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Sadwick v. University of Utah

United States District Court, D. Utah, Central Division
Jan 16, 2001
Case No. 2:00-CV-412C (D. Utah Jan. 16, 2001)

Opinion

Case No. 2:00-CV-412C.

January 16, 2001


ORDER


Plaintiff Ruey-Jen Hwu Sadwick has brought this 42 U.S.C. § 1983 suit against the University of Utah ("University") and various faculty and administrators of the University of Utah (collectively, "Defendants"). Sadwick is a tenured professor in the University's Electrical Engineering Department, and much of her work involves research. Sadwick's claims in this lawsuit generally arise from disputes relating to research she performed at the University, and particularly her belief that George Gray, a former professor in the Electrical Engineering Department, misappropriated inventive work allegedly developed by Sadwick.

This case is now before the court on Defendants' motion to dismiss Counts 1, 2, 11, 13, 14, 15, 16, 17, and 19 of Sadwick's amended complaint. The facts are set forth in the parties' pleadings and will not be repeated except as necessary to explain the court's decision. For the reasons set forth below, the court grants in part and denies in part Defendants' motion for partial dismissal.

Standard of Review

In ruling on a motion to dismiss, the court must decide whether the factual allegations in the complaint, if true, would entitle the plaintiff to some form of legal remedy. See Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure is appropriate only if "the plaintiff can prove no set of facts in support of his claims to entitle him to relief." Seamons v. Snow, 84 F.3d 1226, 1231 (10th Cir. 1996). The court "must accept as true all the factual allegations in the complaint, construe them in a light most favorable to the plaintiff, and resolve all reasonable inferences in plaintiff's favor." Id. at 1231-32.

When qualified immunity is asserted as a defense, the plaintiff is held to a heightened standard of pleading. See Dill v. City of Edmond, 155 F.3d 1193, 1204 (10th Cir. 1998). The complaint must contain "specific, non-conclusory allegations of fact sufficient to allow the district court to determine that those facts, if proved, demonstrate that the actions taken were not objectively reasonable in light of clearly established law." Id.

Discussion

I. Federal claims A. Count 13-Misappropriation of the Inventions

Between mid-1995 and November 30, 1996, Sadwick was the principal investigator on a research contract sponsored by the American Laser Corporation ("American Laser"). As part of her research on the American Laser project, Sadwick developed two inventions, known as U-2293 and U-2294 ("the Inventions"), and she disclosed reports on the Inventions to the University's Technology Transfer Office ("TTO") in March 1996. Since that time, the TTO has not sought to patent the Inventions. (See Am. Compl. ¶¶ 21-28.)

Sadwick alleges that, during the summer of 1996, Defendant George Gray, a faculty member in the Electrical Engineering Department, discovered Sadwick's research results and sought to publish them as his own, without crediting either Sadwick or American Laser. (See id. ¶¶ 29-43.) Sadwick claims that when she informed Defendant David Pershing, the Dean of the College of Engineering, about Gray's plagiarism, Pershing did nothing to remedy the situation. (See id. ¶¶ 38-39.) An informal investigation into Gray's actions was initiated by the TTO in August 1996, and Defendant Om Gandhi, Chair of the Electrical Engineering Department, and Defendant Douglas Christiansen, a faculty member in the Electrical Engineering Department, were appointed as committee members. The committee concluded that Gray's work did not appear to be based on Sadwick's Inventions. (See id. ¶¶ 53-59.) Sadwick further claims that Christiansen aided Gray's plagiarism by releasing to him information from Sadwick's invention disclosures and, along with Defendant Robert Benner, another faculty member of the Electrical Engineering Department, by collaborating with Gray to publish Gray's plagiarized work in a journal article. (See id. ¶¶ 62, 72-73.)

On April 13, 1998, Sadwick submitted to Defendant Richard Koehn, the Vice-President of Research for the University, a formal request for investigation and hearing concerning Gray's alleged research misconduct. Koehn transferred this request to Pershing, who formed a Faculty Hearing Committee to conduct an investigation. The Faculty Hearing Committee never held a hearing, instead dismissing Sadwick's claims on March 29 and May 19, 1999. Sadwick appealed the denial of hearing, but University President J. Bernard Machen affirmed the decision in July 1999. (See id. ¶¶ 76-87.)

Count 13 of Sadwick's amended complaint alleges that the Defendants violated 42 U.S.C. § 1983 by appropriating her Inventions without affording her her Fourteenth Amendment right to due process. Specifically, Sadwick contends that her right to due process was violated by: (a) Gray when he plagiarized her research work, (b) Christiansen when he aided Gray's plagiarism, and (c) Pershing, Koehn, Gandhi, and Christiansen when they failed to hold a hearing or otherwise protect Sadwick against Gray's plagiarism. Defendants seek to dismiss this claim, asserting that Count 13: (1) fails to identify a protectable property interest, (2) fails to establish a causal connection between the Defendants and Sadwick's claimed loss, (3) fails to state a claim for injunctive relief, (4) is barred by the applicable statute of limitations, (5) is barred by the doctrine of qualified immunity.

Count 13 of Sadwick's amended complaint also alleges the violation of 42 U.S.C. § 1985(3) and 42 U.S.C. § 1986, but Sadwick has waived these claims. (See Pl.'s Mem. in Opp. to Mot. for Partial Dismissal at 17, stating that Plaintiff "does not object to the dismissal of her Title 42 U.S.C. § 1985(3) and 1986 claims contained in her Thirteenth Claim for Relief.")

