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*TRACINDA CORPORATION, Appellant
v.
DAIMLERCHRYSLER AG, a Federal Republic of Germany Corporation; Daimler-Benz AG, a Federal Republic of Germany Corporation; Jurgen Schrempp, a citizen of the Federal Republic of Germany; Manfred Gentz, a citizen of the Federal Republic of Germany; Hilmar Kopper, a citizen of the Federal Republic of Germany
*(Caption Amended as per the Clerk's 8/24/07 Order).
In re DaimlerChrysler AG Securities Litigation
DaimlerChrysler AG; Daimler-Benz AG, Jurgen Schrempp, and Manfred Gentz, Appellants.
United States Court of Appeals, Third Circuit.
*215 Natalie J. Haskins, Esquire, Alan J. Stone, Esquire, Jay N. Moffitt, Esquire, Morris, Nichols, Arsht & Tunnell, Wilmington, DE, Terry N. Christensen, Esquire (Argued), Mark G. Krum, Esquire, Eric P. Early, Esquire, Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP, Los Angeles, CA, Julie E. Kamps, Esquire, William G. McGuinness, Esquire, Fried, Frank, Harris, Shriver & Jacobson, LLP, New York, NY, for Appellant/Cross-Appellee Tracinda Corporation.
Thomas J. Allingham, III, Esquire, Robert S. Saunders, Esquire, Skadden, Arps, Slate, Meagher & Flom, LLP, Wilmington, DE, Jonathan J. Lerner, Esquire (Argued), Lea H. Kuck, Esquire, Joseph N. Sacca, Esquire, Skadden, Arps, Slate, Meagher & Flom, LLP, New York, NY, for Appellees/Cross-Appellants DaimlerChrysler AG, Daimler-Benz AG, Jurgen Schrempp and Manfred Gentz.
Jeffrey A. Barist, Esquire (Argued), Douglas W. Henkin, Esquire, Josh Porter, Esquire, Milbank, Tweed, Hadley & McCloy, LLP, New York, NY, for Defendant/Appellee Hilmar Kopper.
Before: RENDELL, CHAGARES and ROTH, Circuit Judges.
OPINION
ROTH, Circuit Judge:
This appeal arises from the 1998 merger of Daimler-Benz AG, a German corporation and owner of the Mercedes-Benz brand, and Chrysler Corporation, one of the "Big Three" American automakers. Prior to closing, the merger had been billed as a "merger of equals," with management of the new company, DaimlerChrysler AG, to be shared equally between former Daimler-Benz and Chrysler executives. Shortly after the merger, however, several former Chrysler executives left the company, leaving a greater share of control to the former Daimler-Benz executives. In 2000, the CEO of DaimlerChrysler, Jurgen Schrempp, made public statements suggesting that these management changes were exactly what he and other Daimler-Benz executives had wanted prior to the merger. In response, various Chrysler shareholders, including Kirk Kerkorian's investment company, Tracinda Corporation, brought suit against DaimlerChrysler, Daimler-Benz, Schrempp, Manfred Gentz, and Hilmar Kopper (Defendants), alleging fraud, misrepresentation, and other violations of the *216 federal securities laws in connection with the merger. The Chrysler shareholders alleged that, had they known the merger was a takeover, rather than a "merger of equals," they would have demanded a change-in-control premium upon consummation of the merger.
The cases were consolidated before the United States District Court for the District of Delaware. Defendants reached a settlement with most of the plaintiffs. Tracinda's case, however, culminated in a bench trial. In April 2005, the District Court issued a lengthy written opinion, finding in favor of Defendants on all counts. Tracinda appealed that finding, as well as the District Court's pre-trial rulings striking Tracinda's demand for a jury trial and dismissing defendant Hilmar Kopper for lack of personal jurisdiction. Defendants have cross-appealed, contending that the District Court erred in its post-trial decision, levying a half-million-dollar sanction against them for discovery violations. Defendants have also appealed the District Court's denial of their motion for summary judgment on statute of limitations grounds.[1]
I. BACKGROUND
None of the District Court's factual findings is challenged on Tracinda's appeal. We derive the factual portion of the following summary from the District Court's post-trial opinion. See Tracinda Corp. v. DaimlerChrysler AG, 364 F.Supp.2d 362, 366-388 (D.Del.2005). Our summary of the procedural history draws from the entire record.
A. Factual Findings
Tracinda Corporation is a holding company, involved primarily in private investment. Its chairman, chief executive officer, and sole shareholder is multi-billionaire Kirk Kerkorian. Prior to the merger of Daimler-Benz and Chrysler Corporation in 1998, Tracinda was the largest holder of Chrysler stock at approximately 14%. Between 1992 and 1996, Kerkorian had a contentious relationship with Chrysler's managers. He frequently pressured them for stock buybacks, stock splits, and dividend increases, and he threatened to initiate a proxy fight in 1995. In 1996, Chrysler and Kerkorian settled their differences with various agreements. Among other things, Chrysler agreed to appoint a Tracinda designee, James Aljian, to the Chrysler Board of Directors.
