Court Opinion

ID: 3192556
Source: CourtListenerOpinion
Date Created: 2016-04-08 17:01:02.219925+00
Date Added: 2024-06-11T14:36:12.504250
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

IN RE ORANGE, S.A.; ANNE                No. 15-71668
BENRIKHI; DIMITRI DELMAS; OLIVER
GODINIAUX; GUILLAUME GUIMOND;              D.C. No.
FABRICE PETESCH; JACQUES VIEL;          3:14-cv-03985-
BARBARA BOBILLIER; BENOIT AMET;               JD
THOMAS LESENECHAL; FLORIAN DE
SA; ANTOINE LECOUTTEUX,
                                          OPINION

ORANGE, S.A.; ANNE BENRIKHI;
DIMITRI DELMAS; OLIVER
GODINIAUX; GUILLAUME GUIMOND;
FABRICE PETESCH; JACQUES VIEL;
BARBARA BOBILLIER; BENOIT AMET;
THOMAS LESENECHAL; FLORIAN DE
SA; ANTOINE LECOUTTEUX,
                      Petitioners,

                 v.

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF
CALIFORNIA, SAN FRANCISCO,
                     Respondent,

TELESOCIAL, INC.,
              Real Party in Interest.
2                      IN RE ORANGE, S.A.

                 Petition for Writ of Mandamus

                  Argued and Submitted
        October 19, 2015—San Francisco, California

                        Filed April 8, 2016

      Before: J. Clifford Wallace, Dorothy W. Nelson,
          and Richard R. Clifton, Circuit Judges.

                    Opinion by Judge Wallace

                           SUMMARY*

                        Mandamus Relief

    The panel denied a petition for a writ of mandamus,
brought by Orange, S.A., and several of its employees, under
28 U.S.C. § 1651, asking this court to direct the district court
to dismiss Telesocial, Inc.’s First Amended Complaint.

    Orange and Telesocial executed a non-disclosure
agreement (“NDA”) concerning a custom software
application named “Call Friends.” Telesocial filed an action
in the Northern District of California, alleging violations of
the Computer Fraud and Abuse Act, and California state law
claims. The district court denied Orange’s motion to dismiss
Telesocial’s First Amended Complaint based on forum non
conveniens.

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                    IN RE ORANGE, S.A.                       3

    In denying Orange’s petition for writ of mandamus, the
panel applied the factors in Bauman v. United States, 557
F.2d 650, 654 (9th Cir. 1977), and concluded that the district
court did not commit clear legal error in determining that the
NDA did not cover the claims at issue; Orange had the ability
on direct appeal to attain the relief it desired; Orange would
not be prejudiced in a way that was not correctable on appeal;
and the district court’s decision did not raise a novel issue
that affected the international business community.

                         COUNSEL

Daniel Schimmel (argued) and Anthony D. Mirenda, Foley
Hoag, New York, New York; Michael H. Page, Durie Tangri,
San Francisco, California, for Petitioners.

Benjamin L. Singer (argued) and Renee B. Bea, Colt Singer
Bea, San Francisco, California; Matthew S. Warren and
Patrick M. Shields, Warren Lex, San Francisco, California,
for Respondent.

                         OPINION

WALLACE, Senior Circuit Judge:

    Orange, S.A. and several of its employees (collectively,
Orange) ask this court to issue a writ of mandamus under
28 U.S.C. § 1651 directing the district court to (1) vacate its
order denying Orange’s motion to dismiss and (2) direct an
entry of judgment dismissing Telesocial, Inc.’s (Telesocial)
First Amended Complaint (FAC). We have jurisdiction
pursuant to the All Writs Act, 28 U.S.C. § 1651(a), and
4                    IN RE ORANGE, S.A.

decline to issue the writ. Under 28 U.S.C. § 1291, we have
“jurisdiction of appeals from all final decisions of the district
courts.” Special Investments, Inc. v. Aero Air, Inc., 360 F.3d
989, 993 (9th Cir. 2004). A district court’s decision is
appealable under section 1291 only when the decision ends
the litigation on the merits and leaves nothing for the court to
do but execute the judgment. Confederated Salish v.
Simonich, 29 F.3d 1398, 1401 (9th Cir. 1994) (internal
quotation and citation omitted). A district court order
denying a motion to dismiss for forum non conveniens is not
a final decision for purposes of section 1291. Van
Cauwenberghe v. Biard, 486 U.S. 517, 529 (1988).
Nevertheless, under the All Writs Act, if we would have the
power to entertain appeals at some stage of the proceedings,
we have the power to issue writs of mandamus in the case.
United States v. Harper, 729 F.2d 1216, 1221 (9th Cir. 1984).

