Amyndas Pharmaceuticals, S.A. v. Zealand Pharma A/S ( 2022 )

United States Court of Appeals
For the First Circuit
No. 21-1781
AMYNDAS PHARMACEUTICALS, S.A. and AMYNDAS PHARMACEUTICALS, LLC,
Plaintiffs, Appellants,
v.
ZEALAND PHARMA A/S and ZEALAND PHARMA U.S., INC.,
Defendants, Appellees,
ALEXION PHARMACEUTICALS, INC.,
Defendant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Leo T. Sorokin, U.S. District Judge]
Before
Barron, Chief Judge,
Selya and Kayatta, Circuit Judges.
Robert E. Counihan, with whom David K. Tellekson, Jessica M.
Kaempf, Deena J. Greenberg Feit, Todd R. Gregorian, Fenwick & West
LLP, Russell Beck, and Beck Reed Riden LLP were on brief, for
appellants.
Edwina Clarke, with whom Kevin P. Martin, Robert D. Carroll,
Huiya Wu, Tiffany Mahmood, and Goodwin Procter LLP were on brief,
for appellees.
September 2, 2022
SELYA, Circuit Judge. When biotech firms engage in the
entrepreneurial equivalent of musical chairs, one firm sometimes
gets left out in the cold. That is essentially what happened here
— and it led to the litigation described below.
The music began with serial decisions by plaintiffs
Amyndas Pharmaceuticals, S.A., now known as Amyndas
Pharmaceuticals Single Member P.C., and Amyndas Pharmaceuticals,
LLC (collectively, Amyndas), appellants here, to consider separate
joint ventures with defendants Zealand Pharma A/S (Zealand Pharma)
and Alexion Pharmaceuticals, Inc. (Alexion), respectively. In the
ensuing chorus of negotiations, Amyndas relied on confidential
disclosure agreements (CDAs) to safeguard its trade secrets. After
Amyndas shared that confidential information, though, neither of
the joint ventures materialized.
Even so, the band played on. Zealand Pharma and its
newly established affiliate, Zealand Pharma U.S., Inc. (Zealand
US), announced a partnership with Alexion — a partnership that
contemplated bringing to market a drug targeting the same part of
the immune system on which Amyndas had been concentrating. Amyndas
responded by suing for misappropriation of trade secrets and other
confidential information.
The district court dismissed Amyndas's claims against
Zealand Pharma on the ground that the CDA between the parties
required Amyndas to litigate those claims in Denmark. See Amyndas
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Pharms., S.A. v. Alexion Pharm., Inc., No. 20-12254, 2021 WL
4551433, at *7 (D. Mass. June 8, 2021). It then dismissed
Amyndas's claims against Zealand US for failure to state a claim
because the complaint's allegations were predominately against the
Zealand entities, collectively, and thus "[we]re insufficient to
put [the Zealand entities] on notice as to 'who did what to whom.'"
Id. at *2. Twenty-eight days later, Amyndas filed a motion for
reconsideration or, in the alternative, for leave to amend,
attaching a proposed amended complaint. The district court denied
both reconsideration and leave to amend.
Amyndas appealed these rulings. Because Amyndas's
claims against Alexion remained pending in the district court, the
district court entered a partial final judgment under Federal Rule
of Civil Procedure 54(b) to enable immediate appellate review.
Following briefing and oral argument, we now uphold the entry of
a partial final judgment under Rule 54(b). And having confirmed
the existence of appellate jurisdiction, we affirm the dismissal
of Amyndas's claims against Zealand Pharma, vacate the dismissal
of Amyndas's claims against Zealand US, and remand to the district
court for further proceedings consistent with this opinion.
I
We briefly rehearse the facts and travel of the case.
In that account, we take as true all well-pleaded facts alleged in
the proposed amended complaint, drawing all reasonable inferences
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in the pleader's favor. See Rodríguez-Reyes v. Molina-Rodríguez,
711 F.3d 49, 52-53 (1st Cir. 2013); Panther Partners Inc. v. Ikanos
Commc'ns, Inc., 681 F.3d 114, 119 (2d Cir. 2012).
Amyndas consists of a Greek company and its American
affiliate. It is a biotechnology firm that researches and develops
therapeutics targeting a part of the immune system known as the
complement system. When the complement system malfunctions, it
can cause the immune system to attack healthy tissue, either
causing or exacerbating a wide variety of conditions. One area of
Amyndas's research deals with "complement inhibitors."
Amyndas's research has yielded compstatin — a peptide
that selectively inhibits the C3 protein (which plays a role in
activating the complement system). What is more, Amyndas also has
developed a related peptide (AMY-101) targeting that protein for
clinical use. Amyndas is the exclusive licensee of patents related
to this work and has endeavored to develop therapies based on AMY-
101 that target the C3 protein. It owns trade secrets and
confidential information related to this work.
In March of 2015, Zealand Pharma, a Danish biotechnology
firm, contacted Amyndas about a potential partnership for the
development of complement-related therapeutics. Discussions
ensued. The next month, the two firms entered into a CDA regarding
information-sharing "for the purposes of evaluating a possible
business/ services relationship between the parties and their
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respective Affiliates." Shortly thereafter, Amyndas started
giving Zealand Pharma access to confidential information
(including confidential information about AMY-101). In August of
2016, the firms signed a second CDA — with added protections — for
"the evaluation or formation of a possible business and/or services
and/or collaborative relationship."
Both CDAs contained elaborate confidentiality
provisions. The confidentiality provision of the second CDA is
emblematic. It stated that the recipient of confidential
information:
shall (a) make no use of any of the
Confidential Information disclosed by
Discloser other than for the Purpose [of the
evaluation or formation of a possible business
and/or services and/or collaborative
relationship between the parties and their
respective Affiliates], (b) not disclose such
Confidential Information to third parties, and
(c) take all reasonable precautions to prevent
disclosure of such Confidential Information to
third parties.
The confidentiality provision further stated that the recipient of
confidential information:
may only provide the Confidential Information
of Discloser to its Representatives and its
Affiliates who (a) need it for the Purpose,
(b) are informed of the confidential nature of
the Confidential Information, and (c) are
bound by obligations of confidentiality and
non-use no less restrictive than those
contained herein.
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The second CDA also contained an explicit guarantee that Amyndas
would "own all the Developed Technology incorporating, or
involving the use of, the Amyndas Base Technology."
Both CDAs included an identical "Governing Law"
provision. This provision consisted of a choice-of-law clause
stipulating that the CDAs would "be interpreted and governed by
the laws of the country (applicable state) in which the defendant
resides" and a forum-selection clause stipulating that "any
dispute arising out of th[e CDA] shall be settled in the first
instance by the venue of the defendant."
Following the execution of the second CDA, Amyndas
shared more proprietary information with Zealand Pharma.
Meanwhile, Zealand Pharma began its own research program in late
2016, also focused on complement therapeutics. It did not inform
Amyndas of this initiative. Although negotiations continued, the
firms ultimately decided not to collaborate. On April 26, 2017,
Amyndas terminated its information-sharing relationship with
Zealand Pharma.
We fast-forward to August of 2018, at which time Zealand
Pharma formed Zealand US, a Delaware corporation having its
principal place of business in Boston, Massachusetts. Without
Amyndas's knowledge or consent, Zealand Pharma filed two European
patent applications in 2018. Zealand Pharma then filed an
international patent application in February of 2019, claiming
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priority in the two earlier patent applications and designating
the United States as one jurisdiction in which patent protection
would be sought.
On September 6, 2019, the international patent
application was published, thus making its contents publicly
available for the first time. The application purported to
describe "compstatin analogues that are capable of binding to C3
protein and inhibiting complement activation." The C3 protein —
which is the target of AMY-101 — has been the focus of Amyndas's
research for many years. Perhaps more importantly, it was one
subject of Amyndas's information-sharing with Zealand Pharma.