1. Property interest

The Defendants first contend that Sadwick has failed to identify a property interest in her Inventions which would be protected under the Due Process Clause of the Fourteenth Amendment. The procedural protections of the Due Process Clause apply when the government has deprived an individual of an interest in liberty or property. See Board of Regents v. Roth, 408 U.S. 564, 569 (1972). The existence of a property interest is determined by reference to "existing rules or understandings that stem from an independent source such as state law." Id. at 577; accord Calhoun v. Gaines, 982 F.2d 1470, 1473 (10th Cir. 1992). It is clear that, under Utah law, interest in unpatented inventions unknown to potential competitors, or trade secrets, constitutes a property right.See Uniform Trade Secrets Act, Utah Code Ann. § 13-24-3; Jensen v. Redevelopment Agency, 998 F.2d 1550, 1556 (10th Cir. 1993), citing Microbiological Research Corp. v. Muna, 625 P.2d 690, 696 (Utah 1981). The question here is to whom the property interest belonged: Sadwick or the University.

Sadwick admits that, under the University's contract with American Laser, "any intellectual property developed with the involvement of American Laser's employees would be owned jointly by American Laser and the University." (Am. Compl. ¶ 22.) Sadwick claims that she nevertheless maintains a property interest in two aspects of the Inventions: (1) the royalties stemming from potential marketing of the Inventions, and (2) a reversionary interest in ownership of the Inventions. Royalties would be due to Sadwick only if the Inventions were claimed by the University and licensed. (See id. ¶ 247.) Sadwick would have a reversionary interest in the Inventions, on the other hand, only if the University did not promote or develop the Inventions within three years. (See id. ¶ 228, quoting University manual § 6-4(III)(B)(5), attached as Ex. A to Pl.'s Mem. in Opp. to Mot. for Partial Dismissal: "[I]f the University does not actively promote or develop the inventions over a 3 year period, the inventor's claim to full rights will be honored.")

"A property interest must be specific and presently enforceable." See Doyle v. Oklahoma Bar Ass'n, 998 F.2d 1559, 1569 (10th Cir. 1993); Board of Regents v. Roth, 408 U.S. 564, 577 (1972) ("To have a property interest in a benefit, a person . . . must have more than a unilateral expectation of it.") It is true that, at the time the alleged misappropriation of her Inventions occurred, Sadwick's interest in royalties and her reversionary interest were potential only — the University had not yet marketed the Inventions, nor had three years already expired without the University promoting her Inventions. This does not, however, indicate that Sadwick did not have a property interest in the Inventions. Only two possible paths exist in this case: either the University would claim and promote the Inventions (in which case Sadwick would have a property interest in the royalties), or they would not (in which case Sadwick would have a property interest in the reversion of the rights to her). The court thus finds that at the time she filed her complaint, Sadwick did maintain a property interest in the Inventions, even if she did not know the precise form that property interest would take.

2. Causal connection

The Defendants next allege that Sadwick fails to identify a sufficient causal connection between the individual defendants (Gray, Christensen, Gandhi, Koehn, and Pershing) and the alleged constitutional violation. Sadwick's amended complaint alleges that Gray submitted invention disclosures to the TTO for inventions which incorporated the research work he misappropriated from Sadwick. The TTO then proceeded with patent applications on Gray's submissions, to the alleged detriment of Sadwick's ability to patent her own Inventions. (See Am. Compl. ¶¶ 61, 92.) The Defendants contend that this amounts to an admission that it was the University's TTO office, and not the individual defendants, who compromised Sadwick's interest in her Inventions.

Contrary to the Defendants' assertions, however, Sadwick does identify a causal connection between the Defendants and the alleged misappropriation of the Inventions. Sadwick's amended complaint alleges that Gray misappropriated her research (see id. ¶¶ 29-43); that Christiansen aided Gray in his misappropriation (see id. ¶¶ 62, 72-73), and that Pershing, Koehn, Gandhi, and Christiansen failed to affirm Sadwick as the true creator of the Inventions (see id. ¶¶ 38-39, 53-59, 78-87.). Sadwick has, then, alleged that the aforementioned defendants were involved and responsible at various stages before the TTO's eventual involvement; the TTO's licensing of Gray's inventions was only the final step in this alleged misconduct. Accordingly, the court finds that Sadwick has sufficiently alleged a causal connection between the individual Defendants' actions and the alleged constitutional injury.

3. Failure to state a claim for injunctive relief

The Defendants contend that Sadwick has failed to state a claim for injunctive relief because her amended complaint alleges only injuries which occurred in the past. A plaintiff must demonstrate "a real and immediate threat of injury" in the future in order to be entitled to injunctive relief. See City of Los Angeles v. Lyons, 461 U.S. 95, 101 (1983). Sadwick's amended complaint, however, does allege a future injury. Sadwick claims that, by virtue of his plagiarism of Sadwick's research, Gray will receive royalties in the future to which Sadwick is legally entitled. (See Am. Compl. ¶¶ 92, 158-159, 167, 181, 274.) The amended complaint makes clear that the alleged injury to Sadwick is ongoing: "The misappropriation of Plaintiff's trade secrets has caused Plaintiff to suffer and continue to suffer a loss of recognition for her work, a potential loss of patent protections on her inventions, [and] a loss of royalties . . ." (See id. at ¶ 167) (emphasis added). Although money damages would reimburse Sadwick for value misappropriated from the Inventions in the past, an injunction could be necessary to direct the University to assign any future royalties derived from Gray's allegedly plagiarized inventions to Sadwick. Therefore, Sadwick has stated a claim for injunctive relief.

4. Statute of limitations

Sadwick filed her initial complaint in Utah state court on November 24, 1999. Sadwick then filed an amended complaint on March 29, 2000, after which the case was removed to this court on May 18, 2000.

The Defendants allege that Sadwick filed her complaint after the expiration of the statute of limitations on her allegations. "For section 1983 actions, state law determines the appropriate statute of limitations." Fratus v. Deland, 49 F.3d 673, 675 (10th Cir. 1995). Under Utah law, § 1983 claims are entitled to a four-year statute of limitations, as provided by Utah Code Ann. § 78-12-25(3). See Larson v. Snow College, 115 F. Supp.2d 1296, 1307 (D.Utah 2000).

