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Telepet USA, Inc. v. Qualcomm, Inc.

United States District Court, D. Nevada

December 3, 2014

TELEPET USA, INC., a Nevada Corporation; Plaintiff,
v.
QUALCOMM, INCORPORATED, a Delaware Corporation; SNAPTRACS, INC., a California Corporation; ALEX ROGERS, an individual; JAMES HOFFMAN, an individual; DUDLEY FETZER, an individual; DAVE VIGIL, an individual; DOES I through XX, inclusive, and ROE BUSINESS ENTITIES XXI through XL, inclusive, Defendants

For Telepet USA, Inc., Plaintiff: Scott Michael Cantor, LEAD ATTORNEY, Scott Michael Cantor, Ltd., Las Vegas, NV.

For Qualcomm Incorporated, Snaptracs, Inc., Dudley Fetzer, Alex Rogers, James Hoffman, Dave Vigil, Defendants: Philip M. Hymanson, LEAD ATTORNEY, Greenberg Traurig, LLP, Las Vegas, NV; Eric W. Swanis, Greenberg Traurig, Las Vegas, NV.

ORDER

Gloria M. Navarro, Chief United States District Judge.

Pending before the Court is Defendants' Motion to Compel Arbitration (ECF No. 4) and Motion to Dismiss, or in the alternative, Motion to Stay (ECF No. 5). Plaintiff filed a Response (ECF No. 14), and Defendants filed a Reply (ECF No. 22). For the reasons discussed below, Defendants' Motion to Compel Arbitration (ECF No. 4) and Motion to Dismiss (ECF No. 5) are GRANTED.

I. BACKGROUND

This dispute arises out of a settlement and patent license agreement. On January 14, 2013, Plaintiff Telepet USA, Inc. (" Plaintiff") filed a patent infringement suit against Defendant Qualcomm, Incorporated (" Qualcomm") before this Court. See Telepet USA v. Qualcomm Incorporated, Case No. 2:13-cv-00063-GMN-CWH. On June 7, 2013, the case was dismissed after Telepet entered into the Settlement and Patent License Agreement (" Settlement Agreement") with Qualcomm and Defendant Snaptracs, Inc. (" Snaptracs"). (Ex. A to Defs.' Pet. For Removal ¶ 20, ECF No. 1). Plaintiff now alleges that Qualcomm and Snaptracs made material misrepresentations of fact and withheld material facts from Telepet in an attempt to induce Telepet to settle the patent infringement lawsuit and enter into the Settlement Agreement.[1] (Id. ¶ 21).

Section 10.2 of the Settlement Agreement provides as follows:

This Agreement shall be governed by, interpreted, and construed in accordance with the laws of California, without reference to conflicts of laws principles. Any legal action or other legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement must be brought or otherwise commenced in San Francisco, California, under California law, and subject to mandatory, binding arbitration at AAA.

(Ex. B to Defs.' Mot. to Compel Arbitration at 30, ECF No. 4-1). Pursuant to this arbitration clause of the Settlement Agreement, Defendants request that the Court compel arbitration of this dispute. (Defs.' Mot. to Compel Arbitration 1:20-23). Additionally, Defendants request that the Court dismiss this case, or in the alternative, stay the case pending the arbitration proceedings. (Id. 1:23-2:1).

II. LEGAL STANDARD

Section 2 of the Federal Arbitration Act (" FAA") provides that:

A written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

9 U.S.C. § 2. " In enacting § 2 of the federal Act, Congress declared a national policy favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration." Southland Corp. v. Keating, 465 U.S. 1, 10, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984). Courts shall place arbitration agreements " upon the same footing as other contracts." Volt Info. Sciences, Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 478, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989).

Under the FAA, parties to an arbitration agreement may seek an order from the Court to compel arbitration. 9 U.S.C. § 4. The FAA " leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985). Thus, the Court's " role under the Act is ... limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue." Lee v. ...


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