Amyndas alleges that it shared confidential information with
Zealand Pharma under the CDAs — information about various features,
profiles, and characteristics of AMY-101 as well as how it could
be used to make next-generation compounds.
At this juncture, it is useful to describe Alexion's
role in this saga of alleged corporate intrigue. In 2007, Alexion
— an established player in the complement therapeutics field —
brought to market Soliris, a complement inhibitor that targets the
C5 protein (a protein in the complement system). Soliris has been
approved by the Food and Drug Administration (FDA) for four
indications and — until recently — Soliris was the only FDA-
approved and clinically available complement-specific therapeutic
on the market. Alexion's patent on Soliris expires soon, and
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Alexion is facing commercial pressure to bring new complement-
based drugs to market.
In January of 2018, representatives of Alexion and
Amyndas met in San Francisco. Following that meeting, Alexion
expressed interest in forming a partnership with Amyndas. The two
companies signed a CDA limiting the use of exchanged confidential
information to a singular purpose, namely, the "exploration of one
or more potential business arrangements and/or potential
arrangements of research, development, and commercialization of
drug candidates relating to Amyndas' complement inhibitors."
Alexion requested and received certain confidential information
about Amyndas's complement therapeutic research, including details
about Amyndas's intellectual property, planned clinical trials,
platform, and collaboration network.
Although Alexion and Amyndas continued to talk for some
time, their partnership negotiations ran aground. But through at
least December of 2018, Alexion continued to receive confidential
research updates from Amyndas. Unbeknownst to Amyndas, Alexion
and Zealand Pharma had been discussing a collaboration during the
same time frame. On March 20, 2019, those two firms issued a joint
press release announcing a joint venture to develop complement
therapeutics. More recently, they have announced that they
anticipate entering Phase I clinical trials with a complement
inhibitor targeting the C3 protein in the complement system.
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Amyndas came to suspect that Alexion and Zealand Pharma
had misappropriated confidential information which Amyndas had
shared pursuant to the CDAs. The announced collaboration between
Alexion and Zealand Pharma for drugs targeting the C3 protein
heightened these suspicions. Deeming its rights infringed,
Amyndas sued Zealand Pharma, Zealand US, and Alexion in the United
States District Court for the District of Massachusetts. Its
complaint alleged that the Zealand defendants breached the CDAs,
misappropriated trade secrets and other confidential information,
and conspired with Alexion to use those misappropriated materials
in producing competing complement therapeutic products.
Specifically, the complaint alleged claims against the Zealand
defendants for trade secret misappropriation, unfair competition,
breach of contract, breach of the implied covenant of good faith
and fair dealing, and unjust enrichment. So, too, the complaint
alleged claims against Alexion for trade secret misappropriation,
tortious interference with contractual relations, unfair
competition, breach of contract, and unjust enrichment. The
complaint then tied all the defendants together by asserting
conspiracy claims.
Alexion answered the complaint, but the Zealand
defendants moved to dismiss. On June 8, 2021, the district court
dismissed Amyndas's claims against both Zealand defendants. See
Amyndas, 2021 WL 4551433, at *7. As to Zealand Pharma, the court
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ruled that the forum-selection clause in the CDAs required that
all claims against that defendant be brought in Denmark. See id.
at *4-6. Looking to the plain meaning of the phrase "shall be
settled in the first instance by the venue of the defendant," the
court concluded that the "only plausible reading" of the forum-
selection clause was that "adjudication of claims against a party
defendant that arise out of the CDA must occur in the location of
the party defendant." Id. at *4. As to Zealand US (which had not
itself executed a CDA with Amyndas), the court ruled that the
complaint failed to state a claim upon which relief could be
granted. See id. at *3. The court noted that the complaint
largely referred to "Zealand" as a single entity and did not make
clear whether and how Zealand US was involved. See id. at *2-3.
And because Zealand US was not formed until August of 2018, the
"claims stated against 'Zealand' as a combined entity [we]re not
sufficient to put Defendants on notice as to which claims pertain
to Zealand [US]." Id. at *3.
Twenty-eight days later, Amyndas moved for
reconsideration or, in the alternative, leave to amend the
complaint. In its proposed amended complaint, Amyndas carefully
distinguished between the two Zealand entities and pleaded its
claims against them as discrete counts. Furthermore, the proposed
amended complaint alleged additional facts supporting the claim
that Zealand US was involved in the continuing exploitation of
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Amyndas's trade secrets, including allegations that Zealand US
bears ongoing responsibility for the Alexion partnership and is
participating in efforts to obtain regulatory approval for
therapeutics derived from Amyndas's trade secrets. The proposed
amended complaint also alleged that Zealand US is a corporate alter
ego of Zealand Pharma and that the two are operated as a single
business.
On August 27, 2021, the district court denied Amyndas's
motion. In a minute order, the court summarily refused
reconsideration and denied Amyndas's request to file an amended
complaint. The court indicated that the proposed amended complaint
would be futile — but undertook no analysis of any specific
allegations against Zealand US. Instead, it tersely stated that
the "proposed additional factual allegations" did not "plausibly
allege a basis to conclude either that the Court should disregard
the Zealand defendants' separate legal identities, or that Amyndas
has stated claims directly against Zealand US."
Amyndas appealed. In conjunction with its notice of
appeal, Amyndas moved for entry of a partial final judgment. See
Fed. R. Civ. P. 54(b). Zealand Pharma and Zealand US opposed the
Rule 54(b) motion. The district court overruled the Zealand
defendants' objections and entered a partial final judgment, thus
breathing life into the notice of appeal. See Fed. R. App. P.
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4(a)(2). Briefing followed in due course, and we heard oral
argument on June 8, 2022.
II
Mindful that a federal court must always ensure that its
rulings rest on a solid jurisdictional plinth, see Charlesbank
Equity Fund II v. Blinds To Go, Inc., 370 F.3d 151, 155-56 (1st
Cir. 2004) ("When a colorable question exists, an appellate court
has an unflagging obligation to inquire sua sponte into its own
jurisdiction."), we start by considering the basis for our
jurisdiction over this interlocutory appeal: the district court's
entry of partial final judgment under Rule 54(b). A federal
appellate court's jurisdiction over an appeal is ordinarily
limited to "final decisions" of the district court. 28 U.S.C.
§ 1291. This finality principle typically requires a final
disposition of all claims in an action that have been brought by
or against all of the parties. See Curtiss-Wright Corp. v. Gen.
Elec. Co., 446 U.S. 1, 8 (1980); Quinn v. City of Boston, 325 F.3d
18, 26 (1st Cir. 2003); see also Sears, Roebuck & Co. v. Mackey,
351 U.S. 427, 431-38 (1956). But Federal Rule of Civil Procedure
54(b) carves out an exception: it permits a district court to
issue a partial final judgment that is immediately appealable as
to particular claims or parties when those claims or parties can
be sufficiently separated from other claims or parties in the case.
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Withal, the district court's authority in this respect
is narrowly circumscribed. Only if the court supportably
determines both that its decision regarding a claim or party is
sufficiently final and that "there is no just reason for
delay[ing]" an immediate appeal may it enter a partial final
judgment under Rule 54(b). See Fed. R. Civ. P. 54(b); see also
Curtiss-Wright Corp., 446 U.S. at 7-8.
