Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-00249/USCOURTS-casd-3_17-cv-00249-0/pdf.json

Nature of Suit Code: 195
Nature of Suit: Contract Product Liability
Cause of Action: 

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

JOEL GOTTESFELD,

Plaintiff,

v.

REPLIGEN CORPORATION, a 

Delaware Corporation,

Defendant.

Case No.: 3:17-CV-0249-CAB-AGS

ORDER RE MOTION TO DISMISS

[Doc. No. 9]

This matter is before the Court on Defendant Repligen Corporation’s motion to 

dismiss. The motions have been fully briefed and the Court deems them suitable for 

submission without oral argument.1

 For the reasons set forth below, the motion to dismiss 

is GRANTED. 

I. FACTUAL BACKGROUND 

Plaintiff Joel Gottesfeld is a professor of cell and molecular biology and chemistry 

employed by The Scripps Research Institute. Defendant Repligen Corporation is a 

publicly-traded life sciences company which focuses on the development, production, and 

1 Accordingly, Plaintiff’s request for oral argument is denied.

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commercialization of products used in the processing of biologic drugs. On or about March 

31, 2007, Gottesfeld and Repligen entered into a consulting agreement. Under the 

agreement, Gottesfeld would assist Repligen in its efforts to develop treatments for 

Friedreich’s Ataxia (“FA”) using the compounds invented by Gottesfeld. 

In addition to the consulting agreement, Gottesfeld and Repligen entered into a 

Common Stock Purchase Warrant (the “Warrant”). The Warrant granted Gottesfeld the 

right to purchase 150,000 shares of Repligen stock, at a cost of $0.01 per share, in three 

tranches of 50,000 shares. [Doc. No. 1 at 3-4.]2 The options to purchase each of the three 

tranches were to be executable upon the occurrence of three separately defined milestones 

in the Warrant. [Id.] The first milestone in the Warrant is entitled “First Patient Dosing,” 

which means “the first patient dosed in a US clinical study sponsored by the [Defendant] 

with a pharmaceutical for the treatment of Friedrich’s Ataxia.” [sic] [Id. at 4]. The 

complaint does not allege that any patient in a clinical study in the United States was ever 

dosed by Repligen with a drug for the treatment of FA, and Gottesfeld does not contend in 

his opposition that any such study occurred. However, the complaint does allege that in 

2012, Repligen conducted a clinical study with a drug for the treatment of FA in Italy. 

[Doc. No. 1 at 4-6.] 

On January 27, 2014, Gottesfeld sent a letter and a check for $500 to Repligen 

attempting to exercise his option to purchase the first tranche of 50,000 shares—executable 

upon the “First Patient Dosing”—under the Common Stock Purchase Warrant. [Doc. No. 

1 at 7]. Repligen returned Gottesfeld’s $500 check because “no patient was ever dosed in 

a U.S. clinical study.” [Id.; Doc. No. 9-1 at 11]. After additional unsuccessful efforts to 

exercise his first option under the Warrant, Plaintiff filed this lawsuit. 

2 Document numbers and page references are to those assigned by CM/ECF for the docket entry. 

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II. LEGAL STANDARD

To survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain 

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 Atlantic Corp. v. 

Twombly, 550 U.S. 544, 570 (2007)). Thus, the Court “accept[s] factual allegations in the 

complaint as true and construe[s] the pleadings in the light most favorable to the 

nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 

(9th Cir. 2008). On the other hand, the Court is “not bound to accept as true a legal 

conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678; see also Lee v. City of 

Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001) (“Conclusory allegations of law are 

insufficient to defeat a motion to dismiss”). Nor is the Court “required to accept as true 

allegations that contradict exhibits attached to the Complaint or . . . allegations that are 

merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” DanielsHall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 2010). “In sum, for a complaint to 

survive a [12(b)(6)] motion to dismiss, the non-conclusory factual content, and reasonable 

inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff 

to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quotations 

omitted). 

III. DISCUSSION

Both parties concede that the only issue before the Court is whether the phrase “US 

clinical study,” as used within the definition of “First Patient Dosing” in the Warrant, is 

ambiguous.3 Repligen argues that the phrase is unambiguous and means a clinical study 

conducted in the United States. Because no clinical study was ever conducted in the United 

States, Repligen asserts that the first milestone in the Warrant was not met and Gottesfeld 

3

 Because the relevant language from the Warrant was alleged in the complaint, the Court did not review 

any of the documents included by Repligen with its motion. Accordingly, Gottesfeld’s evidentiary 

objections are denied as moot. 

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has no right to exercise his option to purchase the first tranche of 50,000 shares of Repligen 

stock. 

For his part, Gottesfeld points out that the Warrant does not define the phrase “US 

clinical study and argues that the study conducted in Italy was a “US clinical study” 

because the phrase “includes any study in which it is contemplated that said study will be 

submitted to the FDA for approval of the drug for use in the United States in accordance 

with 21 CFR § 312.120.” [Id. at 4-5]. At the very least, Gottesfeld argues that the phrase 

“US clinical study” is ambiguous and open to more than one reasonable interpretation.

