Meldrum v. Arizona Board of Regents

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 Deirdre Meldrum, No. CV-20-02165-PHX-GMS 10 Plaintiff, ORDER 11 v. 12 Arizona Board of Regents, et al., 13 Defendants. [15] 16 Pending before the Court is Defendants Arizona Board of Regents (“ABOR”), 17 Michael Crow, Robert Page, Mark Searle, Barry Graham Ritchie, Sethuraman 18 Panchanathan, Joshua LaBaer, and Tamara Deuser’s (collectively, “ASU Defendants”) 19 Motion to Dismiss. (Doc. 12.) Also before the Court is Defendants Rick Shangraw, Jr., 20 Augustine Cheng, and Arizona Science and Technology Enterprises LLC’s (now known 21 as Skysong Innovations, LLC) (“AzTE/Skysong”) (collectively, “AzTE/Skysong 22 Defendants”) Motion to Dismiss. (Doc. 13.) For the following reasons, both motions are 23 granted in part and denied in part.1 24 BACKGROUND 25 Plaintiff Deirdre Meldrum (“Plaintiff”) is a professor at Arizona State University [26] 1 Plaintiff requested oral argument. That request is denied because the parties have had an 27 adequate opportunity to discuss the law and evidence and oral argument will not aid the Court’s decision. See Lake at Las Vegas Invs. Grp., Inc. v. Pac. Malibu Dev. Corp., 933 28 F.2d 724, 729 (9th Cir. 1991). 1 (“ASU”). (Doc. 1-3 at 6 ¶ 3.) Defendant Michael Crow, President of ASU, recruited 2 Plaintiff in 2005. Id. ¶ 18. Plaintiff alleges Crow made several promises to induce her to 3 accept a position at ASU as a Dean. Id. ¶ 19. Those promises were eventually set forth in 4 Plaintiff’s 2006 offer letter and commitment of resources (“Outline of Resources”). Id. ¶¶ 5 19, 21. After working for several years as a Dean, ASU demoted Plaintiff to the role of 6 Senior Scientist. Id. ¶ 26. During her transition from Dean to Senior Scientist in 2010, 7 Plaintiff alleges that Provost Capaldi Phillips renewed the promises Crow made to her 8 when she was recruited. Id. ¶ 27. 9 While working for ASU, Plaintiff became increasingly concerned about 10 “mismanagement and potential waste of funds at ASU.” Id. ¶ 32. On June 12, 2014, 11 Plaintiff served a letter (the “Letter”) on the Governor of Arizona and the Arizona Attorney 12 General and sent copies of the Letter to other individuals at ASU and ABOR. Id. ¶ 47. 13 The Letter raised several issues about ASU’s practices. Id. ¶¶ 47–48. Plaintiff later served 14 a second version of the Letter, which contained a summary about other individuals whom, 15 she alleges, were “lured to ASU with unfulfilled promises.” Id. ¶ 50. 16 Plaintiff asserts that several ASU employees took actions against her following 17 service of the Letter. Those employees include Defendant Crow, Robert E. Page, Mark 18 Searle, Barry Graham Ritchie, Sethuraman Panchanathan, Joshua LaBaer, and Tamara 19 Deuser. Plaintiff also asserts that Defendants R.F. Shangraw, Jr. and Augustine Cheng 20 took actions against her. Shangraw and Cheng work for Defendant AzTE/Skysong, which 21 is the exclusive intellectual property management and technology transfer organization for 22 ASU. Id. ¶ 14. 23 Plaintiff filed suit in Maricopa County Superior Court on September 28, 2020. The 24 Complaint asserts the following causes of action: Declaratory Relief A.R.S. § 12-1831 25 (“Count I”); Breach of Contract (“Count II”); Breach of Implied Covenant of Good Faith 26 and Fair Dealing (“Count III”); Intentional and Negligent Misrepresentation (“Count IV”); 27 Unjust Enrichment (“Count V”); Promissory Estoppel (“Count VI”); Whistleblowing 28 Retaliation in Violation of Public Policy (“Count VII”); Tortious Interference with 1 Employment Relationship (“Count VIII”); Violations of the Arizona Wage Act (“Count 2 IX”); Violations of the First Amendment (Right to Free Speech) (“Count X”); Violations 3 of the First Amendment (Petition to Redress Grievances) (“Count XI”); Violation of Title 4 IX (“Count XII”); and Violation of Arizona Public Records Laws (“Count XIII”). 5 Defendants removed the case to this Court on November 10, 2020. The ASU Defendants 6 and AzTE/Skysong Defendants now move to dismiss the Complaint. 7 DISCUSSION 8 I. Legal Standard 9 To survive dismissal for failure to state a claim pursuant to Federal Rule of Civil 10 Procedure 12(b)(6), a complaint must contain more than a “formulaic recitation of the 11 elements of a cause of action”; it must contain factual allegations sufficient to “raise the 12 right of relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544 , 555 13 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). When analyzing a complaint 14 for failure to state a claim, “allegations of material fact are taken as true and construed in 15 the light most favorable to the non-moving party.” Smith v. Jackson, 84 F.3d 1213 , 1217 16 (9th Cir. 1996). However, legal conclusions couched as factual allegations are not given a 17 presumption of truthfulness, and “conclusory allegations of law and unwarranted 18 inferences are not sufficient to defeat a motion to dismiss.” Pareto v. F.D.I.C., 139 F.3d 19 696, 699 (9th Cir. 1998). 20 II. Analysis2 21 a. Counts I-III, VI 22 1. Institutional Funding and Research Space [23] 2 The ASU Defendants assert that, as to ABOR, Crow, Page, Searle, Ritchie, and 24 Panchanathan, Plaintiff’s state law claims are time barred to the extent they are based on facts occurring prior to March 1, 2015 and federal law claims are barred to the extent they 25 are based on facts prior to March 1, 2014. (Doc. 12 at 5.) As to LaBaer and Deuser, the ASU Defendants argue that those defendants cannot be held liable for actions that occurred 26 before September 28, 2019 on the state law claims and before September 28, 2018 on the federal law claims. Id. at 6. Plaintiff does not dispute that these limitations periods apply. 