Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-00268/USCOURTS-casd-3_12-cv-00268-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1335 Interpleader Action

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

GENOMATICA, INC.,

Plaintiff,

v.

ICELANDIC GENOMIC VENTURES

HOLDING, S.A.R.L. et al.,

Defendants,

 

AND RELATED COUNTERCLAIMS

AND CROSS-CLAIMS.

 

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

Case No. 3:12-cv-0268-GPC-BGS

ORDER:

(1) GRANTING GENOMATICA,

INC.’S MOTION TO DISMISS

AND DISCHARGE; 

(2) DENYING IGVH’S MOTION

FOR SUMMARY JUDGMENT

(3) GRANTING GENOMATICA,

INC.’S MOTION TO DISMISS

IGVH’S COUNTERCLAIMS;

(ECF NOS. 19, 23, 27)

INTRODUCTION

This is an interpleader action in which Genomatica, Inc. (“Genomatica”) asserts

it is an innocent stakeholder in a dispute over the ownership of certain shares of its

stock. (ECF No. 1.) In its Complaint, Genomatica alleges a dispute has arisen between

Iceland Genomic Ventures Holding S.à.R.L. (“IGVH”), on the one hand, and Iceland

Genomic Partners (“IGP”), on the other hand. (Id.)

On May 22, 2012, IGVH filed an answer to Genomatica’s Complaint, also

asserting counterclaims against Genomatica and cross-claims against IGP, Tryggvi

3:12-cv-0268-GPC-BGS

Case 3:12-cv-00268-GPC-BGS Document 64 Filed 03/21/13 Page 1 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Petursson (“Petursson”), and Iceland Genomic Venture Partners, S.A. (“IGVP”) (all

three collectively, “Petursson Defendants”). (ECF No. 7.)

On July 10, 2012, IGP filed an answer to Genomatica’s Complaint. (ECF No.

18.) The Petursson Defendants, however, never responded to IGVH’s cross-claims. 

Accordingly, this Court entered default judgment on IGVH’s cross-claims against the

Petursson Defendants on January 31, 2013. (ECF No. 60).

Before the Court are three pending motions. On August 1, 2012, Genomatica

filed a motion to dismiss and discharge, which has been fully briefed. (ECF Nos. 23,

28, 31). On August 27, 2012, IGVH filed a motion for summary judgment, which has

also been fully briefed, (ECF Nos. 27, 61, 62). On July 16, 2012, Genomatica filed a

motion to dismiss IGVH’s counterclaims, which has also been fully briefed. (ECF

Nos. 19, 26, 30). The Court held a hearing on these motions on February 22, 2013. 

(ECF No. 63.) Having considered the parties’ submissions and arguments, and for the

reasons that follow, the Court hereby GRANTS Genomatica’s Motion to Dismiss &

Discharge, DENIES IGVH’s Motion for Summary Judgment; and GRANTS

Genomatica’s Motion to Dismiss IGVH’s Counterclaims.

BACKGROUND

Genomatica alleges it issued 3,000,000 shares of its stock to IGVH in 2000 and

500,000 of its sharesto IGVH in 2001. (ECF No. 1 at ¶¶ 2, 8-9.) Genomatica alleges, 1

and the stock purchase agreements indicate, that Petursson executed the purchase

agreements on behalf of IGVH. (Id. ¶¶ 8-9; ECF No. 19-3 at 4; ECF No. 19-4 at 4.) 2

The share certificates indicate theywere actually issued to an entity called “Iceland Genomics 1

Ventures, S.A.” In paragraph 2 of its Complaint, Genomatica alleges that “Icelandic Genomic

Ventures Holding, S.a.R.L” is also known as “Iceland Genomics Ventures, S.A.” IGVH denies this

in paragraph 2 of its Answer and asserts it is “incorrectly identified as ‘Icelandic Genomic Ventures

Holdings, S.a.R.L. a/k/a Iceland Genomic Ventures, S.A.” IGVH appears to take issue with the

allegation because (1) its name begins with “Iceland,” not “Icelandic,” and (2) it is not also known as

“Iceland Genomics Ventures, S.A.,” but has instead – in almost all of Genomatica’s corporate records

– been erroneously identified as such.

