Fibrogen, Inc. v. Hangzhou Andao Pharmaceutical LTD.

N.D. California

Fibrogen, Inc. v. Hangzhou Andao Pharmaceutical LTD.

DecidedApril 19, 2023

Docket3:22-cv-07148

StatusUnknown

This text of Fibrogen, Inc. v. Hangzhou Andao Pharmaceutical LTD. (Fibrogen, Inc. v. Hangzhou Andao Pharmaceutical LTD.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Fibrogen, Inc. v. Hangzhou Andao Pharmaceutical LTD., (N.D. Cal. 2023).

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 FIBROGEN, INC., Case No. 5:22-cv-07148-EJD

9 Plaintiff, ORDER GRANTING MOTION TO STAY DISCOVERY PENDING 10 v. DISPOSITIVE MOTION

11 HANGZHOU ANDAO PHARMACEUTICAL LTD., et al., Re: ECF Nos. 34, 35 12 Defendants.

13 Defendants Hangzhou Andao Pharmaceutical Ltd., Kind Pharmaceuticals LLC, Dr. 14 Dongliu, and Dr. Shaojiang Deng (“Defendants”) move for a Rule 26(c) protective order to stay 15 discovery (“Motion”) until their motion to dismiss has been resolved. ECF No. 34. 16 The Court finds that this matter is suitable for disposition without oral argument and 17 thereby VACATES the August 17, 2023 hearing on the Motion. 18 I. PROCEDURAL BACKGROUND 19 On November 14, 2022, Plaintiff FibroGen, Inc. filed this action, asserting patent 20 inventorship and breach of contract claims against two of its former scientists and the companies 21 they started. ECF No. 1. 22 On February 7, 2023, Defendants moved to dismiss the Complaint. ECF No. 31. About a 23 week later, they also filed the instant motion to stay discovery pending the resolution of the 24 motion to dismiss. ECF No. 34. Both of these motions were scheduled for hearing on August 17, 25 2023. On February 13, Defendants also moved to expedite the hearing on their motion to stay. 26 ECF No. 35. 27 The parties have completed briefing on Defendants’ motion to dismiss (ECF Nos. 31, 55, 1 63), the instant Motion to Stay Discovery (ECF Nos. 34, 47, 51), and the motion to expedite the 2 hearing (ECF Nos. 35, 39). 3 II. DISCUSSION 4 Federal Rule of Civil Procedure 26(c) provides that a court may, “for good cause, issue an 5 order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or 6 expense.” Fed. R. Civ. P. 26(c)(1). Although a district court has the discretion to stay discovery 7 for good cause, Fed. R. Civ. P. 26(c)(1)(A), the Federal Rules of Civil Procedure “do not provide 8 for automatic or blanket stays of discovery when a potentially dispositive motion is pending.” 9 Tradebay, LLC v. eBay, Inc., 278 F.R.D. 597, 600 (D. Nev. 2011). 10 “Courts in this district have applied a two-pronged test to determine whether discovery 11 should be stayed pending resolution of a dispositive motion.” Reveal Chat Holdco, LLC v. 12 Facebook, Inc., 2020 WL 2843369, at *2 (N.D. Cal. Apr. 10, 2020) (collecting cases). “First, a 13 pending motion must be potentially dispositive of the entire case, or at least dispositive on the 14 issue at which discovery is directed. Second, the court must determine whether the pending 15 dispositive motion can be decided absent additional discovery.” Pac. Lumber Co. v. Nat’l Union 16 Fire Ins. Co. of Pittsburgh, PA, 220 F.R.D. 349, 352 (N.D. Cal. 2003). 17 A. Potentially Dispositive Motion 18 On the first Pacific Lumber factor, Defendants have moved to dismiss under Rule 12(b)(6). 19 The Complaint asserts eight claims in total: one claim for correction of inventorship under 35 20 U.S.C. § 256; one claim for declaration of patent ownership; and six claims for various breaches 21 of contract and implied covenants. In taking its “preliminary peek” into the motion to dismiss, the 22 Court observes that Defendants seek to dismiss the inventorship claim for failure to allege the 23 necessary facts to state a claim (Claim 1) and the remaining contract claims as legally void for 24 violating California public policy (Claims 2–8). This is sufficient to meet the first Pacific Lumber 25 factor, which only considers whether the motion is “potentially dispositive of the entire case.” 26 Pac. Lumber, 220 F.R.D. at 352 (emphasis added). 