Court Opinion

ID: 3024628
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:31:57.340939+00
Date Added: 2024-06-11T11:47:41.968337
License: Public Domain

United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                    ___________

                                    No. 99-3188
                                    No. 00-1566
                                    ___________

Medtronic, Inc., a Minnesota            *
corporation,                            *
                                        *
                    Appellee,           *
                                        * Appeals from the United States
       v.                               * District Court for the District of
                                        * Minnesota.
Advanced Cardiovascular Systems, Inc., *
a California corporation; Guidant       *      [UNPUBLISHED]
Corporation, an Indiana corporation,    *
                                        *
                    Appellants.         *
                                   ___________

                               Submitted: May 11, 2000

                                   Filed: May 18, 2000
                                    ___________

Before WOLLMAN, Chief Judge, FAGG, Circuit Judge, and HENDREN,* District
      Judge.
                             ___________

PER CURIAM.

       Advanced Cardiovascular Systems, Inc. (ACS) appeals the district court's denial
of its motion to stay a lawsuit against ACS by Medtronic, Inc. (Medtronic) pending

      *
        The Honorable Jimm Larry Hendren, Chief Judge, United States District Court
for the Western District of Arkansas, sitting by designation.
arbitration between ACS and Medtronic, Inc's wholly-owned subsidiary, Medtronic-
AVE (Med-AVE). We affirm.

        Medtronic filed a patent infringement suit against ACS in November 1997. In
April 1998, ACS entered a settlement agreement (ACS-Bard agreement) in an unrelated
infringement dispute with C.R. Bard, which contained a covenant that Bard and its
affiliates would not sue ACS and its affiliates "for any and all debts, claims, demands,
and liabilities, . . . based . . . on any and all of ACS's and its Affiliates past and current
domestic and foreign angioplasty catheters including stent delivery catheters" and a
clause requiring arbitration of any disputes under the ACS-Bard agreement. When
Bard sold its coronary catheter lab business to Arterial Vascular Engineering, Inc.
(AVE) in October 1998, AVE expressly accepted assignment of the ACS-Bard
agreement. A few months later, Medtronic formed a wholly-owned subsidiary, which
then merged with AVE. As the successor of AVE, Med-AVE is now the holder of the
original ACS-Bard agreement and admits responsibility for obligations under that
agreement. ACS contends the parent-subsidiary relationship between Medtronic and
Med-AVE binds Medtronic to the original ACS-Bard agreement and on that basis ACS
asked the court to stay Medtronic's lawsuit so the parties could arbitrate. The district
court refused.

       On appeal, ACS first claims the district court erroneously failed to hold a trial
on the issue of whether Medtronic is bound by the ACS-Bard agreement. We disagree.
Contrary to ACS's view, Medtronic is the only party entitled to demand a jury trial.
See 9 U.S.C. § 4 (if no jury trial demanded by party alleged to be in default, court shall
hear and determine issue); Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., Ltd., 636
F.2d 51, 54 (3d Cir. 1980). Because ACS has created no genuine issue of fact
concerning its theories for holding Medtronic bound, the district court properly decided
the issue without a trial, see Par-Knit Mills, Inc., 636 F.2d at 54; Sunkist Soft Drinks,
Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 757 (11th Cir. 1993).

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       ACS next offers three theories it claims bind Medtronic to the ACS-Bard
agreement: 1) Medtronic is an affiliate under the express language of the agreement;
2) Medtronic is the alter-ego of Med-AVE; and 3) Medtronic is a third-party
beneficiary receiving direct benefits under the agreement. We conclude Medtronic is
not bound under any of these theories. The express language of the ACS-Bard
agreement says "Bard and its Affiliates covenant not to sue ACS and its Affiliates,"
defining Affiliate as "any corporation . . . which, now or hereafter, directly or indirectly
owns, is owned by or is under common ownership of a party." Because Medtronic
does not own Bard, is not owned by Bard, and is not under the common ownership of
Bard or ACS, Medtronic is not bound by the express language of the agreement. See
Thomson-CSF, S.A. v. American Arbitration Ass'n, 64 F.3d 773, 776 (2d Cir. 1995)
(ordinary contract principles applied to determine if a party is bound to arbitrate). The
alter-ego and third-party beneficiary theories fail for the reasons stated in the district
court's thorough opinion. Having concluded that Medtronic is not bound by the ACS-
Bard agreement, we affirm the district court's denial of ACS's motion to stay. See 8th
Cir. R. 47B.

       A true copy.

              Attest:

                      CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

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