                               I.

    Telesocial is a San Francisco start-up, formed in 2008, to
solve a unique telecommunications problem: how to enable
telephone calls between users of social media without the
need for telephone numbers. To remedy the problem,
Telesocial created a custom software application (app) named
“Call Friends,” which allows users of social networks (such
as Facebook) to place carrier-based phone calls directly to
other users.

    Orange, a French telecommunications provider,
approached Telesocial in February 2012 about a possible
agreement to acquire the app. Over the next several months,
Telesocial demonstrated its software and arranged for Orange
staff to test the product. To test the product, Telesocial
allowed Orange personnel in the United States to download
                    IN RE ORANGE, S.A.                       5

and use the demonstration app without restriction. Because
Telesocial had to pay for its users’ international calls, it
required overseas users to insert a password. On April 18,
2012, Telesocial provided Orange with the
password—“CALLFRIENDS”—and confirmed that Orange
had overseas access to test the app.

    Shortly after, on April 25, 2012, Orange and Telesocial
executed a non-disclosure agreement (NDA). The NDA
specifies that the “[p]arties desire to have certain business
discussions with regards to a possible contractual
relationship” and that they “wish to reciprocally protect and
safeguard any information they may disclose to each other
during their [d]iscussions, and intend to hold such disclosures
in confidence.” The NDA protected all “confidential
information,” which it defined as all non-public information
that either party disclosed during the discussions, from being
disclosed to third parties, used for purposes beyond the
discussions, or otherwise distributed. The NDA excluded
some confidential information from its scope, including
information which “is already known or is in the possession
of the receiving Party at the time it is disclosed . . . .”

    The final page of the NDA included a forum selection
clause, which stated:

       This Agreement shall be governed by and
       construed in accordance with French law. Any
       and all dispute, controversy, claim or question
       arising out of or relating to the Agreement
       including the validity, binding effect,
       interpretation, performance or non
       performance thereof shall first be submitted to
       the respective authorized management of the
6                   IN RE ORANGE, S.A.

       Parties for discussion in good faith and
       amicable resolution. In the event the Parties
       cannot resolve such dispute on an amicable
       basis within (30) thirty days after the
       beginning of such discussion and after making
       their best efforts to do so, then the Parties
       hereto irrevocably consent that the matter
       shall be submitted to the Court of Paris
       (France).

    For the next two months, Telesocial continued to
demonstrate its app to Orange. While Telesocial was
responsive to Orange’s information requests, Telesocial
asserts that it never disclosed how it implemented its
technology, electing to keep that proprietary information
confidential until Orange and Telesocial executed a
partnership agreement. On July 4, 2012, Orange told
Telesocial that it was going to offer Telesocial a Production
Contract to seal a development deal between the parties.

     Shortly after, on July 31, 2012, Orange abruptly
terminated negotiations, telling Telesocial that its price of
about one million U.S. dollars was a “no go.” Instead of
purchasing the app from Telesocial, Orange elected to create
the technology itself. Telesocial alleges that at this point,
Orange, unsuccessful in replicating the technology and under
pressure to create its own social calling software, made a
drastic decision: instead of continuing its attempts to create
the technology, Orange would instead steal it from Telesocial.
Beginning on August 31, 2012, Orange repeatedly used
fictitious names and a variety of telephone numbers to access
Telesocial’s application. By using the fictitious names,
Orange was able to make dozens of unauthorized telephone
calls and execute certain functions to obtain information
                    IN RE ORANGE, S.A.                      7

about how the Teleoscial platform operated. Telesocial
further alleges that Orange hacked into its Emeryville
computer servers to access proprietary information about the
software.