 The Court considers the purchase agreements because they are referenced in Genomatica’s

2

Complaint, because IGVH refers to the purchase agreements in its counterclaims against Genomatica,

and because neither party has contested their authenticity. See Van Buskirk v. Cable News Network,

2 3:12-cv-0268-GPC-BGS

Case 3:12-cv-00268-GPC-BGS Document 64 Filed 03/21/13 Page 2 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The parties agree that, in July 2007, Petursson consented to a merger on behalf

of IGVH, which consent IGVH ratified at oral argument on its Motion for Default

Judgment.

Genomatica alleges that, in September 2007, Petursson exercised a stock option

to purchase 60,417 shares of Genomatica stock, which option he was granted in

January 2007. Genomatica alleges that Petursson then executed a transfer of those

shares from himself to his company, IGP. It is unclear whether IGVH claims

ownership of those 60,417 shares.

Genomatica alleges it filed “Amendment No. 3 to Form S-1 Registration

Statement” with the SEC in November 2011. IGVH attachesthe registration statement

to its responsive pleading, and Genomatica does not contest its authenticity. (ECF No.

7 at 24.) The registration statement provides that Iceland Genomics Ventures, S.A.

owns 3,560,417 shares of stock. (ECF No. 7 at 26.) In a footnote, the registration

statement providesthatIceland Genomics Ventures, S.A.’s number ofshares “Includes

3,500,00 shares of common stock held by Iceland Genomics Ventures, S.A. and 60,417

shares of common stock held by Iceland Genomics Partners.” (Id. at 25.) The footnote

goes on to state: “Tryggvi Petursson has sole voting and investment power with respect

to the shares held by Iceland Genomics Ventures, S.A. and Iceland Genomics

Partners.” (Id.)

Genomatica assertsthat, in December 2011, Petursson informedGenomatica that

“Iceland Genomics Ventures was closing down and that the partnership was

terminating.” Genomatica claims “Petursson requested that Genomatica transfer the

3,500,000 Genomatica shares owned by Iceland Genomics Ventures to Iceland

Genomics Ventures’ two main shareholders, which he identified as Genomic Holding

S.A. and Iceland Genomic Partners.” Genomic Holding, S.A. is IGVH’s parent

company and not a party to this action. IGP is Petursson’s company.

Genomatica alleges “Petursson instructed that 3,100,000 shares be transferred

Inc., 284 F.3d 977, 980 (9th Cir. 2002).

3 3:12-cv-0268-GPC-BGS

Case 3:12-cv-00268-GPC-BGS Document 64 Filed 03/21/13 Page 3 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

to Genomic Holding S.A. and the remaining 400,000 shares be transferred to Iceland

Genomic Partners.” Genomatica claims that, “[i]n connection with this transfer,

Petursson executed documents asGeneralManger ofIceland Genomics Ventures,” and

that “Petursson also executed affidavits of loss in connection with the issuance of new

stock certificates as General Manager of Iceland Genomics Ventures.” Genomatica

alleges it “proceeded with the execution of the stock transfer but, at Petursson’s

request, retained the new stock certificates.”

Genomatica alleges that thereafter, in January 2012, it received notice from

counsel for IGVH “that the stock was actually owned by Icelandic Genomic Ventures

Holding, and that no entity with the name Iceland Genomics Ventures existed in

Luxembourg.” Genomatica alleges it received notice that “Petursson does not have

investment or voting power with respect to the stock held by Iceland Genomics

Ventures,” and that “Icelandic Genomic Ventures Holding was not undergoing

dissolution and did not intend to dissolve.” Genomatica alleges it received a demand

that it “immediately restore ownership and title” of the stock to “Icelandic Genomic

Ventures Holding.”

Genomatica alleges that, “[a]t the same time, Petursson communicated with

Genomatica and maintained that he had authority to effectuate the December 2011

stock transfer and that the stock was appropriately divided between Icelandic Genomic

Holdings and Iceland Genomic Partners.” 

