Opinion ID: 4682858
Heading Depth: 2
Heading Rank: 1

Heading: The Denial of Leave to Amend

Text: The Trust challenges the denial of leave to amend the crossclaims to add claims for breach of contract and misappropriation of trade secrets. 2 The district court denied the motion as futile, concluding that the amended claims would not survive a motion to dismiss.
When reviewing a denial of leave to amend, we ordinarily apply the abuse-of-discretion standard. Johnson v. Spencer, 950 F.3d 680, 720–21 (10th Cir. 2020). But when a district court disallows amendments based on futility, we conduct de novo review. Id. Here the district court concluded that the amendments were futile because they would not survive a motion to dismiss for failure to state a valid claim. So our review is de novo. Dismissal for failure to state a claim is proper only if the allegations lack enough facts 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)). “A claim is facially plausible when the allegations give rise to a reasonable inference that the defendant is liable.” Mayfield v. Bethards, 826 F.3d 1252, 1255 (10th Cir. 2016). In determining facial plausibility, “we will disregard conclusory statements and look only to . . . the remaining[] factual allegations . . . .” Khalik v. United Air Lines, 671 F.3d 1188, 1191 (10th Cir. 2012). But “specific facts” are unnecessary; the claimant needs only to provide “fair notice” of the claim and its grounds. Id. at 1192. We credit the “well-pled factual allegations,” viewing them “in the light most favorable” to the claimant and in “the context of the entire [crossclaim.]” Evans v. Diamond, 3 957 F.3d 1098, 1100 (10th Cir. 2020) (quoting Peterson v. Grisham, 594 F.3d 723, 727 (10th Cir. 2010)); Ullery v. Bradley, 949 F.3d 1282, 1288 (10th Cir. 2020). B. The Proposed Addition of a Crossclaim for Breach of Contract For substantive legal principles on the proposed amendment to the crossclaim for breach of contract, we apply Utah law. Corneveaux v. CUNA Mut. Ins. Grp., 76 F.3d 1498, 1506 (10th Cir. 1996). Under Utah law, a contract claim requires four elements:

Am. W. Bank Members, L.C. v. State, 342 P.3d 224, 230–31 (Utah 2014). The district court denied the adequacy of allegations on the first two elements: a contract and Dr. Robertson’s performance. 1 We disagree with the district court. 1 BYU does not question satisfaction of the last two elements (a contractual breach and the existence of damages). 4 1. The Trust plausibly alleged a contract and Dr. Robertson’s performance. In our view, the Trust’s amended crossclaim for breach of contract satisfied the first two elements by alleging a contract and Dr. Robertson’s performance. a. The Trust plausibly alleged a contract between Dr. Robertson and BYU based on the IP Policies in effect from 1989 to 1992 and adopted in 1992. For a contract claim, the Trust must allege a contract between Dr. Robertson and BYU. The district court regarded the allegations as deficient for failing to say  what the material terms were or  when and how a contract had been formed. We disagree because the Trust plausibly alleged that Dr. Robertson and BYU had entered into implied contracts governed by the IP Policies  in effect from 1989 to 1992 and  adopted in 1992. 2 2 The complaint refers to “the BYU IP Policy that was in effect from 1989 through 1992 during the development of COX-2.” See, e.g., Appellant’s App’x vol. 2, at 78–79, ¶¶ 27, 38. The Trust has explained in district court and on appeal that this reference encompasses the IP Policy adopted in 1992. Id. at 199, 201, 207–210, 225, 229–33; Appellant’s Opening Br. at 24, 34; Appellant’s Reply Br. at 2, 8. 5
“An implied contract may arise from . . . personnel policies . . . .” Cabaness v. Thomas, 232 P.3d 486, 502 (Utah 2010), abrogated on other grounds by Gregory & Swapp, PLLC v. Kranendonk, 424 P.3d 897 (Utah 2018). Personnel policies create an implied contract if  the employer communicates a “promise of employment under certain terms” to the employee and  the employee performs under the offer. Johnson v. Morton Thiokol, Inc., 818 P.2d 997, 1001–02 (Utah 1991). ii. The alleged facts establish an implied contract under the IP Policy in effect between 1989 and 1992. The Trust plausibly alleged an implied contract under the IP Policy in effect from 1989 to 1992 by stating the material terms. The Trust paraphrased the terms but did not attach the IP Policy in effect before the adoption of the 1992 policy. Attaching the policy was unnecessary; the Trust needed only to plead the key promises. See T.G. Slater & Son, Inc. v. Donald P. & Patricia A. Brennan LLC, 385 F.3d 836, 841–42 (4th Cir. 2004) (concluding that a plaintiff had adequately pleaded a breach of contract without attaching written documentation by pleading that a defendant had “retained” the plaintiff to work on a real estate purchase and had agreed to pay “a customary real estate commission for [the plaintiff ’s] services”); Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993) (“A plaintiff is under no 6 obligation to attach to her complaint documents upon which her action is based . . . .”); see also 5A Arthur R. Miller, Mary Kay Kane & A. Benjamin Spencer, Federal Practice and Procedure § 1327 (4th ed. Oct. 2020 update) (“The provision for incorporation of exhibits in Rule 10(c) is permissive only, and there is no requirement that the pleader attach a copy of the writing on which his claim for relief or defense is based.”). The Trust satisfied this requirement by pleading the key promises of the IP Policy: 10. The development of COX-2 occurred on BYU’s campus between 1989 and 1992. 11. At all times during their employment, in particular during the development of COX-2, BYU’s employment agreements with Dr. Robertson, Dr. Simmons, and Dr. Xie included the provisions of BYU Intellectual Property Policy as it existed at that time.