According to the amended complaint, the earliest Sadwick could have known of Gray's alleged plagiarism was June 28, 1996, when she was shown an article written by Gray which allegedly incorporated Sadwick's research. (See Am. Compl. ¶ 34.) As noted above, Sadwick's amended complaint was filed on March 29, 2000, less than four years later. Accordingly, the court finds that Sadwick filed her amended complaint within the time allowed by the applicable statute of limitations.

5. Qualified immunity

The individual defendants, as state employees, assert that they are entitled to qualified immunity. The doctrine of qualified immunity protects government officials performing discretionary functions so long as their conduct does not violate clearly established federal rights.See Tonkovich v. Kansas Bd. Of Regents, 159 F.3d 504, 516 (10th Cir. 1998). Once a defendant pleads qualified immunity, the plaintiff "bears a heavy two-part burden." Albright v. Rodriguez, 51 F.3d 1531, 1534 (10th Cir. 1995). First, the court must "determine whether the plaintiff has alleged the deprivation of an actual constitutional right at all."Wright v. Layne, 526 U.S. 603, 609 (1999); accord Oliver v. Woods, 209 F.3d 1179, 1185 (10th Cir. 2000). Second, if the plaintiff shows a violation of a federal right, the court should then "proceed to determine whether that right was clearly established at the time of the alleged violation." Wright, 526 U.S. at 603; accord Oliver, 209 F.3d at 1185. Two distinct groups of Defendants warrant separate analysis here: Gray and Christiansen are alleged to have directly misappropriated Sadwick's research, while Pershing, Koehn, and Gandhi are alleged to have denied Sadwick a hearing concerning her complaints of Gray's misappropriation.

a. Gray and Christiansen

Gray and Christiansen are alleged to have violated Sadwick's constitutional rights by misappropriating her inventive work without due process of law. (See Am. Compl. ¶¶ 29-43, 62, 72-73.) Sadwick has fulfilled the first prong of the qualified immunity analysis by sufficiently alleging that Gray and Christiansen's actions violated the Due Process Clause. In Jensen v. Redevelopment Agency, 998 F.2d 1550 (10th Cir. 1993), the Tenth Circuit Court of Appeals acknowledged that, under Utah law, an individual's interest in trade secrets represents a property interest. See id. at 1556. The Jensen court assumed, without holding, that misappropriation of a valid trade secret would constitute a constitutional violation. See id. at 1556-57.

Some property interests — those which can be characterized as truly de minimus — are not constitutionally protected. See Dill v. City of Edmond, 155 F.3d 1193, 1207 (10th Cir. 1998). Sadwick's interest in royalties from and ownership of her Inventions, which could amount to thousands of dollars or more, cannot be said, however, to be a de minimus property interest. See Goss v. Lopez, 419 U.S. 565, 575 (1975) (holding that 10-day suspension from school was not de minimus);Fuentes v. Shevin, 407 U.S. 67, 90 n. 21 (1972) (acknowledging that due process must be granted before deprivation of property interest that "cannot be characterized as de minimus").

The next question is whether the federal right alleged by Sadwick to have been violated was clearly established at the time of the alleged violation. A constitutional right is "clearly established" if "[t]he contours of the right [are] sufficiently clear that a reasonable official would understand that what he is doing violates that right." Anderson v. Creighton, 483 U.S. 635, 640 (1987); accord Tonkovich, 159 F.3d at 516. "Ordinarily, in order for the law to be clearly established, there must be a Supreme Court or Tenth Circuit decision on point, or the clearly established weight of authority from other courts must have found the law to be as the plaintiff maintains." Medina v. City and County of Denver, 960 F.2d 1493, 1498 (10th Cir. 1992).

The Tenth Circuit's reached its decision in Jensen in 1993, three years before Gray and Christiansen are alleged to have misappropriated Sadwick's research. Therefore, "the constitutional or statutory rights the defendant allegedly violated were clearly established at the time of the conduct at issue." Oliver, 209 F.3d at 1185.

b. Pershing, Koehn, and Gandhi

To satisfy the first prong of the qualified immunity analysis, Sadwick must have sufficiently alleged that Pershing, Koehn, and Gandhi's actions violated a federal right. See Oliver, 209 F.3d at 1185. It is unclear whether Sadwick has satisfied this prong because it is unclear exactly what Pershing, Koehn, and Gandhi are accused of doing. Sadwick's amended complaint at times alleges that Pershing, Koehn, and Gandhi failed to adequately investigate Sadwick's complaints of Gray's plagiarism. (See Am. Compl ¶¶ 38-39, 53-59, 78-87.) In other places, however, the amended complaint makes the stronger allegation that Pershing, Koehn, and Gandhi "acted jointly and in concert with each other pursuant to a mutual purpose to impair Plaintiff's property interests in her inventions . . . [and to] deprive Plaintiff of her right to a fair and impartial resolution and resolution of her Research Misconduct . . ." (Id. ¶ 273.) For the purposes of this motion to dismiss, the court assumes that the stronger of Sadwick's allegations is true.

But even with that liberal reading of her claim, Sadwick has failed to demonstrate that the law was clearly established at the time of the alleged violation. Sadwick argues that well-established Utah law against stealing trade secrets is sufficient to put Pershing, Koehn, and Gandhi on notice that denying Sadwick a hearing about her complaints of research plagiarism was also unconstitutional. (See Pl.'s Mem. in Opp. to Mot. to Dismiss at 17.) Direct misappropriation of trade secrets, however, is very different from failure to hold a hearing on the matter of whether a colleague has misappropriated trade secrets. "A plaintiff `must do more than identify in the abstract a clearly established right and allege that the defendant has violated it.' . . . A plaintiff `must articulate the clearly established constitutional right and the defendant's conduct which violated the right with specificity." Tonkovich, 159 F.3d at 517;accord Smith v. Plati, 56 F. Supp.2d 1195, 1204 (D.Colo. 1999) (stating that "plaintiff must allege a specific law or right violated by defendant's conduct"). Sadwick has presented no case law which would clearly establish that a University administrator or faculty member is violating the Constitution if he or she denies a researcher a hearing or fails to adequately investigate following that researcher's complaint of research plagiarism. Pershing, Koehn, and Gandhi are therefore entitled to qualified immunity against Sadwick's thirteenth claim for relief.

