                                       PRECEDENTIAL

     UNITED STATES COURT OF APPEALS
          FOR THE THIRD CIRCUIT

                     ________

                    No. 12-3434
                    _________


       G. DAVID JANG, M.D., an individual,
                                  Appellant

                         v.

BOSTON SCIENTIFIC SCIMED, INC., a corporation;
BOSTON SCIENTIFIC CORPORATION, a corporation

                     ________

   On Appeal from the United States District Court
             for the District of Delaware
              (D.C. No. 1-10-cv-00681)
    District Judge: Honorable Sue L. Robinson
                       _______

               Argued: July 10, 2013

Before: GREENAWAY, JR., SLOVITER, and BARRY,
               Circuit Judges

             (Filed: September 5, 2013)
Jed I. Bergman, Esq. [Argued]
Henry B. Brownstein, Esq.
Kasowitz, Benson, Torres & Friedman
New York, NY 10019

Richard H. Cross, Jr., Esq.
Tara M. DiRocco, Esq.
Cross & Simon
Wilmington, DE 19801-0000

Attorneys for Appellant

Matthew M. Wolf, Esq. [Argued]
Edward Han, Esq.
John Nilsson, Esq.
Arnold & Porter
Washington, DC 20004

Pilar G. Kraman, Esq.
Karen L. Pascale, Esq.
Young, Conaway, Stargatt & Taylor
Wilmington, DE 19801

Attorneys for Appellees




                              2
                        ___________

                         OPINION
                        ___________


SLOVITER, Circuit Judge.

        This appeal concerns a multimillion-dollar contract
dispute over the distribution of profits from medical patents.
In particular, it involves U.S. Patent No. 5,922,021 (“the ‘021
patent”), awarded to appellant G. David Jang for coronary
stent technology. Jang, a doctor and inventor, sued Boston
Scientific Corporation (“BSC”), the company to which Jang
assigned his coronary stent patents, for breach of the patent
assignment agreement (“Agreement”). The Agreement
requires BSC to share profits from the patents with Jang,
including any damages it recovers from third-party infringers.
In 2010, BSC settled a claim against the Cordis Corporation
(“Cordis”) for infringement of the ‘021 patent in combination
with a claim that Cordis had against BSC. The net result was
that BSC made a payment to Cordis, and the parties
exchanged several patent licenses. BSC then denied that it
had recovered any damages that it was obligated to share with
Jang, and Jang sued.

       The central question in the case is whether the
Agreement provision that requires BSC to share “any
recovery of damages” from third-party infringers – § 7.3(c) –
extends to the benefits that BSC received in the Cordis
settlement. According to Jang’s allegations, BSC’s
infringement claim won it a significant return: a multibillion-
dollar “offset” in its damages payment to Cordis, as well as




                               3
valuable patent licenses. BSC contends that neither of these
qualify as “damages” under the plain meaning of § 7.3(c).
Jang argues that they do qualify as “damages,” or in the
alternative, that BSC violated the implied covenant of good
faith and fair dealing by structuring a settlement to thwart the
purpose of § 7.3(c). In addition, Jang argues that BSC
violated the Agreement’s anti-assignment provision, § 9.4, by
licensing his patents to Cordis.

       The District Court granted judgment on the pleadings
for BSC, and denied his post-judgment motion for
reconsideration and leave to amend his complaint to add the §
9.4 claim. We must decide whether it did so in error.

                       I.    Background

    A. The Assignment Agreement

       In 2002, Jang assigned a series of his coronary stent
patents to BSC through its wholly owned subsidiary, Boston
Scientific Scimed, Inc. (“Scimed”). BSC and Scimed
develop, manufacture and market medical devices. The
assignment agreement granted BSC the exclusive rights to
develop and sell stents using Jang’s patents, and to prosecute
patent-infringement suits against third parties. In return, BSC
paid Jang approximately $50 million up front. It also agreed
to pay him ten percent of future profits from his patents – in
the Agreement’s terminology, ten percent of “Net Sales” of
“Contingent Payment Products” – with the payments capped
at $60 million.1 Finally, BSC agreed that if its profits from

1
 The Agreement provided that BSC would pay Jang $10
million towards this $60 million cap if it had not taken certain




                               4
the Jang patents reached $2.5 billion within five years, it
would pay Jang an additional $50 million.