27 The claims that are not dismissed on the merits all sufficiently rest on factual allegations that occurred within the parties agreed-upon limitations period. Accordingly, without 28 deciding that the assented statutory period is proper, the statute of limitations does not bar the remaining claims. 1 The Outline of Resources contained several promises, including that Plaintiff would 2 be “a center director in the Biodesign Institute with 5,000 square feet of lab space in 3 Biodesign, your research office, and 10 office/desk spaces.” (Doc. 12-1 at 4.) Plaintiff 4 alleges that Crow “repeatedly reassured Plaintiff that these resources would be made 5 available to Plaintiff and did not suggest to Plaintiff that these resources were limited in 6 duration or could be modified or terminated during her tenure without her agreement or 7 consent.” (Doc. 1-3 at 17 ¶ 22.) Plaintiff alleges ASU breached the promises in the Outline 8 of Resources in several ways, such as by reducing Plaintiff’s lab space beginning in May 9 2016. Id. ¶ 92. Drawing all reasonable inferences in favor of Plaintiff, Plaintiff plausibly 10 alleges that ABOR breached her employment contract by reducing her institutional funding 11 and research space. 12 Contrary to the ASU Defendants’ assertions, Plaintiff’s correspondence with 13 Provost Phillips does not prove lack of breach. Prior to accepting her terms of employment 14 as Senior Scientist in 2010, Plaintiff asked Provost Capaldi what promises from the Outline 15 of Resources would remain in force in her new role. Id. ¶27. Provost Phillips stated that 16 ASU would continue to support items 3 and 4 in the Outline of Resources, subject to a 17 review on a five-year schedule, and that all other commitments would “remain as agreed 18 to previously.” (Doc. 12-1 at 4.) The promise about Plaintiff’s lab space, for instance, is 19 listed as Item 5 in the Outline of Resources. (Id. at 4.) Accordingly, Plaintiff’s 20 correspondence with Provost Phillips does not indicate that her lab space was subject to 21 modification. Additionally, the ABOR policies regarding evaluation procedures do not 22 indicate that the promises in the Outline of Resources were limited in duration or subject 23 to modification. See (Doc. 12 at 7.) Accordingly, Plaintiff may base her contract claims 24 on her allegations regarding institutional funding and research space. 25 2. Non-Renewal of Administrative Appointments 26 The ASU Defendants assert that Plaintiff cannot base her contract claims on the 27 non-renewal of her appointment as Senior Scientist and her removal as a Biodesign 28 Director because ABOR policies provide that administrative appointments may be 1 terminated “at any time without cause or explanation.” Id. at 8. Plaintiff does not address 2 this argument in her response, and she apparently concedes that her contract incorporated 3 ABOR policies and it is appropriate to consider them on a motion to dismiss. Accordingly, 4 Counts I-III and VI are dismissed to the extent that they are based on non-renewal of her 5 administrative appointments. 6 3. Teaching Assignments 7 The Outline of Resources promised that Plaintiff would “not have required 8 teaching.” (Doc. 12-1 at 4.) Plaintiff alleges ABOR breached this promise when Director 9 Phillips informed Plaintiff in 2015 that she had to teach two classes. (Doc. 1-3 at 34 ¶ 82.) 10 It is plausible that this promise is still enforceable, even though Plaintiff is no longer 11 a Dean. As previously discussed, Provost Phillips confirmed that certain commitments in 12 the Outline of Resources, including the promise about teaching requirements, would 13 “remain as agreed to previously” in Plaintiff’s new role as Senior Scientist. (Doc. 12-2 at 14 3.) Additionally, ABOR Policy 6-201(G) does not prohibit ASU from making such a 15 promise. (Doc. 12-15.) Accordingly, Counts I-III and VI remain to the extent they are 16 based on her teaching assignments. 17 4. Sabbatical 18 The Outline of Resources also provided that “[w]hen you have the college such that 19 you can take leave, you are authorized for a sabbatical.” (Doc. 12-1 at 4.) Plaintiff further 20 alleges in her complaint that “Plaintiff’s sabbatical leave was approved by Defendant Crow 21 for use in conjunction with her deanship in the College of Engineering which ended 22 December 31, 2010.” (Doc. 1-3 at 37 ¶ 95). In 2017, Plaintiff advised her academic unit 23 that she intended to take her “pre-approved sabbatical” beginning in Fall 2017. (Id. ¶ 95.) 24 Director Phillips notified Plaintiff that her sabbatical was denied, which Plaintiff alleges is 25 “contrary to the terms of [her] employment contract which made the granting of her 26 sabbatical non-discretionary. Id. ¶ 96. Dean Squires later reversed this denial and approved 27 Plaintiff’s sabbatical for Spring 2018. Id. at 38 ¶ 101. 28 Plaintiff does not respond to the ASU Defendants’ argument that ASU’s sabbatical 1 policies require persons eligible for a sabbatical to submit a proposal for approval. (Doc. 2 12 at 9.) Nor does she explain how the right to choose the specific period of her sabbatical 3 which was expressly designed in conjunction with her deanship, survived its termination. 4 Instead, Plaintiff asserts that ASU’s interference with her sabbatical is a breach of the 5 implied covenant of good faith and fair dealing. 