27 Plaintiff argues that Defendants cannot meet this first factor because Defendants’ motion to 1 dismiss presents neither an Article III jurisdictional basis for dismissal nor a basis that would 2 dismiss the Complaint without leave to amend. Opp. 6–7. Although a motion challenging subject 3 matter jurisdiction could certainly be case dispositive, Plaintiff does not cite any authority 4 suggesting that only jurisdictional arguments may be “potentially dispositive of the entire case.” 5 Indeed, one of Plaintiff’s cited cases support the opposite inference. Opp. 5 (citing Calvary 6 Chapel San Jose v. Cody, 2021 WL 5353883, at *2 (N.D. Cal. Nov. 12, 2021) (finding it 7 “especially true” that a motion is potentially dispositive “where, if the Court ultimately finds the [] 8 Defendants’ arguments meritorious, the Court will be deprived of Article III jurisdiction over 9 those claims”) (emphasis added)). 10 Nor does the Court find persuasive Plaintiff’s argument that the motion must set forth a 11 basis for dismissal without leave to amend. This interpretation is inconsistent with the 12 requirement that the motion only be “potentially dispositive” and would likely require more than a 13 “preliminary peek” at the merits, specifically a premature assessment of the Foman factors for 14 granting leave to amend. See Eminence Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 15 2003) (citing Foman v. Davis, 371 U.S. 178 (1962)). More directly, Plaintiff’s proposed 16 interpretation simply is not the practice in this district. See, e.g., In re Nexus 6p Prod. Liab. Litig., 17 2017 WL 3581188, at *2 (N.D. Cal. Aug. 18, 2017) (finding motion to be potentially dispositive 18 “even with leave to amend freely given”); In re Google Digital Advert. Antitrust Litig., 2020 WL 19 7227159, at *2 (N.D. Cal. Dec. 8, 2020) (same); Yamasaki v. Zicam LLC, 2021 WL 3675214, at 20 *2 (N.D. Cal. Aug. 19, 2021) (same). 21 Accordingly, without opining on the merits of Defendants’ motion to dismiss, the Court 22 finds that, if granted, the motion would be dispositive of all claims in the Complaint. Defendants 23 satisfy the first prong of the Pacific Lumber inquiry. 24 B. Need for Additional Discovery 25 With regards to the second Pacific Lumber factor, Defendants point out that a motion 26 under Federal Rule of Civil Procedure 12(b)(6) only considers the legal sufficiency of the facts as 27 pled in the complaint and, therefore, requires no discovery to resolve. Mot. 5. Plaintiff responds 1 that Defendants’ “failure to plead” arguments are “textbook examples of ‘factual issues raised in a 2 |} Rule 12(b) motion.’” Opp. 8-9. 3 Plaintiff's argument, again, is mistaken. The Court accepts all factual disputes in favor of 4 || the plaintiff on a Rule 12(b)(6) motion to dismiss, which wholly precludes any potential factual 5 issues that may require discovery or further factual development. See, e.g., Jarvis v. Regan, 833 6 || F.2d 149, 155 (9th Cir. 1987) (finding no “factual issues that required discovery” where the 7 district court “accepted the facts alleged by the [plaintiffs] as true, but found them deficient as a 8 || matter of law”). Plaintiff's references to various categories of non-public information in 9 Defendants’ possession that could be relevant to the motion to dismiss (Opp. 8-9) carries no 10 || weight on a Rule 12(b)(6) motion, where the Court merely considers whether sufficient allegations 11 are included in the four corners of the Complaint.