        The Agreement defined “Net Sales” to include revenue
from BSC’s own sales as well as any damages obtained from
third-party infringers. Section 7.3(c), the key provision in
this case, directed that “any recovery of damages” from an
infringement “suit or settlement” should first be used to pay
BSC’s legal expenses; “the balance” is deemed part of BSC’s
Net Sales, such that BSC must pay Jang ten percent, and also
count the recovery toward the $2.5 billion threshold. App. at
112. Section 7.3(c) does not extend to “special or punitive
damages.” Id.2


steps toward the marketing of Contingent Payment Products
by 2004. BSC made this payment to Jang.
2
    The full text of the provision is as follows:

         Any recovery of damages by Scimed in a suit
         brought pursuant to the provisions of this
         Section 7.3 shall be applied first in satisfaction
         of any unreimbursed expenses and legal fees of
         Scimed relating to the suit or settlement thereof.
         The balance, if any, remaining after Scimed has
         been compensated for expenses shall be
         retained by Scimed; provided, that any recovery
         of ordinary damages based upon such
         infringement shall be deemed to be “Net Sales”
         and upon receipt of such recovery amount,
         Scimed shall pay Jang as additional Earn Out
         from such recovery amount an amount
         calculated in accordance with Section 3.1(c) to




                                  5
       The Agreement also included an anti-assignment
provision, § 9.4, which prohibited either party from
“assign[ing] its rights or obligations” under the Agreement
“without the prior written consent of the other party,” and
required any assignee to agree in writing “to assume all of the
obligations of the assignor” under the Agreement. App. at
116.3
   B. The Cordis Litigation and Settlement




         reimburse Jang for payments due in respect of
         lost sales of Contingent Payment Products.
         Any such recovery shall be count[ed] toward
         Net Sales as of the date of the infringement for
         purposes of Section 3.1(d). The allocation
         described in this Section 7.3(c) shall not apply
         as to special or punitive damages.

App. at 112.
3
    Section 9.4 provides in pertinent part that

         neither party may assign its rights or obligations
         hereunder without the prior written consent of
         the other party, which consent shall not be
         unreasonably withheld in the case of any
         assignment; provided that the proposed assignee
         under this Section 9.4 agrees in writing to
         assume all of the obligations of the assignor
         party under this Agreement.

App. at 116.




                                  6
        In 2003, Cordis, another manufacturer of coronary
stents, sued BSC in the District of Delaware for infringement
of two Cordis-owned patents. BSC filed a counterclaim
against Cordis for infringement of Jang’s ‘021 patent. The
claims were severed; in 2005, separate juries returned verdicts
finding that Cordis had infringed the Jang patent, and that
BSC had infringed the Cordis patents. The United States
Court of Appeals for the Federal Circuit affirmed both
verdicts.

       BSC was therefore entitled to damages from Cordis for
infringement of the Jang patent, and Cordis was entitled to
damages from BSC for infringement of Cordis’ patents.
Jang’s complaint alleges that each company owed the other
several billion dollars. A damages trial was scheduled for
February 2010.

        On the eve of the damages trial, BSC and Cordis
settled. The settlement agreement provided for only one cash
payment: approximately $1.725 billion from BSC to Cordis.
Jang alleges, and BSC appears to admit, that this represented
the net difference between the companies’ claims: Cordis’
damages minus BSC’s damages. As BSC wrote in its brief,
the damages to which it was entitled for the Jang-patent
infringement translated into a “settlement offset” against the
damages it owed Cordis. Appellees’ Br. at 19. Jang alleges
that BSC’s payment to Cordis was offset by several billion
dollars.

       The settlement also entailed an exchange of licenses.
BSC granted Cordis non-exclusive, perpetual, irrevocable,
fully paid-up and retroactive licenses on eleven Jang patents,
including the ‘021 patent. Cordis granted BSC non-




                               7
exclusive, perpetual, irrevocable, fully paid-up and retroactive
licenses on ten Cordis patents. Each company released its
infringement claims against the other.

   C. Jang’s Contract Suit against BSC

       Following the settlement, BSC denied that it had
recovered any damages that it was obligated under the
Agreement to share with Jang. Jang filed suit. He brought
the case in the Central District of California on diversity
grounds; it was transferred to the District of Delaware to
follow the litigation between BSC and Cordis.

       Jang’s complaint presented five state-law claims: (1)
that BSC breached the Agreement by refusing to pay Jang his
share of the infringement recovery; (2) that BSC breached the
Agreement by refusing to pay Jang his share of the value
from the licensing of his patents; (3) breach of the implied
covenant of good faith and fair dealing; (4) breach of
fiduciary duty; and (5) a demand for the enforcement of an
equitable lien that Jang had claimed on BSC’s right to recover
from Cordis.

       Each party moved for judgment on the pleadings
pursuant to Federal Rule of Civil Procedure 12(c). Jang, in
subsequent briefing, alleged that BSC had also breached the
Agreement’s anti-assignment provision, § 9.4, by licensing
his patents without his permission. He noted that he “would
be prepared to amend” the complaint to add this claim. App.
at 559. He did not, however, amend the complaint.