6 A party breaches the covenant “by exercising express discretion in a way 7 inconsistent with a party’s reasonable expectations and by acting in ways not expressly 8 excluded by the contract’s terms but which nevertheless bear adversely on the party’s 9 reasonably expected benefits of the bargain.” Keg Rests. Ariz., Inc. v. Jones, 240 Ariz. 64 , 10 77, 375 P.3d 1173, 1186 (Ct. App. 2016) (quoting Bike Fashion Corp. v. Kramer, 202 Ariz. 11 420, 424, 46 P.3d 431, 435 (Ct. App. 2002)). Plaintiff alleges that the purpose of her 12 sabbatical was to “pursue scientific research to de-risk certain inventions and intellectual 13 property.” (Doc. 1-3 at 49 ¶ 131.) Plaintiff alleges that several of the ASU Defendants 14 interfered with her ability to conduct her sabbatical project. Id. ¶ 143. For instance, 15 Plaintiff alleges that, during relocation of her lab space in Spring 2018, “Defendants . . . 16 engage[d] in delay tactics, or, alternatively, failed to take all reasonable and necessary 17 means” to relocate her lab in a prompt manner. Id. ¶ 143(j). Plaintiff asserts that this 18 interference delayed her sabbatical for three months and “irreparably damaged” her 19 research projects. Id. ¶ 144. Taken together, Plaintiff plausibly alleges breach of the 20 implied covenant of good faith and fair dealing. As Plaintiff appears to only defend her 21 covenant claim, Counts I, II, and VI are dismissed to the extent they are based on Plaintiff’s 22 sabbatical. 23 5. Named Professorship 24 Finally, Plaintiff’s 2006 offer letter promised “a named professorship.” Id. ¶ 21. A 25 named professorship is important for several reasons, including for recognition, credibility, 26 and the ability to secure research grants. Id. ¶ 177. Plaintiff alleges that she repeatedly 27 requested her named professorship, as promised, but that the ASU Defendants continued 28 to state that the named professorship was “forthcoming.” Id. ¶ 178. Plaintiff further asserts 1 that “Defendants continued to unreasonably and unjustifiably delay and stonewall in 2 fulfilling” this promise. Id. Relying on the reassurances that the named professorship was 3 forthcoming, Plaintiff took no affirmative action, other than repeatedly raising the issue. 4 Id. ¶ 179. 5 In June 2016, Dean Squires informed Plaintiff that she would receive a “generic, 6 non-descriptive name, ‘Professor of Biosignatures.’” Id. ¶ 182. Plaintiff alleges that this 7 name is not a “true named professorship.” Id. ¶ 185. After protest, Plaintiff conditionally 8 agreed to the title of “Distinguished Professor of Biosignatures Discovery.” Id. ¶ 186. 9 Plaintiff asserts that, to this date, ASU has not provided her with “an appropriately named 10 professorship consistent with its contractual commitment and generally recognized and 11 accepted standards in academia” and that ASU’s delay and refusal to provide her an 12 appropriate name has negatively impacted her work in several ways. Id. ¶¶ 187–88. As 13 ASU allegedly interfered with Plaintiff’s ability to receive a named professorship, Plaintiff 14 plausibly alleges her contract claims. 15 Additionally, Plaintiff’s contract claims are not barred by the statute of limitations. 16 A defendant may be equitably estopped from asserting a statute of limitations defense if 17 the “defendant made specific promises, threats, or inducements to prevent the plaintiff from 18 filing suit, those acts actually induced the plaintiff to forbear from filing suit, the acts 19 reasonably caused the plaintiff to forbear filing suit timely, and the plaintiff filed the suit 20 within a reasonable time after termination of the conduct warranting estoppel.” Viniegra 21 v. Town of Parker Mun. Prop. Corp., 241 Ariz. 22, 26 , 383 P.3d 665, 669 (Ct. App. 2016). 22 Plaintiff’s allegations that she took no action because she relied on ASU’s promise that her 23 named professorship was forthcoming provides plausible grounds for equitable estoppel. 24 b. Count IV 25 To state a claim for intentional misrepresentation, Plaintiff must allege: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker’s [26] knowledge of its falsity or ignorance of its truth; (5) the speaker’s intent that 27 it be acted upon by the recipient in the manner reasonably contemplated; (6) the hearer’s ignorance of its falsity; (7) the hearer’s reliance on its truth; (8) [28] the hearer’s right to rely on it; [and] (9) the hearer’s consequent and 1 proximate injury. 2 Comerica Bank v. Mahmoodi, 224 Ariz. 289 , 291–92, 229 P.3d 1031 , 1033–34 (Ct. App. 3 2010). 4 To state a claim for negligent misrepresentation, Plaintiff must allege that: (1) the defendant provided false information in a business transaction; (2) the [5] defendant intended for the plaintiff to rely on the incorrect information or 6 knew that it reasonably would rely; (3) the defendant failed to exercise reasonable care in obtaining or communicating the information; (4) the [7] plaintiff justifiably relied on the incorrect information; and (5) resulting 8 damage. 9 KB Homes Tucson, Inc, v. Charter Oak Fire Ins. Co., 236 Ariz. 326, 333 , 340 P.3d 405 , 10 412 n.7 (Ct. App. 2014). Claims grounded in fraud, such as intentional and negligent 11 misrepresentation, must abide by Federal Rule of Civil Procedure 9(b)’s heightened 12 pleading requirements. See Medrano v. Carrington Foreclosure Servs. LLC, No. CV-1913 04988-PHX-DWL, 2019 WL 6219337 , at *5 (D. Ariz. Nov. 21, 2019). “Rule 9(b) 14 demands that, when averments of fraud are made, the circumstances constituting the 15 alleged fraud be specific enough to give defendants notice of the particular misconduct . . 