Fareportal, Inc., the plaintiff-appellant, sued its former employee, Nishith Kumar, and several other defendants for alleged wrongdoing. This lawsuit followed the filing of other related complaints, with Fareportal asserting it had received new evidence of Kumar's misconduct. The district court granted judgment on the pleadings in favor of Kumar on five of the six claims, reasoning that those claims were untimely because Fareportal had already known of the alleged misdeeds. The district court also denied Fareportal's request to amend its complaint. Fareportal appealed, challenging both the dismissal of the claims and the denial of leave to amend.
The Ninth Circuit reviewed the grant of judgment on the pleadings de novo, accepting all allegations as true but not legal conclusions. The court affirmed the dismissal of the Civil RICO, Defend Trade Secrets Act (DTSA), and California trade secret claims. For the RICO claim, the statute of limitations began to run in 2016 when Fareportal's previous complaint demonstrated it knew of the injury. The court found the discovery rule inapplicable because Fareportal knew of the injury then. Furthermore, Fareportal failed to allege specific facts concealed by the defendants, which waived the equitable tolling defense. For the DTSA and California trade secret claims, the court found Fareportal had not adequately alleged new facts supporting these claims since 2016. Regarding the California trade secret claim, the allegations did not show that Fareportal actually learned something it did not know before, constituting conclusory allegations of delayed discovery. The court also found that Fareportal failed to allege fraudulent conduct by Kumar, making equitable tolling inapplicable to that claim. However, the court reversed the dismissal of the civil conspiracy and Unfair Competition Law (UCL) claims. The civil conspiracy claim was timely because a co-conspirator lied in a deposition on November 8, 2017, an act in furtherance of the conspiracy that fell within the four-year statute of limitations. The UCL claim, while untimely as filed, was tolled under California's discovery rule because Fareportal alleged it discovered new emails in February 2021 that disclosed the scheme and that it was diligent in pursuing those documents. Finally, the court held that the district court abused its discretion in denying leave to amend the trade secret claims, as the dismissal based on the statute of limitations did not foreclose the possibility of amendment to show lack of reasonable notice or facts demonstrating reasonable diligence.
The decision affirms the dismissal of Fareportal's RICO, DTSA, and trade secret claims, effectively ending those specific causes of action due to the statute of limitations. However, the case is remanded for further proceedings on the civil conspiracy and Unfair Competition Law claims, which were found to be timely. The ruling clarifies that a plaintiff must allege specific facts of concealment to invoke equitable tolling and that a deposition lie by a co-conspirator can reset the statute of limitations for a civil conspiracy claim. It also establishes that denying leave to amend a complaint based on the statute of limitations is an abuse of discretion if the complaint does not clearly foreclose the possibility of amendment.
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