Suzuki v. Abiomed, Inc., 112719 FED1, 19-1233

Docket Nº:19-1233
Opinion Judge:SELYA, CIRCUIT JUDGE
Party Name:KEISUKE SUZUKI, Plaintiff, Appellant, v. ABIOMED, INC., Defendant, Appellee.
Attorney:William T. Harrington, with whom Christine A. Maglione and Harrington Law, P.C. were on brief, for appellant. Kenneth M. Bello, with whom Alexandra D. Thaler and Bello Welsh LLP were on brief, for appellee.
Judge Panel:Before Lynch, Selya, and Barron, Circuit Judges.
Case Date:November 27, 2019
Court:United States Courts of Appeals, Court of Appeals for the First Circuit
 
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KEISUKE SUZUKI, Plaintiff, Appellant,

v.

ABIOMED, INC., Defendant, Appellee.

No. 19-1233

United States Court of Appeals, First Circuit

November 27, 2019

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Denise J. Casper, U.S. District Judge]

William T. Harrington, with whom Christine A. Maglione and Harrington Law, P.C. were on brief, for appellant.

Kenneth M. Bello, with whom Alexandra D. Thaler and Bello Welsh LLP were on brief, for appellee.

Before Lynch, Selya, and Barron, Circuit Judges.

SELYA, CIRCUIT JUDGE

This case involves a claimed breach of the implied covenant of good faith and fair dealing brought by a former executive who contends that his quondam employer, a producer of heart pumps, terminated his employment, allegedly to deprive him of a sizable equity incentive. Because the plaintiff has failed to present sufficient evidence that this equity incentive constituted compensation already earned by virtue of his past work under state law, we affirm the district court's entry of summary judgment in the defendant's favor. The tale follows.

I. BACKGROUND

We rehearse the facts and travel of the case, viewing those facts in the light most flattering to the summary judgment loser (here, the plaintiff). See Flovac, Inc. v. Airvac, Inc., 817 F.3d 849, 852 (1st Cir. 2016). Defendant-appellee Abiomed, Inc. designs, manufactures, and markets temporary mechanical circulatory support devices, including the Impella line of heart pumps. In early 2009, plaintiff-appellant Keisuke Suzuki started consulting with Abiomed about the company's efforts to secure Japanese regulatory approval for its Impella devices. The approval process involves the submission of an application - known as the Shonin application - to Japan's Pharmaceutical and Medical Device Agency (PMDA). Submission of the Shonin application typically is followed by various tests, audits, and expert panel reviews. Thereafter, the PMDA makes a recommendation to the so-called Upper Panel of Japan's Ministry of Health, Labour and Welfare (MHLW). Once the Upper Panel's review is complete, the MHLW announces its final decision regarding approval.

In April of 2010, Suzuki began to work full-time as Abiomed's vice-president of Asia - a position in which he assumed primary responsibility for shepherding the Impella devices through the Japanese regulatory approval process. His employment was memorialized by an offer letter and a nondisclosure agreement. In addition to a base salary, an annual bonus potential, and a commission opportunity, the offer letter outlined three equity awards to be paid upon the achievement of certain milestones en route to regulatory approval: first, the issuance of 10, 000 shares of Abiomed common stock upon the submission of the Shonin application; second, the issuance of 20, 000 shares "when the MHLW approve[d] Impella for general use"; and third, the issuance of 15, 000 shares when Abiomed gained "[a]pproval for [the] targeted reimbursement level of Impella."

Withal, the offer letter contained several caveats. To begin, it stated that in order to receive the equity awards, Suzuki must be actively employed by Abiomed when the relevant milestone was achieved. Additionally, Abiomed "reserve[d] the right on a prospective basis to modify, change or eliminate its [c]ompensation, [b]onus or [b]enefit programs." Last but not least, the offer letter admonished that it was not to be "construed as an agreement, either express or implied, to employ [Suzuki] for any stated term," and it in no way altered Abiomed's policy "under which both [Suzuki] and [Abiomed] remain[ed] free to end the employment relationship at any time and for any reason."

