Abuse of Discretion – Arbitration

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7^th Circuit Court of Appeals

Case Name: DePuy Synthes Sales, Inc., v. OrthoLA, Inc., et al.

Case No.: 19-2765

Officials: WOOD, Chief Judge, and ROVNER and ST. EVE, Circuit Judges.

Focus: Abuse of Discretion – Arbitration

This lawsuit was sparked by a distributorship agreement that fell apart. DePuy Synthes Sales, Inc., manufactures medical implants and instruments, including joint-reconstruction products. It uses exclusive distributors to bring those products to its customers. For a time, its distributor for the Los Angeles area was OrthoLA, Inc., a company founded and run by Bruce Cavarno. (We refer to them collectively as OrthoLA unless the context requires otherwise.)

We summarize the underlying dispute in more detail below. For now, it is enough to know that when the parties’ distribution arrangements came to an end, OrthoLA turned to the Los Angeles Superior Court for help. DePuy responded with a motion to refer those claims to arbitration, but the state court denied it. DePuy then took two steps: it appealed the state court order to the California Court of Appeal, and on the same day it filed a demand for arbitration with the American Arbitration Association. Three days later, it filed the present suit in the federal district court in Indianapolis, seeking an order compelling arbitration and an injunction against the state court proceedings. Citing Colorado River Conservation Dist. v. United States, 424 U.S. 800 (1976), the district court elected to stay the case before it pending the resolution of the California action. DePuy has appealed from that stay order. We conclude, however, that the district court did not stray beyond the boundaries of its discretion, and so we affirm.

Affirmed

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.