       The District Court granted judgment for BSC. Of
relevance here, it held that the value BSC obtained in the




                               8
Cordis settlement did not constitute a “recovery of damages”
under § 7.3(c) of the Agreement, and that there could be no
breach of the implied covenant of good faith and fair dealing
absent a breach of the contract’s express terms. The Court
declined to address Jang’s § 9.4 claim on the ground that Jang
had not pled it, and dismissed Jang’s complaint with
prejudice. Jang timely moved for reconsideration and for
leave to amend the complaint. The District Court denied the
motion.

        Jang now appeals. He argues (1) that the District
Court erred in dismissing his first breach-of-contract claim;
(2) that it erred in dismissing his alternative claim for breach
of the implied covenant of good faith and fair dealing; (3) that
it erred in refusing to consider his § 9.4 claim and dismissing
the complaint with prejudice; and (4) that it erred in denying
his motion for reconsideration and leave to amend.4



           II.   Jurisdiction and Applicable Law

       The District Court had diversity jurisdiction pursuant
to 28 U.S.C. § 1332. We have appellate jurisdiction pursuant
to 28 U.S.C. § 1291.

        The Agreement includes a choice-of-law provision
specifying that Massachusetts law shall govern its
interpretation. If there is no controlling decision from a
state’s highest court, we must “predict” how that court would

4
 Jang appeals the denial of the motion for reconsideration
only to the extent it related to the motion for leave to amend.




                               9
decide, giving “due regard, but not conclusive effect” to
decisions from lower courts. Nationwide Mut. Ins. Co. v.
Buffetta, 230 F.3d 634, 637 (3d Cir. 2000).

                      III.   Analysis

   A. Breach of Contract

       Jang claims that BSC breached § 7.3(c) of the
Agreement by refusing to pay him a share of the damages it
recovered for Cordis’ infringement of the Jang patent. The
District Court found that BSC had not breached the
Agreement because it had not recovered any “damages.” We
exercise plenary review of the District Court’s grant of
judgment on the pleadings. See Knepper v. Rite Aid Corp.,
675 F.3d 249, 257 (3d Cir. 2012); FED. R. CIV. P. 12(c). We
may affirm “only if, viewing all the facts in the light most
favorable to the nonmoving party, no material issue of fact
remains and the moving party is entitled to judgment as a
matter of law.” Id.

        Under Massachusetts law, the interpretation of a
contract is, in the first instance, a matter of law, but the
meaning of an ambiguous provision is a question of fact. See
Seaco Ins. Co. v. Barbosa, 761 N.E.2d 946, 951 (Mass.
2002). “Contract language is ambiguous ‘only if it is
susceptible of more than one meaning and reasonably
intelligent persons would differ as to which meaning is the
proper one.’” S. Union Co. v. Dep’t of Pub. Utils., 941
N.E.2d 633, 640 (Mass. 2011) (quoting Citation Ins. Co. v.
Gomez, 688 N.E.2d 951, 953 (Mass. 1998)).




                             10
       The District Court found that § 7.3(c) unambiguously
referred to “cash received or monetary profits.” Jang v. Bos.
Scientific Scimed, Inc., 817 F. Supp. 2d 409, 414 (D. Del.
2011). It reasoned that the provision’s terms – “damages,”
“the balance,” “upon receipt,” and “from such recovery
amount” – plainly allude to monetary gain. See id. at 414-15.
We do not disagree. See BLACK’S LAW DICTIONARY 445 (9th
ed. 2009) (defining “damages” as “[m]oney claimed by, or
ordered to be paid to, a person as compensation for loss or
injury”).

        Jang argues for a broader reading of “damages,” but in
vain; the cases he cites simply address what kinds of loss
damages can compensate. See Salvas v. Wal-Mart Stores,
Inc., 893 N.E.2d 1187, 1216-17 (Mass. 2008) (noting that
“damages” means “‘the equivalent in money for the actual
loss sustained by the wrong of another’”) (quoting F.A.
Bartlett Tree Expert Co. v. Hartney, 32 N.E.2d 237, 240
(Mass. 1941)); Hazen Paper Co. v. U.S. Fid. & Guar. Co.,
555 N.E.2d 576, 583-84 (Mass. 1990) (finding that
“damages” in an insurance policy covered costs of
environmental cleanup); Berube v. Selectment of Edgartown,
147 N.E.2d 180, 185 (Mass. 1958) (“‘Damages' is the word
which expresses in dollars and cents the injury sustained by a
plaintiff. . . .”). These cases simply confirm that the ordinary
meaning of “damages” is a sum of money. 5


5
  At oral argument, BSC appeared to take the position that the
term “damages” is limited to a monetary sum awarded by a
court or jury. That reading is foreclosed by the text of §
7.3(c), which applies to damages recovered “in a suit or
settlement.”




                               11
       The conclusion that § 7.3(c) refers only to monetary
recoveries does not end the analysis, however, because Jang
argues that the infringement claim did produce a monetary
gain for BSC: the cash offset. Furthermore, he contends that
§ 7.3(c) uses monetary terms only because the parties did not
consider the possibility of a non-monetary settlement. He
argues that the provision is therefore ambiguous with respect
to BSC’s recovery of licenses, and must be construed to
require BSC to share the value of the licenses with him.