On the advice of a friend who was also an attorney, Suzuki requested the insertion of a provision to the effect that if his employment was terminated without cause, he would retain "the right to claim the equity" as long as a particular milestone was achieved "within 6 months of [his] departure, as the majority of the work would be done before that." Suzuki added that a provision allowing him to claim the equity if a milestone was achieved within three months after his dismissal would also be "reasonable." Frank LeBlanc, Abiomed's chief human resources official, responded that Abiomed declined to accommodate this request, as its policy with respect to event-based equity incentives entailed "grant[ing] those shares only after the event has occurred, and only to active employees." Suzuki backed off, replying: "Fair enough. I had to ask." He proceeded to sign the offer letter that same day.

Eight days later, Suzuki executed the nondisclosure agreement. This agreement provided, in pertinent part, that Abiomed could terminate Suzuki's employment at any time with or without cause during the first six months of his tenure. Thereafter, Abiomed could discharge him without cause only upon twenty-eight days' written notice. Relatedly, the agreement allowed Suzuki to resign his employment without cause at any time upon twenty-eight days' written notice.

Around the same time that he assumed his new role, Suzuki estimated that the Shonin application would be submitted by August of 2010 and that approval of the Impella devices would take approximately two years. These predictions proved overly optimistic, and it was not until late March of 2011 that Abiomed submitted the Shonin application and (in accordance with the 2010 offer letter) issued 10, 000 shares of its common stock to Suzuki. Between 2011 and 2014, Suzuki and his co-workers responded to well over one hundred questions posed by the PMDA. During this period, Suzuki's projected timeline for approval shifted. In periodic presentations to Abiomed executives between 2011 and 2013, Suzuki indicated that approval would occur in one to two years. On at least two occasions, Suzuki intimated to colleagues that the PMDA was poised to approve the Impella devices - but approval nonetheless remained elusive.

The parties hotly dispute the reasons for this sluggish pace. Suzuki maintains that Abiomed failed to prioritize the Japanese approval effort, while various Abiomed executives stated in depositions and affidavits that Suzuki's caustic style and aggressive tactics stunted progress. This criticism does not appear to have come out of thin air: the record contains ample uncontroverted evidence of abrasive e-mails from Suzuki to Abiomed executives, together with evidence that Suzuki stormed out of at least three meetings with colleagues during his five-year tenure. Equally concerning, Abiomed learned in January of 2015 that Yoshimasa Yokoyama, the PMDA's lead reviewer of Abiomed's Shonin application, had reported that "bad rumors" were circulating about Suzuki. These rumors depicted Suzuki as telling a "biased story" about the Impella devices, "blaming PMDA for delay," and recruiting Japanese physicians to pressure regulators for approval (a tactic that Suzuki asserts he undertook with the blessing of senior management).

Shortly after learning about Yokoyama's concerns, Abiomed encountered several new roadblocks on the path to regulatory approval. For one thing, Suzuki informed Abiomed executives that the PMDA would postpone an in-person meeting (the Menkai meeting) planned for the end of January. Andrew Greenfield, Abiomed's vice-president of healthcare solutions, was told that the PMDA delayed this meeting because it was continuing to assess issues related to the Shonin application. For another thing, in February of 2015, Suzuki informed Abiomed executives that the PMDA was requesting information about the distinctions between various versions of the 2.5 and 5.0 Impella models - questions that Suzuki believed would generate a significant amount of work. By that spring, some of Suzuki's correspondence contained glimmers of doubt about the prospects for approval.

Abiomed executives weighed Suzuki's future with the company, including the possibility of terminating his employment, as early as April of 2014. An e-mail exchange from September of 2014 between Greenfield and Abiomed's chief executive officer, Michael Minogue, indicates that the two thought a "change" was necessary because Suzuki's caustic communication style had "gotten worse," despite "multiple discussions about [the] behavior." The matter simmered, however, until the following year.

On May 14, 2015, the pot came to a boil. Greenfield met with Suzuki and told him that Abiomed intended to change his duties and compensation structure, given Suzuki's failure to secure approval of the Impella devices despite a five-year run-up. The following week, Greenfield delivered Suzuki's annual performance review, again telling Suzuki that his failure to achieve approval necessitated a changed role. This time, though, Greenfield added that Suzuki would not receive...

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