There is good reason why Rule 54(b) is narrowly
circumscribed. The rule is designed to balance the need for the
timely adjudication of important issues that arise early in a case
with the "long-settled and prudential policy against the
scattershot disposition of litigation." Spiegel v. Trs. of Tufts
Coll., 843 F.2d 38, 42 (1st Cir. 1988). The entry of "[j]udgments
under Rule 54(b) must be reserved for the unusual case in which
the costs and risks of multiplying the number of proceedings and
of overcrowding the appellate docket are outbalanced by pressing
needs of the litigants for an early and separate judgment as to
some claims or parties." Id. (quoting Morrison-Knudsen Co. v.
Archer, 655 F.2d 962, 965 (9th Cir. 1981) (Kennedy, J.)).
The court below determined that this case fit within the
confines of Rule 54(b). It entered a partial final judgment
dismissing Amyndas's claims against Zealand Pharma and dismissing
Amyndas's claims against Zealand US. At the same time, it retained
jurisdiction over Amyndas's claims against Alexion but stayed
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further proceedings pending the disposition of Amyndas's
anticipated appeal.
The Zealand defendants contend that the court erred in
entering the partial final judgment. We review the district
court's legal determination regarding finality de novo. See
González Figueroa v. J.C. Penney P.R., Inc., 568 F.3d 313, 317
(1st Cir. 2009). But we review the district court's determination
that there is no just reason to delay the entry of judgment on the
dismissal of the claims against the Zealand defendants for abuse
of discretion. See id.The finality requirement is satisfied as long as the
"trial court action underlying the judgment disposed of all the
rights and liabilities of at least one party as to at least one
claim." Credit Francais Int'l, S.A. v. Bio-Vita, Ltd., 78 F.3d
698, 706 (1st Cir. 1996); see Curtiss-Wright, 446 U.S. at 7. Here,
it is undisputed that the dismissal of Amyndas's claims against
the Zealand defendants satisfies this standard. Moreover, that
order is unarguably final. See Credit Francais, 78 F.3d at 706.
The burden of our inquiry thus falls on whether there is any "just
reason for delay." Fed. R. Civ. P. 54(b).
In mounting this inquiry, we must "scrutinize the
district court's evaluation of such factors as the
interrelationship of the claims so as to prevent piecemeal appeals
in cases which should be reviewed only as single units." Curtiss-
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Wright, 446 U.S. at 10. For this purpose, the district court acts
as a "dispatcher," determining which final decisions should await
appeal in the ordinary course and which should be permitted to go
forward immediately. See id. at 8. If the district court
considers the appropriate factors and adequately explains its
reasoning, its determination is given "substantial deference."
See Spiegel, 843 F.2d at 44 (quoting Pahlavi v. Palandjian, 744
F.2d 902, 904 n.5 (1st Cir. 1984)). After all, the district court
has a more intimate familiarity with the case, the parties, and
the interrelationships among the claims.
The Zealand defendants submit that the district court
undervalued the cost of piecemeal litigation and did not take
proper account of Amyndas's ability to pursue its claims in
Denmark. Such considerations, however, are outweighed by the
desirability of a single trial in a single forum — and we think
that it was well within the ambit of the district court's
discretion to facilitate an interlocutory appeal designed to test
these waters.
Here, moreover, the issues on appeal are ripe for review
and distinct from the merits of the claims remaining against
Alexion. An immediate resolution of those issues will determine
whether a joint trial is feasible.
Of course, even when concerns about piecemeal litigation
are at a minimum because there is little risk of competing and
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overlapping judgments on merits issues — as is the case here — a
party seeking entry of partial final judgment must establish a
compelling reason for accelerated appellate review. See id. at
45-46. For instance, the party may show a "pressing, exceptional
need for immediate appellate intervention, or grave injustice of
the sort remediable only by allowing an appeal to be taken
forthwith, or dire hardship of a unique kind." Id. The district
court concluded that Amyndas had satisfied this requirement, and
we think that this determination was comfortably within the court's
discretion. Although Amyndas can pursue litigation against the
Zealand defendants (or at least against Zealand Pharma) in Denmark,
it would be shortsighted to underestimate the added expense,
inconvenience, and other disadvantages of following that path. If
the forum-selection clause does not require resort to that venue,
the parties ought to know that fact sooner rather than later.
Where, as here, the appropriate forum is in legitimate dispute and
the consequences of forum selection are substantial, that
circumstance weighs heavily in favor of accelerated review. Cf.
Fed. Home Loan Bank of Bos. v. Moody's Corp., 821 F.3d 102, 107
n.3 (1st Cir. 2016) (approving partial final judgment aimed at
allowing case to proceed in "appropriate venue"). And the nature
of the rights at issue here — intellectual property rights that
may erode in significance over time — also factors in favor of
speedier review. Given this medley of factors, we find no abuse
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of discretion in the district court's determination that there was
no just reason for delay in entering a partial final judgment.
Because the Rule 54(b) judgment covers all of the claims brought
against the Zealand defendants, because the judgment as to those
claims is final, and because the district court supportably
determined that there was no just reason to delay the entry of
that judgment, we have jurisdiction to hear and determine this
appeal.
III
We divide our analysis of the appealed rulings into two
movements. First, we address the district court's dismissal of
Amyndas's claims against Zealand Pharma by reason of the forum-
selection clause. Second, we address the district court's denial
of Amyndas's motion for leave to file an amended complaint against
Zealand US. We then recapitulate our conclusions.
A
We begin with the district court's dismissal of
Amyndas's claims against Zealand Pharma. That dismissal was based
upon the identical forum-selection clauses contained in the two
CDAs.
As an initial matter, we note that Zealand Pharma
properly raised the forum-selection issue. The Supreme Court has
indicated that "the appropriate way to enforce a forum-selection
clause pointing to a state or foreign forum is through the doctrine
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of forum non conveniens." Atl. Marine Constr. Co. v. U.S. Dist.
Ct. for W. Dist. of Tex., 571 U.S. 49, 60 (2013) (emphasis in
original). Even so, the Atlantic Marine Court left the door open
for considering forum-selection arguments under the aegis of Rule
12(b)(6). See id. at 61 & n.4. This court has typically analyzed
forum-selection clauses under that framework. See, e.g., Rivera
v. Kress Stores of P.R., Inc., 30 F.4th 98, 102 (1st Cir. 2022);
Claudio-de León v. Sistema Universitario Ana G. Méndez, 775 F.3d
41, 46 & n.3 (1st Cir. 2014). The arguments posed by Zealand
Pharma fit within these contours.
Against this backdrop, we train the lens of our inquiry
upon the forum-selection clause. We first discuss the
interpretation of that clause and then discuss its enforceability.
1
We review de novo an order of dismissal under Rule
12(b)(6). See Silva v. Encycl. Britannica Inc., 239 F.3d 385, 387
(1st Cir. 2001). As we have said, both CDAs between Amyndas and
Zealand Pharma contained the same forum-selection provision1:
Governing Law. For any claim brought against
a party under this Agreement, the Agreement
will be interpreted and governed by the laws
of the country (applicable state) in which the
defendant resides. If an amicable settlement
cannot be reached, any dispute arising out of
this Agreement shall be settled in the first
instance by the venue of the defendant.
Given the identicality of the two forum-selection clauses,
1
we treat the two forum-selection clauses as one.
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(second emphasis supplied). The district court concluded that
"the only plausible reading of the forum selection clause . . . is
that adjudication of claims against a party defendant that arise
out of the CDA must occur in the location of the party defendant."
Amyndas, 2021 WL 4551433, at *4. It further concluded that the
"location" of Zealand Pharma was Denmark. See id. at *4-5.
Inasmuch as all of Amyndas's claims against Zealand Pharma arose
out of the CDAs, those claims had to "be litigated in Denmark."
Id. at *4.