Accordingly, the court grants Defendants' motion to dismiss Count 13 with respect to Pershing, Koehn, and Gandhi, but denies Defendants' motion to dismiss Count 13 with respect to Gray and Christiansen.

Sadwick's amended complaint alleges that Christiansen also failed to properly investigate or otherwise affirm Sadwick's interest in the Inventions. (See Am. Compl. at 48-49.) As discussed above, Christiansen is entitled to qualified immunity against the charge that he failed to properly investigate or otherwise affirm Sadwick's interest in the Inventions, but he is not entitled to qualified immunity against the charge that he directly misappropriated Sadwick's research.

B. Count 14-Removal from Associate Chair position

Gray resigned from his position with the University in August 1997. One month later, Gandhi appointed Sadwick as the Associate Chair of the Electrical Engineering Department. After hearing about Sadwick's appointment, Gray sent a letter to Gandhi and several departmental faculty members suggesting that Sadwick's appointment to the Associate Chair position was inappropriate. On October 20, 1997, Defendants Christiansen, Madgy Iskander, Richard Grow, Robert Huber, and Robert Benner — all faculty members in the Electrical Engineering Department — jointly drafted a letter to Gandhi, protesting Sadwick's promotion and demanding her removal. (See Faculty Letter to Gandhi, attached at rear of Am. Compl.) In October 1998, Gandhi removed Sadwick from the Associate Chair position.

Count 14 of Sadwick's amended complaint alleges that Gandhi, Pershing, Grow, Iskander, Christensen, Huber, and Benner violated § 1983, § 1985(3), and § 1986 by contributing to the removal of Sadwick from the Associate Chair position without due process of law. As discussed below, Count 14 fails to state a claim upon which relief can be granted.

1. Section 1985(3) and 1986 claims 42 U.S.C. § 1985(3) provides that "[i]f two or more persons . . . conspire . . . for the purpose of depriving . . . any person . . . of the equal protection of the laws, . . . the party so injured or deprived may have an action for the recovery of damages." See 42 U.S.C. § 1985(3). Section 1985(3) claims do not "apply to all tortious, conspiratorial interferences with the rights of others," but rather only to conspiracies motivated by "some racial, or perhaps otherwise class-based, invidiously discriminatory animus." Griffin v. Breckenridge, 403 U.S. 88, 101-02 (1971). In the absence of allegations of class-based animus, a claim cannot be brought under § 1985(3). See Bisbee v. Bey, 39 F.3d 1096, 1102 (10th Cir. 1994) (dismissing claims under § 1985 where plaintiff failed to allege class-based animus). Sadwick fails to allege anywhere in her amended complaint that her removal from the Associate Chair position was due to class-based animus. Accordingly, Sadwick's § 1985(3) claim under Count 14 of her amended complaint fails to state a claim.

Sadwick's § 1986 claim falls along with her § 1985(3) claim. Section 1986 confers liability upon individuals who know that a conspiracy in violation of § 1985 is about to be committed but fail to prevent it. See 42 U.S.C. § 1986. "[T]here can be no valid claim under § 1986 of neglect to prevent a known conspiracy, in the absence of a conspiracy under § 1985." Santistevan v. Loveridge, 732 F.2d 116, 118 (10th Cir. 1984). Because her amended complaint does not allege facts which could constitute a violation of § 1985, Sadwick also fails to state a claim under § 1986. The Defendants' motion to dismiss Count 14's § 1985(3) and § 1986 claims is granted.

2. Section 1983 claim

Count 14 also fails to state a claim under § 1983. In order to be entitled to protection under the Due Process Clause, an individual must allege that she possessed a liberty or property interest. See Roth, 408 U.S. at 569. Sadwick has alleged that she maintained a property interest in the Associate Chair position. (See Am. Compl. ¶¶ 277-286.) The existence of a property interest is determined by reference to "existing rules or understandings that stem from an independent source such as state law." Id. at 577; accord Calhoun, 982 F.2d at 1473. Sadwick, however, has not identified any independent source, such as state law, which establishes that a teacher at a university has a property right to remain in a particular appointed position once appointed. In fact, Tenth Circuit decisions suggest that Sadwick likely did not have a property interest in the position. Accord Lancaster v. Independent Sch. Dist. No. 5, 149 F.3d 1228, 1234-35 (10th Cir. 1998) (holding that, under Oklahoma law, a high school teacher's extra-duty assignment as a football coach was not a protected property interest because "tenured teachers have a protected interest only in continued employment, not in a particular position"); Childers v. Independent Sch. Dist. No. 1, 676 F.2d 1338, 1341 (10th Cir. 1982) (Under Oklahoma law, "[t]eachers do not acquire the right to be employed in any particular position, rather the right of a tenured teacher is to continuing employment. Subject to statutory boundaries, the Board may assign teachers within the school system as they desire."). Accordingly, Defendants' motion to dismiss Count 14's § 1983 claim is granted.

C. Count 15-Returned overhead account

At the University, research contracts frequently accumulate "returned overhead," and this money is typically spent by the faculty researchers. According to Sadwick, in November or December of 1999, Defendants Gerald Stringfellow, the Dean of the College of Engineering, and John Matthews, the Acting Chair of the Electrical Engineering Department, appropriated the returned overhead on the American Laser contract for use by the University. (See Am. Compl. ¶¶ 154-57.)