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 FIBROGEN, INC., Case No. 5:22-cv-07148-EJD

9 Plaintiff, ORDER GRANTING MOTION TO STAY DISCOVERY PENDING 10 v. DISPOSITIVE MOTION

11 HANGZHOU ANDAO PHARMACEUTICAL LTD., et al., Re: ECF Nos. 34, 35 12 Defendants.

13 Defendants Hangzhou Andao Pharmaceutical Ltd., Kind Pharmaceuticals LLC, Dr. 14 Dongliu, and Dr. Shaojiang Deng (“Defendants”) move for a Rule 26(c) protective order to stay 15 discovery (“Motion”) until their motion to dismiss has been resolved. ECF No. 34. 16 The Court finds that this matter is suitable for disposition without oral argument and 17 thereby VACATES the August 17, 2023 hearing on the Motion. 18 I. PROCEDURAL BACKGROUND 19 On November 14, 2022, Plaintiff FibroGen, Inc. filed this action, asserting patent 20 inventorship and breach of contract claims against two of its former scientists and the companies 21 they started. ECF No. 1. 22 On February 7, 2023, Defendants moved to dismiss the Complaint. ECF No. 31. About a 23 week later, they also filed the instant motion to stay discovery pending the resolution of the 24 motion to dismiss. ECF No. 34. Both of these motions were scheduled for hearing on August 17, 25 2023. On February 13, Defendants also moved to expedite the hearing on their motion to stay. 26 ECF No. 35. 27 The parties have completed briefing on Defendants’ motion to dismiss (ECF Nos. 31, 55, 1 63), the instant Motion to Stay Discovery (ECF Nos. 34, 47, 51), and the motion to expedite the 2 hearing (ECF Nos. 35, 39). 3 II. DISCUSSION 4 Federal Rule of Civil Procedure 26(c) provides that a court may, “for good cause, issue an 5 order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or 6 expense.” Fed. R. Civ. P. 26(c)(1). Although a district court has the discretion to stay discovery 7 for good cause, Fed. R. Civ. P. 26(c)(1)(A), the Federal Rules of Civil Procedure “do not provide 8 for automatic or blanket stays of discovery when a potentially dispositive motion is pending.” 9 Tradebay, LLC v. eBay, Inc., 278 F.R.D. 597, 600 (D. Nev. 2011). 10 “Courts in this district have applied a two-pronged test to determine whether discovery 11 should be stayed pending resolution of a dispositive motion.” Reveal Chat Holdco, LLC v. 12 Facebook, Inc., 2020 WL 2843369, at *2 (N.D. Cal. Apr. 10, 2020) (collecting cases). “First, a 13 pending motion must be potentially dispositive of the entire case, or at least dispositive on the 14 issue at which discovery is directed. Second, the court must determine whether the pending 15 dispositive motion can be decided absent additional discovery.” Pac. Lumber Co. v. Nat’l Union 16 Fire Ins. Co. of Pittsburgh, PA, 220 F.R.D. 349, 352 (N.D. Cal. 2003). 17 A. Potentially Dispositive Motion 18 On the first Pacific Lumber factor, Defendants have moved to dismiss under Rule 12(b)(6). 19 The Complaint asserts eight claims in total: one claim for correction of inventorship under 35 20 U.S.C. § 256; one claim for declaration of patent ownership; and six claims for various breaches 21 of contract and implied covenants. In taking its “preliminary peek” into the motion to dismiss, the 22 Court observes that Defendants seek to dismiss the inventorship claim for failure to allege the 23 necessary facts to state a claim (Claim 1) and the remaining contract claims as legally void for 24 violating California public policy (Claims 2–8). This is sufficient to meet the first Pacific Lumber 25 factor, which only considers whether the motion is “potentially dispositive of the entire case.” 26 Pac. Lumber, 220 F.R.D. at 352 (emphasis added). 27 Plaintiff argues that Defendants cannot meet this first factor because Defendants’ motion to 1 dismiss presents neither an Article III jurisdictional basis for dismissal nor a basis that would 2 dismiss the Complaint without leave to amend. Opp. 6–7. Although a motion challenging subject 3 matter jurisdiction could certainly be case dispositive, Plaintiff does not cite any authority 4 suggesting that only jurisdictional arguments may be “potentially dispositive of the entire case.” 5 Indeed, one of Plaintiff’s cited cases support the opposite inference. Opp. 5 (citing Calvary 6 Chapel San Jose v. Cody, 2021 WL 5353883, at *2 (N.D. Cal. Nov. 12, 2021) (finding it 7 “especially true” that a motion is potentially dispositive “where, if the Court ultimately finds the [] 8 Defendants’ arguments meritorious, the Court will be deprived of Article III jurisdiction over 9 those claims”) (emphasis added)). 