Before we reach the dispositive issue, two preliminary
matters demand our attention. First, we think it important to
remark that neither party quarrels with the district court's
conclusion that Amyndas's claims against Zealand Pharma "aris[e]
out of" the CDAs. Second, we also think it important to remark
that the parties agree that the forum-selection clause in this
case is mandatory. In other words, the clause specifies a forum
in which claims must be brought (unless enforcement of the clause
is either waived or impermissible). See Rivera, 30 F.4th at 103;
Huffington v. T.C. Group, LLC, 637 F.3d 18, 21 (1st Cir. 2011).
Where, as here, a federal court is asked to enforce a
forum-selection clause, federal common law supplies the rules of
decision. See Rivera, 30 F.4th at 102-03; Lambert v. Kysar, 983
F.2d 1110, 1116 (1st Cir. 1993). Notwithstanding the choice-of-
law clause contained in each CDA, the parties have agreed that
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federal common law and general contract-law principles control
here.
Under federal common law, a contract must be "read in
accordance with its express terms and the plain meaning thereof."
C. Sanchez & Son, Inc. v. United States, 6 F.3d 1539, 1543 (Fed.
Cir. 1993). The contractual terms are accorded "their ordinary
meaning unless the parties mutually intended and agreed to an
alternative meaning." Harris v. Dep't of Veterans Affairs, 142
F.3d 1463, 1467 (Fed. Cir. 1998); see Forcier v. Metro. Life Ins.
Co., 469 F.3d 178, 185 (1st Cir. 2006) (noting that federal common
law "requires that we accord [a contract's] unambiguous language
its plain and ordinary meaning"); Smart v. Gillette Co. Long-Term
Disab. Plan, 70 F.3d 173, 178 (1st Cir. 1995) (explaining that
federal common law demands the application of "common-sense canons
of contract interpretation"). Even so, an inquiring court must
avoid tunnel vision: instead of focusing myopically on individual
words, it must consider contractual provisions within the context
of the contract as a whole. See Rivera v. Centro Médico de Turabo,
Inc., 575 F.3d 10, 17 (1st Cir. 2009); Smart, 70 F.3d at 179.
Given the parties' consensus on these points, the
interpretive question before us boils down to the meaning of the
term "the venue of the defendant." Amyndas argues that "the venue
of the defendant" denotes multiple locations as applied to Zealand
Pharma — including locations where Zealand Pharma and its
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affiliates have a presence (including both Denmark and
Massachusetts). We do not believe that "the venue of the
defendant" is susceptible to so elastic an interpretation.
"Venue" is a term that — in legal matters — has both a
general meaning and a more specialized meaning. Amyndas contends
that the meaning of "venue" in the forum-selection clause should
closely track its specialized legal meaning. In particular, it
draws sustenance from the federal venue statute, see 28 U.S.C.
§ 1391, which defines venue to include not only the place or places
where a defendant resides (which — for corporations — can include
multiple locations) but also the place or places where events or
omissions giving rise to the claim occurred, see id. § 1391(b)-
(d). Such a construction would inevitably lead to the conclusion
that Zealand Pharma potentially could be sued in virtually any
jurisdiction. But such a conclusion would undercut the certainty
that forum-selection clauses are meant to confer and would render
the clause largely superfluous. See M/S Bremen v. Zapata Off-
Shore Co., 407 U.S. 1, 13 n.15, 17 (1972). So viewed, Amyndas's
principal argument lacks force.
Nor does Amyndas's effort to tether Zealand Pharma to
Zealand US gain Amyndas any traction with respect to its principal
argument. After all, the two are separate corporations, and
Zealand US did not exist when the CDAs were executed. Given that
factual backdrop, we cannot credit Amyndas's argument that the
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parties, as "sophisticated" entities, used the term "the venue of
the defendant" to signify virtually any location.
Amyndas tries a variation on this theme — a variation
that also relies heavily on treating Zealand Pharma as
substantially equivalent to Zealand US. It suggests that even if
"the venue of the defendant" is accorded the narrower but still
widely shared meaning of "locale" or "location," see, e.g.,
Merriam-Webster Dictionary,
https://www.merriam-webster.com/dictionary/venue (defining
"venue" as "locale"); Oxford English Dictionary,
https://www.oed.com/view/Entry/222318 (defining "venue" with
various sense of place, scene, and location), Zealand Pharma
operates in multiple locales. Amyndas points to facts suggesting
that Zealand Pharma operates hand-in-glove with Zealand US and
argues that the locations of Zealand US's offices in Massachusetts
and New York qualify as residences of Zealand Pharma.
But this argument ignores the distinction between
Zealand Pharma and Zealand US. The forum-selection clause points
unerringly to Zealand Pharma, not to Zealand US. Only the latter
has a residence in the United States. This interpretation has the
unparalleled benefit of being consistent with other aspects of the
CDAs. See PowerShare, Inc. v. Syntel, Inc., 597 F.3d 10, 17 (1st
Cir. 2010) (explaining that "one of the cardinal rules of contract
interpretation" is "that a document should be read to . . . render
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[all its provisions] consistent with each other" (quoting
Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 63
(1995))). Take the choice-of-law clause, for instance. That
clause sets the governing law as that of "the country (applicable
state) in which the defendant resides." At the time the CDAs were
signed, Zealand Pharma's residence could only have been Denmark.
Thus, as applied to Zealand Pharma, "the country . . . in which
[it] resides" could only have been understood to mean that singular
location.
For this reason, we reject Amyndas's argument that the
parties' use of the phrase "the country . . . in which the
defendant resides" shows that they knew how to select the
defendant's place of residence when they intended to do so. See,
e.g., Vendura v. Boxer, 845 F.3d 477, 485 (1st Cir. 2017). Given
Zealand Pharma's singular location at the times the CDAs were
signed, we think it is more consistent with those agreements as a
whole to interpret "the venue of the defendant" similarly to
"country . . . in which the defendant resides." Simply stated,
both "venue" and "residence" point to Denmark because that is
Zealand Pharma's lone location.
We are not convinced of any contrary conclusion by
Amyndas's argument regarding the parties' use of the definite
article "the" before "venue" in the forum-selection clause. "[T]he
definite article 'the' 'particularizes the subject spoken of,'
- 24 -
suggesting . . . refer[ence] to a single object." Hernandez v.
Williams, Zinman & Parham PC, 829 F.3d 1068, 1074 (9th Cir. 2016)
(quoting Black's Law Dictionary 1647 (4th ed. 1968)). Just as
"the house" means that there is one house, so too "the venue," in
this context, could mean that there is one venue.
To be sure, the force of "the" and the singular form
depend on context and use. Amyndas points to the Dictionary Act,
which provides that — so far as the construction of federal
statutes is concerned — "words importing the singular include and
apply to several persons, parties, or things." 1 U.S.C. § 1.
Relatedly, Amyndas notes that the federal venue statute, 28 U.S.C.
§ 1391, uses "the venue" even though "no single such location
exists."
Assuming without deciding that Amyndas is correct that
"the" could refer to multiple locations, that does not change the
outcome of this case. That is because — as we already have stated
— Zealand Pharma has had only one residence at all relevant times:
Denmark. Consequently, it would be struthious to suggest that
"the venue" of Zealand Pharma carried a plural meaning.
And in addition, our reading of the agreement accords
with the core purpose of a mandatory forum-selection clause: to
restrict the fora in which covered controversies may be resolved.
That purpose was adequately evinced in this case, as the forum-
selection clause was a "reasonable effort to bring vital certainty
- 25 -
to this international transaction." M/S Bremen, 407 U.S. at 17.
The interest in creating certainty would be poorly served by
construing "the venue of the defendant," as used in the CDAs, as
referring to virtually anywhere. A mandatory forum-selection
clause that permits suit to be brought virtually anywhere is not
a mandatory forum-selection clause at all.
