Houser v. Feldman

600 F.Supp.3d 550

Steven HOUSER, Plaintiff,

v.Arthur FELDMAN and Temple University, Defendants.

CIVIL ACTION NO. 21-0676

United States District Court, E.D. Pennsylvania.

Filed April 28, 2022

Courtney A. Keaveney, David M. Burkholder, Wisler Pearlstine, LLP, Blue Bell, PA, Nicole D. Galli, ND Galli Law LLC, Philadelphia, PA, for Plaintiff.

Michael J. Fortunato, Melanie Elizabeth Osborn, Peter Nakonechni, Rubin, Fortunato & Harbison P.C., Wayne, PA, Rachael Luken Carp, Rubin, Fortunato & Harbison P.C., Paoli, PA, for Defendant Arthur Feldman.

Carolyn Anne Pellegrini, Darius C. Gambino, James A. Keller, Saul Ewing Arnstein & Lehr, LLP, Philadelphia, PA, for Defendant Temple University.

MEMORANDUM OPINION

WENDY BEETLESTONE, District Judge

This is a fight between two distinguished academics and the University at which they have tenure over a Pig Model that could have far reaching consequences in the development of treatments and therapies for certain types of heart attacks. Defendants Dr. Arthur Feldman ("Feldman") and Temple University ("Temple" or the "University") seek to dismiss, pursuant to Federal Rule of Procedure 12(b)(6), Plaintiff Steven Houser's claims for trade secret misappropriation under the Pennsylvania Uniform Trade Secrets Act ("PUTSA"), 12 Pa. C.S. § 5301, et seq. , breach of contract, defamation, civil conspiracy, unjust enrichment, conversion, specific injunctive relief and a constructive trust. For the following reasons, Defendants’ Motions to Dismiss shall be granted in part and denied in part.

I. BACKGROUND ¹

As this opinion is written primarily for the benefit of the Parties, only those facts and details pertinent to the instant Motion will be discussed and familiarity with the prior decisions in this matter will be assumed. See Houser v. Feldman , 569 F.Supp.3d 216 (E.D. Pa. Oct. 27, 2021) ; Houser v. Feldman , 2021 WL 4963534 (E.D. Pa. Oct. 26, 2021).

Houser and his laboratory staff ("lab") developed a pig model ("Pig Model") by inducing heart attacks in pigs and opening their arteries after ninety minutes. He and his lab then took tissue samples from these models ("Pig Samples"), conducted tests of therapies for the treatment of heart failure, and collected data pertaining to heart function ("Pig Data"). Houser alleges that, together, the Pig Model, Pig Samples and Pig Data ("Pig Materials") constitute his trade secrets. He further alleges that the Pig Materials are valuable because they have "broad clinical significance" as tests on such models are necessary precursors to the development of potential treatments and therapies for humans.

Defendant Feldman, like Houser, was studying heart failure. Specifically, he was studying the relationship between heart failure and levels of a molecule known as "BAG3" on a mouse model. Feldman did not have a large animal model like Houser's Pig Model, and his mouse model did not hold the same degree of relevancy or significance to the development of human therapies and treatments. For whatever reason, sometime in 2014 or 2015, Feldman told one of the graduate students working in Houser's lab, Thomas Sharp, that Houser had authorized Feldman to use the Pig Data and Pig Samples for his BAG3 research and that Houser would be a collaborator on forthcoming papers. In reality, Houser had not provided any such authorization, and Feldman had managed to lure Sharp into providing him with Houser's trade secrets ("Stolen Pig Materials"). In 2015, Feldman and Sharp co-authored and published a paper that included the Stolen Pig Data and additional data derived from the Pig Samples. In 2017, Houser learned of this and reported Feldman to the Senior Associate Dean of Faculty Affairs at Temple's School of Medicine, who in turn, forwarded Houser's report to Temple's Integrity Officer and Vice President of Research, Michele Masucci.

Houser's report was made pursuant to Temple's "Policy on Misconduct in Research and Creative Work" ("Policy on Misconduct"), which protects "traditional principles of academic freedom" and requires that individuals "engag[ing] in or supervis[ing] research or creative work conduct[ ] their activities in an ethical manner." Houser contends that the Policy on Misconduct is incorporated into Houser's employment agreements with Temple. By way of background, over the course of his time at the University, Houser has had several employment agreements with Temple. Two employment agreements cover the period of time relevant to this lawsuit—one which began on March 20, 2012 and expired June 30, 2017, and a second which ran from March 23, 2017 to June 30, 2022. One of Houser's enumerated responsibilities and duties under the 2012 agreement was to "adher[e] to the policies and guidelines of the department school, university and accrediting bodies." Houser was similarly obligated, under the 2017 agreement, to "ensur[e] compliance with sponsor, University and School policies." Houser contends that these duties made all of Temple's policies, including the Policy on Misconduct, terms and conditions of both of his employment agreements.

