Lamba v. ASML US, L.P.

Background

Vishal Lamba sued ASML US, L.P., Shannon Hildreth, and other defendants. The complaint alleged that ASML offered Lamba 350 stock options in 2008, that the options were shown as forfeited in 2011, and that ASML later reinstated them with the 2008 origination year. Lamba continued working for ASML/Zygo until December 2019, believing the options had been reissued in 2011 and would expire in 2021. In January 2021, he learned that the options had expired in 2018 and were unavailable to exercise.

Lamba alleged that ASML and its agents failed to communicate properly about the options’ expiration date, causing him to lose their value. He asserted claims for breach of contract, negligence, breach of fiduciary duty, and restitution based on unjust enrichment. The defendants removed the case from California state court based on diversity of citizenship.

Motion and Legal Standard

Hildreth moved under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. Lamba did not oppose the motion. The court accepted well-pleaded factual allegations as true for purposes of the motion but required the complaint to contain enough facts to make each claim plausible.

Discussion

Breach of contract. The court held that the complaint did not allege a contract between Lamba and Hildreth. The complaint described a contractual relationship between Lamba and ASML but included no specific allegations connecting Hildreth to that contract. The court therefore granted Hildreth’s motion to dismiss this claim with leave to amend.

Negligence. Under California law, negligence requires a duty of care, a breach of that duty, and damages caused by the breach. The court found that Lamba’s conclusory allegations did not plausibly show that Hildreth, an ASML human-resources employee, owed him a duty to provide specific information about the stock options. The court granted Hildreth’s motion to dismiss this claim with leave to amend.

Breach of fiduciary duty. The court found that Lamba did not allege a fiduciary relationship between himself and Hildreth. It also found that Hildreth had not knowingly undertaken responsibilities concerning Lamba’s stock options and that Lamba identified no authority establishing a fiduciary relationship between a human-resources employee and an employee stockholder. The court granted Hildreth’s motion to dismiss this claim with leave to amend.

Restitution based on unjust enrichment. The court explained that California law permits an unjust-enrichment allegation to be treated as a quasi-contract claim seeking restitution, even though unjust enrichment is not itself a standalone cause of action. Such a claim requires receipt of a benefit and unjust retention of that benefit at another person’s expense. Lamba alleged that ASML, not Hildreth, was unjustly enriched, and he did not allege that Hildreth received any benefit. The court granted Hildreth’s motion to dismiss this claim with leave to amend.

Order

Judge Beth Labson Freeman ordered that Hildreth’s motion to dismiss was granted with leave to amend. Lamba had 14 days to file an amended complaint. The order stated that failure to meet the deadline or to cure the identified deficiencies would result in dismissal of the deficient claims with prejudice. The order addressed Hildreth’s motion; it did not state that the claims against ASML were dismissed.