[00:00:00] Speaker 04: The next case on calendar for argument is Nettleton versus Exact Sciences Corporation. [00:00:40] Speaker 04: All right, Councilor Palin, please approach and proceed. [00:00:51] Speaker 03: Thank you, Your Honors. [00:00:51] Speaker 03: May it please the court? [00:00:53] Speaker 03: My name is Andrea Coit. [00:00:54] Speaker 03: I am the attorney for the plaintiff, the appellant in this case, Christopher Nettleton. [00:01:00] Speaker 03: I have 10 minutes, so I'm going to jump right in. [00:01:02] Speaker 03: If there are any questions about the facts, please stop me and ask. [00:01:06] Speaker 03: Mr. Nettleton brought two claims in this case, a breach of contract claim and a fraudulent inducement to enter into an employment agreement claim. [00:01:15] Speaker 03: The district court dismissed both of those claims on a 12b6 motions with prejudice. [00:01:21] Speaker 03: In the Oregon Appellate Court case of Warren v. Smart Choice Payments, with respect to our contract claim, the court of appeals explained that to determine if the parties intended the integrated writing to be a complete or partial integration, the court considers all relevant evidence, including writings and the surrounding circumstances. [00:01:40] Speaker 03: In this case, Mr. Nettleton presented a breach of contract claim arguing that the letter that the district court determined was a full and complete integration was in fact a partial integration. [00:01:52] Speaker 03: He attached to his complaint two emails, one dated August 31st of 2021 and the other September 3rd that he asserted in this case made up the contents of his employment agreement. [00:02:06] Speaker 03: At excerpt of record 32, the August 31st email stated that ExactSciences, the defendant in this case, wanted to make hiring of Mr. Nettleton, a former Pfizer employee who sold Cologuard for ExactSciences, wanted to make it easy. [00:02:22] Speaker 03: It told him in that email that all he had to do was submit an application [00:02:26] Speaker 03: which required him to give his name, his address, his date of birth, and his driver's license number, and his social security number. [00:02:34] Speaker 03: And if he did that, he would receive an offer commensurate with the above. [00:02:39] Speaker 03: Now the above in that email is the description of the position being offered to him of senior territory manager. [00:02:47] Speaker 03: The above included the description of the pay he would receive, the bonus potential, and the unconditional assertion that this position does not require relocation. [00:02:57] Speaker 04: Was it an unconditional assertion or was it an expectation? [00:03:02] Speaker 03: It was an absolute unconditional assertion. [00:03:04] Speaker 04: What's the language that you're relying on to say that there was an unconditional [00:03:09] Speaker 04: assertion that there would be no relocation in the emails. [00:03:12] Speaker 03: It is in the accepted record 32. [00:03:14] Speaker 03: It is the August 31st email and it is a statement that says, the position offered above will not require relocation and it is our expectation that the Pfizer or Pfizer colleagues territories will remain the same. [00:03:34] Speaker 02: So Council, that was true. [00:03:36] Speaker 02: Even if we accept that that was a term of the contract and that it wasn't overcome by later communications, when he started the job, that was true. [00:03:45] Speaker 02: He didn't have to relocate and he did have his same territory. [00:03:49] Speaker 02: And my understanding is that this was an at-will contract. [00:03:51] Speaker 02: He didn't have a guarantee for any sort of period of time. [00:03:55] Speaker 02: So how do you establish breach when things changed later? [00:04:04] Speaker 03: Assertion made to Mr. Nettleton was that he would not have to relocate if he took that job ever. [00:04:10] Speaker 00: You're reading a time duration into this sentence that is not there expressly. [00:04:18] Speaker 03: Well, there's also no time duration in that sentence. [00:04:22] Speaker 03: So yes, they could have fired him at any point. [00:04:24] Speaker 03: We are not saying he couldn't have been fired. [00:04:27] Speaker 03: If they said, we don't want you here any longer after eight months of his working, you're fired. [00:04:32] Speaker 03: That would be termination in an out will employment. [00:04:35] Speaker 02: So what's the difference between saying you're out and out fired versus [00:04:39] Speaker 02: things have changed within the company. [00:04:42] Speaker 02: We need to make some adjustments. [00:04:44] Speaker 02: This is going to have to be how it goes going forward. [00:04:46] Speaker 02: If you can't do that, you're fired. [00:04:48] Speaker 02: Then that