Tran

California’s compulsory cross-complaint statute prohibits a party from asserting a claim if, at the time the party answered a complaint in prior litigation, it failed to allege in a cross-complaint any then existing, related cause of action against the plaintiff. (Code Civ. Proc., § 426.30, subd. (a).) Few cases have construed the relatedness requirement of the compulsory cross-complaint statute. Accordingly, whether an unasserted claim is a “related” cause of action that is barred by section 426.30 can be a difficult question to answer.

In January 2008, appellant Align Technology, Inc., sued its former employee, Bao Tran, for (among other things) breach of contract and conversion of patents belonging to the company. Tran demurred, claiming that the action was barred under the compulsory cross-complaint statute. He asserted that Align, in a prior state court action in San Francisco (the prior suit), had sued Tran, he had cross-complained for wrongful termination, and Align had failed to assert the current claims at the time it answered the cross-complaint. The court agreed that Align’s claims were barred under section 426.30 because they should have been raised in the…