Count 15 of Sadwick's amended complaint alleges that the appropriation of her returned overhead constituted a denial of her due process and equal protection rights. Defendants respond by asserting that Stringfellow and Matthews are entitled to qualified immunity.

1. Due process

In order to defeat an assertion of qualified immunity, Sadwick must first demonstrate the violation of a federal right. See Oliver, 209 F.3d at 1185. To demonstrate that she was denied her rights under the Due Process Clause, Sadwick must identify a liberty or property interest identified by an existing independent source such as state law. See Roth, 408 U.S. at 569, 577.

Sadwick's amended complaint alleges that "[o]ne of Plaintiff's employment benefits is the right for her to use returned overhead from contracts . . ." (Am. Compl. ¶ 154.) The complaint does not identify whether this supposed employment benefit derives from state law, an official University policy, the University's consistent practice, the University's occasional practice, the department's consistent practice, or the department's occasional practice. Indeed, Sadwick has failed to identify any existing rule under which the right to use returned overhead from research contracts is deemed a property interest. "To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it." Board of Regents v. Roth, 408 U.S. 564, 564 (1972). Sadwick has failed to demonstrate whether use of the returned overhead was an entitlement or a mere subjective expectancy. See Heynneman v. Housing Auth., 1995 WL 302429 at *2 (N.D.Cal. May 15, 1995) (ruling that employee's expectancy in his annual performance review was not a property interest sufficient to convey protection under § 1983).

The cases cited by Sadwick on this point are easily distinguishable. In Cook v. Zions First National Bank, 919 P.2d 56 (Utah App. 1996), a state court held that the plaintiff had a contractual interest in her sick leave time, as distinct from her employment itself. In Cook, however, the plaintiff had an express contractual right to her sick leave. See id. at 59. Sadwick has not similarly alleged an express contractual right to her returned overhead. Moreover, Cook was not a § 1983 case at all, but rather a case under contract law.

In Calhoun v. Gaines, 982 F.2d 1470 (10th Cir. 1992), the plaintiff had worked at a college without a formal tenure system, and employees at the college would be re-hired every year on a new contract. Before his termination, the plaintiff had worked at the college for ten years, had always been re-offered continued employment, and had acquired an expectation in his continued employment based on this consistent practice. The court concluded that Calhoun had sufficiently identified a property interest, stating that a property interest in continued employment could arise not only from state law and employment contracts but also from "a contract `implied' from policies and practices of a particular institution." Id. at 1473. Sadwick analogizes that, because the apparent University practice was to reward researchers with returned overhead, she had a protected expectation in its continued receipt. The plaintiff's interest in Calhoun, however, was continued public employment, a subject which has been repeatedly recognized as conferring a protected property interest. See, e.g., Roth, 408 U.S. at 564. Sadwick's property interest is not continued public employment, but rather her returned overhead, an alleged benefit of her employment.

Sadwick's allegations also fail to meet the second prong of the qualified immunity analysis which requires a plaintiff to demonstrate that the allegedly violated federal right "was clearly established such that a reasonable person in the defendant's position would have known that his or her conduct violated that right." Tonkovich, 159 F.3d at 516. Even had Sadwick demonstrated that the appropriation of the returned overhead account violated a federal right, she has still failed to demonstrate that this right was clearly established. In order for the law to be "clearly established," there must ordinarily be a Supreme Court or Tenth Circuit decision on point, or the clearly established weight of authority from other courts must have supported the plaintiff's view of the law. See Medina, 960 F.2d at 1498. Sadwick has not identified any cases that have held that the appropriation of returned overhead accounts represents a constitutional violation. If anything, the case law seems to oppose Sadwick's claim: courts have held that employment benefits, as opposed to continued employment itself, are "not sufficiently weighty to warrant constitutional protection." Heynneman, 1995 WL 302429, at *2;accord Portman v. County of Santa Clara, 995 F.2d 898, 907 n. 3 (9th Cir. 1993) (granting qualified immunity to state officials charged with violating plaintiff's due process right to sick leave and medical benefits); Ramsey v. Board of Educ., 844 F.2d 1268, 1272 (6th Cir. 1988) (holding that property interest in accumulated sick leave should be protected under state breach of contract action rather than § 1983).

Defendant's motion to dismiss Count 15's due process claim is granted.

2. Equal protection

Sadwick's amended complaint alleges that the Stringfellow and Matthews violated her right to equal protection by appropriating her returned overhead but not that of other faculty members. (See Am. Compl. ¶ 157.) "An equal protection violation occurs when the government treats someone differently than another who is similarly situated." Penrod v. Zavaras, 94 F.3d 1399, 1406 (10th Cir. 1996), citing City of Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 439 (1985). Sadwick has failed to identify any other faculty member who was similarly situated but treated differently by Stringfellow and Matthews.

D. Count 16-Pay raises

Sadwick's amended complaint alleges that, in 1998 and 1999, Gandhi gave Sadwick a lower raise than he gave other members of the electrical engineering department. (See Am. Compl. ¶ 161.) Count 16 of Sadwick's amended complaint contends that this different treatment violated Sadwick's right to equal protection.

Again, Sadwick has failed to identify any faculty member who received a higher raise than Sadwick did in 1998 or 1999, or whether other faculty members were "similarly situated" (in terms of seniority, faculty duties, other criteria factoring into the awarding of raises). Count 16 of Sadwick's amended complaint therefore fails to state a claim under the Equal Protection Clause and is dismissed.