Genomatica asserts it is “indifferent with respect to which Defendant should

receive all or a portion of the stock and claims no interest in such stock.”

Genomatica therefore seeks to deposit the new stock certificates with the Court

until the Court determines the lawful owner of the stock.

DISCUSSION

The Court will first address Genomatica’s Motion to Dismiss & Discharge and

IGVH’s Motion for Summary Judgment. The Court will thereafter address

Genomatica’s Motion to Dismiss IGVH’s counterclaims.

4 3:12-cv-0268-GPC-BGS

Case 3:12-cv-00268-GPC-BGS Document 64 Filed 03/21/13 Page 4 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

I. Motion to Dismiss & Discharge and Motion for Summary Judgment

At the core of both Genomatica’s Motion to Dismiss & Discharge and IGVH’s

MSJ is the issue of whether interpleader is appropriate. Genomatica argues it has

satisfied the interpleader requirements and should therefore be discharged. IGVH

argues Genomatica has not satisfied the interpleader requirements, offering evidence

in support of its MSJ demonstrating there exists no property subject to multiple,

colorable claims.

A. Legal Standards

1. Interpleader

Genomatica filed its Complaint in Interpleader pursuant to Federal Rule of Civil

Procedure 22, which provides in relevant part:

Persons with claims that may expose a plaintiff to double or multiple

liability may be joined as defendants and required to interplead. Joinder

for interpleader is proper even though:

(A) the claims of the several claimants, or the titles on which their

claims depend, lack a common origin or are adverse and

independent rather than identical; or

(B) the plaintiff denies liability in whole or in part to any or all of

the claimants.

Because Rule 22 does not grant subject matter jurisdiction, there must be some

statutory grant of jurisdiction. Gelfgren v. Republic Nat. Life Ins. Co., 680 F.2d 79,

81 (9th Cir. 1982). Genomatica asserts, and IGVH agrees, that this Court has diversity

jurisdiction pursuant to 28 U.S.C. § 1332. Thus, unlike statutory interpleader pursuant 3

to 28 U.S.C. § 1335, jurisdiction does not depend on the deposit of the disputed funds

or property in the court’s registry. Gelfgren, 680 F.2d at 81-82.

The Ninth Circuit provides that:

An interpleader action typically involvestwo stages. In the firststage, the

district court decides whether the requirements for rule or statutory

The Court agrees it has diversity jurisdiction. The parties are diverse, as Genomatica is a

3

citizen of Delaware and California, IGVH is a foreign citizen, and the Petursson Defendants are

foreign citizens. (ECF No. 1 at 2.) Further, the estimated value of the stock “far exceeds $75,000.”

(Id.)

5 3:12-cv-0268-GPC-BGS

Case 3:12-cv-00268-GPC-BGS Document 64 Filed 03/21/13 Page 5 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

interpleader action have been met by determining if there is a single fund

at issue and whether there are adverse claimants to that fund. If the

district court finds that the interpleader action has been properly brought

the district court will then make a determination of the respective rights

of the claimants.

Mack v. Kuckenmeister, 619 F.3d 1010, 1023-24 (9th Cir. 2010) (quoting Rhoades v.

Casey, 196 F.3d 592 (5th Cir. 1999)) (citation omitted).

A party seeking interpleader and discharge bears the burden of establishing that

the requirements for interpleader are satisfied. Interfirst Bank Dallas, N.A. v.

Purolator Courier Corp., 608 F. Supp. 351, 353 (N.D. Tex. 1985). The party must

establish it is a stakeholder with a “good faith belief that there are or may be colorable

competing claims to the stake.” Michelman v. Lincoln Nat’l Life Ins. Co., 685 F.3d

887, 894 (9th Cir. 2012). This threshold is “necessarily low” so as not to conflict with

the purpose of interpleader. Id. “The purpose of interpleader is for the stakeholder to

‘protect itself against the problems posed by multiple claimants to a single fund.’” 