16 . so that they can defend against the charge and not just deny that they have done anything 17 wrong.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (internal 18 quotations and citation omitted) (alteration in original). “Averments of fraud must be 19 accompanied by ‘the who, what, when, where, and how’ of the misconduct charged.” Id. 20 (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)). Further, a plaintiff must 21 “set forth what is false or misleading about a statement, and why it is false.” Id. 22 1. ASU Defendants 23 Plaintiff alleges that Defendant Crow made numerous promises to induce Plaintiff 24 to accept a position at ASU. (Doc. 1-3 at 16 ¶ 19.) The Complaint lists several specific 25 promises, which include promises of resources, and alleges that Crow “repeatedly assured 26 Plaintiff that these resources would be made available to Plaintiff.” Id. ¶¶ 21–22. Plaintiff 27 also alleges that, at the time of her transition from Dean to Senior Scientist, Crow publicly 28 promised to provide her $2 million in internal funding. Id. ¶ 30. Plaintiff alleges that Crow 1 knowingly made these false representations, and further alleges that Crow routinely “lured 2 faculty and researchers to ASU on false and/or unfulfilled promises.” Id. ¶¶ 51, 212. 3 Taken together, Plaintiff’s allegations are sufficient to defeat a motion to dismiss on Count 4 IV against Defendant Crow. 5 However, Plaintiff does not plausibly allege misrepresentation against Defendants 6 Searle, Panchanathan, Page, LaBaer, or Deuser. Although the Complaint identifies certain 7 representations made by these Defendants, the Complaint does not indicate whether or how 8 Plaintiff detrimentally relied on the representations.3 9 Furthermore, the ASU Defendants fail to show that the economic loss doctrine is a 10 bar to Count IV. The economic loss doctrine is a “common law rule limiting a contracting 11 party to contractual remedies for the recovery of economic losses unaccompanied by 12 physical injury to persons or other property.” Flagstaff Affordable Hous. Ltd. P’ship v. 13 Design All., Inc., 223 Ariz. 320, 323 , 223 P.3d 664, 667 (2010). Arizona takes a narrow 14 approach to the economic loss doctrine. See Sullivan v. Pulte Home Corp., 232 Ariz. 344 , 15 345, 306 P.3d 1, 2 (2013). Arizona courts generally apply the doctrine in product liability 16 and construction defect cases. See Flagstaff, 223 Ariz. at 323 , 223 P.3d at 667 . “In cases 17 where courts have applied the rule outside these contexts, the parties had detailed contracts 18 allocating risk of loss and specifying remedies.” Kenneth Eisen & Assocs., Ltd. v. CoxCom, 19 Inc., No. CV-18-02120-PHX-JJT, 2019 WL 669770 , at *2 (D. Ariz. Feb. 19, 2019). Here, 20 the ASU Defendants do not address why the specificities of Plaintiff’s contract justify the 21 economic loss doctrine’s application. Accordingly, as argued, it does not bar Plaintiff’s 22 claim at this time. 23 2. AzTE/Skysong Defendants 24 3 Plaintiff asserts that the ASU Defendants may also be held “personally liable where they participated in the tort, had knowledge amounting to acquiescence, or were guilty of 25 negligence causing or contributing to the injury.” (Doc. 19 at 14.) The Complaint alleges that Crow, Searle, Panchanathan, and Page “acting both separately and together [ ] made” 26 certain misrepresentations and that Provost Phillips made certain misrepresentations at the direction of Crow and Searle. (Doc.1-3 at 69 ¶¶ 213–14.) The only adequately alleged 27 misrepresentations made by an ASU Defendant are those by Crow, as described above. The Complaint does not indicate how any other ASU Defendant was involved in making 28 those representations. Additionally, the Complaint does not indicate how Crow or Searle were involved in Provost Phillips’ misrepresentations. 1 Plaintiff alleges that Shangraw and Cheng “made the material and false 2 representations set forth in paragraphs 28-30, 52-53, 60-70, 72, 87, 92, 96, [and] 174.” 3 (Doc. 1-3 at 70 ¶ 217.) These paragraphs, however, do not identify misrepresentations 4 made by Shangraw or Cheng.4 Accordingly, Count IV is dismissed as to Shangraw and 5 Cheng. 6 c. Count V 7 To state a claim for unjust enrichment, a plaintiff must allege “(1) an enrichment; 8 (2) an impoverishment; (3) a connection between the enrichment and the impoverishment; 9 (4) absence of justification for the enrichment and the impoverishment and (5) an absence 10 of a remedy provided by law.” Carter v. Safeway Stores, Inc., 154 Ariz. 546, 549 , 744 11 P.2d 458 , 461 (Ct. App. 1987) (citation omitted). A plaintiff may pursue an unjust 12 enrichment claim “as an alternative theory of recovery in conjunction with a breach of 13 contract claim, subject, however, to only one recovery.” Lopez v. Musinorte Ent. Corp., 14 434 F. App’x. 696, 699 (9th Cir. 2011) (citing Trustmark Ins. Co. v. Bank One, 202 Ariz. 15 535, 542–43, 48 P.3d 485 , 492–93 (Ct. App. 2002)). Here, Plaintiff brings her unjust 16 enrichment claim in conjunction with her breach of contract claim. Accordingly, at this 17 stage, it is permissible for Plaintiff to assert both. 18 1. ASU Defendants 19 Plaintiff alleges that ASU failed to provide her the resources and funding to which 20 it agreed while reaping the benefit of her services, including her research, student training, 21 publications, and reputation. (Doc. 1-3 at 71 ¶ 224.) Plaintiff lists several specific 22 examples of impoverishment, including ASU’s reduction of the resources provided to her 23 for research. Id. ¶ 78. Taken together, Plaintiff sufficiently alleges an enrichment and 24 impoverishment. Accordingly, the ASU Defendants’ motion to dismiss Count V is denied. 