              1. The Offset

        Jang argues that an offset is a monetary gain for BSC,
and thus a “recovery of damages.” We agree. A cash offset
is the functional equivalent of a cash payment. Instead of
receiving a direct transfer from Cordis, BSC deducted the
amount it would have received from the amount it owed
Cordis for separate acts of infringement.

         An illustration may be useful: Had BSC received a $2
billion check for the Jang-patent infringement, and then paid
Cordis $3.725 billion out of its general funds for Cordis’
separate claim, there would be no dispute that the Jang claim
had produced $2 billion in “damages.” BSC simply
combined the transactions. Using the numbers from our
illustration, BSC deducted $2 billion from its debt to Cordis,
thereby receiving the $2 billion in the form of an “offset.” It
is still better off, by $2 billion, than it would have been
without the Jang infringement claim. This is clearly a
monetary gain.

        Courts have long recognized the equivalence of a debt
offset and a cash payment through the common-law “right of




                              12
setoff”: “The right of setoff (also called ‘offset’) allows
entities that owe each other money to apply their mutual debts
against each other, thereby avoiding ‘the absurdity of making
A pay B when B owes A.’” Citizens Bank of Md. v. Strumpf,
516 U.S. 16, 18 (1995) (quoting Studley v. Boylston Nat’l
Bank, 229 U.S. 523, 528 (1913)); see also Chi. & N.W. Ry.
Co. v. Lindell, 281 U.S. 14, 17 (1930) (noting that
discharging a debt by setoff is not “to be distinguished from
payment in money”). In this case, BSC made money on the
Jang patent. It lost money on Cordis’ separate claim. That its
gain and loss were consolidated to produce one net payment
does not change the fact that the Jang patent produced a
monetary gain for BSC.

        The real question is whether that gain qualifies as a
“recovery.” We see no reason why it should not; it makes no
difference to BSC’s bottom line whether it receives a check
for the Jang infringement claim or reduces its debt by the
same amount.6 The fact that BSC obtained a right to
damages, and then regained the value of its lost profits
through settlement, should be sufficient to demonstrate a
“recovery.” See BLACK’S LAW DICTIONARY 389 (9th ed.
2009) (defining “recovery” as, inter alia, “[t]he regaining or
restoration of something lost or taken away” or “[t]he
obtainment of a right to something (esp. damages) by a
judgment or decree”).

       What is arguably ambiguous, however, is whether §
7.3(c) applies only when there is a net “recovery” in the “suit

6
 The dissent begs the question of whether an offset qualifies
as a recovery by unilaterally defining “recovery amount” to
mean “net monetary payment.”




                              13
or settlement” as a whole, or whether it applies to any
recovery on the particular claims involving Jang patents, even
if the suit as a whole produces a loss. The parties do not
identify this point of uncertainty, but it may underlie their
disagreement. If the provision is ambiguous in this respect,
there is a material issue of disputed fact.

        In sum: Viewing the facts in the light most favorable
to Jang, as we must at this stage, see Knepper, 675 F.3d at
257, it is clear that the Jang infringement claim entitled BSC
to damages, and resulted in a monetary gain – through the
cash offset – of billions of dollars. It is arguably ambiguous
whether this gain qualifies as a “recovery” pursuant to §
7.3(c). Because “any recovery of damages” in § 7.3(c) could
reasonably be read to include the cash offset, the District
Court erred in dismissing Jang’s breach-of-contract claim as a
matter of law. We will therefore vacate the judgment on the
pleadings so that the case may proceed to discovery. Cf. Gen.
Convention of New Jerusalem in the U.S. of Am., Inc. v.
MacKenzie, 874 N.E.2d 1084, 1087 (Mass. 2007) (noting
“that extrinsic evidence may be admitted when a contract is
ambiguous . . . to remove or to explain the existing
uncertainty or ambiguity”). The parties will then be able to
present arguments as to whether § 7.3(c) applies to the cash
offset with the benefit of a fuller record, either in motions for
summary judgment or at trial.

              2. The Licenses

       Jang also argues that he was entitled to share in the
value of the licenses that BSC recovered in the Cordis
settlement. He contends that the parties did not contemplate
the possibility of a non-monetary settlement, and that § 7.3(c)




                               14
is therefore ambiguous with respect to the licenses.
Construing all the facts in his favor, it is possible that Jang
and BSC failed to consider a settlement-in-kind when
negotiating the Agreement. This does not, however, render §
7.3(c) ambiguous with respect to the licenses.

