bar suits against those acting in violation of the constitution.
In the years since Ex parte Young, the Supreme Court has refined its holding several times. In 1974, the Court took a significant step by limiting the relief available against a state official to prospective injunctive relief only, exactly the relief sought in Ex parte Young. Edelman v. Jordan, 415 U.S. 651, 39 L. Ed. 2d 662, 94 S. Ct. 1347 (1974). Ten years later, the Court took another significant step and limited the grounds for relief to federal causes of action: "we conclude that Young and Edelman are inapplicable in a suit against state officials on the basis of state law.", 79 L. Ed. 2d 67, 104 S. Ct. 900 465 U.S. 89, 106 (1984). It is this latter decision that Defendants invoke in their motion to dismiss counts 1 and 4.
Counts 1 and 4, on their face, allege state law causes of action against state officials, and it appears that they must fail under Pennhurst. However, in its opposing brief, Plaintiff now argues for the first time that count 4 in fact contains two grounds: a state-law ground for misappropriation, and a federal ground alleging an unlawful taking without just compensation. U.S. CONST. amends. V, XIV. Accordingly, it is necessary to examine count 4 to see if it does, in fact, state a federal takings claim.
In interpreting the allegations of a complaint, a court is not limited to the legal theories named in the complaint. Rather, "'the court is under a duty to examine the complaint to determine if the allegations provide for relief on any possible theory.'" O'Boyle v. Jiffy Lube Int'l, Inc., 866 F.2d 88, 93 (3d Cir. 1989) (quoting 5A CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1357 (1969)). "The Federal Rules reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome." Conley, 355 U.S. 41, 48. As long as pleadings "discharge the function of giving the opposing party fair notice of the nature and basis or grounds of the claim and a general indication of the type of litigation involved," the pleadings have served their purpose. In other words, if Plaintiff has alleged sufficient facts to state a takings claim in count 4, then it is irrelevant that Plaintiff has styled this count as a state misappropriation claim.
As an initial matter, even if Plaintiff has stated a takings claim, there is some question as to whether the Eleventh Amendment bars a just compensation claim from federal court. Ex parte Young only allows a party to bring an action for injunctive relief against a state, and the fifth amendment, on its face, requires only compensatory relief: "nor shall private property be taken for public use, without just compensation." U.S. CONST. amend. V; see Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1016, 81 L. Ed. 2d 815, 104 S. Ct. 2862 (1984) ("equitable relief is not available to enjoin an alleged taking of private property . . . when a suit for compensation can be brought"). In other words, it appears that the compensation required by the fifth amendment might not be available under Ex parte Young.
At least one court has adopted this line of reasoning, holding that the Eleventh Amendment bars monetary relief for just compensation against a state in federal court. Chavous v. South Carolina Coastal Council, 745 F. Supp. 1168 (D.S.C. 1990), vacated as moot sub nom. Esposito v. South Carolina Coastal Council, 939 F.2d 165 (4th Cir. 1991), cert. denied, 120 L. Ed. 2d 898, 112 S. Ct. 3027 (1992). But other courts have questioned this reasoning, and even the Chavous court might reason differently were the just compensation issue to arise again. The Fourth Circuit vacated Chavous on other grounds, but the dissent attacked the district court's reasoning as contrary to the spirit of the Supreme Court's opinion in First English Evangelical Lutheran Church v. Los Angeles Cty., 482 U.S. 304, 317, 96 L. Ed. 2d 250, 107 S. Ct. 2378 (1987). The dissent remarked that if the district court were correct, then the "[Takings] Clause could be converted from a fundamental constitutional right into an empty admonition." Esposito, 939 F.2d at 173 n. 3 (Hall, J., dissenting).
Accordingly, I will assume that the Eleventh Amendment does not bar any takings claims that Plaintiff has asserted against the Regents, whether for injunctive relief or for just compensation.
To state a takings claim, Plaintiff must prove that (i) private property (ii) has been taken for (iii) public use (iv) without just compensation. The first of these requirements is satisfied because trade secrets are property rights under state law. Monsanto, 467 U.S. at 1012 (Congress cannot preempt state rights against public disclosure of proprietary data); N.J. State Chamber of Commerce v. Hughey, 600 F. Supp. 606 (D.N.J.), rev'd in part on other grounds, 774 F.2d 587 (3d Cir. 1985). The second and third requirements are satisfied because Plaintiff has sufficiently alleged that its property rights have been taken by the Regents.
The fourth requirement, the denial of just compensation, is more problematic, and I have uncovered no cases directly on point. However, by analogy to takings cases brought against the United States, I find that Plaintiff cannot bring a takings claim against a state official in federal court until Plaintiff has sought just compensation in state court assuming, of course, that California has the legal machinery necessary for Plaintiff to recover such compensation.
The analogous takings cases against the United States are those cases in which a party has applied for injunctive relief against a federal takings without just compensation. The Supreme Court has routinely held that, in such circumstances, the taking claim is not ripe until after the plaintiff has applied for compensation from the Court of Federal Claims under the Tucker Act. See, e.g., Preseault v. I.C.C., 494 U.S. 1, 11-12, 108 L. Ed. 2d 1, 110 S. Ct. 914 (1990) ("takings claims against the Federal Government are premature until the property owner has availed itself of the process provided by the Tucker Act"); Monsanto, 467 U.S. at 1016-1017 (equitable relief is premature if plaintiff has a remedy under the Tucker Act); Larson v. Domestic & Foreign Corp., 337 U.S. 682, 697 n. 18, 93 L. Ed. 1628, 69 S. Ct. 1457 (1949) (sovereign immunity bars a takings claim for specific relief in district court if a remedy exists under the Tucker Act); Hurley v. Kincaid, 285 U.S. 95, 104, 76 L. Ed. 637, 52 S. Ct. 267 (1932) (equitable relief is unavailable if plaintiff has a remedy under the Tucker Act).
The Tucker Act has two operative sections, 28 U.S.C. §§ 1346 & 1491. The first of these sections grants jurisdiction to the district courts over certain claims against the United States for $ 10,000 or less:
The district courts shall have original jurisdiction, concurrent with the United States Claims Court, of: . . . (2) Any other civil action or claim against the United States, not exceeding $ 10,000 in amount, founded either upon the Constitution, or any Act of Congress, Or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort . . . .
28 U.S.C. § 1346(a). The second section grants jurisdiction to the Court of Federal Claims over these claims regardless of amount:
The United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.