UC-USC Alzheimer’s|Grant Spat Narrowed

     SAN DIEGO (CN) — A federal judge has dismissed many individual scientists from a suit in which the University of California claims one of its former scientists conspired with the University of Southern California to take grant funding and employees.
     The UC Regents, on behalf of UC San Diego, claim former Alzheimer’s researcher Paul Aisen conspired with USC to take funding and employees to form a new research center with the private school. At least $100 million in research dollars was at stake, the regents claim.
     Earlier this month, U.S. District Judge Roger Benitez refused to dismiss the case as well as cross-claims filed by Aisen and USC against the regents.
     The regents claim computer systems built by UC San Diego were developed by the school’s staff, who later blocked the UCSD’s access and ability to use its own computer systems when they followed Aisen to USC.
     A total of 11 individuals — including Aisen — were sued by the regents for conspiring with USC.
     In his third order this month, Benitez on Friday found a lack of specific allegations against four of the individual defendants — Hong Mei Qiu, Stefania Bruschi, Jia-Sing So and Mayya Nessirio — and dismissed them, noting they were only mentioned once in the regents’ amended complaint as “double-agents” focused on advancing their own “personal interests.”
     The sole mention of those four defendants in the amended complaint does not satisfy the fair notice and plausibility requirements, Benitez found, noting of the 11 individually named defendants, only seven are “specifically named throughout the substantive allegations.”
     As to the allegations against four other individuals — Jeremy Pizzola, Deborah Tobias, Gustavo Jimenez-Maggiora and Phuoc Hong — Benitez declined to dismiss several claims against them.
     He agreed with the regents’ claim that the individuals breached their duty of loyalty to their employer, citing a recent ruling by the chief judge of the Southern District of California which finds that employees owe a duty of loyalty under state law.
     And since the regents successfully stated a claim for breach of loyalty, their claim against USC for aiding and abetting the breach of loyalty claims also holds up, Benitez wrote.
     UC San Diego’s claim its contracts with study sponsors were intentionally disrupted by the school’s former employees when they worked with Aisen to “engineer” the movement of the Alzheimer’s program away from UC San Diego to USC stands up for now as well, Benitez found.
     Since the defendants knew of the contracts with the study sponsors and the financial gains UC San Diego stood to gain through future economic benefits, the regents’ conversion assertion also holds up, the judge found.
     But Benitez dismissed two claims for computer crimes and conversion of data against the four.
     The computer crimes or “anti-hacking statute” is a complicated law which prohibits the unauthorized use of any computer system, Benitez wrote. Despite being a criminal provision, it also permits a civil claim for relief — but the regents’ amended complaint does not identify any subsection of the statute that the defendants violated.
     On top of the complicated nature of the computer crimes provision, the regents needed to show their former employees acted beyond their regular duties when they blocked UC San Diego from accessing its own computers. This is because the regents identified the four individuals as UC San Diego employees who accessed the computers and networks while in the scope of employment.
     But too few facts offered to support the regents’ claims, Benitez said.
     The regents also failed to identify how the employees’ conduct went beyond their typical work duties, which the regents needed to do in order to successfully plead a computer crimes claim, Benitez noted.
     Benitez found the regents’ conversion claim may only move forward as it applies to physical devices such as laptops and cell phones they claim were stolen by former employees. The conversion of data is superseded by California’s trade secrets law, he said.
     A sweeping conspiracy claim that all the defendants acted as a group to commit conspiracy against UC San Diego was rebutted by the individual defendants who argued again that the regents must cite specific conspiracy claims against each individual.
     The court agreed, finding that while the regents offered evidence of a conspiracy between Aisen and USC, the amended complaint is short on specifics regarding the individual defendants.
     Because of the lack of specifics, the court only allowed the claim for conspiracy to violate the duty of loyalty. All other conspiracy claims against the four defendants were dismissed for failure to state a claim.
     John Quinn with Quinn Emanuel Urquhart & Sullivan in Los Angeles said his clients are pleased the court “continues to whittle away” the regents’ claims.
     “The latest order dismissed four of the defendants outright, confirming our belief that UC Regents sued these individuals for no reason other than to punish them for exercising their right to change jobs and to scare other UC employees from changing jobs as well,” Quinn said.
     The regents are represented by Daniel Sharp with Crowell & Moring in San Francisco, who has not returned multiple email and phone requests for comment on the case.

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