MedCam, Inc. v. MCNC

414 F.3d 972, 2005 WL 1661487
Court of Appeals for the Eighth Circuit·Decided July 18, 2005·No. 04-2572·Published·Cited by 32 cases

Opinion

BOWMAN, Circuit Judge. .

MCNC appeals from the District Court’s 1 order denying MCNC’s motion to *974 dismiss certain claims asserted by Med-Cam, Inc: (MedCam) against MCNC and granting MedCam’s motion to compel arbitration of those claims. We affirm.

I.

The essential facts of this ease can be stated briefly. 2 MedCam and MCNC sought to develop medical imaging technology together, and they entered into a contract (the Agreement) to govern the terms of their joint development. The Agreement restricted the parties’ ability to disclose or transfer the technology developed under the Agreement. The Agreement also contained a clause that restricted MCNC from competing with MedCam for a period of two years beyond the termination of the Agreement. Specifically, the noncompete clause barred MCNC from designing or producing devices in the “Med-Cam Field,” which was an area of imaging technology defined in the Agreement. Agreement ¶¶ 1.16, 6.5. Most importantly, the. Agreement specified that “[a]ll disputes, controversies or differences arising out of or in connection with this Agreement” would be finally settled by binding arbitration. Id. ¶ 9.5.

After several years of jointly developing technology under the Agreement, MCNC terminated the Agreement and began working with other companies to develop optical technology. MedCam claimed that MCNC improperly transferred technologies developed under the Agreement to other companies and that the technologies MCNC developed with and through these other companies violated the noncompete clause of the Agreement. MedCam asked the District Court to compel arbitration of its claims against MCNC and several other companies under the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16 (2000). The District Court dismissed MedCam’s claims against the other companies, but entered an order denying MCNC’s motion to dismiss MedCam’s claims against MCNC and granting MedCam’s motion to compel arbitration of those claims. MCNC appeals the order denying its motion to dismiss and granting MedCam’s- motion to compel arbitration.

II.

When it enacted the FAA, Congress intended for parties who have agreed to arbitrate disputes to do so in a speedy manner without delay or obstruction by the courts. Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967). Accordingly, the FAA limits a district court’s initial role in any challenge to an arbitration agreement to deciding whether “the making of the agreement for arbitration or the failure to comply therewith” is at issue. 9 U.S.C. § 4 (2000). As to whether “the making of the agreement for arbitration” is in issue, id., our Circuit has refined this inquiry to asking 1) whether the agreement for arbitration was validly made and 2) whether the arbitration agreement applies to the dispute at hand, i.e., whether the dispute falls within the scope of the arbitration agreement. See Bob Schultz Motors, Inc. v. Kawasaki Motors Corp., U.S.A., 334 F.3d 721, 726 (8th Cir.2003) (citing Houlihan v. Offerman & Co., 31 F.3d 692, 694-95 (8th Cir.1994)), cert. denied, 540 U.S. 1149, 124 S.Ct. 1147, 157 L.Ed.2d 1042 (2004); Twin City Monorail, Inc. v. Robbins & Myers, Inc., 728. F.2d 1069, 1072-(8th Cir.1984) (stating that arbitration is a matter of contract law and that, absent an arbitration agreement regarding the particular, dispute, a party *975 may not be required to submit the dispute to arbitration) (citing United Steelworkers v. Wamor & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (I960)). Here, the dispute is centered on whether MedCam’s claims fall within the scope of the arbitration clause contained in the Agreement.

The scope of an arbitration agreement is given a liberal interpretation, with any doubts resolved in favor of arbitration. Lyster v. Ryan’s Family Steak Houses, Inc., 239 F.3d 943, 945 (8th Cir.2001). An order compelling arbitration “should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” Id. at 945 (quoting AT & T Techs., Inc. v. Comm. Workers of Am., 475 U.S. 643, 650, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (quoting Warrior & Gulf Navigation Co., 363 U.S. at 582-83, 80 S.Ct. 1347)). Moreover, the question of scope asks only whether the parties have agreed to arbitrate a particular claim and does not reach the potential merits of the claim. Kansas City S. Transp. Co. v. Teamsters Local 41, 126 F.3d 1059, 1067 (8th Cir.1997) (quoting AT & T Techs., 475 U.S. at 649, 106 S.Ct. 1415). Regardless’ of the scope of the arbitration agreement, the district court’s initial inquiry under 9 U.S.C. § 4 remains “an expeditious and summary hearing, with only restricted inquiry into factual issues.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 22, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) (emphasis added). We review de novo the District Court’s order compelling arbitration. Lyster, 239 F.3d at 945.

We hold, as did the District Court, that the arbitration clause contained in the Agreement is susceptible to an interpretation that encompasses MedCam’s claims. The arbitration clause applies to “[a]ll disputes, controversies or differences arising out of or in connection with this Agreement or the making thereof.” Agreement ¶ 9.5 (emphasis added). . This broadly worded arbitration clause applies to all disputes regarding the Agreement. 3 Med-Cam asserts that MCNC breached and violated duties created by the Agreement.

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MedCam, Inc. v. MCNC, 414 F.3d 972, 2005 WL 1661487 (8th Cir. 2005).

414 F.3d 972 (MedCam, Inc. v. MCNC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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