Court Fight Over $100M in Science Grants

SAN DIEGO (CN) - A federal judge refused to dismiss cross-claims that the University of Southern California and a noted Alzheimer's researcher brought over a state school's $100 million research grant.

The Regents of the University of California, on behalf of UC-San Diego, sued Paul S. Aisen and eight of his colleagues in July 2105.

The regents claimed that Aisen conspired with the University of Southern California to take data, funding and his colleagues at UCSD to form a research facility with USC.

The regents said that UCSD discovered that Aisen, a former professor of neurology and medicine and director of its Alzheimer's Disease Cooperative Study (ADCS), conspired with USC to go to USC and "create a brand new 'Institute' in San Diego by hiring away the necessary UCSD employees who serve the ADCS."

The regents claimed that the funding, from government and private sources, was more than $100 million.

U.S. District Judge Roger Benitez on Tuesday refused to dismiss cross-claims against cross-defendant Regents of the University of California, finding the university's claim for relief under the Eleventh Amendment did not hold up.

The board of regents claimed immunity as an entity of the state of California.

But Benitez found that a state can waive its immunity by voluntarily showing up in court as a plaintiff, which the regents did in their July 2015 lawsuit.

The case was removed from San Diego Superior Court to Federal Court.

Aisen has worked with the Alzheimer's Disease Collaborative Study for 23 years, as its director since 2007, according to Benitez's summary. Aisen is the principal investigator of clinical studies and the supervising physician for every patient in the clinical trials.

UC-San Diego was home base for the study, which relies on an advanced computer system known as the Electronic Data Capture system, which maintains data for various clinical trials.

After taking over as director, Aisen sought additional support from UC-San Diego to expand the Alzheimer's program, but had little success. He met with the project's steering committee in January 2014 to discuss his problems with UCSD. The steering committee supported his decision to find another institutional home for the program, according to Benitez's summary.

When UCSD got wind of Aisen's talks with USC, it formed a retention committee which held many meetings with Aisen and "embarked on a course of actions designed to interfere with such a move," according to the cross-complaint, cited in Benitez's order.

On May 22, 2015, UCSD cut off Aisen's access to its computer systems, including email and other servers.

"Since Aisen relied on the university electronic systems for many aspects of his medical practice, including the determination and adjustment of experimental drug dosage for clinical patients, the blocking of access interfered with Aisen's physician-patient relationships, compromised patient safety, and threatened the integrity of the research," Benitez wrote in his order.

The next day, a cross-defendant official "demanded that Aisen sign an Oath of Loyalty" to regain access to university computers, Benitez wrote. Apparently, Aisen refused, and "Four days later, the National Institute of Health intervened with the Cross-Defendants to restore Aisen's access. On June 18, 2015, Aisen tendered his resignation to UCSD."

Aisen claims, among other things, that the loyalty oath violated his speech rights and "infringed on his right to freely consider other positions in academia."

Aisen claims UC San Diego and the University of California have "set out to destroy his reputation in academia."

Other employees who left UCSD and followed Aisen to USC claim that when they gave their notice of resignation, their final paychecks were withheld unless they agreed to an exit interview, and that the school also failed to reimburse them for work-related travel expenses.

USC and Aisen alleged violations of the California Constitution and civil rights, defamation and interference with patient relations, contracts and prospective economic advantage.

Benitez found that state law is clear that as a public entity the University of California cannot require any employee to execute a loyalty oath.

The school argued that it was not really an oath of loyalty, but a "reminder of the legal obligations owed by any employee in California."

Benitez did not buy the regents' argument that Aisen did not suffer or claim to have suffered damages because he did not sign the oath. The judge found that Aisen "has clearly alleged both causation and damages," including a First Amendment violation.

Benitez also found that Aisen sufficiently pleaded a claim for defamation over public statements from representatives of the university who said Aisen could "be put in jail and have his medical license suspended."

Aisen and USC's attorney, Michael Williams with Quinn Emanuel Urquhart & Sullivan in Los Angeles, said his clients are pleased with the ruling.

"Dr. Aisen and USC are very pleased that the court rejected entirely the regents' attempt to dismiss these meritorious claims. Dr. Aisen and USC look forward to proving these claims to a jury and holding the Regents responsible for their conduct," Williams said.

The regents are represented by Daniel Sharp with Crowell & Moring in San Francisco, who did not return an email request for comment.

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