Mack, 619 F.3d at 1024 (quoting Minn. Mut. Life Ins. Co. v. Ensley, 174 F.3d 977, 980

(9th Cir. 1999)). This includes “limiting litigation expenses, which is not dependent

on the merits of adverse claims, only their existence.” Mack, 619 F.3d at 1024 (citation

omitted).

Still, “[t]he availability of interpleader need not produce a harsh result for a

legitimate claimant who is forced into interpleader due to a rival claimaint’s nonmeritorious assertions.” Michelman, 685 F.3d at 898. Indeed, an interpleader action

may be dismissed where a purported claimant does not actually have a potential claim. 

John Hancock Mut. Life Ins. Co. v. Beardslee, 216 F.2d 457 (7th Cir. 1954)

(dismissing interpleader on motion by beneficiary where purported adverse claim by

daughter to father’s life insurance proceeds was only a “plea for help” and not a

potential claim to the insurance proceeds).

2. Summary Judgment

Summary judgment is appropriate where the moving party demonstrates the

absence of a genuine issue of material fact and entitlement to judgment as a matter of

6 3:12-cv-0268-GPC-BGS

Case 3:12-cv-00268-GPC-BGS Document 64 Filed 03/21/13 Page 6 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact

is material when, under the governing substantive law, it could affect the outcome of

the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Freeman v.

Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute about a material fact is genuine

if “the evidence is such that a reasonable jury could return a verdict for the nonmoving

party.” Anderson, 477 U.S. at 248.

B. Analysis

In its Motion to Dismiss & Discharge, Genomatica asserts it has satisfied the

interpleader requirements and should therefore be dismissed and discharged.

In opposition to Genomatica’s Motion to Dismiss & Discharge, and in support

of its Motion for Summary Judgment, IGVH argues there is no property that is subject

to multiple, colorable claims. Regarding the property at stake, IGVH argues the

disputed shares were never actually reissued; that is, it has never been dispossessed of

the shares. IGVH thus argues Genomatica is not technically a stakeholder because it 4

does not possess any property that is subject to multiple claims. Regarding multiple

claimants, IGVH argues Petursson is not a real or potential claimant because his

request that Genomatica transfer the stock had no basis in fact or reality but wasinstead

As evidence, IGVH provides the declaration of a member of its Board of Managers that states, 4

among other things, that IGVH purchased 3,500,000 shares of Genomatica’s common stock paid from

IGVH’s bank account with Bank Havilland (formerly Kaupthing Bank) (“Bank”), account number

xxx.527 (“IGVH Bank Account”). (ECF No. 27-3 at 2.) The declaration provides that 3,000,000

shares were issued on May 20, 2001, “as evidenced by Genomatica stock certificate No. PA 1,” and

an additional 500,000 shares were issued on April 12, 2002, “as evidenced by Genomatica stock

certificate No. PA 2.” (Id. at 2-3, ECF No. 27-4 at 2,4.) The declaration states that, following issuance

of the shares, the share certificates were deposited as securities in IGVH’s Bank Account and have

been stored in the Bank’s vault. (ECF No. 27-3 at 3.)

The declaration further provides that Genomatica erroneously issued the shares to “Iceland

Genomics Ventures, S.A.,” but that IGVH’s ownership of the stocks is confirmed by bank statements

showing payments in amounts totaling$3,500,009 from IGVH’s Bank Account, along with the

corresponding deposit of the share certificates into the Bank’s vault. (Id. at 3; ECF No. 27-9 at 4, 6.)

The declaration provides that, notwithstanding Petursson’s representations that IGVH was

dissolving, there have never been discussions regarding a possible dissolution – much less so any

resolution to dissolve by IGVH’s Board of Managers. (ECF No. 27-3 at 3.) The declaration provides

that the share certificates have never been lost, as Petursson represented, and that IGVH’s Board of

Managers has never resolved to transfer the shares. (Id.)

7 3:12-cv-0268-GPC-BGS

Case 3:12-cv-00268-GPC-BGS Document 64 Filed 03/21/13 Page 7 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

fraudulent.