To say more on this point would be supererogatory.
Considering the text, context, and function of the forum-selection
clause, we agree with the district court that the forum-selection
clause must be interpreted to require that the claims against
Zealand Pharma be brought first in a Danish court.
2
Amyndas argues that even if the forum-selection clause
requires — by textual interpretation — litigating its claims
against Zealand Pharma in Denmark, it would be unreasonable to
enforce that clause as written. The premise that underpins
Amyndas's argument is sound: even if a forum-selection clause is
mandatory and unambiguous — as this one is — a court may decline
to enforce it if the resisting party can show that doing so would
be "unreasonable." See M/S Bremen, 407 U.S. at 10; Claudio-De
León, 775 F.3d at 48-49. Absent such a showing, a forum-selection
clause is presumptively enforceable. See Claudio-De León, 775
F.3d at 48.
- 26 -
We have articulated four grounds for deeming a forum-
selection clause to be unenforceable: the clause derives from
"fraud or overreaching"; enforcing the clause "would be
unreasonable and unjust"; "proceedings in the contractual forum
will be so gravely difficult and inconvenient that the party
challenging the clause will for all practical purposes be deprived
of his day in court"; and enforcing the clause would "contravene
a strong public policy of the forum in which suit is brought,
whether declared by statute or by judicial decision." Id. at 48-
49 (internal quotation marks omitted); see M/S Bremen, 407 U.S. at
15. In addition, public interest factors under the doctrine of
forum non conveniens may sometimes provide support for rejecting
enforcement of an otherwise valid forum-selection clause, but
"those factors will rarely defeat" such a clause. Atl. Marine,
571 U.S. at 64; see Imamura v. Gen. Elec. Co., 957 F.3d 98, 107
(1st Cir. 2020) (noting that public interest factors include "the
administrative difficulties flowing from court congestion; the
'local interest in having localized controversies decided at
home'; the interest in having the trial of a diversity case in a
forum that is at home with the law that must govern the action;
the avoidance of unnecessary problems in conflict of laws, or in
the application of foreign law; and the unfairness of burdening
citizens in an unrelated forum with jury duty" (quoting Piper
Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 (1981))).
- 27 -
Amyndas does not argue that the forum-selection clause
is somehow tainted by fraud or overreaching. Instead, Amyndas
strives to persuade us that forcing it to litigate in Denmark would
be unreasonable and would effectively deprive it of its day in
court. Specifically, it says that Denmark has more restrictive
trade secret protections and imposes limitations on discovery not
imposed by American courts, such as restrictions on the
availability of internal corporate documents.
We are not persuaded. A showing that a litigant would
be so inconvenienced by litigating in a designated forum that a
forum-selection clause should be disregarded is a heavy lift. See
In re Mercurio, 402 F.3d 62, 66 (1st Cir. 2005); cf. Piper
Aircraft, 454 U.S. at 246-55 (holding that potential change in law
cannot, by itself, fend off dismissal under forum non conveniens
absent showing that new law is "clearly inadequate or
unsatisfactory"). Amyndas has not come close to making that heavy
lift in this instance.
When the CDAs were first negotiated and signed, Zealand
Pharma was based in Denmark and Zealand US did not exist. It would
have been obvious to Amyndas at that time that if it wound up suing
Zealand Pharma, it would be obliged to do so in Denmark, using
whatever trade secret protections and discovery procedures were
available under Danish law. Put bluntly, the content and contours
of Danish trade secret law and the potential limitations on
- 28 -
discovery were clearly foreseeable to Amyndas from the start. See
Atl. Marine, 571 U.S. at 64; M/S Bremen, 407 U.S. at 17-18. Had
Amyndas — a sophisticated party acting with the advice of learned
counsel — been wary of litigating under those rules, it could have
negotiated for a different forum or choice of law. That Amyndas
may now be suffering buyer's remorse about the forum to which it
agreed is not a sufficient reason for denying enforcement of a
valid forum-selection clause. See Dayhoff Inc. v. H.J. Heinz Co.,
86 F.3d 1287, 1298 (3d Cir. 1996).
Nor can Amyndas credibly claim that it is being denied
its day in court. Foreign courts frequently have more limited
discovery or stricter evidentiary regimes than federal courts, but
that is rarely a basis for concluding that a party would be denied
its day in court. See, e.g., Robinson v. TCI/US W. Commc'ns Inc.,
117 F.3d 900, 909 (5th Cir. 1997) (holding that more limited
discovery available under English law does not bar application of
forum non conveniens dismissal); see also Gilmer v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 31 (1991) (observing
that the fact that discovery "procedures [in arbitration] might
not be as extensive as in the federal courts" does not render
agreement to arbitrate invalid). Mere differences in procedures
or limitations on remedies, unless they effectively deprive the
complaining party of any remedy at all, will not render a
designated forum unreasonable. See Iragorri v. Int'l Elevator,
- 29 -
Inc., 203 F.3d 8, 14 (1st Cir. 2000) (concluding that remedy
limitations in Colombia did not render forum inadequate); see also
Piper Aircraft, 454 U.S. at 255 (affirming forum non conveniens
dismissal and holding that remedies available in Scottish courts
were not "so clearly inadequate or unsatisfactory" that they were
"no remedy at all"). So it is here: although litigating in
Denmark may be inconvenient for Amyndas and may increase the cost
of litigation, the record does not support its claim that it will
be denied its day in court there.2
Amyndas next contends that public policy requires that
litigation proceed in the United States in order to prosecute its
trade secrets claims. Although the Defend Trade Secrets Act (DTSA)
guarantees a federal forum for trade secret theft claims, see 18
U.S.C. § 1836, Amyndas presents no evidence — and we can discern
none in the record — that the DTSA was meant to supersede the
forum-selection decisions of sophisticated parties.3 Amyndas is
on solid ground in noting that the DTSA's text and legislative
2 In point of fact, Amyndas began proceedings against Zealand
Pharma in Denmark on January 10, 2022, and it has successfully
obtained a stay of the contested patents from the European Patent
Office.
3 We add, moreover, that when the first CDA was signed in
March of 2015, the DTSA had not yet been enacted. Although the
second CDA was signed in August of 2016 (after the DTSA became
effective in May of that year), it would be hard to believe — given
the identical nature of the forum-selection clauses and the other
similarities in the documents — that either of the parties
structured their conduct around the existence of the DTSA.
- 30 -
history make pellucid that Congress was concerned with the theft
of American trade secrets abroad and intended the DTSA to have
extraterritorial reach. See 18 U.S.C. § 1837 (providing for
extraterritorial applicability under certain circumstances); see,
e.g., Pub L. 114-153, 130 Stat 376, 383-84 § 5 ("It is the sense
of Congress that . . . (1) trade secret theft occurs in the United
States and around the world; (2) trade secret theft, wherever it
occurs, harms the companies that own the trade secrets and the
employees of the companies"); S. Rep. No. 114-220 at 1-2, 11-12
(2016); H. Rep. No. 114–529 at 3-4, 15-16 (2016). But the bare
fact that a law provides a federal cause of action with some
extraterritorial reach does not prevent private parties from
contracting either outside it or around it. Here, the mere
existence of the DTSA — without any showing that the DTSA was
linked to the parties' negotiations — does not inhibit a court's
enforcement of the parties' forum-selection choices. See, e.g.,
Fintech Fund, F.L.P. v. Horne, 836 F. App'x 215, 227 (5th Cir.
2020) (affirming dismissal of case involving DTSA claim based on
forum-selection clause designating England as forum).