     After months of probing, on November 21, 2012, Orange
announced that it had created a product called “Party Call.”
Telesocial immediately responded with a cease-and-desist
letter, warning Orange not to proceed with the roll out of the
stolen product. The media found out about the letter, and the
magazine TechCrunch published an article about Telesocial’s
allegations against Orange. See Ingrid Lunden, Startup
Claims That Party Call, France Telecom’s Facebook Calling
App, Was Its Idea, TechCrunch.com (Dec. 2, 2012),
http://archive.is/LqHFs.

    Orange, apparently frustrated by the allegations in the
article, responded by suing Telesocial in the Tribunal de
Commerce of Paris (Tribunal) on March 5, 2013, asserting
that Telesocial had disparaged Orange and breached the
NDA. The Tribunal dismissed all of Orange’s claims, and the
Paris Court of Appeals affirmed the dismissal on April 29,
2014.

    After Orange sued Telesocial, Telesocial began to explore
whether it should file a lawsuit of its own. On June 4, 2013,
Telesocial applied to the Tribunal for ex parte pre-action
document collection, a French procedure for obtaining
discovery without filing suit. In its application for document
production, Telesocial identified two possible claims:
(1) breach of the NDA and (2) “brutal interruption of
negotiations.” The Tribunal granted Telesocial’s application,
and the French authorities seized the requested documents
from Orange. On appeal, the Paris Court of Appeals revoked
8                    IN RE ORANGE, S.A.

the seizure order on the grounds that Telesocial’s application
failed to establish “due cause” for an ex parte seizure.
Telesocial elected not to pursue further its claim regarding the
NDA.

    Telesocial subsequently filed an action in the Northern
District of California, alleging violations of the Computer
Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030, California
state law claims for breach of contract for violating
Telesocial’s “Terms of Use,” breach of the covenant of good
faith and fair dealing, theft of trade secrets, and unfair
competition. Telesocial’s initial complaint stated that
Telesocial provided Orange with the “CALLFRIENDS”
password “solely for the purposes of evaluating the Telesocial
application as part of the negotiations.” Telesocial later
amended its complaint, and removed the statements
surrounding the “CALLFRIENDS” password from the First
Amended Complaint (FAC).

   Orange moved to dismiss Telesocial’s First Amended
Complaint for forum non conveniens. The district court
denied the motion, and this petition followed.

                              II.

    Our standard of review of the challenged district court
order is limited and “only exceptional circumstances
amounting to a judicial ‘usurpation of power’ will justify the
invocation of this extraordinary remedy.” Bauman v. United
States, 557 F.2d 650, 654 (9th Cir. 1977), quoting Will v.
United States, 389 U.S. 90, 95 (1967). To secure issuance of
the writ of mandamus, a petitioner must show a “clear and
indisputable” right to it. Confederated Salish, 29 F.3d at
1404. (internal quotations and citations omitted).
                    IN RE ORANGE, S.A.                       9

    In Bauman, we consolidated our prior mandamus
jurisprudence to focus on five factors which govern the
decision whether to grant a writ of mandamus:

       (1) The party seeking the writ has no other
       adequate means, such as a direct appeal, to
       attain the relief he or she desires. (2) The
       petitioner will be damaged or prejudiced in a
       way not correctable on appeal. (3) The district
       court’s order is clearly erroneous as a matter
       of law. (4) The district court’s order is an oft-
       repeated error, or manifests a persistent
       disregard of the federal rules. (5) The district
       court’s order raises new and important
       problems, or issues of law of first impression.
557 F.2d at 654–55 (citations omitted). The five factors
“often raise questions of degree” and proper disposition
requires “a balancing of conflicting indicators.” Id. at 655.
“No single factor is determinative and all five factors need
not be satisfied at once.” Confederated Salish, 29 F.3d at
1404.

    Our court determines de novo whether the writ should
issue. Valenzuela-Gonzalez v. U.S. Dist. Ct., 915 F.2d 1276,
1279 (9th Cir. 1990), citing Seattle Times v. U.S. Dist. Ct.,
845 F.2d 1513, 1515 (9th Cir. 1988). “Before the writ may
issue, we must be ‘firmly convinced that the district court has
erred,’ and that petitioner’s right to the writ is ‘clear and
indisputable.’” Id., quoting Kerr v. U.S. Dist. Ct., 426 U.S.
394, 403 (1976) (internal citation omitted).