would be presenting him with a new contract and he would have to accept that or he would be fired. [00:04:52] Speaker 02: It seems that the theory in this case is that by doing what I just described, they were breaching. [00:05:01] Speaker 03: I believe that is our theory. [00:05:02] Speaker 03: Our theory is that that was a condition of the agreement. [00:05:06] Speaker 03: That was an obligation that he would not be relocated if he accepted their offer of employment ever. [00:05:12] Speaker 03: Now, they could have fired him. [00:05:14] Speaker 04: He wasn't relocated. [00:05:14] Speaker 04: He actually wasn't relocated. [00:05:16] Speaker 04: His territory was, and he could still service that territory. [00:05:21] Speaker 03: without relocating, correct? [00:05:24] Speaker 03: That, Your Honor, I believe is a disputed issue that needs to be tried to the trier of fact, whether or not he was moved from Eugene, Oregon, where he had lived for 30 years of his life. [00:05:38] Speaker 03: Wasn't moved. [00:05:39] Speaker 03: His job was moved to central and eastern Oregon. [00:05:43] Speaker 03: cities and towns that were at... The territory that he was responsible for. [00:05:47] Speaker 03: That he had to cover, I agree. [00:05:49] Speaker 03: Now whether or not that consisted of a relocation, he believes it does. [00:05:53] Speaker 03: If ExactSciences believes it didn't and they don't think they breached, that is an issue that needs to be decided by the trial of fact. [00:05:59] Speaker 03: It is not an issue that can be decided on a motion to dismiss. [00:06:02] Speaker 03: The court had to have determined if they believe that this was a material term of the agreement, but there was no breach because all they did was change its territory, the district court would have had to make the factual determination that he was not relocated. [00:06:18] Speaker 03: That can't be made on a 12b6 motion. [00:06:21] Speaker 02: So, counsel, we are going to run out of time, and I would like you to address the fraud claim and address what do we do with reliance and reasonable reliance when we're in a situation of an at-will contract that doesn't have any sort of guarantee of duration. [00:06:38] Speaker 03: So, again, that... Sorry, Your Honor. [00:06:44] Speaker 03: The reasonable reliance in this case is found in... [00:06:51] Speaker 03: Mr. Nettleton was told, if you accept this offer, if you do these things as conditions precedent, fill out this application, then you will get a job that is described in this email, an offer for a job that will not require relocation. [00:07:11] Speaker 03: asserted in his complaint that he relied on that statement. [00:07:15] Speaker 03: Exec Sciences has never told us in all of the briefings why it made that statement to him. [00:07:21] Speaker 03: Either they intended it to be a term of the contract or they didn't. [00:07:26] Speaker 03: If they didn't, then it was false. [00:07:28] Speaker 03: And his reliance on it [00:07:32] Speaker 03: Again, he has said in the complaint that he would not have taken this job but for that affirmative assertion. [00:07:40] Speaker 03: Reliance has to be objective, certainly, to be reasonable. [00:07:44] Speaker 03: But his facts and circumstances are taken into account when determining whether or not [00:07:50] Speaker 03: It is an objective reliance. [00:07:52] Speaker 03: Someone in his situation, and he put into that complaint that he had lived here 30 years, his father was ailing, he was the sole care provider for his father, his mother's parents were here, this was his life. [00:08:03] Speaker 00: There's no allegation that he communicated any of this to exact sciences, correct? [00:08:09] Speaker 00: No, but... Or asked more questions about this statement. [00:08:14] Speaker 00: after receiving the offer, which includes the statement about at-will employment and the supersession clause, right? [00:08:22] Speaker 00: No, no, he absolutely did not. [00:08:25] Speaker 00: I think the argument is when an offer of at-will employment [00:08:31] Speaker 00: right, that not only the duration but the conditions of employment may be changed at will of the employer. [00:08:36] Speaker 00: Do you have anything in Oregon law suggesting that in and at will employment as a matter of law is limited only to the duration of employment and not only? [00:08:45] Speaker 00: So I'm asking more specifically in Oregon is there something that restrains what the employer can change in terms of conditions of employment even assuming that there was some [00:08:58] Speaker 00: You know, the initial conditions of employment were no relocation without a durational promise. [00:09:04] Speaker 00: You're saying they couldn't change that at will in an at will employment