In response, Genomatica argues first that IGVH waived any right to contest the

validity of the interpleader by admitting to the propriety of interpleader in its Answer

and by failing to raise a Rule 12 challenge. Genomatica argues its Motion to Dismiss

& Discharge, rather than IGVH’s Motion for Summary Judgment, is the appropriate

procedural vehicle to decide whether the interpleader is proper. Genomatica further

argues that IGVH’s claims of ownership are immaterial to the appropriateness of the

interpleader, as the issue of ownership is reserved for the second stage of an

interpleader action.

Genomatica further argues that, in any event, IGVH’s evidence regarding

ownership isinsufficient. With regard to whether it is a stakeholder, Genomatica cites

Kitzer v. Phalen Park State Bank of St. Paul, 379 F.2d 650, 652 (8th Cir. 1967),

arguing that, as the issuing corporation, it does have “custody or possession” of the

shares. Genomatica asserts that, regardless of whether Genomatica possesses the

original stock certificates, it did actually transfer the shares to Iceland Genomic

Partners.

Genomatica lastly argues that IGVH’s evidence does not demonstrate a lack of

colorable competing claims to the Genomatica stock. Genomatica asserts IGVH

applies an incorrect standard of law in arguing that Petursson’s claim must be “valid.”

Genomatica assertsthat, under the correct standard, it must only show that it has “a real

and reasonable fear of exposure to double liability or the vexation of conflicting

claims.” Genomatica argues the pleadings in this matter establish the existence of

competing claims, as both IGVH and IGP have, in their responsive pleadings, claimed

ownership of the stock. Genomatica further argues it has a good faith basis to believe

that Petursson has a colorable claim to the stock given that Petursson executed the

original stock purchase agreements on behalf of IGVH and the fact that IGVH never

alerted Genomatica to any issue of Petursson’s authority for ten years.

In response, IGVH does not respond to Genomatica’s waiver argument. IGVH

8 3:12-cv-0268-GPC-BGS

Case 3:12-cv-00268-GPC-BGS Document 64 Filed 03/21/13 Page 8 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

reiterates its argument that there is no property at issue and that there are not multiple,

colorable claims to the property. IGVH argues the shares could not have been

transferred and Petursson cannot claim any interest in the shares because Petursson’s

request to transfer the shares was fraudulent in the first place. IGVH argues

Petursson’s fraud is confirmed by the Court’s entry of default judgment against

Petursson on IGVH’s fraud claim.

In response, Genomatica assertsthe Court should not take into consideration the

default judgment against Petursson because, at this stage in the interpleader, the Court

should only determine the appropriateness of interpleader – not the merits of any

underlying claims.

As a preliminary matter, the Court notes that IGVH admitted in its Answer that

this action is properly before the Court pursuant to this Court’s diversity jurisdiction

and Rule 22.

As another preliminary matter, the Court recognizes that the existence of any

adverse claim relates only to the 400,000 shares of Genomatica stock that were

transferred to IGP. Genomatica has not produced any evidence that there is an adverse

claim to the 3,100,000 shares purportedly transferred to Genomic Holding, S.A. 

Moreover, the Genomic Holding, S.A. declaration that IGVH provided in support of

its MSJ disclaims any interest in those 3,100,000 shares. Thus, any remaining adverse

claim must be by IGP to the remaining 400,000 shares.

Next, acknowledging that share certificates are not themselves shares of stock

but are merely evidence of stock ownership, the Court agrees that – regardless of

ownership – Genomatica does have custody of the actual shares for purposes of this

interpleader. Kitzer, 379 F.2d at 652. It is a “well settled principle of Delaware law

that a certificate of stock is only evidence of share ownership and is not the stock

itself.” Joseph E. Seagram & Sons, Inc. v. Conoco, Inc., 519 F. Supp. 506, 513 (D.

Del. 1981). “‘Stockholder status is created instead by the subscription to stock and its

acceptance by the corporation,” and the issuance of shares of stock, accordingly, need

9 3:12-cv-0268-GPC-BGS

Case 3:12-cv-00268-GPC-BGS Document 64 Filed 03/21/13 Page 9 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

not be accompanied by the physical printing and distribution of certificates.” Id.