   Orange petitions this court for a writ of mandamus
ordering the district court to dismiss the case on the grounds
10                    IN RE ORANGE, S.A.

of forum non conveniens. Orange asserts that the district
court clearly erred in determining that Telesocial’s claims
were not subject to the forum selection clause in the NDA.
Orange further argues that mandamus is warranted because it
has no viable alternative to attain relief; it will suffer
significant harm and prejudice that is not correctable on
appeal; and the district court order raises issues that are
critical to the international business community. We will now
analyze these arguments.

    Orange first asserts that the district court clearly erred in
its order denying the motion to dismiss for forum non
conveniens because it refused to dismiss the case even though
a valid forum selection clause was present in the NDA.
Orange argues that the district court artificially narrowed the
scope of the forum selection clause, thereby promulgating a
rule that promotes “artful pleading” and forum-shopping.

    Whether Telesocial’s claims are subject to the NDA is
crucial to the forum non conveniens analysis. In Atlantic
Marine Const. Co. v. U.S. Dist. Ct., 134 S. Ct. 568 (2013), the
Supreme Court redefined the forum non conveniens analysis
when a valid forum selection clause is present. Because a
valid forum selection clause is bargained for by the parties
and embodies their expectations as to where disputes will be
resolved, it should be “given controlling weight in all but the
most exceptional cases.” Id. at 581 (internal quotation marks
omitted).

     The presence of a forum selection clause requires the
court to adjust the forum non conveniens analysis in three
ways: (1) “the plaintiff’s choice of forum merits no weight,”
id. at 581; (2) the court “should not consider arguments about
the parties’ private interests,” id. at 582; and (3) a “transfer of
                     IN RE ORANGE, S.A.                      11

venue will not carry with it the original venue’s choice of law
rules.” Id.

    The success of Orange’s forum non conveniens argument
hinges on whether the NDA forum selection clause applies to
Telesocial’s claims in the FAC. The NDA contained the
following forum selection provision: “Any and all dispute,
controversy, claim or question arising out of or relating to the
Agreement…shall be submitted to the Court of Paris
(France).”

    But Telesocial did not sue Orange in the Northern District
of California for breach of the NDA, or for disclosures that
were made pursuant to the covered negotiations. Rather,
Telesocial brought claims for violations of the CFAA,
California state law claims for breach of contract for violating
Telesocial’s “Terms of Use,” breach of the covenant of good
faith and fair dealing, theft of trade secrets, and unfair
competition.

    The district court concluded that the claims were so
factually distinct from the NDA that the forum selection
clause could not apply. Telesocial’s CFAA, theft of trade
secrets, and unfair competition claims are predicated on
Orange’s using fictitious names to use Telesocial’s app and
hacking into Telesocial’s servers after Orange ceased the
“discussions” at the center of the NDA. Telesocial’s contract
claims, moreover, stem from a breach of Telesocial’s “Terms
of Use” agreement. Nothing in the claims required the district
court to interpret, let alone reference, the NDA to issue a
ruling on Telesocial’s claims.

    Orange contends that the district court erroneously
narrowed the forum selection clause’s broad language.
12                   IN RE ORANGE, S.A.

Orange argues that the district court’s citation to Manetti-
Farrow, Inc. v. Gucci America Inc., 858 F.2d 509, 514 (9th
Cir. 1988), which addressed the scope of a forum selection
clause that applied to any disputes “‘regarding interpretation
or fulfillment’ of the contract,” demonstrates that it ignored
the reach of a forum selection clause that applies to claims
“relating to” a contract. In Manetti, we stated that whether
Manetti’s tort claims were subject to the forum selection
clause “depend[ed] on whether resolution of the claims
relat[ed] to interpretation of the contract.” Id. at 514. The
district court applied that standard in its own analysis,
concluding not only that Telesocial’s claims did not require
analyzing the NDA to decide them, but also bore no relation
to the NDA.

