Kongsberg Automotive Holding ASA v. Teleflex Inc. ( 2014 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 13-2309
___________
KONGSBERG AUTOMOTIVE HOLDING ASA,
a Norway Corporation,
Appellant
v.
TELEFLEX INCORPORATED, a Delaware Corporation
On Appeal from the United States District Court
for the District of Delaware
(D. C. No. 1-09-cv-00414)
District Judge: Honorable Gregory M. Sleet
Argued on January 16, 2014
Before: RENDELL, ROTH and BARRY, Circuit Judges
(Opinion filed: April 2, 2014)
OPINION
Edward M. McNally, Esquire (Argued)
Patricia A. Winston, Esquire
Morris James
500 Delaware Avenue
Suite 1500
Wilmington, DE 19081
Counsel for Appellant
Sean J. Bellew, Esquire (Argued)
Ballard Spahr
919 North Market Street
11th Floor
Wilmington, DE 19801
David A. Felice, Esquire
Bailey & Glasser
2961 Centerville Road
Suite 302
Wilmington, DE 19808
Counsel for Appellee
ROTH, Circuit Judge:
Kongsberg Automotive Holding ASA appeals the April 29, 2013, order of the
District Court, staying this litigation pending the resolution of a court action in Canada.
Because our jurisdiction is limited to the “final decisions of the district courts,” 28 U.S.C.
§ 1291, and because the District Court’s stay order is not a final decision, we will dismiss
Kongsberg’s appeal for lack of jurisdiction.
I. Background
In February 2006, Teleflex Canada Limited Partnership (Teleflex Canada), a
wholly-owned subsidiary of Teleflex, entered into a contract with Bombadier
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Recreational Products, Inc. (BRP), a maker of recreational vehicles. Under the
agreement, Teleflex Canada agreed to design, develop, supply, and sell Dynamic Power
Steering (DPS) units to BRP, to be used in BRP’s Roadster Can-Am Spyder.
In early 2007, Teleflex transferred certain responsibilities with respect to the DPS
product line from Teleflex Canada to Megatech, a sister company of Teleflex Canada
which was also owned by Teleflex. The parties agree that the transferred responsibilities
included the manufacture and production of DPS units. However, they disagree as to
whether responsibility for the design of the units was also transferred to Megatech or
whether it remained with Teleflex Canada. On October 1, 2007, BRP and Megatech
entered into a supply agreement by which Megatech agreed to produce the DPS unit.
On October 14, 2007, Teleflex and Kongsberg entered into a purchase agreement
whereby Kongsberg acquired Teleflex’s Global Motion Systems operations, “its business
unit that designs, manufactures, and markets automotive and industrial driver controls,
motion systems, and fluid handling systems.” Evidently, this included Megatech, but not
Teleflex Canada. The purchase agreement defined certain liabilities as “Excluded
Liabilities,” including liabilities arising out of or related to contracts not assigned to or
assumed by Kongsberg in the purchase agreement. Teleflex retained responsibility for
such Excluded Liabilities. According to Kongsberg, the 2006 supply agreement between
Teleflex Canada and BRP “is an Excluded Liability under the Purchase Agreement and
[therefore] the responsibility for the design of the DPS remained with Teleflex.”
Conversely, Teleflex maintains that through the purchase agreement, Kongsberg
“purchased Megatech and Megatech’s obligations with respect to the DPS unit.”
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Kongsberg filed this action against Teleflex in the Delaware District Court, seeking a
declaration that Teleflex is responsible for these alleged defects under the 2006
agreement and must indemnify Kongsberg from any and all claims regarding those
alleged defects.
In November 2010, BRP filed a lawsuit against Teleflex and Kongsberg in
Quebec, Canada, seeking reimbursement and indemnification for any claims regarding
defects in the DPS units. In that suit, BRP alleged that both Teleflex and Kongsberg are
responsible for defects in the design, development, and manufacturing, of the DPS units,
and that these defects exposed BRP to third-party claims.
On April 29, 2013, the District Court in the Delaware action granted Teleflex’s
motion to stay the proceedings pending the outcome of the Canadian action. In the
District Court’s estimation, resolution of the issues presented in that action “is likely to
simplify the issues before the” District Court in this action. After the District Court
granted this motion, the Canadian action was itself stayed until June 29, 2014, with
Kongsberg’s consent. 1
II. Discussion
With limited exceptions, our jurisdiction is limited to appeals from the “final
decisions of the district courts” within our Circuit. See 28 U.S.C. § 1291. Accordingly,
we may typically review only those decisions that “end[] the litigation on the merits and
leave[] nothing for the court to do but execute the judgment.” Quackenbush v. Allstate
1
Kongsberg’s Motion for Judicial Notice of the stay order in the Quebec action is
granted.
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Ins. Co., 517 U.S. 706, 712 (1996) (internal quotation marks omitted). The “usual rule”
is that a district court’s order staying proceedings is not a final decision under § 1291.
Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 10 n.11 (1983).
A stay is considered a final decision under § 1291, however, if it “amounts to a dismissal
of the suit” because it “has the effect of putting the plaintiff out of court . . ..” Wilderman
v. Cooper & Scully, P.C., 428 F.3d 474, 476 (3d Cir. 2005) (internal quotation marks
omitted).
The District Court’s order staying Kongsberg’s declaratory judgment action was
not a final decision. Although the stay was entered to permit a foreign court to simplify
the legal issues in this case, the Canadian action will not make the Delaware action res
judicata. See Wilderman, 428 F.3d at 477. Thus, a final resolution of the Canadian
action will not put Kongsberg out of court on its claim for declaratory judgment. See
Michelson v. Citicorp Nat’l Servs., Inc., 138 F.3d 508, 514 (3d Cir. 1998). Moreover, as
a party to the Canadian action, Kongsberg has at least some control over the speed at
which that action will progress. See CTF Hotel Holdings, Inc. v. Marriott Int’l, Inc., 381
F.3d 131, 135-36 (3d Cir. 2004). The fact that Kongsberg has consented to stays in that
action means that Kongsberg is at least partially responsible for the delays. 2
III. Conclusion
2
Although we find that the District Court’s stay order is not appealable, we recognize
that further developments or delays in the Canadian action could unreasonably delay
Kongsberg’s case in Delaware. In that circumstance, a future petition to the District
Court to lift the stay could be appropriate. The current record, however, does not support
Kongsberg’s claim that the stay in the Canadian action is so temporally indefinite as to
put it effectively out of court in Delaware.
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For these reasons, the District Court’s stay order did not amount to a dismissal, did
not have the effect of putting Kongsberg out of court on its claim for declaratory
judgment, and was not a final decision. We therefore lack jurisdiction in this case, and
will dismiss this appeal.
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