## Facts

- Simula developed an automotive side-impact head protection airbag system known as the Inflatable Tubular Structure (ITS).
- After BMW directed Simula to work through Autoliv as an approved supplier, Simula and Autoliv entered nondisclosure agreements and Simula shared confidential ITS technology and testing data.
- The parties later executed development, supply, and license agreements governing integration of ITS into vehicles, pricing, and royalties.
- The agreements included an arbitration clause requiring arbitration of “any controversy or claim arising in connection with” the agreements.
- Simula alleged Autoliv misused Simula’s proprietary information to develop a competing side-impact product, disparaged ITS to manufacturers, and engaged in anticompetitive and other tortious conduct.
- Simula sued asserting Sherman Act claims, Lanham Act claims, defamation, misappropriation, breach of the nondisclosure agreements, and seeking injunctive relief and damages.

## Issues

1. Whether an arbitration clause covering disputes “arising in connection with” the parties’ agreements encompasses Simula’s antitrust, Lanham Act, defamation, tort, and contract claims.
2. Whether federal statutory claims under the Sherman Act and Lanham Act are arbitrable under the Federal Arbitration Act when they are tied to the parties’ contractual relationship.
3. Whether multiple affiliated Autoliv entities, including foreign affiliates, could invoke the arbitration clause in these agreements.

## Decision

- The Ninth Circuit affirmed the order compelling arbitration.
- The court held the phrase “arising in connection with” is a broad grant that reaches disputes having a significant relationship to the contract, including those whose origin or genesis is in the contractual relationship.
- The court concluded all of Simula’s claims, including antitrust and Lanham Act claims, were sufficiently related to the agreements and therefore must be arbitrated.
- The court allowed the Autoliv entities to invoke the arbitration clause where the alleged conduct and obligations were intertwined with the integrated set of agreements.

## Legal Principles

- Under the Federal Arbitration Act, arbitration agreements must be enforced as written, and doubts about the scope of arbitrable issues are resolved in favor of arbitration.
- A clause requiring arbitration of claims “arising in connection with” an agreement is construed broadly and can extend beyond pure breach-of-contract disputes to tort and statutory claims that are factually tied to the contractual relationship.
- Federal statutory claims, including antitrust and Lanham Act claims, are arbitrable when the parties agreed to arbitrate and the claims are significantly related to the contract.
- When related corporate affiliates’ alleged conduct is intertwined with a unified contractual arrangement containing an arbitration clause, they may compel arbitration consistent with ordinary contract and arbitration principles.

## Conclusion

Because Simula’s statutory and common-law claims were rooted in and closely connected to the parties’ ITS-related agreements containing a broad “arising in connection with” arbitration clause, the Ninth Circuit required arbitration of the entire dispute and affirmed the district court’s order compelling arbitration.


Simula, Inc. v. Autoliv, Inc., 175 F.3d 716 (9th Cir. 1999)