        Jang relies on Cofman v. Acton Corp., 958 F.2d 494
(1st Cir. 1992), in which the First Circuit, applying
Massachusetts law, found an apparently clear contract
provision to be ambiguous in context. In that case, Acton, the
defendant corporation, had agreed to pay the plaintiff
companies a sum of money if its stock rose above a certain
price. Id. at 495. Later, its stock plummeting, Acton
executed a “reverse stock-split” in which it drastically
reduced the number of its shares on the market. Id. at 496.
This had the effect of artificially increasing each share’s par
value by a multiple of five, far above the contractual
threshold. Id. The plaintiffs demanded their money. Id.
Acton refused on the ground that the provision was not meant
to be triggered unless its fortunes improved, which they had
not; the parties had simply not considered the possibility of
stock-price manipulation. Id.

        The First Circuit sided with Acton. Id. It found that
the parties had not provided for stock-price manipulation, and
that the payment provision could not be read to apply to
manipulated price changes, because that would have allowed
Acton to avoid reaching the threshold by manipulating par
values downward. Id. at 497. The court therefore held that
the provision was not triggered by Acton’s reverse stock-split.
Id. at 498.




                              15
       Jang argues that the application of § 7.3(c) to a
recovery of licenses is analogous. The Agreement does not
explicitly speak to this situation. Construing the facts in the
light most favorable to Jang, it is possible that the parties did
not consider it. Jang contends that the contract is thus
ambiguous, and that we cannot infer that § 7.3(c) was
intended to exclude non-monetary recoveries, because that
would allow BSC to evade its obligation at any time simply
by arranging to receive its recovery in non-monetary form.

       Jang’s argument is compelling – but not, in the end,
persuasive. First, Jang’s situation is unlike Acton in that,
whereas the Acton court was willing to read an implied
exception into a contract, Jang asks us to read an additional
obligation into the contract. The Acton court construed the
parties’ obligations more narrowly than a literal reading
would suggest; Jang asks us to construe the parties’
obligations more broadly. More importantly, though, Acton
stands in tension with the great weight of Massachusetts
contract law. The central mantra of that law is that contract
terms must be interpreted according to their plain meaning.
See, e.g., S. Union Co., 941 N.E.2d at 640. Only if their
meaning is indeterminate may the court look to a provision’s
broader purpose for clarification. Id.

       Section 7.3(c) plainly applies to monetary recoveries
only. Even if this is because the parties considered no other
kind, that omission does not render the scope of § 7.3(c) –
which imposes an affirmative obligation on BSC –
ambiguous. The contract simply does not require BSC to
share the proceeds of a settlement-in-kind, and we cannot
supplement the contract terms. Cf. Winchester Gables, Inc. v.
Host Marriott Corp., 875 N.E.2d 527, 535 (Mass. App. Ct.




                               16
2007) (holding that, although the literal application of the
contract to an unforeseen situation produced an extreme
result, the court is not “free to substitute” a more rational
term).

       It is true that this reading allows BSC to circumvent §
7.3(c) by electing to receive any recovery in non-monetary
form. If BSC takes this course of action to intentionally
thwart the purpose of the provision, however, the appropriate
charge against it is violation of the implied covenant of good
faith and fair dealing, not breach of the express contract
terms. We agree with the District Court that BSC did not
breach the Agreement’s express terms in refusing to share the
value of the Cordis licenses.

   B. Breach of the Implied Covenant of Good Faith and
      Fair Dealing

       In the alternative to his breach of contract claim, Jang
argues that the purpose of § 7.3(c) was to require BSC to
share any kind of infringement recovery, and that BSC
violated the implied covenant of good faith and fair dealing
by structuring a settlement deal to thwart that purpose.

       Under Massachusetts law, every contract includes an
implied covenant of good faith and fair dealing (“implied
covenant” or “covenant”). See Anthony’s Pier Four, Inc. v.
HBC Assocs., 583 N.E.2d 806, 820 (Mass. 1991). The
covenant provides “‘that neither party shall do anything that
will have the effect of destroying or injuring the right of the
other party to receive the fruits of the contract.’” Id. (quoting
Drucker v. Roland Wm. Jutras Assocs., 348 N.E.2d 763, 765
(Mass. 1976)). Good faith requires “faithfulness to an agreed




                               17
common purpose and consistency with the justified
expectations of the other party.” RESTATEMENT (SECOND) OF
CONTRACTS § 205 cmt. a (1981); see also Krapf v. Krapf, 786
N.E.2d 318, 325 (Mass. 2003) (quoting § 205). Conduct that
does not breach the express terms of the contract may still
violate the covenant if it constitutes an “evasion of the spirit
of the bargain,” id. § 205 cmt. d, or if it violates “community
standards of decency, fairness or reasonableness,” id. § 205
cmt. a. “The covenant may not, however, be invoked to
create rights and duties not otherwise provided for in the
existing contractual relationship. . . .” Uno Rests., Inc. v. Bos.
Kenmore Realty Corp., 805 N.E.2d 957, 964 (Mass. 2004).