The sockdolager, of course, is that — despite very
general statements that the DTSA was intended to allow enforcement
in federal court and that Congress was concerned by foreign trade
secret theft — Amyndas has produced no compelling evidence that
the forum-selection clause here "contravene[s] a strong public
- 31 -
policy." M/S Bremen, 407 U.S. at 15; see Rafael Rodríguez Barril,
Inc. v. Conbraco Indus., Inc., 619 F.3d 90, 93-95 (1st Cir. 2010).
Tellingly, Amyndas has identified no case in which a court
concluded that the DTSA has been construed to trump a valid forum-
selection clause. We decline to blaze a new trail through this
uncharted terrain.
Amyndas next contends that the public interest in
judicial economy warrants keeping all parties in the district court
action because it would be inefficient and, thus, unreasonable to
require Amyndas to litigate in Denmark while allowing its
litigation against Alexion (and, possibly, Zealand US) to proceed
in the district court. But Amyndas's private inconveniences in
litigating its claims in Denmark were wholly foreseeable at the
time Amyndas signed the CDAs and, thus, its private inconveniences
bear no weight. See Atl. Marine, 571 U.S. at 64. To cinch the
matter, public interest factors will rarely tip the balance:
"forum-selection clauses should control except in unusual cases."
Id. This is not so rare a case.
Assuming without deciding that judicial economy concerns
may, under special circumstances, override a mandatory forum-
selection clause, Amyndas has failed to show that any such
sufficiently compelling circumstances are present here. Virtually
all of the cases that Amyndas cites in support of this argument
- 32 -
involve section 1404 transfer requests4 and/or predate Atlantic
Marine's injunction that "forum-selection clauses should control
except in unusual cases." Id. We see no principled basis for
accepting Amyndas's invitation to keep Zealand Pharma in the
district court action in the interest of judicial economy.
We do not gainsay that Amyndas may now regret negotiating
a forum-selection provision that gives Zealand Pharma home-court
advantage and a more favorable choice of law for the trade secret
dispute that has arisen. Those regrets may coalesce into a bitter
lesson about looking at a nascent partnership through rose-colored
glasses. But they are not a sufficient reason for disregarding
the plain text and manifest purpose of a valid forum-selection
clause.
That ends this aspect of the matter. We conclude that
the forum-selection clause is valid and enforceable. Under its
terms, Amyndas's claims against Zealand Pharma must be litigated
in a Danish court. Accordingly, we uphold the district court's
dismissal of Amyndas's claims against Zealand Pharma.
B
This brings us to Amyndas's claims against Zealand US.
The district court dismissed the claims contained in the original
4 Section 1404 places a premium on considerations of judicial
economy. See Cont'l Grain Co. v. The FBL-585, 364 U.S. 19, 26
(1960).
- 33 -
complaint against Zealand US. The court noted that the complaint
largely referred to "Zealand" as a single entity and did not
specify whether and how Zealand US was involved. See Amyndas,
2021 WL 4551433, at *2-3. Twenty-eight days later, Amyndas sought
leave to amend. Amyndas annexed to its motion a proposed amended
complaint pleading its claims against each Zealand defendant
separately. The district court denied leave to amend, and Amyndas
appeals the denial with respect to its claims against Zealand US.5
The Civil Rules take a liberal stance toward the
amendment of pleadings, consistent with the federal courts'
longstanding policy favoring the resolution of disputes on the
merits. See Foman v. Davis, 371 U.S. 178, 182 (1962) ("If the
underlying facts or circumstances relied upon by a plaintiff may
be a proper subject of relief, he ought to be afforded an
opportunity to test his claim on the merits."). Rule 15(a) permits
amendments with leave of court, which the court "should freely
give . . . when justice so requires." Fed. R. Civ. P. 15(a)(2).
"In the absence of any apparent or declared reason — such as undue
delay, bad faith or dilatory motive on the part of the movant,
repeated failure to cure deficiencies by amendments previously
allowed, undue prejudice to the opposing party by virtue of
In the alternative, Amyndas asked the district court to
5
reconsider the earlier order of dismissal. For all practical
purposes, though, the original complaint has dropped out of the
case.
- 34 -
allowance of the amendment, futility of amendment, etc. — the leave
sought should, as the rules require, be 'freely given.'" Foman,
371 U.S. at 182; see Palmer v. Champion Mortg., 465 F.3d 24, 30
(1st Cir. 2006).
A denial of leave to amend is reviewed for abuse of
discretion. See Palmer, 465 F.3d at 30. A district court's
"discretion is necessarily broad—but it is not absolute." Indep.
Oil & Chem. Workers of Quincy, Inc. v. Procter & Gamble Mfg. Co.,
864 F.2d 927, 929 (1st Cir. 1988). An "[a]buse occurs when a
material factor deserving significant weight is ignored, when an
improper factor is relied upon, or when all proper and no improper
factors are assessed, but the court makes a serious mistake in
weighing them." Id.With respect to the claims against Zealand US, the
district court's stated reasons for rejecting the proposed amended
complaint and denying leave to amend fall into two recognizable
buckets: undue delay and futility. As to undue delay, the court
observed that "at no point in the course of the motion to dismiss
process did Amyndas request . . . leave to amend its pleading" and
"[i]nstead, it waited until nearly a month had elapsed following
the challenged Order before it first made such a request."
Moreover, "the factual allegations Amyndas [sought] to add were
publicly available prior to the hearing on the original motion to
dismiss." The allegations, the court stated, were "not 'new,' and
- 35 -
justice does not require that Amyndas be permitted to belatedly
add them."
As to futility, the court ruled — without dissecting the
substance of any of the allegations in the proposed amended
complaint — that "none of the additional factual allegations change
the analysis . . . presented by the prior motion to dismiss." It
concluded that "the proposed additional factual allegations" do
not "plausibly allege a basis to conclude . . . that Amyndas has
stated claims directly against Zealand US." Thus, the court said,
"Amyndas's request for leave to amend is futile."
Amyndas challenges both of the district court's stated
grounds on appeal. We consider each ground in turn.
1
A motion for leave to file an amended complaint "requires
that a court examine the totality of the circumstances and exercise
sound discretion in light of the pertinent balance of equitable
considerations." Quaker State Oil Ref. Corp. v. Garrity Oil Co.,
884 F.2d 1510, 1517 (1st Cir. 1989); see Palmer, 465 F.3d at 30-
31. Although delay alone is not a sufficient basis for denying
leave to amend, undue delay assuredly is. See, e.g., Hagerty ex
rel. United States v. Cyberonics, Inc., 844 F.3d 26, 34 (1st Cir.
2016) (explaining that "undue delay, on its own, may be enough to
justify denying a motion for leave to amend"); Hayes v. N. Eng.
Millwork Distribs., Inc., 602 F.2d 15, 19 (1st Cir. 1979)
- 36 -
(similar). When a party has allowed a "considerable period of
time" to elapse, it must "show some 'valid reason for [its] neglect
and delay.'" Hayes, 602 F.2d at 19-20; see In re Lombardo, 755
F.3d 1, 3 (1st Cir. 2014) (Souter, J.) ("[W]e have repeatedly said
that when considerable time has elapsed . . . , the movant has [at
the very least] the burden of showing some valid reason for his
neglect and delay." (internal quotation marks omitted) (second
alteration in original)); Calderón-Serra v. Wilmington Tr. Co.,
715 F.3d 14, 20 (1st Cir. 2013) ("Appreciable delay alone, in the
absence of good reason for it, is enough to justify denying a
motion for leave to amend."). Thus, for delay to be "undue," the
period of delay must be both substantial and unjustified.
Determining how long is too long depends on the facts
and circumstances of each particular case. This inquiry considers
the reasonableness of the time between the filing of the motion
for leave and a variety of points at which a party would become
aware of a need to amend, such as the filing of a motion to dismiss,
a dismissal order, or the discovery of new information that
substantially alters the substance or viability of the claims.