The Policy on Misconduct provides that it "typically will be followed" upon a report of misconduct. Under its terms, an individual may complain of a violation or act of misconduct by reporting it to an Integrity Officer, like Masucci, who "preliminarily will assess" the complaint and determine whether sufficient information exists to refer the matter to an "Inquiry Committee." The Inquiry Committee then evaluates whether there is sufficient evidence of actionable misconduct to warrant an investigation or a formal proceeding to impose discipline or dismissal. The Committee provides a recommendation to the President of the University on the propriety of a formal proceeding, who ultimately decides whether to pursue further action or impose discipline.

About a week after Houser's report regarding Feldman's theft of his Pig Materials, Houser was told that Masucci would like him to accept an apology from Feldman. Houser accepted the apology and assumed that was all that could be done; Feldman did not return the Stolen IP or correct the 2015 Paper to note Houser's contribution. As far as Houser is aware, no inquiry or investigation into Feldman was launched pursuant to the Policy as a result of his complaint.

Things were quiet for a while, but then in October of 2018, Houser learnt, through a public posting by Harvard University, that a peer-reviewed paper he had authored with other academics was under scrutiny by Harvard and the American Heart Association for including a potentially fabricated figure. The concern arose due to the paper's affiliation with a disgraced former professor at Harvard University. Houser corrected the figure, the paper was unflagged and "remains accepted and competent scientific research." But that was not the end of the matter.

Around this time, Feldman—according to the Amended Complaint—began to falsely tell other people, including Houser's colleagues, that Houser was under investigation by Harvard as well as the National Institute of Health. Also, sometime between October 2018 through September 2019, Temple began a preliminary assessment into Houser related to the peer-reviewed paper as well as Houser's ties with the Harvard professor.² As part of Temple's assessment, on October 10, 2019, Houser was interviewed by attorneys from the law firm of Wilmer Hale LLP. At that interview, Houser complained about false statements Feldman made to two faculty members, Dr. John Daly and Patrick O'Connor, about Houser being under investigation. Somewhere in the midst of all this, Temple interviewed Houser's laboratory staff and collected his scientific notebooks and other documents.

While this investigation was pending, Houser contacted Masucci to ask whether Feldman had used the Stolen Pig Materials in connection with any patent filings as he had learned that Feldman's company, Renovcar, had obtained significant private investment for its BAG3 treatments. Masucci noted it was a fair question but declined to provide an answer until the close of Temple's investigation.

Houser's troubles only continued to mount. In 2020, Temple launched a second investigation into Houser following a complaint from the Office of Research Integrity of Department of Health and Human Services ("Office of Research Integrity"). This complaint pertained to anonymous allegations of plagiarism or fabrication made on the publishing website "PubPeer." This investigation is governed by regulations promulgated by the United States Secretary of Health and Human Services. See, e.g., Houser , 2021 WL 4963534, at *1.

Over time, due to the investigations and Temple's failure to respond to his own complaints about Feldman, Houser lost faith in Temple. He again complained to counsel for Temple (in January 2020) and to Masucci that he believed Feldman had defamed him, but the University took no action. Because he no longer believed that Temple would respond in good faith to his question as to whether Feldman used the Stolen Pig Materials in patent filings, he enlisted a colleague to help him independently research the issue. This search led him to the discovery, on November 17, 2020, that Feldman and Temple had jointly filed two U.S. patent applications and three foreign patent applications between 2015 and 2020, all of which include the Stolen Pig Materials. As of the date of the Amended Complaint, none of the five patents had issued. Houser alleges that the Defendants are relying on the Stolen Pig Materials to prosecute the patents. He further alleges that Renovacor is using the Stolen Pig materials to develop treatments for heart failure using BAG3, and that the Stolen Pig Materials were integral to both Renovacor's obtaining private equity financing and also merging with another entity—Chardan Healthcare Acquisition Corporation.

Houser alleges that based on the contribution of his Pig Materials to these inventions, he is, pursuant to the terms of Temple's Policy...