25 2. AzTE/Skysong Defendants 26 Plaintiff alleges that the AzTE/Skysong Defendants wrongfully omitted Plaintiff 27 4 Plaintiff asserts that Shangraw and Cheng can be held liable because they aided and abetted the ASU Defendants’ misrepresentations. (Doc. 20 at 11.) However, the 28 Complaint alleges that Shangraw and Cheng “made” the representations, not that they aided the ASU Defendants. 1 from an invention disclosure. Id. ¶ 66. Plaintiff further alleges that Shangraw and Cheng 2 continue to market this “misappropriated intellectual property.” Id. ¶ 67. Based on these 3 actions, Plaintiff asserts that the AzTE/Skysong Defendants have been enriched by the 4 intellectual property she developed and that she has been impoverished by a deprivation of 5 certain intellectual property rights and income derived therefrom. Id. ¶¶ 65, 229–30. 6 Drawing all reasonable inferences in favor of Plaintiff, Plaintiff plausibly states a claim for 7 unjust enrichment. 8 d. Count VII 9 A.R.S. § 38-532 prohibits whistleblowing-related retaliation against an employee 10 who discloses information on a matter of public concern to a public body. Section 533 11 further provides that this statute: [12] does not apply to an employee or former employee of a state university or 13 the board of regents which has in effect at the time a personnel action is taken against the employee a rule or provision for the protection of its employees [14] from reprisal for the disclosure of information to a public body, except that 15 the employee or former employee may appeal the final administrative decision to the superior court. [16] 17 ABOR Policy 6-914 provides administrative procedures for employees, like 18 Plaintiff, who believe they have been retaliated against for whistleblowing. See (Doc. 1219 17.) Accordingly, this statute is only applicable to Plaintiff if she is appealing a final 20 administrative decision. As Plaintiff is not appealing an ASU administrative decision in 21 this suit and provides no assertions in her Complaint that pursuing these administrative 22 procedures would have been futile, Plaintiff is barred from bringing her whistleblowing 23 retaliation claim under Arizona statutory law. 24 Nor does Plaintiff have a private right of action under the Arizona Constitution. 25 Contrary to Plaintiff’s assertion, Ariz. Const. art. XVIII, § 6 (the “Anti-Abrogation 26 Clause”) does not create a private right to sue here. The Anti-Abrogation Clause prohibits 27 the abrogation, not the regulation, of certain tort claims which trace their origins to the 28 common law. Cronin v. Sheldon, 195 Ariz. 531, 538 , 991 P.2d 231, 238 (1999); see also 1 Barrio v. San Manuel Div. Hosp. for Magma Copper Co., 143 Ariz. 101, 106 , 692 P.2d 2 280, 285 (1984) (“[T]he abrogation clause is implicated when the right of action is 3 ‘completely abolished.’”). Furthermore, the Court will not recognize a Bivens-like cause 4 of action under the Arizona Constitution. Neither party presents authority that Arizona 5 recognizes a state Bivens-like claim. Additionally, the existence of a state statutory remedy 6 compels against a state Bivens action in any event. See Ziglar v. Abbasi, 137 S. Ct. 1843 , 7 1865 (2017) (“[T]he existence of alternative remedies usually precludes a court from 8 authorizing a Bivens action.”). Accordingly, Count VII is dismissed as to both the ASU 9 Defendants and the AzTE/Skysong Defendants. 10 e. Count VIII 11 To state a claim for tortious interference with a contractual relationship or business 12 expectancy, a plaintiff must allege: [13] (1) The existence of a valid contractual relationship or business expectancy; 14 (2) knowledge of the relationship or expectancy on the part of the interferer; (3) intentional interference inducing or causing a breach or termination of the [15] relationship or expectancy; and 16 (4) resultant damage to the party whose relationship or expectancy has been disrupted. [17] Wagenseller v. Scottsdale Mem’l Hosp., 147 Ariz. 370, 386 , 710 P.2d 1025, 1041 (1985). [18] 19 1. ASU Defendants 20 Plaintiff plausibly alleges that Defendants ABOR, Crow, Searle, Panchanathan, 21 LaBaer, and Deuser intentionally interfered with her employment relationship and business 22 expectancies. Plaintiff alleges that Crow and Searle took the position that Plaintiff’s 23 sabbatical leave was not approved, which was contrary to Plaintiff’s employment terms. 24 (Doc. 1-3at 37 ¶ 96.) Plaintiff also alleges that ASU failed to provide her with certain 25 resources in violation of her National Science Foundation grant’s terms. Id. ¶ 136. Plaintiff 26 asserts that Crow, Searle, and Panchanathan “intended to delay, disrupt and interfere” her 27 ongoing research projects by, for instance, mandating that Plaintiff relocate to inferior 28 research space. Id. ¶¶ 137, 143. Further, Plaintiff alleges her ongoing and future research 1 projects have been negatively impacted because Biodesign personnel, at the direction of 2 LaBaer and Deuser, attempted to repair and caused significant damage to Plaintiff’s 3 equipment in 2020. Id. ¶ 168. Despite Plaintiff’s insistence, Defendants have refused to 4 repair this equipment. Id. ¶¶ 168–69. Drawing all reasonable inferences in favor of 5 Plaintiff, the Complaint plausibly alleges intentional interference.5 6 Additionally, tortious interference with employment claims are not limited to a 7 defendant who is a third party to the contractual relationship. (Doc. 12 at 13.) In 8 Wagenseller, the Arizona Supreme Court held that the plaintiff could pursue a claim for 9 tortious interference with her employment contract against her supervisor. 