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Suzuki v. Abiomed, Inc.

United States District Court, D. Massachusetts

January 4, 2019

ABIOMED, INC., Defendant.


          Denise J. Casper United States District Judge.

         I. Introduction

         Plaintiff Keisuke Suzuki (“Suzuki”) has filed this lawsuit against Defendant Abiomed, Inc. (“Abiomed”) asserting numerous claims, including the sole remaining claim for a breach of the implied covenant of good faith and fair dealing (Count I). D. 1; D. 18; D. 59 at 3, n.3. Abiomed has moved for summary judgment. D. 44. For the reasons stated below, the Court ALLOWS the motion. The Court DENIES Abiomed's motion to strike portions of the record, D. 71; D. 87, as moot.

         II. Standard of Review

         The Court grants summary judgment where there is no genuine dispute as to any material fact and the undisputed facts demonstrate that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). “A fact is material if it carries with it the potential to affect the outcome of the suit under the applicable law.” Santiago-Ramos v. Centennial P.R. Wireless Corp., 217 F.3d 46, 52 (1st Cir. 2000) (quoting Sánchez v. Alvarado, 101 F.3d 223, 227 (1st Cir. 1996)). The movant bears the burden of demonstrating the absence of a genuine issue of material fact. Carmona v. Toledo, 215 F.3d 124, 132 (1st Cir. 2000); see Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant meets its burden, the non-moving party may not rest on the allegations or denials in her pleadings, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986), but “must, with respect to each issue on which she would bear the burden of proof at trial, demonstrate that a trier of fact could reasonably resolve that issue in her favor.” Borges ex rel. S.M.B.W. v. Serrano- Isern, 605 F.3d 1, 5 (1st Cir. 2010). “As a general rule, that requires the production of evidence that is ‘significant[ly] probative.'” Id. (quoting Anderson, 477 U.S. at 249) (alteration in original). The Court “view[s] the record in the light most favorable to the nonmovant, drawing reasonable inferences in his favor.” Noonan v. Staples, Inc., 556 F.3d 20, 25 (1st Cir. 2009).

         III. Relevant Factual Background

         The following facts are drawn primarily from Abiomed's statement of undisputed facts, D. 46, Suzuki's response to Abiomed's statement of undisputed facts, D. 63, Suzuki's statement of disputed material facts, D. 64, and supporting documents. The facts are undisputed unless otherwise noted.

         Abiomed is a publicly traded company that is a leading provider of temporary mechanical circulatory support devices-also known as “heart pumps.” D. 46 ¶ 1; D. 63 at 2. The specific line of heart pumps that Abiomed develops, manufactures and markets is called “Impella.” D. 46 ¶ 1; D. 63 at 2.

         Suzuki has worked as a manager or director in the medical device field since 1998. D. 60 ¶ 2. 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. ¶ 3. 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. ¶ 4.

         A. Terms of Suzuki's Employment and Compensation Package at Abiomed

         From late 2009 to early 2010, Suzuki engaged in discussions regarding potential employment at Abiomed with Abiomed's CEO Michael Minogue (“Minogue”), its Vice President of Healthcare Solutions Andrew Greenfield (“Greenfield”) and its head of Human Resources Frank LeBlanc (“LeBlanc”). D. 46 ¶¶ 3-4; D. 1 ¶ 13. Suzuki and the various representatives from Abiomed discussed his compensation package consisting of a combination of salary, bonuses, shares of Abiomed stock and potential commissions. D. 46 ¶ 3; D. 63 at 2-3. Suzuki related to Minogue and Greenfield that his annual earnings at Guidant and Suzuki Consulting were much greater than what Abiomed was offering, but that he would be willing to work at Abiomed for a lesser salary because “[h]opefully the equity [would be] huge to make this up.” D. 64 ¶ 1; D. 60 ¶ 7; D. 60-2.

         On April 1, 2010, Abiomed made a written offer of employment (“Offer Letter”)[1] to Suzuki for the position of Vice President of Asia, reporting to Greenfield. D. 46 ¶ 6; D. 50-10; D. 63 at 3. The Offer Letter detailed Suzuki's annual salary, annual bonus potential and a commission opportunity. D. 46 ¶ 6; D. 50-10; D. 63 at 3-5. It also provided that “this letter shall not be construed as an agreement, either express or implied, to employ you for any stated term, and shall Case 1:16-cv-12214-DJC Document 94 Filed 01/04/19 Page 4 of 24 in no way alter Abiomed policy under which both you and the Company remain free to end the employment relationship at any time and for any reason.” D. 50-10 at 4. 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 milestones. D. 46 ¶ 7; D. 50-10; D. 63 at 3-5. 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 (“MHLW”) 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.” D. 46 ¶ 7; D. 50-10; D. 63 at 3-5. 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.” D. 46 ¶ 7; D. 50-10; D. 63 at 3-5.