(citations omitted). Further, the mere preparation of stock certificates does not

constitute issuance of stock. Graham v. Commerical Credit Co., 200 A.2d 828, 830

(Del. Ch. 1964). Thus, Genomatica, as a custodian of the actual shares, is in the

position of being forced to recognize the true owner of its stock.

The Court further agrees IGVH and IGP have presented competing claims to

400,000 shares of Genomatica stock as evidenced by IGVH’s and Iceland Genomic

Partner’s responsive pleadings, as both companies claim to own those shares. (ECF

No. 7 at 6-7; ECF No. 18 at 4.) Further, given Petursson’s actions on behalf of

“Iceland Genomics Ventures, S.A.” (including execution ofthe originalstock purchase

agreements), the Court finds that Genomatica could, in good faith, believe that

Petursson had authority to request the transfer of shares.

In sum, the Court finds Genomatica has met its burden of satisfying the

interpleader requirements. Accordingly, the Court GRANTS Genomatica’s Motion

to Dismiss & Discharge and therefore DENIES IGVH’s Motion for Summary

Judgment.

II. Counterclaims

IGVH asserts two counterclaims against Genomatica: (1) Failure to Transfer

Stock and (2) Negligence/Breach of Fiduciary Duty. (ECF No. 7 at 14-17.) As a

remedy, IGVH seeks rescission of the stock transfer and return of the shares. IGVH

also seeks attorney fees and costs incurred in connection with this action.

A. Legal Standards

1. Counterclaims in Interpleader

“The protection afforded by interpleader takes severalforms. Mostsignificantly,

it prevents the stakeholder from being obliged to determine at his peril which claimant

has the better claim.” Lee v. W. Coast Life Ins. Co., 688 F.3d 1004, 1009 (9th Cir.

2012). “By contrast, interpleader protection generally does not extend to counterclaims

that are not claims to the interpleaded funds.” Id. When an interpleaded defendant

10 3:12-cv-0268-GPC-BGS

Case 3:12-cv-00268-GPC-BGS Document 64 Filed 03/21/13 Page 10 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

“asserts that the stakeholder is independently liable to him, the interposition of a

counterclaim is appropriate.” Id. That is, “The stake marks the outer limits of the

stakeholder’s potential liabilitywhere the respective claimants’ entitlement to the stake

is the sole contested issue; however, where the stakeholder may be independently liable

to one or more claimaints, interpleader does not shield the stakeholder from tort

liability, nor from liability in excess of the stake.” Id. at 1011 (citing State Farm Fire

& Cas. Co. v. Tashire, 386 U.S. 523 (1967)). Thus, where a stakeholder’s negligence

caused the controversy giving rise to an interpleader action, an interpleaded defendant

may claimdamagesflowing fromthat negligence, including, for example, attorney fees

incurred in the interpleader action. Lee, 688 F.3d at 1012. Such a claim of negligence,

however, cannot be premised on the stakeholder’s mere “failure to resolve the

controversy over entitlement to the insurance proceeds in [the interpleaded

defendant’s] favor.” Id.

2. Rule 12(b)(6)

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the

sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). 

Dismissal is warranted under Rule12(b)(6) where the complaint lacks a cognizable

legal theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir.

1984); see Neitzke v. Williams, 490 U.S. 319, 326 (1989) (“Rule12(b)(6) authorizes

a court to dismiss a claim on the basis of a dispositive issue of law.”). Alternatively,

a complaint may be dismissed where it presents a cognizable legal theory yet fails to

plead essential facts under that theory. Robertson, 749 F.2d at 534. While a plaintiff

need not give “detailed factual allegations,” a plaintiff must plead sufficient facts that,

if true, “raise a right to relief above the speculative level.” Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 545 (2007).