147 Ariz. at 10 388–89, 710 P.2d at 1043–44. The court focused on whether the supervisor “improperly” 11 interfered with the employment relationship. Id. at 388 , 710 P.2d at 1043 . In Mintz v. Bell 12 Atlantic Systems Leasing Intern., Inc., the Arizona Court of Appeals affirmed that a 13 plaintiff may bring an interference claim in such an instance if the interfering party’s action 14 was improper. 183 Ariz. 550, 556 , 905 P.2d 559, 565 (Ct. App. 1995); see also Bernstein 15 v. Aetna Life & Cas., 843 F.2d 359 , 367 (9th Cir. 1988). Plaintiff’s tortious interference 16 allegations, as partially described above, assert that the ASU Defendants acted 17 inconsistently with Plaintiff’s terms of employment. See (Doc. 1-3 at 77 ¶ 254.) 18 Accordingly, as Plaintiff plausibly alleges that the ASU Defendants acted improperly, 19 Count VIII remains as to the ASU Defendants. 20 2. AzTE/Skysong Defendants 21 Plaintiff alleges that, under the conditions of her employment, she had an 22 expectation of sharing in revenue derived from inventions on which she was the Principal 23 Investigator, including invention M15-170L. Id. ¶¶ 61, 250. Plaintiff asserts that two 24 former ASU employees filed invention disclosure M15-170L with AzTE/Skysong without 25 her approval and that AzTE/Skysong, at the direction of Shangraw and Cheng, failed to 26 notify Plaintiff of the proposed disclosure. Id. ¶¶ 61, 66. Plaintiff further alleges that 27 5 Plaintiff refers to several paragraphs in stating her tortious interference claims against the ASU Defendants. Id. at 77 ¶ 254. These paragraphs do not refer to Defendants Page 28 or Ritchie. Accordingly, Count VIII is dismissed against Page and Ritchie in their individual capacities. 1 AzTE/Skysong later filed a provisional patent application without an adequate 2 investigation to determine inventorship or notifying Plaintiff. Id. ¶ 65. 3 Plaintiff’s allegations that Shangraw and Cheng directed AzTE/Skysong to not 4 notify Plaintiff about the proposed disclosure plausibly indicate that the AzTE/Skysong 5 Defendants intentionally interfered with Plaintiff’s ability to share in revenue from her 6 invention. Accordingly, Plaintiff plausibly states a claim for intentional interference with 7 contract. 8 Plaintiff, however, fails to sufficiently allege tortious interference with business 9 expectancy. “A plaintiff must be able to ‘identify a specific relationship with which the 10 defendant interfered’ to state a plausible claim for relief; the speculative hope of a business 11 expectancy is not enough.” ThermoLife Intern., LLC v. Gaspari Nutrition, Inc., 871 F. 12 Supp. 2d 905, 912 (D. Ariz. 2012) (quoting Dube v. Likins, 216 Ariz. 406, 414 , 167 P.3d 13 93, 101 (Ct. App. 2007)). Plaintiff asserts that the AzTE/Skysong Defendants interfered 14 with her expectation of revenue and royalties “derived from Defendants’ 15 commercialization through contracts with third parties.” (Doc. 20 at 17.) However, 16 Plaintiff does not identify who these third parties are. Accordingly, Plaintiff’s allegations 17 do not rise beyond the “mere hope” of a business expectancy. See Dube, 216 Ariz. at 412 , [18] 167 P.3d at 99 . Therefore, to the extent Count VIII alleges tortious interference with 19 business expectancy against the AzTE/Skysong Defendants, it is dismissed. 20 f. Count IX 21 Effective June 30, 2016, Plaintiff was demoted from her 12-month appointment as 22 Senior Scientist to a 9-month appointment as a Professor. (Doc. 1-3 at 65 ¶ 189.) Prior to 23 this demotion, Plaintiff had accrued 337.23 unused vacation hours. Id. ¶ 191. After the 24 demotion, ASU informed Plaintiff that she would receive a payout of only 176 hours and 25 that she forfeited the rest of her hours. Id. ¶ 190. 26 Plaintiff fails to sufficiently allege a violation of the Arizona Wage Act, regardless 27 of whether ASU or ABOR policy applies. Under A.R.S. § 23-355, if an employer fails to 28 pay wages due to an employee, the employee may recover “an amount that is treble the 1 amount of the unpaid wages.” Under ASU Academic Affairs Policies and Procedures 2 Manual (“ACD”) Policy 704-01, in effect in 2006 and 2010, “[a] cash payment for accrued 3 vacation leave will be made at the eligible faculty or academic professional’s current rate 4 of pay upon termination. Payment for vacation leave will not exceed the amount earned for 5 one year of service (i.e., 176 hours).” (Doc. 19 at 24, 32.) Similarly, ABOR Policy 6-803 6 provides that, “[u]pon termination of employment,” an employee shall be paid for her 7 accumulated vacation leave, not to exceed one year’s accrual. Id. at 37. Plaintiff is still 8 employed by ASU. (Doc. 1-3 at 6 ¶ 3.) Accordingly, under these policies, Plaintiff is not 9 yet entitled to any payment for her accrued vacation leave. 10 Plaintiff is also not entitled to a payout beyond 176 hours if the later version of ACD 11 Policy 704-01 applies. That version states that a payment of accrued vacation leave will 12 be made “upon termination from the position or any vacation-accruing appointment,” not 13 to exceed 176 hours. (Doc. 12-18 at 3.) As Plaintiff received a payout of 176 hours, ABOR 14 did not violate this version of ACD 704-01 either. Accordingly, Count IX is dismissed. 