue and Greenfield that he made $500, 000 per year at his consulting company, he indicated that he would be willing to sacrifice his short-term base salary for long-term incentive compensation. Id.

         On April 1, 2010, Abiomed made a written offer of employment (“Offer Letter”) to Suzuki for the position of Vice President of Asia with an annual salary of $250, 000, an annual bonus of up to $100, 000 and a commission opportunity of up to $1 million. Id. ¶ 14. Additionally, the Offer Letter reflected that Suzuki would be awarded up to 45, 000 shares of Abiomed common stock which would be contingent on meeting three benchmarks. Id. ¶¶ 14, 17. Specifically, (1) a performance share of 10, 000 shares of Abiomed's stock would issue upon the successful submission of an application to Japan's Pharmaceutical and Medical Device Agency (“PMDA”) for Impella use in Japan; (2) a performance share of 20, 000 shares of Abiomed's stock would issue when Japan's Ministry of Health, Labor, and Welfare approved Impella for general use; and (3) a performance share of 15, 000 shares of Abiomed's stock would issue “when Approval for targeted reimbursement level of Impella is gained.” Id. ¶ 17. The Offer Letter further stated that the performance share awards “require that you continue to be employed by the Company on the date that any of these milestones are achieved . . . ” and that “[o]nce approval is gained for Impella General Use in Japan and provided that you remain and are qualified to be employed in the Commercial leadership role, we will present to you a commission structure.” Id. ¶ 16. On or about April 9, 2010, Suzuki terminated his consulting business and moved from Japan to Massachusetts to begin working as Vice President at Abiomed. Id. ¶¶ 18-22. On April 10, 2010, Suzuki signed an Employment, Nondisclosure, and Non-Competition Agreement (the “Nondisclosure Agreement”). Id. ¶ 23. The Nondisclosure Agreement stipulated that after six months of employment, Abiomed could terminate Suzuki without cause upon 28 days' written notice or with cause at any time. D. 1-4 at 1.

         On April 29, 2010, in accordance with the Offer Letter, Abiomed granted Suzuki three awards of performance shares, none of which would vest or issue until the achievement of the specific goals outlined in the letter. D. 1 ¶ 27. By March 31, 2011, Suzuki had met the first milestone under the Offer Letter and Abiomed issued him 10, 000 shares of common stock. Id. ¶ 39. At the time, the stock was trading at $14.53 per share and the total value to Suzuki was $145, 300. Id.

         Suzuki alleges that while he continued working on getting the Impella line of devices approved for general use in Japan, Abiomed refused to devote the resources necessary to achieve such a result. Id. ¶¶ 40-43. For example, PMDA invited Abiomed to a “kick-off” meeting in June 2011 where it presented Abiomed with hundreds of questions that it wanted answered by September 2011. Id. ¶ 40. Despite this deadline, Abiomed failed to answer the questions until a year later. Id. ¶ 41. Moreover, Abiomed continued to be consumed by fixing various problems identified in the Impella device. Id. ¶ 42. Because no other Abiomed employees, with the exception of Minogue, had compensation incentives tied to gaining approval in Japan, expansion to the Japanese market was not a priority. Id. Nonetheless, Suzuki continued working on obtaining regulatory approval and also worked on preparing the Japanese market for entry of the Impella line. Id. ¶ 44. By March or April 2015, Suzuki's continued work in Japan paid off and he was able to secure a meeting between Abiomed's representatives and officials at the PMDA. Id. ¶ 46. While Abiomed originally had concerns that Impella would not be approved without being required to first conduct a costly and time-consuming human study in Japan, PMDA made clear that no such study would be mandated. Id. ¶ 47. Furthermore, PMDA informed Abiomed that it was inclined to approve the Impella line for general use once it received updated reports addressing four modifications that the company had made to the device since it had submitted the original application. Id.

         At this point, Suzuki alleges that his value to Abiomed decreased precipitously. Id. ¶ 49. Indeed, following the meeting with PMDA, Abiomed regarded it as a near certainty that Japan would approve Impella for general use. Id. ¶ 48. Suzuki's work had largely paved the path toward regulatory approval-especially his shepherding of the application through Japanese regulatory authorities-and he had also established Abiomed's new Japanese subsidiary and staffed its office in Japan. Id. ¶ 50. Abiomed realized that Suzuki's continued employment through the time of Japan's eventual approval of Impella's general use would thereby require it to issue Suzuki the 20, 000 shares called for in the Offer Letter. Id. ¶ 51. Because Abiomed's stock value had significantly increased since the time of the original offer, the 20, 000 shares would be equivalent to a $1.3 million value, a value that Suzuki alleges was much greater than Abiomed had planned on paying Suzuki. Id. Suzuki further contends that, once approval and reimbursement issued, Abiomed realized he would be entitled to an additional 15, 000 shares of common stock and eligible for future commission rights as outlined in the Offer Letter. Id. ¶ 52. Rather than follow through with the terms outlined in the Offer Letter, Suzuki alleges that Abiomed decided to give him a falsely negative job performance review to lay the groundwork necessary to avoid the mandatory contractual terms outlined in the letter. Id. ¶ 55. Furthermore, Abiomed decided to deny Suzuki his annual bonus and diminish his role in the company. Id. Prior to this point, Suzuki had never had a negative job performance review and he always received annual bonuses of between $80, 000 and $90, 000 per year. Id. ¶ 56. He had also consistently been given salary raises each year. Id.

         On May 14, 2015, Greenfield met with Suzuki and discussed changing his duties and compensation structure. Id. ¶ 57. Several days later, Greenfield provided Suzuki a proposed amendment to the Offer Letter in the form of a letter entitled “Amendment to Offer Letter Dated April 1, 2010” (the “Proposed Amendment”). Id. ¶ 58. The Proposed Amendment would have limited Suzuki's duties to Japan, rather than all of Asia, and would have cancelled the remaining 35, 000 performance shares that would be owed to him under the terms of the original Offer Letter. Id. ¶ 60. Instead, Suzuki would receive Restricted Stock Units (“RSUs”) in lower amounts and at significantly less value than the performance shares originally promised in the Offer Letter. Id. Moreover, under the Proposed Amendment, the change to RSUs would be coupled with a stipulation stating that Suzuki would not be granted the shares, but instead would simply have the right to purchase them in an amount later ...


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