       The District Court dismissed Jang’s claim on the
ground that “[t]here can be no breach of [the] covenant of
good faith and fair dealing . . . in the absence of a breach of
contract.” Jang, 817 F. Supp. 2d at 416. This is incorrect.
“A party may breach the covenant of good faith and fair
dealing implicit in every contract without breaching any
express term of that contract.” Speakman v. Allmerica Fin.
Life Ins. & Annuity, 367 F. Supp. 2d 122, 132 (D. Mass.
2005) (applying Massachusetts law); see also Krapf, 786
N.E.2d at 325.

        The appropriate question is whether Jang’s allegations
state a plausible claim that BSC intentionally subverted the
purpose of the Agreement and Jang’s justified expectations.
The complaint alleged that Jang “reasonably expected” to
share in “the value of the consideration received” by BSC in
any suit or settlement against infringers, and further that BSC
structured the settlement to “depriv[e]” him of that benefit,
“while enriching themselves at Dr. Jang’s expense.” App. at
49. The complaint described the settlement and asserted that




                               18
BSC received a value of several billion dollars for the Jang
patent infringement, while paying Jang nothing. These
allegations are minimally sufficient to state a claim for
violation of the implied covenant, and to survive dismissal on
the pleadings.7

        Viewed in the light most favorable to him, Jang’s
allegations describe a situation similar to cases in which the
Massachusetts Supreme Judicial Court has found that a party
violated the covenant by circumventing – rather than
breaching – a contractual obligation. See Krapf, 786 N.E.2d
at 324-26 (where a divorce settlement entitled the defendant’s
ex-wife to half of his military retirement benefits, he violated
the covenant by electing disability benefits instead); Nile v.
Nile, 734 N.E.2d 1153, 1160 (Mass. 2000) (where a divorce
agreement required the defendant to leave two-thirds of his
probate estate to his heirs, he violated the covenant by
emptying his estate and transferring all his property to his
new wife); Fortune v. Nat’l Cash Register Co., 364 N.E.2d
1251, 1251-58 (Mass. 1977) (jury was permitted to find that a
company breached the covenant by terminating the plaintiff’s
at-will contract in order to avoid paying him a commission).

7
  We do not, as the dissent alleges, hold that Jang could have
“understood or expected[] that BSC was obligated to structure
all settlements to provide for a monetary recovery.” No one
disputes BSC’s right to control infringement suits. What Jang
claims to have expected is simply that BSC would share the
value of any recovery for infringement of his patents,
whatever form it took. His allegation is that BSC
intentionally arranged a non-monetary recovery in order to
exploit the terminology of § 7.3(c) and deny any obligation to
share the value with him.




                              19
If BSC intentionally circumvented its obligation to share
infringement profits with Jang by arranging to receive those
profits in a form that does not qualify as a “recovery,” it may
have violated the covenant.

        The cases that BSC cites are not to the contrary.
Where the Massachusetts Supreme Judicial Court has found
an implied-covenant claim to be precluded as a matter of law,
the plaintiff’s expectations were “flatly inconsistent with the
plain language” of the contract. Merriam v. Demoulas Super
Markets, Inc., 985 N.E.2d 388, 396 (Mass. 2013) (internal
quotation marks omitted); see, e.g., Eigerman v. Putnam
Invs., Inc., 877 N.E.2d 1258, 1265 (Mass. 2007) (company
could not violate the covenant by refusing to repurchase
employee stock shares when the stock-share plan explicitly
gave it that right); Lafayette Place Assocs. v. Bos. Redevel.
Auth., 694 N.E.2d 820, 831 (Mass. 1998) (city agency could
not violate the covenant by refusing to modify express
deadlines in the contract).

        In this case, nothing in the Agreement explicitly grants
BSC the right to keep any non-monetary recovery without
obligation to Jang. Nothing flatly contradicts Jang’s asserted
expectations. Nor is the alleged “spirit of the bargain”
patently unreasonable, as in Uno Rests., 805 N.E.2d at 962-65
(lessee could not reasonably expect its landlord to reject
lucrative third-party offers for its leased space simply because
it could not match their price). BSC may ultimately convince
a fact-finder that Jang’s expectation of sharing in any
infringement recovery was not justified. At this stage,
however, the reasonableness of his expectation is a disputed
material fact.




                              20
       Because there are disputed material facts as to the
purpose of § 7.3(c) and the reasonableness of Jang’s
expectations, his implied-covenant claim is not barred as a
matter of law, and the District Court erred by dismissing it on
the pleadings.

   C. Jang’s § 9.4 Claim

       Finally, we briefly address Jang’s arguments that the
District Court erred in dismissing the complaint without
considering his § 9.4 claim, and in denying his post-judgment
motion for reconsideration and leave to amend. We review
both decisions for abuse of discretion. See United States ex
rel. Wilkins v. United Health Grp., Inc., 659 F.3d 295, 302
(3d Cir. 2011); Burtch v. Milberg Factors, Inc., 662 F.3d 212,
220 (3d Cir. 2011).