scheme. [00:09:11] Speaker 00: Do you have any Oregon case law that says even though the employer has offered only at will employment, that that means they can't change conditions? [00:09:22] Speaker 03: I don't, Your Honor, in a breach of contract context, but that flips it then to the fraud claim where we've alleged these as alternative causes of action. [00:09:31] Speaker 03: And when we're looking at the fraudulent inducement, it's what they knew and what they said at the time that the statement was made. [00:09:38] Speaker 03: And the time the statement was made, [00:09:40] Speaker 03: that this position will not require relocation, they knew that they had hired or were in the midst of hiring someone to do a complete reorganization of its sales force. [00:09:50] Speaker 03: They knew that they needed to get these people on board for the fourth quarter as quickly as possible, and they needed to say whatever they could say to get them to accept this offer. [00:09:59] Speaker 03: They did it in an incredibly condensed timeframe. [00:10:02] Speaker 03: They had to submit their application within a few days. [00:10:05] Speaker 03: And they offered Mr. Nettleton a $20,000 bonus which they gave to him but was conditioned on him staying there for six months. [00:10:14] Speaker 03: So we have presented evidence into the records showing that at the time that they made the statement to him, they knew or it was with reckless disregard that they could not keep this promise to him. [00:10:28] Speaker 03: And so, no, I don't have case law saying that an at-will employment, you can't change the term later on, but I think any contract law, if we're switching back to the contract claim, if it's a material element of the claim, of the contract, [00:10:43] Speaker 03: You cannot change that at will. [00:10:46] Speaker 03: He had to have been giving some further consideration to then modify a material term of his agreement on the contract claim. [00:10:55] Speaker 03: And my time is up. [00:10:56] Speaker 03: Thank you. [00:10:57] Speaker 04: We'll give you a minute for a bottle. [00:10:59] Speaker 04: Appreciate it. [00:11:04] Speaker 01: Good morning, Your Honors. [00:11:05] Speaker 01: John Berg on behalf of Exact Sciences Corporation. [00:11:09] Speaker 01: May it please the Court, this Court's analysis can begin and end with the supersession clause. [00:11:17] Speaker 01: There are multiple reasons to affirm, my clients submit, but that is sufficient enough alone to support the District Court's rulings. [00:11:28] Speaker 02: On the breach of my question on the super session if that's where we're going to start is my understanding of Oregon law. [00:11:35] Speaker 02: Is that later communications about the terms of the contract when there is a provision that says that this will be our agreement, whether you want to call that super session or integration or whatever. [00:11:44] Speaker 02: that that controls over anything that might have been said earlier that was contrary. [00:11:51] Speaker 02: But if there are things that were said earlier that are not contrary to what is said last, then those things can come in. [00:11:57] Speaker 02: And I don't see anything in the latest statement of terms which your client wants to rely on that is contrary or says anything about location that could be contrary to what was said earlier about you're not going to have to move. [00:12:12] Speaker 01: So when a contract is on its face a complete integration, there's a presumption that arises that it is the final and full agreement of the parties. [00:12:20] Speaker 01: The party contending that a contract exists based on those terms needs to come forward with substantial evidence. [00:12:29] Speaker 01: So the partial integration doctrine, though, in the parole evidence rule, bars consideration of inconsistent terms. [00:12:40] Speaker 01: So taking your point. [00:12:42] Speaker 01: But isn't any term that arises from any discussion [00:12:47] Speaker 01: prior to 9-3 necessarily directly inconsistent with the supersession clause. [00:12:55] Speaker 01: How can they be reconciled? [00:12:58] Speaker 04: So I would argue that one contract says nothing about a subject and the other contract discusses the subject. [00:13:05] Speaker 04: They're not inconsistent. [00:13:07] Speaker 01: Are they? [00:13:08] Speaker 01: The allegation here is that this contract is comprised by two different documents, right, both attached to the complaint. [00:13:18] Speaker 01: And, of course, you can consider them all that you please. [00:13:22] Speaker 01: And so the supersession clause, though, says anything proceeding, right, this document on 9-3 is superseded. [00:13:35] Speaker 01: What preceded that? [00:13:36] Speaker 01: The 831 email. [00:13:38] Speaker 01: