Bae Systems Aircraft Controls Inc. v. Eclipse Aviation Corp.

224 F.R.D. 581, 2004 U.S. Dist. LEXIS 23346, 2004 WL 2615234
CourtDistrict Court, D. Delaware
DecidedNovember 10, 2004
DocketNo. CIV.04-158-SLR
StatusPublished
Cited by11 cases

This text of 224 F.R.D. 581 (Bae Systems Aircraft Controls Inc. v. Eclipse Aviation Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bae Systems Aircraft Controls Inc. v. Eclipse Aviation Corp., 224 F.R.D. 581, 2004 U.S. Dist. LEXIS 23346, 2004 WL 2615234 (D. Del. 2004).

Opinion

MEMORANDUM OPINION

SUE L. ROBINSON, Chief Judge.

I. INTRODUCTION

Plaintiff BAE Systems Aircraft Controls Incorporated (“Aircraft Controls”) filed this action on March 12, 2004, against defendant Eclipse Aviation Corporation (“Eclipse”). Aircraft Controls is seeking a preliminary and permanent injunction enjoining Eclipse from infringing its copyrights, misappropriating its trade secrets and using or disclosing its confidential information. (D.I. 1 at 2) Aircraft Controls has also initiated arbitration proceedings against Eclipse for monetary damages. Aircraft Controls is a Delaware corporation, with its principal place of business in California. (Id. at 3) Eclipse is a Delaware corporation, with its principal place of business in New Mexico. (Id.) The court has personal jurisdiction pursuant to 28 U.S.C. § 1332 because the parties are both citizens of the State of Delaware. In addition, the court has original and exclusive jurisdiction for any civil action arising under any Act of Congress relating to copyrights under 28 U.S.C. § 1338.

Currently before the court are: 1) Eclipse’s motion to compel arbitration and dismiss or stay the proceedings pending completion of the arbitration; 2) Aircraft Controls’ motion for expedited discovery; 3) Eclipse’s motion to transfer venue; and 4) Aircraft Controls’ motion to strike the “For Attorneys’ Eyes Only” designation from Eclipse’s brief and accompanying appendix. For the reasons stated below, Eclipse’s motion to compel arbitration and stay this action is granted, Aircraft Controls’ motion to expedite discovery is denied, Eclipse’s motion to transfer venue is denied, and Aircraft Controls’ motion to strike the “For Attorneys’ Eyes Only” designation is granted.

II. BACKGROUND

Eclipse is an aviation company based in Albuquerque, New Mexico. It is in the process of developing and bringing to the market the Eclipse 500, the first jet aircraft retailing for less than $1,000,000. (D.I. 1 at 4) Eclipse hired Williams International Co., LLC (“Williams”) to find contractors to develop the various systems that would be incorporated into the Eclipse 500. (D.I. 14 at 4) On May 16, 2000, Williams entered into a Master Agreement (“Agreement”) with Aircraft Controls. (D.I.l, Ex. B) The Agreement contained several attachments which also governed the relationship of the parties, including: Attachment A covering Purchase Order Terms and Conditions; Attachment C covering a Statement of Work; and Purchase Order # 333336. (Id.)

Under the Agreement, Aircraft Controls was obligated to develop, certify, and supply the Aircraft Integrated Electronic System [584]*584(“AIES”), a component of the Eclipse 500, at a per-unit cost of $24,326 per annual supply of 1,500.1 (D.I.14, 15) This work was novel and required Aircraft Controls to either custom design or modify existing components to develop the AIES. On March 20, 2001, Williams assigned his rights and obligations in the Agreement to Eclipse. (D.I. 1 at 4)

The Agreement contains several key provisions:

14.3 Confidentiality. The parties agree, without limiting any of the remedies referred to in Section 22.8, that any disclosure of Confidential Information in violation of this Section 14 constitutes irreparable injury to the non-disclosing Party that will entitle the non-disclosing Party to injunctive relief. The non-disclosing party may, in its sole discretion, seek such injunctive relief from a court of competent jurisdiction.

(D.I. 1, Ex. B at 12)

19.5.1 Aircraft Controls’ Remedies Upon Termination. Except as provided in Section 14.3, the remedies of Aircraft Controls upon its termination of this Agreement for cause shall be limited to Aircraft Controls’ right to recover damages, if any, in an action at law, and Aircraft Controls waives any right or remedy in equity, or right to enjoin or restrain or otherwise impair in any manner the production, distribution, exhibition, or other exploitation of the AIES or other product produced pursuant to the provisions of this Agreement or any parts or elements thereof or the use, publication, or dissemination of any advertising in connection therewith.

(D.I. 1, Ex. B at 16)

22.11 Dispute Resolution. If a dispute, controversy, or claim (“Disputed Matter”) arises between Aircraft Controls and Williams concerning the performance of this Agreement or any terms or conditions herein and the Parties fail to resolve the dispute by written agreement, except as provided in Section 14.3, (I) Aircraft Controls and Williams agree that any Disputed Matter shall be settled in accordance with the dispute resolution procedures detailed in Attachment “A” (Purchase Order Terms and Conditions), and (ii) the mediation and arbitration provided for in Attachment “A” (Purchase Order Terms and Conditions) shall be the sole and exclusive remedy of the parties for any Disputed Matter.

(D.I. 1, Ex. B at 22) Attachment A, the “Purchase Order Terms and Conditions,” also contains some key language:

20.0 Disputes. Williams and Aircraft Controls shall strive to settle amicably and in good faith any dispute arising in connection with this Agreement. If unable to do so, the dispute shall be resolved by binding arbitration conducted under the rules of the American Arbitration Association, as presently in force, by three arbitrators appointed in accordance with said rules. The place of arbitration shall be Detroit, Michigan. Pending resolution of any dispute hereunder, Aircraft Controls shall proceed diligently with the performance of work, including the delivery of Goods in accordance with Williams’ direction. Upon resolution of the dispute, Orders shall be equitably adjusted, if necessary, to reflect such resolution.

(D.I. 1, Ex. C at 34)

In a June 18, 2003 meeting in Albuquerque, Aircraft Controls’ representatives informed Eclipse that its AIES design would have a per-unit cost of $50,260 per annual supply of 1,500. (D.I.15, Ex. A) In response to this deviation, Eclipse sent Aircraft Controls a Notice of Breach on June 27, 2003. (D.I. 14 at 5) Aircraft Controls failed to remedy the breach within thirty days of Eclipse’s notice as was required by the Agreement. On August 6, 2003, Eclipse sent Aircraft Controls a notice of termination for cause of both Purchase Order # 333336 and the Agreement. Aircraft Controls replied on August 19, 2003, by sending Eclipse a notice of termination for cause, characterizing Eclipse’s failure to pay for certain invoices totaling over $8.5 million as grounds for termination. (D.I. 1 at 10)

[585]*585Following the termination of the contract, Eclipse entered into agreements with several new vendors to develop systems to replace the AIES. Eclipse claims that it is not using the designs or specifications developed by Aircraft Controls to complete the project; rather, the new vendors are modifying their own proprietary designs to fit Eclipse’s specifications. (D.I. 14 at 6) In addition, Eclipse contends that the architecture of the Eclipse 500 has changed significantly so that Aircraft Controls’ designs are now obsolete. (Id.)

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224 F.R.D. 581, 2004 U.S. Dist. LEXIS 23346, 2004 WL 2615234, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bae-systems-aircraft-controls-inc-v-eclipse-aviation-corp-ded-2004.