    Orange also relies heavily on Simula, Inc. v. Autoliv, Inc.,
175 F.3d 716 (9th Cir. 1999) to show that the NDA’s forum
selection clause is further reaching than the district court
decided. In Simula, we were tasked with determining whether
an arbitration clause that covered “[a]ll disputes arising in
connection with [the] Agreement” extended to allegations
that included antitrust violations, misappropriation of trade
secrets, and defamation. Id. at 720 (emphasis omitted).
Simula held that the “language ‘arising in connection with’
reaches every dispute between the parties having a significant
relationship to the contract and all disputes having their origin
or genesis in the contract.” Id. at 721. Orange argues that
Simula’s holding dictates that every claim that touches an
agreement with a forum selection clause is automatically
covered by that clause.

    Simula is distinct from the present case. The fact that the
forum selection clause in Simula was an arbitration provision
weighed heavily in our analysis. We stated that “all doubts
                     IN RE ORANGE, S.A.                      13

are to be resolved in favor of arbitrability,” and, as a result,
the plaintiff’s claims “need only ‘touch matters’ covered by
the contract.” Id. Here, we do not interpret an arbitration
clause, and, accordingly, do not apply the strong presumption
that prompted us in Simula to construe broadly the scope of
the arbitration clause.

    Moreover, regardless of the interpretative distinctions
between arbitration clauses and forum selection clauses, the
district court’s reasoning in this case is in line with the
analysis in Simula. In Simula, we analyzed each of the tort
claims, and considered whether the tort claim required us to
interpret the underlying contract. Id. at 721–25. The district
court applied the same considerations here: it looked at
Telesocial’s tort claims and determined if there was anything
factually within the claims that required it to interpret the
NDA. Unlike the facts underpinning the tort claims in Simula,
the relevant facts in this case did not involve the parties’
agreement. Orange fails to show how the district court’s
conclusion is legal error.

    Orange also pursues the alternative theory that Telesocial
engaged in “artful pleading” to mislead the district court.
Orange attempts to tie the NDA to Telesocial’s claims by
arguing that it was able to access servers due to the
“CALLFRIENDS” password that Telesocial provided during
negotiations. It contends that Telesocial excluded the fact that
it gave Orange a password to access its computer servers in
its FAC in an attempt to mislead the court into concluding
that the NDA does not cover its claims. Although these
arguments might present an argument on appeal from final
judgment, the district court’s conclusion that Telesocial’s
claims were unrelated to the NDA was not so clearly
14                   IN RE ORANGE, S.A.

erroneous that Orange’s right to a writ of mandamus is “clear
and indisputable.” Bauman, 557 F.2d at 662.

     Orange’s contention that the district court’s ruling is
erroneous because it promotes forum shopping lacks merit.
According to Telesocial, the reason that there was ongoing
litigation in France in the first instance was because Orange,
not Telesocial, initiated suit there. After Orange sued
Telesocial, Telesocial applied to the Tribunal for ex parte pre-
action document collection, and Telesocial ultimately elected
not to pursue its claims further, even though it had the right
to do so. That Orange may have to litigate a breach of the
NDA in France and tort claims in the United States is not a
reflection that the district court erred; it is a reflection of
Orange’s extensive conduct that brought about the claims.

    In sum, it is far from clear that the district court
committed an act that amounts to a “judicial usurpation of
power” or that Orange has shown a “clear and indisputable”
right to the writ as required by Bauman. As a result, this
factor does not weigh in favor of granting the writ of
mandamus.

                              III.

     Orange asserts that mandamus is also warranted because
it lacks any viable alternative to attain relief; it will suffer
significant harm and prejudice that is not correctable on
appeal; and the district court order raises issues that are
critical to the international business community.

    Orange contends it has no viable alternative to obtain
relief because direct appeal is not available from the district
court’s denial of its motion to dismiss. Varsic v. U.S. Dist.
                     IN RE ORANGE, S.A.                       15