              1. Dismissal of the Complaint with Prejudice

        The District Court declined to address Jang’s § 9.4
claim on the basis that Jang had not pled it. This was correct.
Jang asserts that he adequately pled the § 9.4 claim – that
BSC breached § 9.4 by unilaterally granting Cordis perpetual
licenses to Jang patents – because he pled “the elements of a
claim for breach of contract.” Appellant’s Br. at 41. But to
state a claim that can survive dismissal, a complaint must
include “more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

       Jang’s bare recital of the elements of a breach-of-
contract claim was clearly insufficient to state a claim for
breach of § 9.4. The supposed “clarification” in his brief in




                              21
opposition to judgment on the pleadings, which in fact
presented an entirely new legal theory, did not cure the
defective complaint. See Frederico v. Home Depot, 507 F.3d
188, 202-03 (3d Cir. 2007). Jang’s proffer that he “would be
prepared to amend” his complaint, App. at 559, does not
change the analysis, because it cannot be construed as a
motion for leave to amend. See Ranke v. Sanofi-Synthelabo
Inc., 436 F.3d 197, 206 (3d Cir. 2006). The District Court
thus did not abuse its discretion in declining to address the §
9.4 claim, nor in dismissing the complaint with prejudice.
See Fletcher-Harlee Corp. v. Pote Concrete Contractors,
Inc., 482 F.3d 247, 252 (3d Cir. 2007) (holding that in non-
civil rights cases, district courts have no obligation to offer
leave to amend before dismissing a complaint unless the
plaintiff properly requests it).

              2. Denial of Jang’s Motion for Reconsideration
                 and Leave to Amend

        Federal plaintiffs are entitled to amend their complaint
once, as of right, within twenty-one days of serving it or of
receiving a responsive pleading or motion to dismiss. FED. R.
CIV. P. 15(a)(1). After the twenty-one days, “a party may
amend its pleading only with the opposing party's written
consent or the court’s leave.” FED. R. CIV. P. 15(a)(2). A
district court “should freely give leave when justice so
requires,” id., but may deny leave on a finding of undue
delay, bad faith, prejudice to the opposing party, or futility.
See Cureton v. Nat’l Collegiate Athletic Ass’n, 252 F.3d 267,
273 (3d Cir. 2001). When a party seeks leave to amend a
complaint after judgment has been entered, it must also move
to set aside the judgment pursuant to Federal Rule of Civil
Procedure 59(e) or 60(b), because the complaint cannot be




                              22
amended while the judgment stands. See Fletcher-Harlee
Corp., 482 F.3d at 252; 6 CHARLES ALAN WRIGHT ET AL.,
FEDERAL PRACTICE AND PROCEDURE § 1489 (3d ed. 2013).
We have held that “[w]here a timely motion to amend
judgment is filed under Rule 59(e), the Rule 15 and 59
inquiries turn on the same factors.” Cureton, 252 F.3d at 272;
see also Burtch, 662 F.3d at 230.

        In this case, the District Court denied Jang’s Rule 15
and 59(e) motions on the ground that his delay in seeking
leave to amend was undue and prejudicial to BSC.8 Delay
may become undue “when a movant has had previous
opportunities to amend a complaint” but instead “delays
making a motion to amend until after [judgment] has been
granted to the adverse party,” and when “allowing an
amendment would result in additional discovery, cost, and
preparation to defend against new facts or new theories.”
Cureton, 252 F.3d at 273. The District Court found that
Jang’s delay met these criteria. Jang could have moved to
amend his complaint at any time before the District Court
granted the dismissal. He offered no cogent reason for his
failure to do so. Even on appeal, his only explanation is that
“it was early in the case, the pleadings had not previously
been tested, and so Dr. Jang clarified [the § 9.4 claim] in his
briefs, indicated his willingness to amend the Complaint if

8
  Jang argues that the District Court improperly constrained
its analysis to the typical Rule 59 analysis rather than
consider the Rule 15 and 59(e) motions together. The District
Court did consider the Rule 15 factors, however, and held that
Jang’s Rule 15 motion lacked merit even “independently of
the court’s analysis of the Rule 59 motion.” App. at 6.




                               23
necessary, and then waited for the District Court to rule.”
Appellant’s Br. at 54.