E. Count 17-Freedom of speech

American Laser terminated its contract with the University on November 30, 1996. In the fall of 1998, the University and American Laser were engaged in negotiations over amounts still due on the contract. Sadwick claims that Defendant Lynne Chronister, the Director of the Office of Sponsored Projects, deliberately misrepresented facts in an attempt to mislead American Laser. (See Am. Compl. ¶¶ 122-144.) When Sadwick requested permission to speak with American Laser to correct these alleged misrepresentations, Stringfellow allegedly told Sadwick not to communicate with American Laser. (See id. ¶¶ 131, 148.) Count 17 of Sadwick's amended complaint contends that Chronister and Stringfellow violated her First Amendment rights to free speech and association by refusing to allow Sadwick to communicate with American Laser.

In order for a claim to be justiciable under Article III, it must be shown to be a ripe controversy. See New Mexicans for Bill Richardson v. Gonzalez, 64 F.3d 1495, 1499 (10th Cir. 1995). "Ripeness is peculiarly a question of timing . . . intended `to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements.'" Id. When determining whether a case is ripe for judicial review, a court should consider two factors: "(1) hardship to the parties by withholding review; (2) fitness of the controversy for judicial review." Id. at 1499.

In certain First Amendment cases which present a facial challenge to a statute, the court considers an additional factor — the chilling effect the challenged law may have on First Amendment liberties. See New Mexicans for Bill Richardson, 64 F.3d at 1500. Sadwick's First Amendment claim does not present a facial challenge to a statute. Even were this additional factor considered, however, the court concludes that Sadwick's First Amendment claim would not be ripe for judicial review.

Examining the first factor of the ripeness analysis, Sadwick has failed to demonstrate any hardship in withholding review. She has alleged only that Chronister and Stringfellow "told her she could not talk to American Laser." (Am. Compl. ¶ 148; see also id. ¶ 131.) Sadwick has not alleged that the Defendants made a "genuine threat of enforcement" by threatening to retaliate against her if she communicated with American Laser. Steffel v. Thompson, 415 U.S. 452, 473 (1973) (finding declaratory judgment against state prosecution appropriate in absence of arrest and indictment, where plaintiff had been warned twice and threatened with arrest if he did not cease his conduct). The case ofNational Treasury Employees Union v. Kurtz, 600 F.2d 984 (D.C. Cir. 1979), is similar to the situation here. In Kurtz, a union official issued a press release charging the IRS with squandering money, after which the IRS issued a memorandum reminding personnel of an IRS regulation which required personnel not to disclose matters relating to IRS operations without prior authorization. When the union brought suit against the IRS regulation on First Amendment grounds, the court determined that the issue was not ripe, as there had been no allegation that any employee had been threatened with adverse action for exercising his or her free speech rights. See id. at 989; accord Renne v. Geary, 501 U.S. 312, 320 (1991) (finding that First Amendment issue was not ripe for review where potentially illegal regulation had not been enforced subsequent to plaintiffs' speech); Smith v. Boyer, 442 F. Supp. 62, 64-65 (W.D.N.Y. 1977) (dismissing First Amendment case on ripeness grounds because, inter alia, there had been no threat of sanctions if plaintiff engaged in contested conduct).

With regards to the second factor, Sadwick's allegations are not ripe for judicial review. Simply put, Sadwick has not yet engaged in any speech. Sadwick has alleged only that she desired to communicate with American Laser but was instructed not to do so. Because there has been no actual speech in this case, the court can only speculate whether statements made by Sadwick would or would not have been constitutionally protected.

Because Sadwick's First Amendment claims are not yet ripe for judicial review, Defendants' motion to dismiss Count 17 of Sadwick's amended complaint is granted.

II. State law claims A. Count 1-Uniform Trade Secrets Act

The first count of Sadwick's amended complaint alleges that Gray and Christiansen violated the Utah Uniform Trade Secrets Act ("UTSA"). Under the UTSA, an individual may be liable for damages if he or she acquired a trade secret through improper means. See Utah Code Ann. § 13-14-1 et seq.

Under Utah law, "an action for misappropriation shall be brought within three years after the misappropriation is discovered or, by the exercise of reasonable diligence should have been discovered. For the purposes of this section, a continuing misappropriation constitutes a single claim." Utah Code Ann. § 13-24-7. Sadwick discovered that Gray was plagiarizing her research results as early as June 1996. On or about June 28, 1999, Sadwick was shown a paper written by Gray, suspected that it utilized her research, and confronted Gray about the issue. (See Am. Compl. ¶¶ 34, 35; see also id. ¶ 38, stating that on July 15, 1996, Sadwick "expressed her concerns to Defendant Pershing . . . about Defendant Gray's plagiarization of her research.") The statute of limitations thus allowed Sadwick until June 1999 to file her action under the UTSA. Sadwick did not file her amended complaint, however, until May 2000, nearly a year after the expiration of the statute of limitations period.

Sadwick's original complaint, filed on November 24, 1999, was also filed after the expiration of the statute of limitations period.

Sadwick argues that the statute of limitations period should be extended for two reasons. First, Sadwick's amended complaint alleges that "[i]n or about the end of April 1997, Plaintiff learned about [Gray's] abstracts and, for the first time, suspected that Defendant Gray had successfully published and misused her research and inventive work." (Am. Compl. ¶ 63.) Sadwick argues that the statute of limitations period doesn't expire until three years after this date, in April 2000. As shown by the allegations in her amended complaint, however, Sadwick knew or should have known about Gray's misappropriation in June 1996. Her amended complaint, filed more than three years later, in May 2000, was filed after the expiration of the statute of limitations.

Second, Sadwick contends that because Gray's alleged misappropriation of Sadwick's research occurred over a period of time, the statute of limitations did not begin to run until after Gray's alleged misconduct had been completed. The statute of limitations on a misappropriation action begins to run, however, once a plaintiff is made aware of the facts which could give rise to a misappropriation claim. See Chasteen v. UNISIA JECS Corp., 216 F.3d 1212, 1216-20 (10th Cir. 2000); see also Glue-Fold, Inc. v. Slautterback Corp., 82 Cal.App.4th 1018, 1025 (Cal.App. 2000) (holding that, under the California Uniform Trade Secrets Act, the statute of limitations period begins to run when the plaintiff knew or should have known that the defendant has acquired, disclosed, or used the plaintiff's trade secret).

