Case Name: Venkat Konda v. Dejan Markovic, et al.

Case No: 19CV345846

Plaintiff Venkat Konda (“Plaintiff”) brings this action against Dejan Markovic (“Markovic”), Cheng C. Wang (“Wang”), Flex Logix Technologies, Inc. (“Flex Logix”), the Regents of the University of California (“UC”), and Munger, Tolles & Olson, LLC (“Munger, Tolles”) for damages associated with misappropriation of intellectual property.

According to the allegations of the first amended complaint (“FAC”), Plaintiff founded Konda Tech to develop semiconductor devices known as Field Programmable Gate Arrays (“FPGA’s”). (FAC, ¶¶ 2, 29.) In 2009, he was introduced to Markovic, a professor at UCLA who offered him funding for his work. (Id. at ¶ 30.) Plaintiff sent Markovic his business plan, but when he visited UCLA to present the plan, Markovic told him that UCLA does not fund technologies built outside of UCLA. (Ibid.) Nonetheless, Plaintiff presented his business plan to members of UCLA’s Institute for Technology Advancement (“UCLA/ITA”) and also to some of Markovic’s students.

Thereafter, Markovic sought to use Plaintiff’s intellectual property, and he and Wang submitted a funding proposal using some of the technology. (FAC, ¶¶ 35, 37.) The funding proposal was rejected, but they persisted in efforts to implement Plaintiff’s IP without authorization. (Id. at ¶ 38.) Unbeknownst to Plaintiff, they founded Hierlogix to commercialize Plaintiff’s technology. (Id. at ¶ 39.) Plaintiff believes this was done using the confidential presentation he provided to Markovic. (Id. at ¶ 41.)

In the ensuing years, though they spoke on occasion and he presented himself as an advisor, Markovic never told Plaintiff that he and his students continued to use Plaintiff’s IP, including as part of Wang’s Ph.D. dissertation. (FAC, ¶ 45.) Plaintiff was also unaware that they had formed a new company, Flex Logix, or that it was an FPGA startup and they actively concealed this from him. (Id. at ¶¶ 48, 51, 54.) It wasn’t until 2015, during a meeting with another professor, that Plaintiff learned Flex Logix was implementing his technology, which he was able to confirm on its website. (Id. at ¶¶ 62, 63.) He subsequently learned of Hierlogix, the predecessor to Flex Logix, and its connection to UCLA/ITA. (Id. at ¶ 71.)

Though he expressed his concerns regarding plagiarism and misappropriation of his technology, authorities at UCLA did not agree with his position. (FAC, ¶¶ 73, 75.) Instead, the CEO of Flex Logix, Geoff Tate (“Tate”), threatened to ruin Plaintiff’s career if he filed a lawsuit, and on one occasion, the CEO tried to interfere in one of Plaintiff’s business relationships. (Id. at ¶¶ 77, 78.) Attempts at settling the dispute have been unsuccessful. (Id. at ¶ 79.)

As a result of the foregoing, Plaintiff brings the FAC alleging causes of action for: (1) unfair business practices; (2) fraud – intentional misrepresentation; (3) fraud – concealment; (4) misappropriation of trade secrets; and (5) ongoing conspiracy.

UC demurs to the fifth cause of action for ongoing conspiracy, and also moves to strike portions of the complaint.

I. Meet and Confer
II.

As a preliminary matter, Plaintiff takes issue with the sufficiency of UC’s meet and confer efforts, and argues that they were deficient and as a result the demurrer and motion to strike should be denied.

A demurrer must be filed within 30 days after service of the complaint. (Code Civ. Proc., § 430.40, subd. (a).) However, if parties are not able to meet and confer at least five days before the date the responsive pleading is due, the demurring party shall be granted an automatic 30-day extension of time within which to file a responsive pleading. (Code Civ. Proc., § 430.41, subd. (a)(1).) The extension is granted by the party filing and serving, on or before the date on which a demurrer would be due, a declaration stating that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer. (Code Civ. Proc., § 430.41, subd. (a)(2).) These requirements are identical with respect to a motion to strike. (Code Civ. Proc., 435.5, subd. (a).)

Here, the FAC was filed and served on November 15, 2019, and its responsive pleading would have been due by December 16, 2019. UC filed a declaration stating “the parties participated in a meet and confer phone conversation on December 6, 2019.” (Gherini decl. in response to the subject complaint proceeding pursuant to Code Civ. Proc. § 435.5, ¶ 5.) Plaintiff responded with an email on December 10, 2019. (Id. at ¶ 6.) After another back and forth by email on December 12, 2019, Plaintiff filed a declaration for the purpose of extending the time to file a demurrer by 30 days.

Given the facts as presented, though, UC was not “unable to meet and confer” with Plaintiff five days before the responsive pleading was due sufficient to justify the 30-day extension. Instead, the parties had a phone conversation on December 6, 2019, followed by an email exchange on or before December 10, 2019. In its declaration, UC cites the inability to reach a resolution, based on Plaintiff’s status as a pro per litigant for the need for “more time to meet and confer.” However, the extension of time to file a demurrer is granted for “inability to meet and confer” not for unsuccessful meet and confer and therefore the demurrer is untimely.