15 g. Counts X and XI 16 1. ASU Defendants 17 “The First Amendment shields a public employee if [s]he speaks as a citizen on a 18 matter of public concern.” Ellins v. City of Sierra Madre, 710 F.3d 1049, 1056 (9th Cir. 19 2013) (quoting Anthoine v. N. Cent. Cntys. Consortium, 605 F.3d 740, 748 (9th Cir. 2010)). 20 A claim that a government entity impermissibly retaliated against a plaintiff for the exercise 21 of her First Amendment rights requires the plaintiff to show that (1) she spoke on a matter 22 of public concern, (2) she spoke as a private citizen (not as a public employee), and (3) her 23 speech was a substantial or motivating factor in the adverse employment action. Robinson 24 v. York, 566 F.3d 817, 822 (9th Cir. 2009). 25 “The public concern inquiry is purely a question of law.” Eng v. Cooley, 552 F.3d 26 1062, 1070 (9th Cir. 2009). It looks at “the content, form, and context of a given statement, 27 as revealed by the whole record.” Connick v. Myers, 461 U.S. 138 , 147–48 (1983). 28 “Speech involves a matter of public concern when it can fairly be considered to relate to 1 ‘any matter of political, social, or other concern to the community.’” Johnson v. 2 Multnomah Cnty., 48 F.3d 420, 422 (9th Cir. 1995) (quoting Connick, 461 U.S. at 146 .) 3 For instance, “misuse of public funds, wastefulness, and inefficiency in managing and 4 operating government entities are matters of inherent public concern.” Id. at 425. The 5 speech in question need not be wholly devoted to issues of public concern to obtain First 6 Amendment protection. See Connick, 461 U.S. at 149 (affording protection to a multi7 party questionnaire that touched on matters of public concern). Nevertheless, “passing 8 references to public safety [ ] incidental to the message conveyed weighs against a finding 9 of public concern.” Desrochers v. City of San Bernardino, 572 F.3d 703, 711 (9th Cir. 10 2009) (internal quotations and citation omitted). 11 Plaintiff’s First Amendment claims are based, in part, on the Letter. Although much 12 of the Letter is focused on Plaintiff’s personal issues, the Letter touches on matters of public 13 concern. See (Doc. 1-3 at 24 ¶¶ 47–48.) For instance, the Letter discusses ASU’s failure 14 to properly account for private and public funds entrusted to ASU. (Doc. 12-19 at 8–9). 15 Focusing only on the content of the Letter, the ASU Defendants do not address the form 16 and context of the statements. As the Letter touches on matters of public concern, and the 17 ASU Defendants do not present arguments on the remainder of the public concern test, it 18 is not appropriate to dismiss Plaintiff’s First Amendment claims at this stage. 19 Additionally, contrary to the ASU Defendants’ assertions, the Complaint does 20 allege adverse actions that took place after Plaintiff released the Letter. See (Doc. 1-3 ¶ 21 266.) Accordingly, the ASU Defendants’ motion to dismiss Counts X and XI is denied. 22 2. AzTE/Skysong Defendants 23 The Complaint alleges that, following service of the Letter, the ASU Defendants, 24 Shangraw, and Cheng retaliated against her in various ways. Id. ¶ 243. However, Plaintiff 25 does not specifically allege that Shangraw or Cheng knew about or read the Letter. Plaintiff 26 argues that the contents of the Letter, which refers to the AzTE/Skysong Defendants, (Doc. 27 12-19), several paragraphs in her Complaint, (Doc. 1-3 ¶¶ 12-14, 28-29, 47-53, 59-72, 9028 92, 102-104, 242-243), and the interrelationship between AzTE/Skysong and ASU allows 1 the reasonable inference that Shangraw and Cheng knew about the contents of the Letter. 2 Plaintiff’s citations provide a speculative basis, at best, for finding that Shangraw and 3 Cheng were aware of the Letter and its contents. Accordingly, Plaintiff’s First Amendment 4 claims are dismissed against the AzTE/Skysong Defendants. 5 h. Count XII 6 Title IX provides that: No person in the United States shall, on the basis of sex, be excluded from [7] participation in, be denied the benefits of, or be subjected to discrimination 8 under any education program or activity receiving Federal financial assistance. [9] 20 U.S.C. § 1681 (a). The Ninth Circuit has not yet determined whether an employee of a [10] federally-funded educational institution can pursue an employment discrimination claim [11] under Title IX. The First, Third, Fourth, and Sixth Circuits hold that employees may pursue [12] Title IX employment discriminations claims, while the Fifth and Seventh Circuits hold that [13] Title IX employment discrimination claims are preempted by Title VII. Jane Doe v. Mercy [14] Cath. Med. Ctr., 850 F.3d 545 (3d Cir. 2017) (allowing a private cause of action under [15] Title IX), and Ivan v. Kent State Univ., 92 F.3d 1185 (6th Cir. 1996) (same), and Preston [16] v. Va. ex rel. New River Cmty. Coll., 31 F.3d 203 (4th Cir. 1994) (same), and Lipsett v. [17] Univ. of Puerto Rico, 864 F.2d 881 (1st Cir. 1988) (same), with Lakoski v. James, 66 F.3d 18 751, 754 (5th Cir. 1995) (finding that employees may not bring a Title IX suit because it [19] would disrupt Title VII’s “carefully balanced remedial scheme for redressing employment [20] discrimination”), and Waid v. Merrill Area Pub. Schs., 91 F.3d 857 (7th Cir. 1996), [21] abrogated in part on other grounds by Fitzgerald v. Barnstable Sch. Comm., 555 U.S. 246 22 (2009) (same). [23] The Court follows the holdings of the First, Third, Fourth, and Sixth circuits. These [24] holdings are consistent with Supreme