Kawasaki Heavy Indus., Ltd. v. Bombardier Recreational Prods., Inc.l

The parties, involved in patent infringement cases, agreed to a settlement that required dismissal of their lawsuits and included an arbitration provision and request that a bank subordinate its interests in defendant's patents to the settlement. Defendant stated that the bank had agreed; the parties executed the agreement and dismissed their suits. When plaintiff became aware that the bank would not cooperate, defendant demanded arbitration, but plaintiff went to court to vacate dismissal of its claims and seek compliance with the agreement. The court dismissed for lack of subject matter jurisdiction. Before the Federal Circuit ruled on an appeal, the parties participated in mediation. Plaintiff took a voluntary dismissal, then filed new claims, including claims against defendant's bank and attorneys, claiming that defendant and its attorneys lied or the bank reneged on its commitment. The district court held that defendant had waived its right to arbitrate and that the bank and attorneys, not parties to the settlement, could not be compelled to arbitrate. The Seventh Circuit reversed in part, holding that defendant's participation in earlier litigation did not amount to waiver under the Federal Arbitration Act. 9 U.S.C. 1, and vacated with respect to the bank and attorneys. Plaintiff may want to arbitrate with those parties if it must arbitrate with defendant. View "Kawasaki Heavy Indus., Ltd. v. Bombardier Recreational Prods., Inc.l" on Justia Law