         In response to the Offer Letter, Suzuki emailed Greenfield and LeBlanc with several follow-up questions. D. 46 ¶ 8; D. 50-12; D. 63 at 5. Among other things, Sukuzi asked:

3) What do you mean but [sic] ‘General Use' of Impella? I can not [sic] predict what will MHLW approve as intended use. Our goal is to gain the same as CE [Conformité Européenne] mark which I am not sure if you can describe as General Use. But the risk is that it will be the same with present FDA [Food and Drug Administration] max of 6 hours . . . .

D. 46 ¶ 8; D. 50-12 at 3; D. 63 at 5. Greenfield responded to Suzuki's question: “3) An approved indication, could be FDA or CE type approval. Specifically not a clinical trial prior to approval.” D. 46 ¶ 9; D. 50-12 at 2; D. 63 at 5. It is undisputed that “indication” in this context means a “patient population [that] can be treated.” D. 46 ¶ 9; D. 63 at 5-6. Abiomed also alleges that Greenfield verbally told Suzuki “general use” was “defined as the same type of approvals [Abiomed] had in the United States, which is from the FDA, as well as in Europe for what is called a CE mark, which were very broad, crossed our main indications for clinical, and in Europe was actually more specific, so it was a restricted [sic], but it was still a series of multiple . . . indications . . . .” D. 46 ¶ 9; D. 50-2 at 4-5. Suzuki acknowledges the conversation took place but could not recall its content. D. 50-1 at 46.[2]

         After receiving the Offer Letter, Suzuki also emailed Matthew Fairshter, who was both a friend and an attorney to Suzuki, asking Fairshter to review the Offer Letter and provide his “personal legal advise [sic].” D. 46 ¶ 11; D. 50-13 at 2; D. 63 at 7. Fairshter responded the next day, advising Suzuki that:

the stock awards need to be confirmed that they are fully vesting at time of award. You also need some interim period protection. What happens if you submit the application, and then it becomes apparent that you are going to achieve the stated ends of your employment, i.e. the approvals being sought? They can presently terminate you prior to the milestone being reached, and thereby preclude you from receiving the stock. This is a common problem when it comes to milestone arrangements.

D. 46 ¶ 11; D. 50-13 at 2; D. 63 at 7. Suzuki relayed the advice to Greenfield and LeBlanc and requested a three or six month interim protection period to get the equity if he were terminated without cause. D. 46 ¶ 12; D. 50-14 at 3; D. 63 at 8. LeBlanc responded Abiomed could not accommodate Suzuki's request because it was Abiomed's “process” to grant performance-based shares “only after the event has occurred, and only to active employees.” D. 46 ¶ 13; D. 50-14 at 3; D. 63 at 8. Suzuki responded: “Fair enough. I had to ask.” D. 46 ¶ 13; D. 50-14 at 2; D. 63 at 8. Suzuki signed the Offer Letter on April 2, 2010. D. 46 ¶ 16; D. 50-11 at 3; D. 63 at 10. When Suzuki signed the letter, the price of Abiomed's stock was $10.00 per share. D. 64 ¶ 30; D. 62 ¶ 2; D. 62-1. In an email drafted shortly before Suzuki signed the letter, Greenfield calculated the value of Abiomed's stock upon the completion of the three milestones at $20.00 per share and $25.00 per share. D. 64 ¶ 31; D. 62-3 at 5; D. 62-4.

         On April 10, 2010, Suzuki signed an Employment, Nondisclosure, and Non-Competition Agreement (the “Nondisclosure Agreement”). D. 64 ¶ 10; D. 60 ¶ 29; D. 60-6. The Nondisclosure Agreement stipulated that Abiomed “may terminate [Suzuki's] employment without cause, ” but after six months of employment, it would give him twenty-eight days written notice of same. D. 64 ¶ 10; D. 60 ¶ 29; D. 60-6 at 1.

         B. Delays in Japanese Approval for Impella

         By March 31, 2011, Suzuki had met the first milestone under the Offer Letter by submitting the “Shonin Application” to the PMDA for pre-market approval for the Impella 2.5 and 5.0 pump devices. D. 46 ¶¶ 20, 22; D. 63 at 11. Pursuant to the Offer Letter, Abiomed issued Suzuki 10, 000 shares of common stock. D. 46 ¶ 24; D. 63 at 12.

         Between March 2011 and summer 2014, Suzuki and others on his team worked on answering questions from the PMDA relating to the Shonin Application. D. 46 ¶¶ 26-28; D. 63 at 13-14. Abiomed's progress in Japan was much slower than expected. D. 46 ¶ 29, 32; D. 63 at 14; D. 64 ¶ 32. Each party casts blame on the other for this lack of progress. Compare D. 46 ¶¶ 52, 55, 58, 59, 63-65, 68 n.35, 70 with D. 63 at 19, 52; D. 64 ¶¶ 60, 62-65, 68-70, 73; D. 60 ¶ 5; D. 60-1. Whatever the reason, according to Suzuki, the delays gave Abiomed “a reason to regret not having a temporal limitation in the Offer Letter, ” D. 64 ¶ 32, unlike Minogue's contract, which provided for an equity incentive triggered upon Impella approval in Japan with a time limitation of December 31, 2015, id. ¶ 35.

         C. The June 9, 2015 Abiomed Meeting ...

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