Bridgetown Trucking, Inc. v. Acatech Solutions, Inc., Case No. 3:16-cv-00236-SI
| Decision Date | 16 June 2016 |
| Docket Number | Case No. 3:16-cv-00236-SI |
| Citation | 197 F.Supp.3d 1248 |
| Parties | BRIDGETOWN TRUCKING, INC., an Oregon corporation, Plaintiff, v. ACATECH SOLUTIONS, INC., a California corporation; and Does 1-10, Defendants. |
| Court | U.S. District Court — District of Oregon |
Howard M. Levine and Clifford S. Davidson, Sussman Shank LLP, 1000 SW Broadway, Suite 1400, Portland, OR 97205. Of Attorneys for Plaintiff Bridgetown Trucking, Inc.
Kristen L. Tranetzki, Angeli Ungar Law Group LLC, 121 SW Morrison Street, Suite 400, Portland, OR 97204, and William F. Small, III, Small & Schena LLP, 1350 Columbia Street, Suite 700, San Diego, CA 92101. Of Attorneys for Defendant Acatech Solutions, Inc.
Plaintiff Bridgetown Trucking, Inc. ("BTI") brings this lawsuit against Defendants Acatech Solutions, Inc. ("Acatech") and Does 1 through 10 ("Doe Defendants")1 under the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030. The CFAA, enacted in 1984, prohibits several forms of computer crimes, including accessing a computer without authorization or in excess of authorized access for the purpose of obtaining protected information, engaging in fraudulent behavior, or intentionally causing damage to a computer. 18 U.S.C. § 1030(a) ; LVRC Holdings LLC v. Brekka , 581 F.3d 1127, 1130 (9th Cir.2009). Violations of the CFAA are punishable as felonies, as are attempts and conspiracies to violate the CFAA. 18 U.S.C. § 1030(b) -(c). The CFAA also authorizes any person suffering damage or loss caused by a violation to bring a civil lawsuit for compensatory damages, injunctive relief, or other equitable relief. Id. § 1030(g).
BTI's First Claim, brought only against Acatech, alleges that Acatech violated the CFAA. BTI's Second Claim, brought only against the unidentified Doe Defendants, alleges that the Doe Defendants conspired to violate the CFAA by committing the same acts that BTI alleges against Acatech. Acatech has moved to dismiss both claims, or in the alternative to transfer this lawsuit to California, or in the further alternative to stay this action. For the reasons stated below, the entirety of this dispute is subject to a valid, binding, and enforceable arbitration agreement between BTI and Acatech. Accordingly, under the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1, et. seq. , the Court grants Acatech's motion to dismiss.
The FAA applies to all contracts involving interstate commerce and specifies that "written agreements to arbitrate controversies arising out of an existing contract ‘shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’ " Dean Witter Reynolds, Inc. v. Byrd , 470 U.S. 213, 218, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985) (quoting 9 U.S.C. § 2 ). When a contract contains an arbitration clause, a presumption of arbitrability exists. AT&T Techs., Inc. v. Commc'ns Workers of Am. , 475 U.S. 643, 650, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) ; see also Mortensen v. Bresnan Commc'ns, LLC , 722 F.3d 1151, 1157 (9th Cir.2013) (). Additionally, where "parties concede that they have agreed to arbitrate some matters pursuant to an arbitration clause, the ‘law's permissive policies in respect to arbitration’ counsel that ‘any doubts concerning the scope of arbitral issues should be resolved in favor of arbitration.’ " Granite Rock Co. v. Int'l Bhd. of Teamsters , 561 U.S. 287, 298, 130 S.Ct. 2847, 177 L.Ed.2d 567 (2010) (emphasis in original) (quoting First Options of Chi., Inc. v. Kaplan , 514 U.S. 938, 945, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995) ).
The text of 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 , 470 U.S. at 218, 105 S.Ct. 1238 (emphasis in original) (citing 9 U.S.C. §§ 3 -4 ). The district court must limit itself "to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue." Chiron Corp. v. Ortho Diagnostic Sys., Inc. , 207 F.3d 1126, 1130 (9th Cir.2000). "If the response is affirmative on both counts, then the [FAA] requires the court to enforce the arbitration agreement in accordance with its terms." Id.
There are often two sides to a story in a federal civil lawsuit. The Court first describes the dispute from BTI's perspective, followed by the perspective of Acatech. The Court relies upon the allegations in BTI's Complaint, Dkt. 1, as well as the information supplied by the parties in their respective declarations and exhibits filed in connection with the pending motion. See Xinhua Holdings Ltd. v. Elec. Recyclers Int'l, Inc. , 2013 WL 6844270, at *5 (E.D.Cal. Dec. 26, 2013) (). Because this case is being dismissed in favor of arbitration, the Court expresses no comment on the merits of the parties' dispute. Accordingly, to the extent relevant to the pending motion, all factual disputes, including any reasonable inferences from the facts, are resolved in favor of BTI.