10 Nor does the Court find persuasive Plaintiff’s argument that the motion must set forth a 11 basis for dismissal without leave to amend. This interpretation is inconsistent with the 12 requirement that the motion only be “potentially dispositive” and would likely require more than a 13 “preliminary peek” at the merits, specifically a premature assessment of the Foman factors for 14 granting leave to amend. See Eminence Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 15 2003) (citing Foman v. Davis, 371 U.S. 178 (1962)). More directly, Plaintiff’s proposed 16 interpretation simply is not the practice in this district. See, e.g., In re Nexus 6p Prod. Liab. Litig., 17 2017 WL 3581188, at *2 (N.D. Cal. Aug. 18, 2017) (finding motion to be potentially dispositive 18 “even with leave to amend freely given”); In re Google Digital Advert. Antitrust Litig., 2020 WL 19 7227159, at *2 (N.D. Cal. Dec. 8, 2020) (same); Yamasaki v. Zicam LLC, 2021 WL 3675214, at 20 *2 (N.D. Cal. Aug. 19, 2021) (same). 21 Accordingly, without opining on the merits of Defendants’ motion to dismiss, the Court 22 finds that, if granted, the motion would be dispositive of all claims in the Complaint. Defendants 23 satisfy the first prong of the Pacific Lumber inquiry. 24 B. Need for Additional Discovery 25 With regards to the second Pacific Lumber factor, Defendants point out that a motion 26 under Federal Rule of Civil Procedure 12(b)(6) only considers the legal sufficiency of the facts as 27 pled in the complaint and, therefore, requires no discovery to resolve. Mot. 5. Plaintiff responds 1 that Defendants’ “failure to plead” arguments are “textbook examples of ‘factual issues raised in a 2 |} Rule 12(b) motion.’” Opp. 8-9. 3 Plaintiff's argument, again, is mistaken. The Court accepts all factual disputes in favor of 4 || the plaintiff on a Rule 12(b)(6) motion to dismiss, which wholly precludes any potential factual 5 issues that may require discovery or further factual development. See, e.g., Jarvis v. Regan, 833 6 || F.2d 149, 155 (9th Cir. 1987) (finding no “factual issues that required discovery” where the 7 district court “accepted the facts alleged by the [plaintiffs] as true, but found them deficient as a 8 || matter of law”). Plaintiff's references to various categories of non-public information in 9 Defendants’ possession that could be relevant to the motion to dismiss (Opp. 8-9) carries no 10 || weight on a Rule 12(b)(6) motion, where the Court merely considers whether sufficient allegations 11 are included in the four corners of the Complaint. 12 Defendants have shown that resolving their motion to dismiss does not require additional 5 13 discovery, thereby satisfying the second Pacific Lumber prong. 14 ook ok 15 Because Defendants’ motion to dismiss may potentially dispose of the entire case and does 16 || not require any further discovery, the Court finds that there is good cause to stay discovery 3 17 pending the resolution of the motion to dismiss. 18 || I CONCLUSION 19 Defendants’ Motion to Temporarily Stay Discovery is GRANTED. The administrative 20 || motion to expedite the hearing date (ECF No. 35) is also DENIED AS MOOT. Discovery in this 21 case shall be STAYED until the Court issues a decision on Defendants’ motion to dismiss. 22 Given this stay, the Court also finds that it is premature to implement a scheduling order 23 and VACATES the Initial Case Management Conference scheduled for April 27, 2023. 24 IT IS SO ORDERED. 25 || Dated: April 19, 2023

EDWARD J. DAVILA 27 United States District Judge 28 || Case No.: 5:22-cv-07148-EJD ORDER GRANTING STAY PENDING DISPOSITIVE MOTION

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