Meldrum v. Ariz. Bd. of Regents

Decision Date03 August 2021
Docket NumberCV-20-02165-PHX-GMS
PartiesDeirdre Meldrum, Plaintiff, v. Arizona Board of Regents, et al., Defendants.
CourtU.S. District Court — District of Arizona
ORDER

G Murray Snow Chief United States District Judge

Pending before the Court is Defendants Arizona Board of Regents (ABOR), Michael Crow, Robert Page, Mark Searle Barry Graham Ritchie, Sethuraman Panchanathan, Joshua LaBaer and Tamara Deuser's (collectively, “ASU Defendants) Motion to Dismiss. (Doc. 12.) Also before the Court is Defendants Rick Shangraw, Jr., Augustine Cheng, and Arizona Science and Technology Enterprises LLC's (now known as Skysong Innovations, LLC) (“AzTE/Skysong”) (collectively, “AzTE/Skysong Defendants) Motion to Dismiss. (Doc. 13.) For the following reasons, both motions are granted in part and denied in part.[1]

BACKGROUND

Plaintiff Deirdre Meldrum (Plaintiff) is a professor at Arizona State University (“ASU”). (Doc. 1-3 at 6 ¶ 3.) Defendant Michael Crow, President of ASU, recruited Plaintiff in 2005. Id. ¶ 18. Plaintiff alleges Crow made several promises to induce her to accept a position at ASU as a Dean. Id. ¶ 19. Those promises were eventually set forth in Plaintiff's 2006 offer letter and commitment of resources (“Outline of Resources”). Id. ¶¶ 19, 21. After working for several years as a Dean, ASU demoted Plaintiff to the role of Senior Scientist. Id. ¶ 26. During her transition from Dean to Senior Scientist in 2010, Plaintiff alleges that Provost Capaldi Phillips renewed the promises Crow made to her when she was recruited. Id. ¶ 27.

While working for ASU, Plaintiff became increasingly concerned about “mismanagement and potential waste of funds at ASU.” Id. ¶ 32. On June 12, 2014, Plaintiff served a letter (the “Letter”) on the Governor of Arizona and the Arizona Attorney General and sent copies of the Letter to other individuals at ASU and ABOR. Id. ¶ 47. The Letter raised several issues about ASU's practices. Id. ¶¶ 47-48. Plaintiff later served a second version of the Letter, which contained a summary about other individuals whom, she alleges, were “lured to ASU with unfulfilled promises.” Id. ¶ 50.

Plaintiff asserts that several ASU employees took actions against her following service of the Letter. Those employees include Defendant Crow, Robert E. Page, Mark Searle, Barry Graham Ritchie, Sethuraman Panchanathan, Joshua LaBaer, and Tamara Deuser. Plaintiff also asserts that Defendants R.F. Shangraw, Jr. and Augustine Cheng took actions against her. Shangraw and Cheng work for Defendant AzTE/Skysong, which is the exclusive intellectual property management and technology transfer organization for ASU. Id. ¶ 14.

Plaintiff filed suit in Maricopa County Superior Court on September 28, 2020. The Complaint asserts the following causes of action: Declaratory Relief A.R.S. § 12-1831 (“Count I”); Breach of Contract (“Count II”); Breach of Implied Covenant of Good Faith and Fair Dealing (“Count III”); Intentional and Negligent Misrepresentation (“Count IV”); Unjust Enrichment (“Count V”); Promissory Estoppel (“Count VI”); Whistleblowing Retaliation in Violation of Public Policy (“Count VII”); Tortious Interference with

Employment Relationship (“Count VIII”); Violations of the Arizona Wage Act (“Count IX”); Violations of the First Amendment (Right to Free Speech) (“Count X”); Violations of the First Amendment (Petition to Redress Grievances) (“Count XI”); Violation of Title IX (“Count XII”); and Violation of Arizona Public Records Laws (“Count XIII”). Defendants removed the case to this Court on November 10, 2020. The ASU Defendants and AzTE/Skysong Defendants now move to dismiss the Complaint.

DISCUSSION
I. Legal Standard

To survive dismissal for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint must contain more than a “formulaic recitation of the elements of a cause of action”; it must contain factual allegations sufficient to “raise the right of relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). When analyzing a complaint for failure to state a claim, “allegations of material fact are taken as true and construed in the light most favorable to the non-moving party.” Smith v. Jackson, 84 F.3d 1213, 1217 (9th Cir. 1996). However, legal conclusions couched as factual allegations are not given a presumption of truthfulness, and “conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss.” Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th Cir. 1998).