See Hagerty, 844 F.3d at 34-35. Ascertaining whether a delay is
"undue" is not simply a matter of counting days but, rather,
depends on the "totality of the circumstances" in the particular
case. Palmer, 465 F.3d at 31.
- 37 -
Of course, the reason offered for seeking leave to amend
must be a "valid" one. See, e.g., Lombardo, 755 F.3d at 3; Hayes,
602 F.2d at 20. Generally, valid reasons include a motion to
dismiss or a ruling from the court pointing out flaws in the
original pleading or the discovery of new information. This is
not a high hurdle, and the dispositive datum often will be the
reasonableness of the pleader's actions. But even if the reasons
are valid, the court must consider whether and to what extent the
opposing party would be unfairly prejudiced as a result of a
delayed amendment. See Zenith Radio Corp. v. Hazeltine Rsch.,
Inc., 401 U.S. 321, 330-31 (1971); Villanueva v. United States,
662 F.3d 124, 127 (1st Cir. 2011).
In particular cases, other factors may weigh in the
balance. For instance, a court may consider whether a proposed
amendment is a first attempt. See City of Mia. Fire Fighters' &
Police Officers' Ret. Tr. v. CVS Health Corp., __ F.4th __, __
(1st Cir. 2022) [No. 21-1479, slip op. at 28] (affirming denial of
leave to amend when plaintiffs sought "a third bite of the apple
in the form of a second amended complaint"); Aponte-Torres v. Univ.
of P.R., 445 F.3d 50, 58 (1st Cir. 2006). Serial amendments may
be given closer scrutiny in terms of timing because "busy trial
courts, in the responsible exercise of their case management
functions, may refuse to allow plaintiffs an endless number of
trips to the well." Aponte-Torres, 445 F.3d at 58. So, too, the
- 38 -
existence of related litigation may be a factor in the decisional
calculus. See, e.g., Nikitine v. Wilmington Tr. Co., 715 F.3d
388, 389-91 (1st Cir. 2013).
In the case at hand, Amyndas had a valid reason for
moving to amend: the district court had pointed out a fatal flaw
in its original complaint (the failure to differentiate
sufficiently between Zealand Pharma and Zealand US with respect to
liability for the claims asserted). Although Amyndas moved for
leave to amend only twenty-eight days after the district court
dismissed its original complaint, the court found undue delay.
The district court's finding of undue delay was based on two
particular circumstances. First, it faulted Amyndas for not
requesting leave to amend during the motion-to-dismiss process,
"even as an alternative." Waiting four weeks after the dismissal
order to request leave to amend, the court concluded, was simply
too late.6 Second, the court concluded that many of the additional
facts added in the proposed amended complaint were publicly
available prior to the hearing on the motion to dismiss the
6 Amyndas says that it did request leave to amend earlier in
the process. In a footnote to its filings in opposition to the
Zealand entities' motion to dismiss, it requested at a "minimum,
or in the alternative, . . . early discovery regarding Zealand US
to allow Plaintiffs the opportunity to amend their Complaint, if
necessary." The general rule, however, is that a district court
need not pay heed to a contingent request for leave to amend made
only in opposition papers. See Fisher v. Kadant, Inc., 589 F.3d
505, 509 (1st Cir. 2009).
- 39 -
original complaint and, thus, were not "new." Accordingly,
"justice d[id] not require that Amyndas be permitted to belatedly
add" its allegations.
Although the timing of a request for leave to amend and
the relative novelty of the added allegations contained in the
proposed amended complaint are relevant considerations, the
district court's reasoning does not pass muster. Amyndas's delay
in filing its motion for leave to amend fell well short of the
timeframes that our cases have identified as undue and cannot,
under all the circumstances, be characterized as substantial. Nor
does the record, fairly read, suggest that Amyndas was dilatory.
Amyndas filed its original complaint in December of 2021, faced a
motion to dismiss from the Zealand defendants in March of 2022,
had a hearing on that motion in May, and received the decision in
June. It filed its motion for leave to amend a scant twenty-eight
days later.
The mere fact that Amyndas's motion for leave to amend
came after the district court dismissed the original complaint is
not sufficient to ground a conclusion that the motion was unduly
delayed. It is common ground that "[a]mendments may be permitted
pre-judgment, even after a dismissal for failure to state a claim."
Palmer, 465 F.3d at 30. After all, the "when justice so requires"
standard of Rule 15(a) puts a thumb on the scale in favor of
allowing amendments in non-frivolous cases. See Foman, 371 U.S.
- 40 -
at 182. Amyndas moved to amend before the district court entered
judgment and, thus, Rule 15's more liberal standards apply here.7
Withal, we have understandably condemned "wait and see"
amendment practices: a plaintiff may not, for instance,
"deliberately wait in the wings for a year and a half with another
amendment to a complaint should the court hold the first amended
complaint was insufficient." ACA Fin. Guar. Corp. v. Advest, Inc.,
512 F.3d 46, 57 (1st Cir. 2008); see Kader v. Sarepta Therapeutics,
Inc., 887 F.3d 48, 61 (1st Cir. 2018); Palmer, 465 F.3d at 30-31.
But here, there is no reason to conclude that Amyndas engaged in
any such "wait and see" practices. Amyndas filed its motion to
amend less than two months after the emergence of new evidence.
And the amended complaint specifically addressed a defect
identified by the district court in its dismissal of the original
complaint: Amyndas's failure to differentiate sufficiently its
claims between Zealand Pharma and Zealand US. See Amyndas, 2021
WL 4551433, at *2-3.
Although it is true that the Zealand defendants moved to
dismiss based, in part, on that same defect, a relatively short
period of time ensued between the date when Zealand's motion put
7 These standards contrast with the somewhat stricter
standards governing post-judgment motions to amend. See CVS
Health, __ F.4th at __ [No. 21-1479, slip op. at 29] (emphasizing
that plaintiffs sought leave to amend after judgment had entered
so "Rule 15 was no longer on the table").
- 41 -
Amyndas on notice of the defect and the date when Amyndas moved to
amend. The length of the delay is, of course, a critical data
point in determining whether a period of delay is "undue." See,
e.g., Hagerty, 844 F.3d at 35 (denying motion to amend in face of
year-long delay); Feliciano-Hernández v. Pereira-Castillo, 663
F.3d 527, 538 (1st Cir. 2011) (denying motion to amend in face of
gap of "nearly a year"); Advest, 512 F.3d at 57 (faulting "year
and a half" delay). Equally as important, this was not a case in
which the plaintiff's complaint contained such an obvious defect
that it was unreasonable to wait until the district court ruled on
the motion to dismiss before moving to amend.
The district court's second ground for concluding that
there was undue delay — that the allegations in the proposed
amended complaint were not "new" — is no more convincing. We agree
that most of the facts undergirding Amyndas's proposed amended
complaint were available before the hearing on the motion to
dismiss. But that circumstance, taken in a vacuum, cannot serve
as a basis for denying Amyndas's motion to amend. Responding
specifically to one of the district court's grounds for dismissal
by realigning previously articulated facts — as Amyndas did here
— is a legitimate basis for amendment.
We add, moreover, that this is a complex case in which
ramified issues are at play. Especially in complex cases, lawyers
ought not to be expected to cobble together pleadings at breakneck
- 42 -
speed. Taking four weeks to assimilate information — including
information not publicly available until the day before the motion-
to-dismiss hearing — and to separate Amyndas's claims against
Zealand US from its claims against Zealand Pharma is within the
realm of reasonableness. As a result, Amyndas's delay cannot be
fairly characterized as "undue."