BTI is an Oregon corporation with its principal place of business in Portland, Oregon. Dkt. 1 ¶ 1. BTI performs trucking and warehouse fulfillment services for many different customers, including product manufacturers. Id. ¶ 8. When an end-user (or ultimate customer) places an order with one of BTI's customers, the BTI customer electronically notifies BTI. Id. BTI then coordinates the delivery of the ordered item or items to the end-user. Id. Acatech is a California corporation with its principal place of business in Orange County, California. Dkt. 7 ¶ 2. Acatech designed and owns software known as the "Warehouse 2000 System" that manages orders and warehouse inventory (the "Software"). Id. ¶ 4.
In August of 2014, BTI and Acatech entered into a written contract in which Acatech agreed, among other things, to grant a non-exclusive license to BTI to use the Software and provide necessary and ongoing system support for BTI's operation of the Software (the "Agreement"). Dkt. 1 ¶ 10; Dkt. 7 ¶ 5; see also Dkt. 7-1 § 2-02 ( ); Dkt. 16 (Agreement, plus "Statement of Work").
The Agreement provides for arbitration between the parties as follows:
Any controversy or claim arising out of or relating to this Agreement or the breach thereof shall be settled by binding arbitration. The arbitration shall take place within the State of California in accordance with the commercial arbitration rules of the American Arbitration Association.... In addition, no party shall have any right to commence or maintain any suit or legal proceeding concerning a dispute hereunder until the dispute has been determined in accordance with the arbitration provisions of this Section and then only for enforcement of the award rendered in such arbitration.
Dkt. 7-1 § 1-16 (emphasis added). The Agreement additionally states that it "shall be governed by and construed in accordance with the laws of the State of California." Id. § 1-15.
On February 1, 2015, the Software was installed on BTI's computer system. Dkt. 1 ¶ 11. Acatech retained remote access to BTI's computer system in order to facilitate support and Software updates. Id. ¶ 10. On August 8, 2015, Acatech remotely accessed BTI's computer system in order to update the Software. Id. ¶ 12. At midnight on Thursday, October 1, 2015, the Software stopped functioning. Id. ¶ 14. When one of BTI's customers attempted to submit an order through the Software, the Software returned an error message and terminated the order. Id. BTI informed Acatech that same day about the Software's failure. Id. ¶ 15. According to BTI, Acatech refused to provide support for the malfunctioning Software and instead demanded that BTI pay $30,000 as a condition for Acatech repairing the Software. Id. ¶ 16. BTI agreed, and on October 2, 2015, wired $10,000 to Acatech. Id. ¶ 17. BTI paid Acatech the remaining $20,000 in two subsequent installments. Id. On October 4, 2015, Acatech remotely accessed BTI's computer system to repair the Software. Id. ¶ 18.
BTI alleges that in November of 2015, BTI discovered that the Software failed on October 1, 2015, because Acatech previously inserted code into the Software that instructed the Software to malfunction on that day. Id. ¶¶ 20-23. BTI calls this code a "time bomb." Id. ¶ 23. BTI alleges that it later searched its computer system for additional "time bombs" and discovered another that was set to instruct the Software to fail on February 5, 2016. Id. ¶¶ 25-26. BTI states that the second "time bomb" was installed on October 4, 2015, the same day that Acatech remotely accessed BTI's computer system to repair the Software. Id. ¶ 37. BTI alleges that the discovery of the second "time bomb" required BTI to decline to accept business from a significant new customer out of fear that BTI would not be able adequately to serve the customer because of the pending Software malfunction. Id. ¶¶ 27-29.
On February 4, 2016, Acatech sent BTI a letter demanding payment of $134,029.38. Id. ¶ 35. In that letter, Acatech stated that BTI owed Acatech past due payments under the Agreement. Id. ¶ 35. BTI denies that it owed that amount to Acatech. Id. The next day, the second "time bomb" "detonated," and the Software again stopped working. Id. ¶ 36. By that time, however, BTI already had migrated to other...
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...underlying dispute but not to the arbitration agreement." Moses H. Cone, 460 U.S. at 20; see also Bridgetown Trucking, Inc. v. Acatech Solutions, Inc., 197 F. Supp.3d 1248, 1262 (D. Ore. 2016) ("The Court finds the existence of an alleged agency relationship between Acatech and the Doe Defe......