Likewise, as Plaintiff argues, it does not appear that meet and confer efforts were sufficient with respect to the motion to strike. (See Code Civ. Proc., § 435.5 [the parties shall meet and confer at least five days before the date a motion to strike must be filed].) As stated in UC’s declaration, discussions regarding the motion to strike only occurred in January, 2020, and were not attempted before the deadline to file the responsive pleading in the first instance.

Nonetheless, the Court will exercise its discretion in considering the motions. (See Code Civ. Proc., § 473, subd. (a)(1) [the court may in its discretion allow an answer to be made after the time limited by the code]; see also Jackson v. Doe (2011) 192 Cal.App.4th 742, 750 [trial court properly exercised its discretion in considering untimely demurrer; see also McAllister v. County of Monterey (2007) 147 Cal.App.4th 253, 282 [trial court’s decision to entertain second demurrer did not affect plaintiff’s substantial rights].) Here, Plaintiff has not sought a default judgment, and other named defendants in the litigation have pending hearings on responsive pleadings, thus his substantive rights are not harmed by the Court’s consideration of the demurrer. However, this will inform the Court’s ruling on a grant of leave to amend.

III. Demurrer
IV.

UC demurs to the fifth cause of action for “ongoing conspiracy” on the ground that it fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc., 430.10, subd. (e).)

A. Legal Standard
B.

A demurrer tests the legal sufficiency of a pleading, but not the truth of a plaintiff’s allegations or the accuracy with which he or she describes the defendant’s conduct. (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958; citing Committee on Children’s Television Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213.) A demurrer reaches only to the contents of the pleading and such matters subject to judicial notice. (Code Civ. Proc. § 430.30, subd. (a); South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732, citations omitted.) “It is not the ordinary function of a demurrer to test the truth of the [ ] allegations, or the accuracy with which [they] describe the defendant’s conduct” and the facts alleged are deemed to be true, however improbable. (Align Technology, Inc. v. Tran, supra, 179 Cal.App.4th 949, 958.)

C. Failure to State Sufficient Facts
D.

UC argues that conspiracy is not a cause of action, or alternatively if it is, it has not been sufficiently pleaded against a public entity, or alternatively that the cause of action is barred by the statute of limitations.

1. Pleading of Conspiracy
2.

Conspiracy is not an independent cause of action, but a legal doctrine that imposes liability on one who, although not committing the tort themselves, share a common plan or design in it perpetration. (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511.) Standing alone, conspiracy engenders no tort liability and must be activated by an underlying tort. (Id. at 511.) Participants in a conspiracy must know that their conduct is wrongful and concur in the “tortious scheme with knowledge of its unlawful purpose.” (People v. Beaumont Inv., Ltd. (2003) 111 Cal.App.4th 102, 137.) In order to properly plead conspiracy, the plaintiff may not rely on “bare legal conclusions, inferences, generalities, presumptions, and conclusions.” (State of California ex. rel. Metz v. CCC Information Services, Inc. (2007) 149 Cal.App.4th 402, 419.)

Given these requirements, the FAC fails to state sufficient facts to allege conspiracy against UC as Plaintiff relies on a bare, legal conclusion that “[t]he Regents of The University of California joined the conspiracy to commit all the cause of action perpetrated by [ ] Markovic and Wang when UCLA/ITA funded Hierlogix.” (FAC, ¶ 148.) It goes on to allege that UC is “responsible for all acts done as part of the conspiracy…” These facts do not allege that UC knowingly participated in wrongful conduct with knowledge of its unlawful purpose, nor are there facts in support of a conclusion that they aided in any torts plan or design. Thus, the demurrer must be sustained.

3. Government Claims Act
4.

Even if the conspiracy claim were properly pleaded, it would still be subject to a demurrer for failure to state sufficient facts, as Plaintiff has not pleaded in compliance with the Government Claims Act (“GCA”). (Gov. Code, § 815, subd. (a).) Government Code section 815, subdivision (a) “makes clear that under the GCA, there is no such thing as common law tort liability for public entities; a public entity is not liable for an injury ‘[e]xcept as otherwise provided by statute.’” (Quigley v. Garden Valley Fire Protection Dist. (2019) 7 Cal.5th 688, 691.) Furthermore, the UC Regents have been held to be a public entity subject to the GCA. (Campbell v. Regents of University of California (2005) 35 Cal.4th 311, 321.)

The FAC fails to identify any statute pursuant to which UC may be liable for a tort that would support an underlying theory for conspiracy. Therefore as UC argues, no basis for liability against it has been pleaded.

5. Statute of Limitations
6.

Finally, UC argues that even if the demurrer to the conspiracy claim is not sustained on the other bases, the cause of action is barred by the statute of limitations.

In an action based on civil conspiracy, the applicable statute of limitations is determined by the nature of the action in which the conspiracy is alleged. (Maheu v. CBS, Inc. (1988) 201 Cal.App.3d 662, 673.)

Here, as UC notes, there is no underlying cause of action to support the civil conspiracy claim against UC in the FAC. Thus, what statute of limitations applies cannot be discerned based on the pleading, and the demurrer cannot be sustained on this basis.

As a result of the foregoing, UC’s demurrer to the fifth cause of action on the ground of failure to state sufficient facts is SUSTAINED, with 10 days leave to amend, on the basis that conspiracy is not sufficiently pleaded.

V. Motion to strike
VI.

In light of the above ruling, the motion to strike portions of the complaint is MOOT.

The Court will prepare the Order.