Whether a contract is clear and unambiguous is a question of law. United States v. 

Sacramento Mun. Util. Dist., 652 F.2d 1341, 1343-45 (9th Cir. 1981). In determining 

whether a contract is ambiguous, the Court looks to the terms of the agreement itself. 

Greco v. Dep’t of the Army, 852 F.2d 558, 560 (Fed. Cir. 1988). “Resolution of contractual 

claims on a motion to dismiss is proper if the terms of the contract are unambiguous.” 

Monaco v. Bear Stearns Residential Mortg. Corp., 554 F.Supp.2d 1034, 1040 (C.D. Cal. 

2008) (quoting Bedrosian v. Tenet Healthcare Corp., 208 F.3d 220 (9th Cir. 2000)). 

The parties agree that the Warrant contains a Delaware choice of law provision and 

that Delaware law controls the interpretation of the Warrant. Under Delaware law, “a 

contract’s construction should be that which would be understood by an objective, 

reasonable third party.” HIFN, Inc. v. Intel Corp., No. 1835-VCS, 2007 WL 1309376, at 

*9 (Del. Ch. May 2, 2007).4

 Contracts are to be read “as a whole,” with each provision

and term given effect “so as not to render any part of the contract mere surplusage.” Osborn 

4

 Even though there is no dispute that Delaware law governs the interpretation of the contract here, 

California law on contract interpretation is virtually identical. “‘In interpreting an unambiguous 

contractual provision we are bound to give effect to the plain and ordinary meaning of the language used 

by the parties.’” People ex rel. Lockyer v. R.J. Reynolds Tobacco Co., 132 Cal. Rptr. 2d 151, 158 (Cal. 

Ct. App. 2003) (quoting Coast Plaza Doctors Hosp. v. Blue Cross of California, 99 Cal. Rptr. 2d 809 

(Cal. Ct. App. 2000)). “Thus, where ‘contract language is clear and explicit and does not lead to absurd 

results, we ascertain intent from the written terms and go no further.’” Id. (quoting Shaw v. Regents of 

Univ. of California 67 Cal. Rptr. 2d 850 (Cal. Ct. App. 1997). 

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v. Kemp, 991 A.2d 1153, 1159 (Del. 2010) (quoting Kuhn Constr., Inc. v. Diamond State

Port Corp., 990 A.2d 393 (Del. 2010)). “A court must accept and apply the plain meaning 

of an unambiguous term in the context of the contract language and circumstances, insofar 

as the parties themselves would have agreed ex ante.” Lorillard Tobacco Co. v. Am. Legacy 

Found., 903 A.2d 728, 740 (Del. 2006). The “true test is not what the parties to the contract 

intended it to mean, but what a reasonable person in the position of the parties would have 

thought it meant.” Rhone-Poulenc Basic Chem. Co. v. Am. Motorists Ins. Co., 616 A.2d 

1192, 1196 (Del. 1992) (citing Steigler v. Ins. Co. of N. Am., 384 A.2d 398, 401 (Del. 

1978)). 

“A contract is not ambiguous merely because the parties disagree as to its proper 

construction.” Matria Healthcare, Inc. v. Coral SR LLC, No. 2513-N, 2007 WL 763303, 

at *6 (Del. Ch. Mar 1, 2007). “Ambiguity does not exist where the court can determine 

the meaning of a contract ‘without any other guide than a knowledge of the simple facts on 

which, from the nature of language in general, its meaning depends.’” Rhone-Poulenc 

Basic Chem. Co., 616 A.2d at 1196 (quoting Holland v. Hannan, 456 A.2d 807, 815 (D.C. 

1983)). “When the contract is clear and unambiguous, [the court] will give effect to the 

plain-meaning of the contract’s terms and provisions.” Osborn, 991 A.2d at 1159–60.

Here, “US clinical study” is not ambiguous. An objective, reasonable third party 

would understand the term “US clinical study” to mean a clinical study conducted in the 

United States, and no reasonable third party would understand the term to include a study 

conducted in Italy. Any alternate definition would render the geographic qualifier “US” 

mere surplusage. Accordingly, the Court need not review any of the evidence or statutes 

that Gottesfeld argues support a different interpretation or render the phrase ambiguous. 

See United Rentals, Inc. v. RAM Holdings, Inc., 937 A.2d 810, 830 (Del. Ch. 2007) 

(“[E]xtrinsic, parol evidence cannot be used to manufacture an ambiguity in a contract that 

facially has only one reasonable meaning.”). 

Using this interpretation of “US clinical study,” the complaint does not state a claim. 

Because the complaint does not allege (and Gottesfeld does not argue) that a clinical study 

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was ever conducted by Repligen in the United States, the first milestone in the warrant was 

never satisfied. Therefore, Repligen did not breach the Warrant by refusing to allow 

Gottesfeld to exercise his first option under the Warrant. 

IV. CONCLUSION

For the foregoing reasons, the motion to dismiss is GRANTED and the complaint 

is DISMISSED WITH PREJUDICE. 

It is SO ORDERED. 

Dated: July 14, 2017

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