The 15th Court of Appeals has affirmed a trial court order granting Southwestern Medical Center’s plea to the jurisdiction in suit filed by a biotech company whose chemical compound was used by Southwestern researchers under a contract with a third party.
Curadev Pharma Pvt. Ltd. and Curadev Pharma Limited v. The University of Texas Southwestern Medical Center (No. 15-25-00004-CV; August 21, 2025) arose from a dispute between Curadev, a biotech company researching drug therapy for cancer, and two researchers at Southwestern working on the same approach to treatment. When the researchers published the results of their research, a Takeda Pharmaceuticals subsidiary entered into a Sponsored Collaboration Research Agreement with Southwestern. Under the agreement, Takeda provided Southwestern with one Curadev’s test compounds. Southwestern agreed not to distribute Takeda’s company material to any person or entity to anyone other than laboratory personnel and to destroy all copies of the material when the research program terminated. The agreement, however, allowed Southwestern to publish the results of the research, contained confidentiality provisions, and permitted Southwestern to license its discoveries under certain circumstances. Shortly thereafter, Curadev terminated its relationship with Takeda and found out that Takeda had provided one of its test compounds to Southwestern for the research program. The Southwestern researchers were not aware that Curadev had invented the compound or of the chemical structure of the test compound or any of Curadev’s other compounds.”
When the researchers published a paper on their research in Nature magazine describing how the Curadev compound worked on a certain protein that produces immune responses (to fight cancer), Curadev sued them, alleging misappropriation of trade secrets, conversion, and an unlawful taking under Art. I, § 17, Texas Constitution. The employees answered and filed a plea to the jurisdiction, asserting sovereign immunity. The trial court granted the plea and dismissed Curadev’s claims with prejudice. Curadev appealed.
In an opinion by Justice Farris, the court of appeals affirmed. First, as to the takings claim, “the Texas Constitution waives sovereign immunity with respect to inverse-condemnation claims…. A claimant alleging a takings claim … must show: (1) an intentional act by a governmental entity, (2) that resulted in a taking of property, (3) for public use” (citations omitted). The court further observed that SCOTX “has held that when the government acts pursuant to colorable contract rights, it lacks the necessary intent to take under its eminent domain powers and thus retains its immunity from suit” (citation omitted). Here the record showed that Southwestern had an agreement with Takeda, to whom Curadev licensed certain material. Curadev argued that Southwestern used its test compound for purposes other than specified in the agreement and that it did not destroy the compound after the agreement terminated. Regardless of those allegations, the court observed, “[w]hen the State acquires property through its contractual capacity … there is no valid takings claim” (citation omitted). Curadev could not show that Southwestern waived sovereign immunity because it acquired the compound through its valid contract with Takeda. Consequently, it failed to show the requisite intent to condemn. It made no difference that Curadev didn’t have a contract with the state because “the proper inquiry is whether the government acted ‘akin to a private citizen.’” State v. Holland, 221 S.W.3d 639, 643 (Tex. 2007). Curadev failed to affirmatively prove that Southwestern had the requisite intent to take property under its sovereign powers. The court thus ruled that the trial court did not err in granting the plea to the jurisdiction on the takings claim.
Turning to the misappropriation and conversion claims, the court looked to the Tort Claims Act to determine “the scope of its waiver” of governmental immunity. Noting that the Act does not waive immunity for claims arising out of intentional torts, the court observed that misappropriation of trade secrets and conversion are, in fact, intentional torts. The trial court didn’t err in dismissing those claims, either. As to Curadev’s claim for violations of the Texas Uniform Trade Secrets Act, the court determined that the Act “does not clearly and unambiguously provide for a waiver of immunity from suit for governmental units.” Alternatively, Curadev argued that Southwestern waived immunity by its conduct, that the researchers could not assert immunity for ultra vires acts, and that the election-of-remedies provision of the Tort Claims Act does not apply to ultra vires claims. As to the first argument, Southwestern couldn’t have waived immunity by conduct because “sovereign immunity may not be waived by a party’s conduct but only by the Legislature” (citation omitted).
Turning to the ultra vires arguments, the court observed that § 101.106, CPRC, requires plaintiffs “to decide at the outset whether an employee acted independently and is thus solely liable, or acted within the general scope of his or her employment such that the governmental unit is vicariously liable.” The researchers invoked this statutory right to dismissal since Curadev’s lawsuit against them was based on conduct within their general scope of employment. The court agreed, holding that by suing Southwestern Curadev elected its vicarious liability theory under the Tort Claims Act, requiring dismissal of its claims against the researchers. Regarding Curadev’s claim that the researchers committed ultra vires acts by acting outside the scope of their authority, the court noted that the employees had no statutory authority, only contractual authority, failure to comply with which “does not give rise to an ultra vires claim” (citation omitted). Curadev further argued that the trial court erred in referring the jurisdictional plea to an associate judge. But Curadev failed both to appeal the judge’s ruling on the plea or request a de novo hearing before the referring court, instead choosing to appeal to the court of appeals. It therefore waived its right to a de novo hearing or appeal of the judge’s order, which became the decree of the district court upon the expiration of 30 days.
Chief Justice Brister dissented from the court’s holding that Southwestern’s contract with Takeda barred the non-contracting party Curadev’s constitutional takings claim. He pointed to SCOTX’s ruling in Texas Department of Transportation v. Self, 690 S.W.3d 12 (Tex. 2024), which he argued stands for the proposition that a taking can occur “even if the government mistakenly believes that it has a legal right to do so apart from its power of eminent domain” (emphasis added). Justice Brister concurred with the court’s judgment affirming dismissal of Curadev’s tort and statutory claims, as well as its claims against the Southwestern employees.
The split decision on the takings issue virtually guarantees that SCOTX will weigh in, so stay-tuned.
