Simula, Inc. v. Autoliv, Inc.

175 F.3d 716, 1999 WL 253191
CourtCourt of Appeals for the Ninth Circuit
DecidedApril 30, 1999
DocketNo. 98-16563
StatusPublished
Cited by183 cases

This text of 175 F.3d 716 (Simula, Inc. v. Autoliv, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 1999 WL 253191 (9th Cir. 1999).

Opinion

TASHIMA, Circuit Judge:

This appeal presents the question of how broadly an arbitration clause containing the phrase “arising in connection with this Agreement” should be construed. The district court held that it encompassed all disputes having their origin or genesis in the contract and granted appellees’ motion to compel arbitration. We have jurisdiction under 28 U.S.C. § 1291 and we affirm.

I.

In 1992, Simula, Inc., and Simula Automotive Safety Devices, Inc. (together “Si-mula”), invented the Inflatable Tubular Structure (“ITS”), an automotive side impact head protection air bag system. In 1993, Simula approached BMW, a German automaker, about purchasing the ITS. BMW instructed Simula to work through Autoliv, AB, and its subsidiaries, Autoliv, Inc., Autoliv Development GMBH, Autoliv ASP, Inc., and Autoliv North America (collectively “Autoliv”), a previously-approved “first-tier” vendor/supplier of automotive components, to present Simula’s technology for incorporation into BMW’s cars.

As directed by BMW, Simula approached Autoliv about the ITS technology. In May 1993, Autoliv and Simula signed nondisclosure agreements. Thereafter, Simula disclosed to Autoliv confidential, proprietary, and trade secret information regarding the ITS, as well as testing data illustrating the enhanced safety advantages it offered.

In January 1994, Autoliv and Simula signed a letter of intent outlining the proposed relationship between them. Under the proposal, Simula would manufacture the ITS and give a conditional license of confidential, proprietary, and trade secret technology to Autoliv. In return, Autoliv would integrate the ITS into the BMW automobile. Autoliv was to pay Simula for each ITS unit delivered by Simula to Auto-liv and pay royalties on the sales of the ITS integrated systems. In July 1994, Autoliv received a contract and a sum of money from BMW to fund a portion of the ITS integration cost.

In August 1994, with Simula’s permission, Autoliv presented the Simula ITS system to Mercedes Benz. Because BMW and Mercedes Benz were head-to-head competitors and viewed one another as leaders in European automotive safety, Mercedes Benz suggested to Autoliv that it begin development of a product that differed from the ITS. Autoliv agreed. As Simula alleges, Autoliv subsequently began to replicate features of the ITS into a competing “inflatable curtain,” accelerated its efforts to develop the inflatable curtain as a competitive “first-to-the-market” product, and undertook a scheme to disparage the ITS to automotive manufacturers and to represent favorably the qualities of Autoliv’s own side protective technology.

In September 1994, Autoliv made a presentation to the Mercedes Benz and Ford Motor Companies regarding the ITS. Simula alleges that Autoliv knowingly presented inaccurate test data and false, misleading, and disparaging information concerning the ITS system. At the same time, however, Autoliv committed to BMW and Simula to provide the ITS on BMW automobiles.

In January 1995, Simula and Autoliv entered into three related agreements including: (1) a Joint Development and Cooperation Agreement; (2) a Licensing Agreement; and (3) a Frame Supply Agreement (collectively, the “1995 Agreement”). At the time that Simula signed the agreements, Simula did not know of and Autoliv did not disclose its inflatable [719]*719curtain concept. Under the Joint Development and Cooperation Agreement and the Frame Supply Agreement, the first customer project between Simula and Autoliv was BMW. Under the Licensing Agreement, Autoliv. maintains it acquired the exclusive rights to all marketing and sales of any ITS system for all automobile manufacturers and that Simula may not market the ITS itself.

In February 1998, Simula brought suit against Autoliv alleging causes of action for: (1) violation of the Sherman Act, 15 U.S.C. § § 1 and 2; (2) violation of the Trademark Act of 1946 (“Lanham Act”), 15 U.S.C. § 1125; (3) misappropriation of trade secrets and breach of the non-disclosure agreements; (4) defamation; and (5) breach of the Arizona Trade Secrets Act, Ariz.Rev.Stat. § 44-^401. Simula sought preliminary and permanent injunctive relief, treble damages for antitrust violations, punitive damages, compensatory damages, attorney’s fees, and costs.

Autoliv moved to compel arbitration pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 3-4, and either to dismiss the complaint or stay the action pending the resolution of arbitration proceedings. The district court granted Auto-liv’s motion to compel arbitration and its motion to dismiss. It held that all of Simula’s claims against Autoliv were subject to the arbitration clause contained in the 1995 Agreement because all of Simu-la’s claims relate to, derive from, and arise in connection with that contract. Simula appeals.

n.

Determinations of arbitrability, like the interpretation of any contractual provision, are subject to de novo review. See Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469, 474 (9th Cir.1991); Mediterranean Enter., Inc. v. Ssangyong Corp., 708 F.2d 1458, 1462-63 (9th Cir.1983). Therefore, we review de novo the district court’s interpretation of the contract language in the parties’ 1995 Agreement.

Federal substantive law governs the question of arbitrability. See Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); Republic of Nicaragua, 937 F.2d at 474-75. The FAA reflects Congress’ intent to provide for the enforcement of arbitration agreements within the full reach of the Commerce Clause. See Republic of Nicaragua, 937 F.2d at 475 (citing Perry v. Thomas, 482 U.S. 483, 490, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987)). The FAA embodies a clear federal policy in favor of arbitration.1 “[A]ny doubts concerning the scope of ar-bitrable issues should be resolved in favor of arbitration.” Moses H. Cone, 460 U.S. at 24-25, 103 S.Ct. 927.

The standard for demonstrating ar-bitrability is not high. The Supreme Court has held that the FAA leaves no place for the exercise of discretion by a district court, but instead mandates that district courts direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed. See Dean Witter Reynolds v. Byrd, 470 U.S. 213, 218, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985). Such agreements are to be rigorously enforced. See id. at 221, 105 S.Ct. 1238. Under § 4 of the FAA,2 the [720]*720district court must order arbitration if it is satisfied that the making of the agreement for arbitration is not in issue.

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175 F.3d 716, 1999 WL 253191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/simula-inc-v-autoliv-inc-ca9-1999.