Accordingly, Defendants' motion to dismiss Count 1 of Sadwick's amended complaint is granted. B. Count 2-Conversion of royalties

Defendants also argue that (1) Sadwick does not own the trade secrets in question, and (2) this claim is barred by the Utah Governmental Immunity Act. The court does not reach these arguments, as it finds that Count 1 of Sadwick's amended complaint is barred under the statute of limitations.

Count 2 of Sadwick's amended complaint alleges that Gray illegally converted Sadwick's royalties when he applied to Process Instruments, Inc., to license inventions based on Sadwick's research. (See Am. Compl. ¶¶ 170-74.) Gray contends that this claim was filed after the expiration of the applicable statute of limitations and must thus be dismissed as untimely.

The amended complaint alleges that Sadwick first learned of Gray's misappropriation in June 1996 (see id. ¶¶ 34-35) and that she complained of this misappropriation to Pershing, the Dean of the College of Engineering, in July 1996 (see id. ¶ 38). It further alleges that Gray began consulting with Process Instruments, Inc. in 1996. (See id. ¶ 70.) Sadwick, then, knew or should have known of Gray's alleged conversion by June 1996 at the earliest and late 1996 at the latest.

Under Utah law, the statute of limitations for conversion is three years. See Utah Code Ann. § 78-12-26. Sadwick had until late 1999 to file her complaint. But her amended complaint was not filed, however, until May 2000, several months after the expiration of the statute of limitations. Accordingly, the court grants Defendants' motion to dismiss Count 2 of Sadwick's amended complaint.

The parties dispute whether Count 2 of Sadwick's amended complaint is governed by Utah Code Ann. § 78-12-26(2), which applies to "taking, detaining, or injuring personal property," or § 78-12-26(3), which relates to the taking of property through fraud. This distinction is important because the statute of limitations on a suit brought under subsection (2) begins to run upon the occurrence of the last event necessary to complete the cause of action, while a suit brought under subsection (3) begins to run only when the plaintiff discovers or should have discovered this cause of action. See Becton Dickinson Co. v. Reese, 668 P.2d 1254, 1257 (Utah 1983). The court concludes, however, that Sadwick's action for conversion would be barred by the statute of limitations under either rule.

Although Sadwick's original complaint was filed in November 1999, it does not allege the general facts needed to support a claim for conversion of royalties. (See Compl. at 2-6.)

C. Count 11-Breach of fiduciary duty

Sadwick's eleventh claim alleges that the University breached its fiduciary duty to Sadwick when it misappropriated and failed to protect the royalties due to her from the Inventions. Because the University is a state agency, it is covered under the Utah Governmental Immunity Act ("UGIA"). Under the UGIA, a plaintiff bringing suit against the state or a state employee is required to file a notice of claim with the state within one year of the alleged injury. See Utah Code Ann. § 63-30-12. Failure to comply with this notice requirement deprives the court of subject matter jurisdiction. See Nielson v. Gurley, 888 P.2d 130, 134 (1995).

Sadwick became aware of the facts giving rise to her fiduciary duty claim in mid-1996 or early-1997 at the latest. (See Am. Compl. ¶¶ 56, 57, 63, 71, 72.) Under the UGIA, she had to file her notice of claim no later than early-1998. Sadwick did not file her notices of claim, however, until November 12 and December 28, 1999. (See Aff. of Emily Olsen in Supp. of Defs.' Mot. for Partial Dismissal at 2.).

Sadwick seeks to excuse her failure to file a timely notice of claim with two arguments. First, she notes that UGIA does not require the filing of a notice of claim for a contract action. See Utah Code Ann. § 63-30-5(1). Breach of fiduciary duty, however, is typically considered a form of tort. See Restatement of Torts 2d § 874 (1979) ("A fiduciary who commits a breach of his duty as a fiduciary is guilty of tortious conduct . . ."); accord Restatement of Contracts 2d § 193 (1979) (describing breach of fiduciary duty as a tort claim). Although an action for breach of fiduciary duty may on rare occasions sound in contract, see Hal Taylor Associates v. Unionamerica, Inc., 657 P.2d 743, 749 (Utah 1982), under Utah law contracts rarely implicate a fiduciary relationship. See Semenov v. Hill, 982 P.2d 578, 580 (Utah 1999). Sadwick has not pointed to any facts of this case which would suggest that her fiduciary duty claim is the extraordinary type sounding in contract and not in tort.

Second, Sadwick argues that her original awareness of a breach of fiduciary duty did not start the clock, as she has alleged a continuing violation. Sadwick points to the language of the UTSA, which states that, for a misappropriation claim, "a continuing misappropriation constitutes a single claim." Utah Code Ann. § 13-24-7. The Tenth Circuit has specifically ruled against the "continuing violation" theory, holding that the clock begins to run on a misappropriation claim once the plaintiff becomes aware of the facts giving rise to his or her suit. See Chasteen v. UNISIA JECS Corp., 216 F.3d 1212, 1217 (10th Cir. 2000) (interpreting provision of Colorado Uniform Trade Secrets Act identical to provision in Utah act); see also Ashton-Tate Corp. v. Ross, 916 F.2d 516, 523-24 (9th Cir. 1990) (interpreting provision of California Uniform Trade Secrets Act identical to provision in Utah act).

Accordingly, Defendants' motion to dismiss Count 11 of Sadwick's amended complaint is granted.