So if we take that location clause, there is no reference to a location or territory on the 9-3 offer letter, none whatsoever. [00:13:47] Speaker 01: So we are essentially grabbing something that doesn't have a placeholder in the 9-3 offer and adding it. [00:13:55] Speaker 01: And the supersession clause is necessarily inconsistent with that. [00:13:59] Speaker 02: What's the best case you have for that idea that a supersession clause is basically just an all-out bar for everything that was said before, whether or not it was contrary or consistent, or at least compatible? [00:14:11] Speaker 01: The Trist case directly applies and enforces an unambiguous supersession clause. [00:14:20] Speaker 01: The Eagle case, forget the full name of the Eagle case, [00:14:25] Speaker 01: eagle industries equally as applying a supersession clause that is entirely unambiguous and as a complete bar without full consideration of even the parole evidence rule. [00:14:38] Speaker 01: I would argue that the parole evidence rule [00:14:40] Speaker 01: and the supersession clause are really two independent grounds to get to that same place. [00:14:47] Speaker 01: Because the parole evidence rule bars inconsistent terms. [00:14:53] Speaker 01: This supersession clause bars all prior understandings, all prior agreements, not just inconsistent stuff, anything that came before. [00:15:02] Speaker 01: And the dates are the dates. [00:15:03] Speaker 01: We can't move those around. [00:15:07] Speaker 01: That is indisputed. [00:15:10] Speaker 01: That's pled in the face of the complaint. [00:15:13] Speaker 02: Can we talk about the fraud claim? [00:15:14] Speaker 01: Sure. [00:15:17] Speaker 01: Your Honor, I think if we look at the reply brief of the appellant, we notice they don't even mention the supersession clause. [00:15:24] Speaker 01: And I think that the reason for that is that there really is no explanation as to how one can reasonably rely on an expressly superseded promise. [00:15:36] Speaker 02: Well, if we set the supersession issue aside, I think your friend across the aisle makes a valid point of if there was going to be no location term or inducement into this contract, why say anything at all about that topic? [00:15:55] Speaker 01: At the time the statement is made, there's an understanding that this individual's location does not need to change. [00:16:03] Speaker 01: And that's exactly what the Konsulman case says is not a fraud. [00:16:09] Speaker 00: It is expressing... Wasn't that a disputed fact at this point? [00:16:14] Speaker 01: I'm sorry. [00:16:14] Speaker 00: Isn't that a disputed fact at this point? [00:16:17] Speaker 01: What, Your Honor, I'm sorry. [00:16:20] Speaker 00: What your client knew or should have known under the reckless standard. [00:16:26] Speaker 01: needs to be pled in some way beyond a speculative level. [00:16:30] Speaker 01: So what we have in the facts here is the allegation that, I think in a nutshell, the allegation is that exact sciences had developed an intent to retain a consultant, that exact sciences had intended to adopt or implement whatever [00:16:53] Speaker 01: that recommendation may be from the consultant, that that recommendation could possibly, could is the term used in the complaint, could possibly change some territories, that Mr. Nettleton is possibly one of those individuals whose territories might change, and that [00:17:16] Speaker 01: Mr. Nettleton's personal circumstances or preferences might pose a problem when it comes to whether or not he can serve that territory while living in Eugene. [00:17:28] Speaker 01: That is a number of different contingencies to such a point. [00:17:33] Speaker 01: It's attenuated. [00:17:36] Speaker 01: It's the district court called it pure speculation. [00:17:39] Speaker 00: So we have nine circuit cases interpreting Oregon law. [00:17:41] Speaker 00: We're saying it doesn't have to be a definite. [00:17:44] Speaker 00: There can be some contingency that would make the representation false or at least the failure to disclose the possibility of the representation being incorrect is enough to create a misrepresentation. [00:18:07] Speaker 00: Seems to me that we're somewhere not quite as firm a contingency, but there's also case law saying it doesn't have to be definite. [00:18:18] Speaker 00: So what is your best case for saying this one is too contingent as a matter of law? [00:18:24] Speaker 01: Well, you can see that the Butters case kind of surveys the law in this jurisdiction. [00:18:30] Speaker 01: It describes several instances in which reckless disregard can be found. [00:18:37] Speaker 01: To me, synthesizing them, it looks to be something that either needs to be certain or needs to be, I should say, almost or nearly