II. Analysis[2]
a. Counts I-III, VI

1. Institutional Funding and Research Space

The Outline of Resources contained several promises, including that Plaintiff would be “a center director in the Biodesign Institute with 5, 000 square feet of lab space in Biodesign, your research office, and 10 office/desk spaces.” (Doc. 12-1 at 4.) Plaintiff alleges that Crow “repeatedly reassured Plaintiff that these resources would be made available to Plaintiff and did not suggest to Plaintiff that these resources were limited in duration or could be modified or terminated during her tenure without her agreement or consent.” (Doc. 1-3 at 17 ¶ 22.) Plaintiff alleges ASU breached the promises in the Outline of Resources in several ways, such as by reducing Plaintiff's lab space beginning in May 2016. Id. ¶ 92. Drawing all reasonable inferences in favor of Plaintiff, Plaintiff plausibly alleges that ABOR breached her employment contract by reducing her institutional funding and research space.

Contrary to the ASU Defendants' assertions, Plaintiff's correspondence with Provost Phillips does not prove lack of breach. Prior to accepting her terms of employment as Senior Scientist in 2010, Plaintiff asked Provost Capaldi what promises from the Outline of Resources would remain in force in her new role. Id. ¶27. Provost Phillips stated that ASU would continue to support items 3 and 4 in the Outline of Resources, subject to a review on a five-year schedule, and that all other commitments would “remain as agreed to previously.” (Doc. 12-1 at 4.) The promise about Plaintiff's lab space, for instance, is listed as Item 5 in the Outline of Resources. (Id. at 4.) Accordingly, Plaintiff's correspondence with Provost Phillips does not indicate that her lab space was subject to modification. Additionally, the ABOR policies regarding evaluation procedures do not indicate that the promises in the Outline of Resources were limited in duration or subject to modification. See (Doc. 12 at 7.) Accordingly, Plaintiff may base her contract claims on her allegations regarding institutional funding and research space.

2. Non-Renewal of Administrative Appointments

The ASU Defendants assert that Plaintiff cannot base her contract claims on the non-renewal of her appointment as Senior Scientist and her removal as a Biodesign Director because ABOR policies provide that administrative appointments may be terminated “at any time without cause or explanation.” Id. at 8. Plaintiff does not address this argument in her response, and she apparently concedes that her contract incorporated ABOR policies and it is appropriate to consider them on a motion to dismiss. Accordingly, Counts I-III and VI are dismissed to the extent that they are based on non-renewal of her administrative appointments.

3. Teaching Assignments

The Outline of Resources promised that Plaintiff would “not have required teaching.” (Doc. 12-1 at 4.) Plaintiff alleges ABOR breached this promise when Director Phillips informed Plaintiff in 2015 that she had to teach two classes. (Doc. 1-3 at 34 ¶ 82.)

It is plausible that this promise is still enforceable, even though Plaintiff is no longer a Dean. As previously discussed, Provost Phillips confirmed that certain commitments in the Outline of Resources, including the promise about teaching requirements, would “remain as agreed to previously” in Plaintiff's new role as Senior Scientist. (Doc. 12-2 at 3.) Additionally, ABOR Policy 6-201(G) does not prohibit ASU from making such a promise. (Doc. 12-15.) Accordingly, Counts I-III and VI remain to the extent they are based on her teaching assignments.

4. Sabbatical

The Outline of Resources also provided that [w]hen you have the college such that you can take leave, you are authorized for a sabbatical.” (Doc. 12-1 at 4.) Plaintiff further alleges in her complaint that Plaintiff's sabbatical leave was approved by Defendant Crow for use in conjunction with her deanship in the College of Engineering which ended December 31, 2010.” (Doc. 1-3 at 37 ¶ 95). In 2017, Plaintiff advised her academic unit that she intended to take her “pre-approved sabbatical” beginning in Fall 2017. (Id. ¶ 95.) Director Phillips notified Plaintiff that her sabbatical was denied, which Plaintiff alleges is “contrary to the terms of [her] employment contract which made the granting of her sabbatical non-discretionary. Id. ¶ 96. Dean Squires later reversed this denial and approved Plaintiff's sabbatical for Spring 2018. Id. at 38 ¶ 101.

Plaintiff does not respond to the ASU Defendants' argument that ASU's sabbatical policies require persons eligible for a sabbatical to submit a proposal for approval. (Doc. 12 at 9.) Nor does she explain how the right to choose the specific period of her sabbatical which was expressly designed in conjunction with her deanship, survived its termination. Instead, Plaintiff asserts that ASU's interference with her sabbatical is a breach of the implied covenant of good faith and fair dealing.

A party breaches the covenant “by exercising express discretion in a way inconsistent with a party's reasonable expectations and by acting in ways not expressly excluded by the contract's terms...

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