       This court has declined to reward a wait-and-see
approach to pleading. See Arthur v. Maersk, Inc., 434 F.3d
196, 204 (3d Cir. 2006) (“When a party fails to take
advantage of previous opportunities to amend, without
adequate explanation, leave to amend is properly denied.”); In
re Adams Golf, Inc. Sec. Litig., 381 F.3d 267, 280 (3d Cir.
2004) (“Plaintiffs relied at their peril on the possibility of
adding to their complaint. . . .”). While the District Court’s
cursory analysis of the delay and resulting prejudice was not
optimal, the Court did not abuse its discretion in denying
Jang’s post-judgment motion for reconsideration and leave to
amend.9 We note, however, that because we are reversing the
judgment on the pleadings, Jang remains free to file a new
motion for leave to amend. We express no opinion as to the
potential merit of that motion.

                      IV.    Conclusion

        Viewing all the facts in the light most favorable to
Jang, two of his claims are sufficiently colorable to survive
judgment on the pleadings: (1) that BSC breached           §
7.3(c), because the cash offset qualifies as a “recovery of
damages”; and (2) that BSC violated the implied covenant of
good faith and fair dealing by structuring a settlement to
thwart the agreed purpose of § 7.3(c). The District Court thus
erred in finding Jang’s claims barred as a matter of law and


9
 We need not reach BSC’s additional argument that
amendment would have been futile.




                              24
granting judgment on the pleadings for BSC. We will reverse
the judgment and remand the case for further proceedings.




                            25
Jang v. Boston Scientific Scimed, Inc., No. 12-3434

Barry, Circuit Judge, dissenting

       The Majority concludes as follows: Dr. Jang’s claim
that BSC breached § 7.3(c) of the Agreement because the
cash offset qualifies as a “recovery of damages,” and his
claim that BSC violated the covenant of good faith and fair
dealing implicit in that Agreement by structuring a settlement
to thwart the purpose of § 7.3(c), were “sufficiently
colorable” to survive judgment on the pleadings. Maj. Op. at
21. It, thus, reverses the judgment, and remands for further
proceedings. Because I believe § 7.3(c), the concededly key
provision in this case, to be decidedly unambiguous, I
respectfully dissent.

       Section 7.3(c) requires BSC to pay Dr. Jang from the
“balance, if any” from “any recovery of damages” received in
a covered infringement suit against a third party. As the
Majority concedes, the “any recovery of damages” language
“plainly” refers to monetary recoveries only. Id. at 14. What
it found to be ambiguous, however, was whether the cash
offset here was a monetary recovery qualifying as a “recovery
of damages” within the meaning of § 7.3(c).                 It
unambiguously was not.

       Under § 7.3(c), there can only be an additional earn
out to Dr. Jang from the “balance,” after expenses, of the
“recovery amount,” i.e. the net monetary payment, that BSC
received from the “suit or settlement” of a covered
infringement claim. BSC did not “recei[ve]” a net monetary
payment in settlement of the Cordis litigation so there was no
“balance” from which to calculate an additional earn out.
That Dr. Jang may not have contemplated offsetting claims or
non-monetary settlements, or have considered the possibility
that broader terms— “benefit,” “consideration,” e.g.—might
be necessary for a non-monetary recovery to be swept in,
does not render § 7.3(c) ambiguous or require us to rewrite it
in his favor. Under the unambiguous language of § 7.3(c),
the earn-out provision was not triggered, and judgment was
properly entered in favor of BSC on the breach of contract
claim.


                              1
        With respect to the claim for violation of the implied
covenant, there is nothing in this record suggesting that Dr.
Jang, in fact, understood or expected, or even could have
understood or expected, that BSC was obligated to structure
all settlements to provide for a monetary recovery; indeed, the
Majority found even the allegations of the complaint to be
only “minimally sufficient.” Id. at 16. Moreover, any
suggestion that Dr. Jang understood or expected that BSC had
any such obligation would be belied by § 7.3(b), which states
that “[BSC] shall have the right, but not the obligation, to
institute, prosecute and control legal proceedings to prevent
or restrain [third-party] infringement” (emphasis added), a
provision that gives BSC broad, unqualified discretion to
bring suit and make all decisions regarding suit, including the
resolution of that suit. It is not for us to add limits to BSC’s
authority and thereby enable Dr. Jang to achieve collaterally
what he neglected to achieve contractually. See Uno Rests.,
Inc. v. Bos. Kenmore Realty Corp., 805 N.E.2d 957, 964
(Mass. 2004).

       Finally, I note that, although the Majority has
discerned a “material fact” or two in dispute as to the purpose
of § 7.3(c) and the reasonableness of Dr. Jang’s expectations,
it nonetheless cites and does not question what the
Massachusetts Supreme Judicial Court has decided: where the
Court has “found an implied-covenant claim to be precluded
as a matter of law, the plaintiff’s expectations were ‘flatly
inconsistent with the plain language’ of the contract.” Maj.
Op. at 17 (quoting Merriam v. Demoulas Super Markets, Inc.,
985 N.E.2d 388, 396 (Mass. 2013)). So, too, here—at least in
my view.

       I would affirm the judgment of the District Court.




                               2