certain. [00:18:51] Speaker 01: that right, you cannot deliver on whatever that promise may be. [00:18:56] Speaker 01: So in this context. [00:18:57] Speaker 02: But if you accept the plaintiff's, I mean we're on a motion to dismiss here, so we accept the plaintiff's arguments. [00:19:02] Speaker 02: I have no idea what they could prove at the end of the day. [00:19:05] Speaker 02: But what they allege is at the time that I was being offered this job and being told I will not have to relocate, the company is hiring a consultant to analyze whether we're going to just reorganize all the territories. [00:19:21] Speaker 02: Why isn't that reckless disregard? [00:19:22] Speaker 02: Because if the plaintiff's allegation is true, the company by its own conduct is creating a situation where it may not deliver on that promise of you're not going to have to move. [00:19:34] Speaker 02: Anything's a possibility and that will circumstance right that that of course is you I mean the possibility thing seems to fall flat to me when we're talking about circumstances that are entirely in control of the promisor [00:19:46] Speaker 01: So entirely in control and they did indeed deliver on the location and the territory for at least four months. [00:19:58] Speaker 01: So I think we have a problem in the way of the breach on the employment, I'm sorry, on the breach of contract side, but also in relation to reasonable reliance. [00:20:07] Speaker 01: Is it reasonable to assume [00:20:09] Speaker 01: That these terms are going to be permanent as plaintiff alleges in this context it flies in the face of the idea that an at will at will terms can be prospectively Modified and accepted acceptance by continued employment. [00:20:25] Speaker 01: There is no other law on that issue So I think the biggest problem with the fraud claim is the reasonable reliance. [00:20:33] Speaker 01: I don't see a means to You have it [00:20:38] Speaker 01: Essentially, a deliberate disregard for the language of the contract. [00:20:45] Speaker 00: I think it's a close issue, but my biggest problem with that argument is our decision in Mead versus Cedar Rapids, where there was an at-will employment. [00:21:00] Speaker 00: It was accepted that there was an at-will employment. [00:21:07] Speaker 00: And we still said, you know, promises about, you know, that there wouldn't be relocation or, you know, we're not essentially overridden by the fact that the plaintiff was aware that they were accepting at-well employment. [00:21:24] Speaker 01: I would agree that it's not a dispositive fact. [00:21:27] Speaker 01: There are several facts that would lead reasonable reliance, I'm sorry, reliance in this instance to be distinctly unreasonable. [00:21:35] Speaker 01: The supersession clause I think alone gets you there, but that you also have the absence of the duration that we're speaking of. [00:21:41] Speaker 01: You have the fact that this is an experienced, highly paid professional who really should know better than to assume a contract doesn't mean what it says. [00:21:52] Speaker 01: And lastly, you do have an expectation. [00:21:56] Speaker 01: The location and territory are, by his own theory, connected to one another. [00:22:01] Speaker 01: His territory [00:22:05] Speaker 01: was changed. [00:22:06] Speaker 01: He says that led to automatically his location being changed. [00:22:10] Speaker 01: He can't marry them and now divorce them. [00:22:13] Speaker 01: If it was an expectation that his territory wouldn't change, it's only an expectation that his territory wouldn't change causing a change in their location. [00:22:23] Speaker 04: But opposing counsel said that's a question of fact. [00:22:27] Speaker 01: Again, it's been pled here in such a way that I don't believe it rises above a speculative level. [00:22:34] Speaker 01: The cost concern, the hotel staying piece of this puzzle is a big one. [00:22:41] Speaker 01: You have traveling sales roles that are very common. [00:22:47] Speaker 01: It's an in-state territory. [00:22:50] Speaker 01: Hotel stays are just part of sales work, especially a traveling sales scenario. [00:22:56] Speaker 01: The objection by the appellant to staying, at least for some portion of the time when the work is on the far end of Oregon, is the cost related to hotels. [00:23:08] Speaker 00: You're over time and I have a question, but I think there are factual differences between this case and cases that have been decided in this court on Oregon law on [00:23:18] Speaker 00: this issue. [00:23:19] Speaker 00: But I guess what my trouble is, why doesn't that at least, I mean just that there's a factual distinction, why doesn't this get past the motion to dismiss at least and there has to be development of the factual record. [00:23:35] Speaker 