D. Count 19-Intentional interference with economic relations

Count 19 of Sadwick's amended complaint alleges that Gandhi intentionally interfered with Sadwick's economic relations when he removed Sadwick from the Associate Chair position, and that Grow, Iskander, Huber, Christensen, Benner, and Gray intentionally interfered with her economic relations by sending the October 20, 1997 letter to Gandhi, demanding Sadwick's removal. The Defendants assert that this claim is barred by Sadwick's failure to file a timely notice of claim as required under UGIA.

UGIA requires that a plaintiff bringing suit against the state or a state employee file a notice of claim with the state attorney general's office within one year of the occurrence of the facts which give rise to the claim. See Utah Code Ann. § 63-30-12. Sadwick was removed from the associate chair position on October 1, 1998. Sadwick's notices of claim were not filed until more than a year later, on November 12 and December 28, 1999. (See Aff. of Emily Olsen in Supp. of Defs.' Mot. for Partial Dismissal at 2.)

Sadwick raises three arguments in an attempt to get around UGIA's notice provision. First, she notes that University policy mandates that "[f]aculty members must not . . . purposely interfere with the legitimate activities of other person on the university campus." (Ex. C § 8-12.4-D(5), attached to Pl.'s Mem. in Opp.) Sadwick claims that her attempt to redress this alleged economic interference through the University's internal grievance system should equitably toll the running of the UGIA's one-year requirement. The Utah courts have established a rule of strict compliance with the notice provisions of UGIA. See Yates v. Vernal Family Health Ctr., 617 P.2d 352, 354 (Utah 1980). The cases cited by Sadwick, in which the courts equitably tolled the UGIA notice provision, are distinguishable, as they all involved situations in which plaintiffs were misled by state officials. See Forsman v. Forsman, 779 P.2d 218, 220 (Utah 1989) (state misrepresented that defendant was not employee of state); Vincent v. Salt Lake County, 583 P.2d 105, 106-07 (Utah 1978) (state agent misinformed plaintiff); Rice v. Granite Sch. Dist., 456 P.2d 159, 161-64 (Utah 1969) (representative of state induced plaintiff into delaying filing of notice); Bischel v. Merritt, 907 P.2d 275 (Utah Ct.App. 1995) (state misinformed plaintiff as to correct address to send the notice of claim). Sadwick does not allege that she failed to file a timely notice of claim because she was misled by a state official.

Second, Sadwick alleges that the individual defendants acted out of personal desires, and not in their official capacities, when they sent their letter to Gandhi. UGIA does not apply to the actions of state officials taken in their personal, rather than their official, capacities. See Nielson, 888 P.2d at 134. The Defendants' request that Sadwick be removed from the Associate Chair position, however, was made as part of a larger letter suggesting ways to improve the Electrical Engineering Department. (See Letter to Gandhi, attached to rear of Am. Compl.) Clearly, the actions of Grow, Iskander, Christensen, Huber, and Benner were made in their official capacities, requiring compliance with the UGIA notice requirement.

Third, Sadwick notes that Gray resigned from the University in August 1997. Once Gray was no longer a state employee, he ceased to be covered by UGIA. See Utah Code Ann. § 63-30-12 (UGIA notice provisions apply to suits against the state and state employees). Sadwick was therefore not required to submit a notice of claim in order to bring suit against Gray for actions alleged to have been committed by Gray after August 1997. Sadwick's amended complaint alleges that Gray intentionally interfered with Sadwick's economic relations when he sent his letter to Gandhi, suggesting that Sadwick be removed from the Associate Chair position, on September 24, 1997. (See Am. Compl. ¶¶ 96-97.) The court finds that Sadwick was not required to file a notice of claim to challenge this action.

Accordingly, the court grants Defendants' motion to dismiss Count 19 of Sadwick's amended complaint with respect to Gandhi, Iskander, Huber, Benner, Grow, and Christiansen, and denies Defendant's motion to dismiss Count 19 with respect to Gray.

III. Leave to amend complaint

Sadwick seeks leave from the court to further amend her complaint so as to: (1) allege a liberty interest under the due process claim of Count 14; (2) allege the existence of a similarly situated individual under the equal protection claim under Count 15; and (3) allege the existence of a similarly situated individual under the equal protection claim of Count 16. (See Pl.'s Mem. in Opp. to Mot. for Partial Dismissal at 3, 19, 22-23.) "[A] party may amend the party's pleading only by leave of court or by written consent of the adverse party . . ." Fed.R.Civ.P. 15(a). Sadwick has not yet filed a motion on this matter, however, nor has she explained to the court why further amending her complaint would not be futile.

Accordingly, Count 14, the equal protection claim of Count 15, and the equal protection claim of Count 16 are dismissed without prejudice. The court denies without prejudice Sadwick's request to amend these claims; if Sadwick wishes to file a motion and memorandum more fully supporting this request, the court will revisit this issue in the future.

Order

For the foregoing reasons, the court GRANTS Defendants' motion to dismiss Counts 1, 2, 11, 14, 15, 16, and 17 of Sadwick's amended complaint; GRANTS Defendants' motion to dismiss Count 13 with respect to Defendants Pershing, Koehn, and Gandhi, but DENIES Defendants' motion with respect to Defendants Gray and Christiansen; and GRANTS Defendants' motion to dismiss Count 19 with respect to Defendants Gandhi, Iskander, Huber, Benner, Grow, and Christiansen, but DENIES Defendants' motion with respect to Defendant Gray.


Summaries of

Sadwick v. University of Utah

United States District Court, D. Utah, Central Division
Jan 16, 2001
Case No. 2:00-CV-412C (D. Utah Jan. 16, 2001)
Case details for

Sadwick v. University of Utah

Case Details

Full title:RUEY-JEN HWU SADWICK, Plaintiff, vs. UNIVERSITY OF UTAH, et al., Defendants

Court:United States District Court, D. Utah, Central Division

Date published: Jan 16, 2001

Citations

Case No. 2:00-CV-412C (D. Utah Jan. 16, 2001)

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