Matthew Leboeuf v. Nvidia Corporation

• Court: Court of Appeals for the Ninth Circuit
• Decided: January 14, 2021
• Docket: 19-17481
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JAN 14 2021 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

MATTHEW LEBOEUF, No. 19-17481

Plaintiff-Appellant, D.C. No. 5:19-cv-02543-SVK

ROBERT HANEY, MEMORANDUM* Appellant,

v.

NVIDIA CORPORATION,

Defendant-Appellee.

Appeal from the United States District Court for the Northern District of California Susan G. Van Keulen, Magistrate Judge, Presiding

Submitted January 12, 2021** San Francisco, California

Before: WALLACE and M. SMITH, Circuit Judges, and RESTANI,*** Judge.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Jane A. Restani, Judge for the United States Court of International Trade, sitting by designation. Appellants Matthew LeBoeuf and Robert Haney (Appellants) appeal the

district court’s order granting Appellee NVIDIA Corporation’s (NVIDIA) motion

to compel arbitration and dismissing the case without prejudice. Because the

parties are familiar with the facts, we do not recount them here, except as

necessary to provide context to our ruling. We have jurisdiction under 28 U.S.C. §

1291. We review de novo the district court’s decision to compel arbitration. Chiron

Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). We

AFFIRM.

Appellants allege they purchased graphics cards that suffered from

performance issues from third-party manufacturers and retailers. Appellants also

downloaded and installed NVIDIA’s software that is necessary to operate the

graphics cards. Before downloading the software, NVIDIA required Appellants to

consent to its License Agreement that contained an arbitration and class-action

waiver provision.

NVIDIA moved to compel arbitration of Appellants’ claims relating to the

graphics cards, and the district court granted that motion based on the License

Agreement. Appellants argue on appeal that the district court erred in granting the

motion for several reasons.

First, Appellants contend the district court erred because their claims relate

to hardware, not software, such that the parties did not enter into a valid arbitration

2 agreement with respect to their claims. This argument fails, however, because the

undisputed facts show that Appellants entered into a valid arbitration agreement

when they twice assented to NVIDIA’s License Agreement. Any dispute as to the

scope of that agreement, and whether Appellants’ claims fall outside the

agreement, must be determined by the arbitrator under the License Agreement’s

delegation clause. See Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct.

524, 530 (2019).

Second, Appellants contend the district court erred by enforcing the License

Agreement’s delegation clause and holding that the arbitrator must determine

issues related to arbitrability. This argument fails because the district court

properly enforced the License Agreement’s choice-of-law provision that required

application of Delaware law because Appellants failed to show that Delaware Law

conflicts with a fundamental California public policy and that California has a

materially greater interest than Delaware in evaluating the delegation clause. See

Nedlloyd Lines B.V. v. Superior Court, 3 Cal. 4th 459, 466 (1992). In addition,

under Delaware law, the broad arbitration clause and incorporation of the Judicial

Mediation and Arbitration Services (JAMS) Rules clearly and unmistakably

evidences the parties’ intention to delegate issues of arbitrability to the arbitrator.

See James & Jackson, LLC v. Willie Gary, LLC, 906 A.2d 76, 80 (Del. 2006); Li v.

3 Standard Fiber, LLC, No. 8191–VCN, 2013 WL 1286202, at *6 (Del. Ch. Mar. 28,

2013) (unpublished).

Third, Appellants contend the delegation clause is procedurally and

substantively unconscionable. This argument fails because Appellants were given

the opportunity to review the License Agreement at two separate points when they

downloaded and installed the NVIDIA software. In addition, Appellants were not

presented with the arbitration agreement on a “take-it-or-leave-it” basis because

NVIDIA provided them the opportunity to opt out. Despite this opportunity,

Appellants chose to continue using the graphics cards and software without opting

out of the arbitration agreement. See Ketler v. PFPA, LLC, 132 A.3d 746, 748

(Del. 2016); Tulowitzki v. Atl. Richfield Co., 396 A.2d 956, 960 (Del. 1978); see

also Mohamed v. Uber Techs., Inc., 848 F.3d 1201, 1210–11 (9th Cir. 2016).

Appellants also fail to demonstrate that the delegation clause “shocks the

conscience” or is on terms “so extreme as to appear unconscionable according to

the mores and business practices of the time and place.” See Chemours Co. v.

DowDuPont Inc., No. CV 2019-0351-SG, 2020 WL 1527783, at *12 (Del. Ch.

Mar. 30, 2020) (citations omitted) (unpublished). To the contrary, the Supreme

Court requires enforcement of such clauses. See Henry Schein, 139 S. Ct. at 528.

AFFIRMED.