Ct., 607 F.2d 245, 251 (9th Cir. 1979) (denial of motion to
dismiss is not appealable final order). Orange is correct that
the possibility of certification, standing alone, is not a bar to
mandamus relief. Cole v. U.S. Dist. Ct., 366 F.3d 813, 817 n.
4 (9th Cir. 2004), citing Executive Software N. Am., Inc. v.
U.S. Dist. Ct., 24 F.3d 1545, 1550 (9th Cir. 1994). But
Orange presents no argument as to why it will not be able to
contest the district court’s decision to deny dismissal for
forum non conveniens after entry of final judgment. This is
crucial as the “foremost ‘prerequisite[ ]’ to invoking statutory
mandamus authority is that the party seeking issuance of the
writ ‘have no other adequate means to attain the relief he
desires.’” In re U.S., 791 F.3d 945, 966 (9th Cir. 2015)
(Wallace, J., concurring), quoting Cheney v. U.S. Dist. Ct.,
542 U.S. 367, 380 (2004). This condition is “designed to
ensure that the writ will not be used as a substitute for the
regular appeals process.” Cheney, 542 U.S. at 380–81.

    While Orange may incur litigation expenses in the
interim, that reason alone is insufficient to conclude that,
absent a writ of mandamus, it has no adequate means of
obtaining relief. Our court has concluded that litigation costs
are a factor weighing in favor of mandamus relief only in the
most extreme circumstances. See, e.g., Varsic, 607 F.2d at
251–52 (holding that mandamus relief was warranted as
severe prejudice would occur due to the peculiar hardship of
the plaintiff, who lived on social security benefits and brought
an action to secure pension benefits, having to travel across
the country as a result of an erroneous forum transfer). Our
court has consistently rejected the “position that the costs of
trying massive civil actions render review after final
judgment inadequate.” In re Cement Antitrust Litigation,
688 F.2d 1297, 1303 (9th Cir. 1982), quoting In re Sugar
Antitrust Litigation, 559 F.2d 481, 484 (9th Cir. 1977); see
16                   IN RE ORANGE, S.A.

also Washington Public Utils. Grp. v. U.S. Dist. Ct., 843 F.2d
319, 325 (9th Cir. 1987).

    To support its position, Orange relies on Pacific Car &
Foundry Co. v. Pence, 403 F.2d 949, 953 (9th Cir. 1968)
(stating that irremediable harm can result from “an expensive
and protracted trial that leads to nowhere” when a district
court improperly denies motion to transfer). Orange ignores
that our court expressly limited Pacific Car’s broad language
suggesting that appellate courts will liberally review forum
non conveniens challenges through mandamus petitions. See,
e.g., Am. Fidelity Fire Ins. Co. v. U.S. Dist. Ct., 538 F.2d
1371, 1375 n.2 (9th Cir. 1976). This limitation serves an
important function: if appellate courts were to issue writs of
mandamus routinely after denial of a motion to dismiss for
forum non conveniens, they would be allowing non-statutory
rights of interlocutory appeal. See Kasey v. Molybdenum
Corp. of America, 408 F.2d 16, 19 (9th Cir. 1969).

    Orange therefore fails to show that it will suffer prejudice
that is not correctable on appeal. On appeal, Orange can
contest the district court’s denial of its motion to dismiss for
forum non conveniens. If our court, at that time, concludes
that the district court abused its discretion in denying the
motion, the only thing that Orange will have incurred is the
normal burden of time and expense spent on litigation.

    Orange contends that its petition presents important
problems for the international business community because
of the uncertainty that the district court’s decision injects into
the interpretation of forum selection clauses. Orange’s
argument misconstrues the extent of the district court’s
opinion. Orange primarily contends that the district court’s
decision will affect international arbitrations. Arbitration
                    IN RE ORANGE, S.A.                      17

clauses are, however, distinct from the simple forum selection
clause at issue here as arbitration clauses are construed
liberally in favor arbitration. See, e.g., Simula 175 F.3d at
720. The district court’s decision, moreover, is limited to its
fact-specific nature: Orange’s motion to dismiss for forum
non conveniens was denied based on the district court’s
reasoned conclusion that the forum selection clause at issue
was unrelated to Telesocial’s claims.

                       IV. Conclusion

    Thus, in applying the Bauman factors, we conclude that
the district court did not commit clear legal error in
determining that the NDA did not cover the claims at issue;
Orange has the ability on direct appeal to attain the relief it
desires; Orange will not be prejudiced in a way that is not
correctable on appeal; and the district court’s decision does
not raise a novel issue that affects the international business
community. Accordingly, we deny Orange’s petition for writ
of mandamus.

   DENIED.