Court precedent which reject Title VII as the [25] exclusive remedy for employment discrimination actions. See Johnson v. Railway Exp. [26] Agency, Inc., 421 U.S. 454, 459 (1975) (“Despite Title VII’s range and its design as a [27] comprehensive solution for the problem of invidious discrimination in employment, the [28] aggrieved individual clearly is not deprived of other remedies he possesses and is not 1 limited to Title VII in his search for relief.”). Further, Title IX’s language, which refers to 2 “[n]o person,” does not exclude employees from its breadth nor does it limit Title IX only 3 to individuals who cannot otherwise bring Title VII claims. See Jackson v. Birmingham 4 Bd. of Educ., 544 U.S. 167, 175 (2005) (“Title IX is a broadly written general prohibition 5 on discrimination.”). Accordingly, Plaintiff may pursue a Title IX discrimination claim 6 against ABOR. See, e.g., Kelley v. Iowa State Univ. of Sci. & Tech., 311 F. Supp. 3d 1051 , 7 1059 (S.D. Iowa 2018); Hunt v. Washoe Cnty. Sch. Dist., No. 3:18-cv-00501-LRH-WGC, [8] 2019 WL 4262510 , at *6–7 (D. Nev. Sept. 9, 2019). 9 Furthermore, Plaintiff plausibly alleges she was discriminated against because of 10 her sex. Specifically, Plaintiff alleges that her expulsion as a Biodesign Center was 11 discriminatory on the basis of sex because another Center Director, Professor Sid Hecht, 12 and his research center were allowed to remain as a Biodesign Center “despite having a 13 lower performance metric rating than Plaintiff.” (Doc. 1-3 ¶ 160.) Accordingly, the ASU 14 Defendants’ motion to dismiss Count XII is denied. 15 i. Count XIII 16 A.R.S. § 39-121.02(a) provides a cause of action for “[a]ny person who has 17 requested to examine or copy public records pursuant to this article, and who has been 18 denied access to or the right to copy such records.” A.R.S. § 39-121.01(e) clarifies that 19 “[a]cess to a public record is deemed denied if a custodian fails to promptly respond to a 20 request for production.” (emphasis added). 21 The ASU Defendants assert that Count XIII is moot because ASU provided the 22 requested documents. (Doc. 12 at 18.) Plaintiff does not deny that ASU provided the 23 documents. (Doc. 19 at 18.) Accordingly, Count XIII is moot to the extent that it requests 24 ASU to produce the requested public records. (Doc. 1-3 at 85 ¶ 303.) 25 The remainder of Count XIII requests an award of attorneys’ fees. A.R.S. § 3926 121.02(b) provides that a court may award attorney fees “if the person seeking public 27 records has substantially prevailed. Plaintiff asserts that ASU’s failure to provide the 28 documents after more than 8 months is a denial of her request. (Doc. 1-3 ¶ 302.) As the 1 question of whether Plaintiff was denied access, as defined in § 39-121.01(e), is still at 2 issue, the remainder of Count XIII is not moot.6 3 j. Leave to Amend 4 “If a motion to dismiss is granted, a court should normally grant leave to amend 5 unless it determines that the pleading could not possibly be cured by allegations of other 6 facts.” Chinatown Neighborhood Ass’n v. Harris, 33 F. Supp. 3d 1085, 1093 (N.D. Cal. 7 2014). Plaintiff may amend her Complaint as to the counts dismissed. 8 Accordingly, 9 IT IS THEREFORE ORDERED that Arizona Board of Regents, Michael Crow, 10 Robert Page, Mark Searle, Barry Graham Ritchie, Sethuraman Panchanathan, Joshua 11 LaBaer, and Tamara Deuser’s Motion to Dismiss (Doc. 12) is GRANTED in part and 12 DENIED in part as follows: 13 1. Counts VII and IX are dismissed. 14 2. The motion is denied as to Counts V, X, XI, and XII. 15 3. Counts I-III and VI are dismissed to the extent that they are based on non16 renewal of Plaintiff’s administrative appointments. Counts I, II, and VI are 17 further dismissed to the extent they are based on Plaintiff’s sabbatical. The 18 remainder of Counts I-III and VI remain. 19 4. Count IV is dismissed against Defendants Searle, Panchanathan, Page, LaBaer, 20 and Deuser in their official and personal capacities. The remainder of Count IV 21 remains. 22 5. Count VIII is dismissed against Defendants Page and Ritchie in their individual 23 capacities. The remainder of Count VIII remains. 24 6. Count XIII is dismissed as moot to the extent it requests that ASU produce the [25] 6 The ASU Defendants also argue that, under Arizona law, “a claim against an employee 26 [in their individual capacity] is appropriate only if the employee was not acting in the course and scope of their employment.” (Doc. 12 at 17.) “Whether an employee’s tort is 27 within the scope of employment is generally a question of fact.” Smith v. Am. Exp. Travel Related Servs. Co., 179 Ariz. 131, 136 , 876 P.2d 1166, 1171 (Ct. App. 1994). Without 28 more information about each of the individual ASU Defendants’ work responsibilities, it is premature to dismiss the ASU Defendants in their individual capacities. 1 requested public records. The remainder of Count XIII remains. 2 IT IS FURTHER ORDERED that Motion to Dismiss Complaint by Defendants 3|| Rick Shangraw, J.r., Augustine Cheng, and Arizona Science and Technology Enterprises (now known as Skysong Innovations, LLC) (Doc. 13) is GRANTED in part and DENIED 5 || in part as follows: 6 1. Counts IV, VII, X, and XI are dismissed. 7 2. The motion is denied as to Count V. 8 3. Count VII is dismissed to the extent that it alleges tortious interference with 9 business expectancy. The remainder of Count VIII remains. 10 Dated this 3rd day of August, 2021. - 12 A Whacrsay Fotos 13 Chief United States District Judge [28] -20 -