01: Again, I think there are multiple ways to get to the result that district court did. [00:23:41] Speaker 01: It wasn't just the absence of reasonable reliance, although I think that's the most clear-cut basis. [00:23:47] Speaker 01: You do need to show an intent to defraud or reckless disregard as of the time of the 831 email. [00:23:54] Speaker 01: I believe on the pleading, the allegations within this complaint, you can't get there. [00:24:00] Speaker 01: It's too attenuated. [00:24:02] Speaker 01: Thank you. [00:24:03] Speaker 04: Thank you, Council. [00:24:05] Speaker 04: One minute for your bottle. [00:24:08] Speaker 03: Thank you, Honors. [00:24:10] Speaker 03: On the supersession clause, the Howell v. Oregon case says that an integration clause in a writing is an indication that the writing is intended to be a complete integration, but it is not conclusive. [00:24:22] Speaker 03: So even if we consider the supersession clause to be equal to an integration clause, it is not conclusive. [00:24:29] Speaker 03: When we have pled that it's a partial integration, we've presented to the district court a plausible theory of partial integration [00:24:35] Speaker 03: We are allowed to move beyond the pleading stage to present our evidence of that. [00:24:40] Speaker 03: It is rebuttable. [00:24:42] Speaker 03: And on the issue of reasonable reliance, the court found that the supersession clause was a complete integration and so therefore we could not rely. [00:24:51] Speaker 03: That was the court's determination. [00:24:52] Speaker 03: So if this court does not agree that the supersession clause, in fact, determined as a matter of law that the second half of the agreement was a complete integration, then that basis for the district court's finding of no reasonable reliance should also fall. [00:25:09] Speaker 03: Now, the second basis that the court said that there couldn't be no reasonable reliance [00:25:15] Speaker 03: was because the court found that the August 31st email was nothing more than merely a targeted advertisement sent to all Pfizer employees. [00:25:25] Speaker 03: Well, the district court could not make that factual determination on this record. [00:25:31] Speaker 03: There was no evidence in the record that any other Pfizer employee received this email to Mr. Nettleton. [00:25:37] Speaker 03: We put into the record the email to Mr. Nettleton that described his position of someone of his seniority, the pay he would receive, and that he himself would not have to relocate. [00:25:49] Speaker 03: That was not a mere advertisement sent to all Pfizer employees. [00:25:52] Speaker 03: So, I think the court erred when it made that factual conclusion that it was an advertisement and therefore reasonable reliance could not follow. [00:26:03] Speaker 03: And finally, I appreciate your exhibit 47 in the, or excuse me, Exit of Record 47 is the document that we put into the record to show that [00:26:17] Speaker 03: ExactSciences knew at the time it made the promise, the assertion, the absolute assertion to my client that he would not have to relocate if he accepted this job offer. [00:26:27] Speaker 03: It shows that on December 3rd, less than three months after this statement was made to him, [00:26:33] Speaker 03: Project Voyager, this complete reorganization of the sales force of Exact Sciences, was being put into play. [00:26:41] Speaker 03: So it was already done. [00:26:43] Speaker 03: The person had been hired. [00:26:44] Speaker 03: The complete study and analysis had been done. [00:26:47] Speaker 03: And it was already being implemented. [00:26:50] Speaker 03: So there are facts in this record that shows this is beyond just speculation. [00:26:55] Speaker 03: This actually happened. [00:26:56] Speaker 03: We put the evidence into the record. [00:26:58] Speaker 03: And lastly, on the theory of can they change this term, this material term of the contract that now six months in, we're going to move your territory, whether you think that's relocation, it's your employee at will. [00:27:13] Speaker 03: They said, well, continued employment, if there was, needed to be a modification, his continued employment showed his acceptance of that modification. [00:27:23] Speaker 03: When he was told that he needed to move five days a week in territory in John Day, Oregon, the other side of the state, this is in New York, this is, or excuse me, this is the small state, this is Oregon, he quit. [00:27:38] Speaker 03: He did not accept the modification. [00:27:41] Speaker 03: Thank you, Your Honors. [00:27:42] Speaker 03: I appreciate it. [00:27:42] Speaker 04: Thank you. [00:27:43] Speaker 04: Thank you to both counsel. [00:27:44] Speaker 04: The case just argued is submitted for decision by the court.