In addition, Amyndas's proposed amended complaint
incorporated new information, not available to it when it drafted
its original complaint. On this point, we reject the Zealand
defendants' suggestion that a press release regarding trials of a
complement therapeutic, issued jointly by Alexion and the Zealand
entities on the day before the motion-to-dismiss hearing, could
not be regarded as "new" for purposes of Amyndas's proposed amended
complaint. A party is not required to seek leave to amend its
complaint each time a new piece of favorable information surfaces
unless that new information is essential to the viability of its
case. Although parties should ordinarily take their best shot and
not sit on new facts, see, e.g., Kader, 887 F.3d at 61; Villanueva,
662 F.3d at 127, they should not be expected either to plead their
cases in granular detail, see Fed. R. Civ. P. 8(a)(2) (requiring
only "a short and plain statement of the claim showing that the
pleader is entitled to relief"), or to seek leave to amend the
very moment a few more facts come to light.
- 43 -
To sum up, Amyndas had a valid reason for seeking leave
to amend and acted with reasonable diligence to cure the fatal
defect in its original complaint and to put a proposed amended
complaint before the district court. Its proposed amended
complaint not only made changes that were directly responsive to
the district court's stated reasons for dismissing the original
complaint but also incorporated some new information. Given the
totality of the circumstances, the twenty-eight-day period that
elapsed between the dismissal of the original complaint and the
filing of the motion to amend cannot fairly be characterized as
"undue delay."
2
The district court also cited futility as a further
ground for denying leave to amend. A proposed amendment is futile
if it is either frivolous or contains some fatal defect. See
Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, 6 Fed. Prac.
& Proc. Civ. § 1487 (3d ed. 2022). Normally, this means that "the
complaint, as amended, would fail to state a claim upon which
relief could be granted." Glassman v. Computervision Corp., 90
F.3d 617, 623 (1st Cir. 1996).
Whether a proposed amendment is futile is "gauged by
reference to the liberal criteria of Federal Rule of Civil
Procedure 12(b)(6)." Juarez v. Select Portfolio Servicing, Inc.,
708 F.3d 269, 276 (1st Cir. 2013); Hatch v. Dep't of Child., Youth
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& Their Fams., 274 F.3d 12, 19 (1st Cir. 2001). Reference to those
criteria teaches that if the amended complaint "contain[s]
sufficient factual matter, accepted as true, to 'state a claim to
relief that is plausible on its face,'" Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)), and contains no other fatal defects, the district
court abuses its discretion by denying the motion to amend on
futility grounds, see Abraham v. Woods Hole Oceanographic Inst.,
553 F.3d 114, 117 (1st Cir. 2009); see also Schreiber Distrib. Co.
v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)
("If a complaint is dismissed for failure to state a claim, leave
to amend should be granted unless the court determines that the
allegation of other facts consistent with the challenged pleading
could not possibly cure the deficiency.").
The issue, then, is whether the proposed amended
complaint states a facially plausible claim against Zealand US.
For a start, the proposed amended complaint specifically
differentiated between Zealand Pharma and Zealand US, thus curing
the defect that the district court had specifically noted with
respect to the original complaint. See Amyndas, 2021 WL 4551433,
at *2-3. Amyndas's proposed amended complaint alleged separate
counts against Zealand US for misappropriation of trade secrets
under the DTSA (count VIII), misappropriation of trade secrets
under Massachusetts General Laws chapter 93, section 42 (count
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IX), misappropriation of trade secrets under common law (count X),
unfair competition (count XI), and unjust enrichment (count XII).
Those allegations were sufficiently specific. For example, the
proposed amended complaint contained allegations to support the
proposition that Zealand US was engaged in the continuing use of
Amyndas's improperly retained trade secrets, which (Amyndas
posited) formed the basis for misappropriation claims under both
federal and state law. See 18 U.S.C. §§ 1839(5)(A)-(B), 1836(d);
Mass. Gen. Laws ch. 93, § 42; see also Oakwood Lab'ys LLC v.
Thanoo, 999 F.3d 892, 909 (3d Cir. 2021).
Amyndas's allegations as to misappropriation in the
proposed amended complaint included:
• "Zealand U.S. impermissibly acquired and
accessed, and continues to impermissibly have
access to Amyndas' trade secrets through
Zealand A/S, which has failed to destroy all
Amyndas trade secret information or
information derived therefrom, or to erect
walls to prevent improper disclosure to
Zealand U.S., in view of the termination of
the Amyndas-Zealand discussions in 2017. "
• "[T]he Alexion-Zealand collaboration is, on
information and belief, intended to research,
develop, and commercialize technology
improperly derived from Amyndas' trade secrets
in the field of peptide pharmaceutical
products, and Zealand U.S., as the arm of
Zealand responsible for such efforts in the
U.S. with respect to such peptide
pharmaceutical products is, on information and
belief, directly involved with those efforts."
• "[O]n information and belief, Zealand U.S.,
and its officers acting on behalf of Zealand
U.S., participate in efforts relating to
obtaining FDA approval for Zealand's peptide-
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based medicines, such as the recently-approved
[product targeting the C3 protein].
Therefore . . . Zealand U.S. and its officers
have used and are currently using Amyndas'
trade secrets in furtherance of the business
purposes of Zealand U.S."
• "On information and belief, Zealand U.S. acts,
at a minimum, as Zealand's representative to
Alexion in connection with discussions,
approvals and other developments related to
Alexion's efforts to commercialize the
products subject to the Zealand-Alexion
agreement."
These allegations, when viewed in combination, define a distinct
course of conduct by Zealand US and connect that course of conduct
to the unauthorized use of Amyndas's trade secrets. Taken as true
— as they must be, see Iqbal, 556 U.S. at 678-79 — they adumbrate
facially plausible claims for the misappropriation of trade
secrets.
The allegations supporting the claims for unfair
competition and unjust enrichment are similarly specific. The
proposed amended complaint, taken as a whole, seemingly states
plausible claims upon which relief could be granted. Yet, the
district court did not engage with these allegations. Rather, it
focused much of its futility analysis on the forum-selection
clause. The only references to Zealand US contained in its minute
order are conclusory.
Courts must take account of the reality of events. In
a case like this one, much of the information concerning the
division of roles, responsibilities, and potential wrongdoing will
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be in the possession of the defendants and may not become visible
until after discovery is completed. Cf. Grant v. News Grp. Bos.,
Inc., 55 F.3d 1, 5 (1st Cir. 1995) (observing, in Title VII
context, that district courts should be cautious about too quickly
denying leave to amend in cases in which discovery will be
essential to development of claims). The fact that Amyndas
unarguably cured the fatal defect in the original complaint that
had been identified by the district court, coupled with the nature,
detail, and apparent plausibility of Amyndas's claims, renders a
finding of futility insupportable.
3
We summarize succinctly. Amyndas sought to file a
proposed amended complaint that stated facially plausible claims
for relief against Zealand US. That represented Amyndas's first
attempt at amendment. The district court's conclusion that Amyndas
unduly delayed in moving for leave to file that complaint is
insupportable, as is the district court's conclusion that the
asserted claims are futile. And, finally, Zealand US has not
advanced any credible claim of prejudice. We conclude, therefore,
that the district court's denial of the motion to amend constituted
an abuse of discretion. Consequently, both its denial of that
motion and its subsequent dismissal of Amyndas's claims against
Zealand US must be vacated, and the case must be remanded for
further proceedings consistent with this opinion.
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IV
We need go no further. For the reasons elucidated above,
we affirm the dismissal of Amyndas's claims against Zealand Pharma.
We vacate the dismissal of Amyndas's claims against Zealand US and
remand for further proceedings consistent with this opinion. All
parties shall bear their own costs.
Affirmed in part, vacated in part, and remanded.
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