B. Analysis

Genomatica argues IGVH’s counterclaims should be dismissed because (1)

IGVH’s counterclaims are directly related to the underlying interpleader action; (2)

11 3:12-cv-0268-GPC-BGS

Case 3:12-cv-00268-GPC-BGS Document 64 Filed 03/21/13 Page 11 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

IGVH has not adequately pled that it is a Genomatica shareholder; (3) there is no

fiduciary duty to transfer stock; (4) corporations themselves do not owe fiduciary

duties to their shareholders; (5) shareholders cannot sue corporations directly in these

circumstances; and (6) even if IGVH could assert a counterclaim directly against

Genomatica, it has failed to allege facts sufficient to state a claim for breach of any

duty. Genomatica argues that, becuase it has met the requirements for an interpleader,

and because IGVH’s counterclaims should be dismissed, that Genomatica should be

entirely dismissed from this action.

In response, IGVH argues it has pled sufficient facts to demonstrate that

Genomatica should not be entirely dismissed from this action but that IGVH should be

allowed to proceed with its counterclaims against Genomatica. IGVH asserts it has

stated recognized claims for failure to transfer stock and for negligence/breach of

fiduciary duty that survive Genomatica’s Motion to Dismiss. In sum, IGVH argues

Genomatica is not an innocent stakeholder in this action but is responsible for this

controversy which has required IGVH to unnecessarily incur fees and expenses in

proving its ownership of the disputed shares.

In reply, Genomatica argues it is an innocent stakeholder, in that it did not cause

the instant controversy. It asserts the controversy “stems from an internal dispute

between warring Icleand-based former investment partners, the existence and details

of which were invisible to Genomatica before it filed the interpleader action.”

Genomatica reiterates that IGVH has not adequately pled that it is a Genomatica

shareholder. Genomatica also reiterates its argument that it, as a corporation, cannot

be sued directly be a shareholder for breach of fiduciary duty and notes that IGVH did

not respond to this argument. Gonamatica finally argues that IGVH has not identified

any fiduciary duty that Genomatica breached by transferring the stock at Petursson’s

request.

The Court concludes the rule that a corporation cannot be liable to a shareholder

for breach of fiduciary duty is dispositive of IGVH’s counterclaims, as both of IGVH’s

12 3:12-cv-0268-GPC-BGS

Case 3:12-cv-00268-GPC-BGS Document 64 Filed 03/21/13 Page 12 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

counterclaims assert Genomatica breached duties owed to IGVH.

Under Delaware law, claims by a shareholder that are predicated solely on a

breach of fiduciary duty by the corporation must be dismissed. Gaffin v. Teledyne,

Inc., 1987 WL 18430, at *2 (Del. Ch. 1987). A shareholder complaint “must allege

something other than a breach of fiduciary duty if it is to be deemed meritorious.” Id. 

A corporation would, for example, “be liable to its stockholders where there is fraud

or affirmative misconduct.” Id. at *2-3.

Here, IGVH alleges, at most, that Genomatica breached duties to transfer the

stock to IGVH and to investigate Petursson’s request to transfer the stock. IGVH does

not allege – or at least does not adequately allege – that Genomatica engaged in fraud

orsome affirmative misconduct. As such, IGVH’s counterclaims against Genomatica,

as a corporation, must be dismissed. Accordingly, Genomatica’s Motion to Dismiss

IGVH’s Counterclaims is GRANTED.

CONCLUSION

For the foregoing reasons, IT IS HEREBY ORDERED that:

1. Genomatica’s Motion to Dismiss & Discharge is GRANTED;

2. IGVH’s Motion for Summary Judgment is DENIED;

3. Genomatica shall deposit the new share certificates created at Petursson’s

direction with the Clerk of Court on or before March 29, 2013;

4. Given that IGVH is the only remaining defendant in the interpleader

portion ofthis action, IGVH shall file the pleadings, motions, and/or other

filings necessary to conclude the interpleader portion of this action on or

before April 12, 2013;

5. Genomatica’s Motion to Dismiss IGVH’s Counterclaims is GRANTED.

DATED: March 21, 2013

HON. GONZALO P. CURIEL

United States District Judge

13 3:12-cv-0268-GPC-BGS

Case 3:12-cv-00268-GPC-BGS Document 64 Filed 03/21/13 Page 13 of 13