With Aljian on Chrysler's Board, Kerkorian acquired significant inside information about the company. In 1997, Aljian reported to Kerkorian that he believed Chrysler's managers were inept and the company faced imminent financial trouble. Consequently, Kerkorian considered selling large blocks of Tracinda's Chrysler shares and also looked into the possibility of a merger partner for Chrysler. Kerkorian approached Bob Eaton, the chairman and CEO of Chrysler, to discuss a possible *217 combination with Daimler-Benz. At that time, Kerkorian learned that Eaton had already spoken with Jurgen Schrempp, the chairman of Daimler-Benz's Board of Management, about possibly merging Chrysler with Daimler-Benz. Kerkorian consulted Jerome York, Tracinda's vice-chairman and the former chief financial officer of Chrysler. York advised Kerkorian that "now is the time" for the merger because Chrysler faced imminent financial risk. York analyzed various issues relating to the potential merger, including the tax consequences for Tracinda, and reported his findings to Kerkorian. Kerkorian was enthusiastic about the merger as it would provide tremendous value to Chrysler shareholders.
Schrempp and Eaton were the primary negotiators for Daimler-Benz and Chrysler. Over the course of several meetings, the two CEOs discussed various aspects of the proposed merger, including the tax consequences of incorporating the new company as an American corporation, as a German Aktiengesellschaft (AG), or as a corporate entity in another nation such as Holland. Schrempp and Eaton discussed the feasibility of joint management shared equally among executives from Daimler-Benz and Chrysler. Eventually, the term "merger of equals" was used to describe the proposed transaction.
In a memo to Kerkorian, Aljian described the proposed management composition of the new company, DaimlerChrysler, and also characterized the merger as a "merger of equals" without elaboration. Kerkorian was not concerned with management structure and supported the merger even before the discussions about corporate governance. Kerkorian had some discussions with Eaton about the implementation of the merger, but they were "reasonably general" and "not on a very deep level." Kerkorian understood that the details of the merger would be incorporated into the Business Combination Agreement (BCA).
The Chrysler Board received a fairness opinion from Credit Suisse First Boston (CSFB), assessing the value of Chrysler shares in light of the proposed merger. CSFB analyzed the merger as a strategic business combination, not involving a sale of or change in control which might warrant a control premium.[2] In determining that the proposed merger was fair to Chrysler shareholders, CSFB considered sixteen previously announced or completed transactions viewed as comparable. For each earlier "merger of equals," CSFB listed one company as the "acquiror" and one company as the "target" and noted that the distribution of seats on the combined company's boards was not always equal between acquiror and target.
On May 6, 1998, the Chrysler Board of Directors unanimously approved the merger and recommended that the Chrysler shareholders do the same. On that same day, simultaneously with the execution of the BCA, Tracinda, Kerkorian, Chrysler, and Daimler-Benz executed the Stockholder Agreement (SHA), which obligated Tracinda to vote its shares in favor of the merger. The SHA contained a jury waiver clause:
Each of the parties hereto ... agrees to waive any right to a trial by jury with respect to any claim, counterclaim or action arising out of or in connection with this Agreement or the transactions completed hereby.
*218 Schrempp signed the SHA on behalf of Daimler-Benz; he did not sign in his individual capacity. The agreement was negotiated at arm's length with both sides represented by counsel and other advisors.
Substantively, the SHA did not use the term "merger of equals" and contained no representations concerning corporate governance. Rather, the SHA referred to the BCA, which described the shared governance structure of the new company. Although the BCA used the term "merger of equals" and contained a lengthy definition section, the BCA did not define that term.
On August 6, 1998, the proxy statement and prospectus (Proxy) which described the proposed merger between Daimler-Benz and Chrysler and sought shareholder approval for the transaction was filed with the SEC. The Proxy was mailed to the Chrysler shareholders along with several attached documents, including a cover letter from Eaton, the BCA, and the CSFB opinion. The Proxy stated, among other things, that "DaimlerChrysler AG" would be the surviving entity, it would be incorporated in Germany, and it would have two headquarters (in Auburn Hills, Michigan, and Stuttgart, Germany). The Proxy explained that the German AG form was chosen primarily for its tax advantages. The Proxy described various risks relating to the merger, including the difficulties inherent in integrating two large corporations from different countries and business cultures. The Proxy reiterated the terms of the BCA's corporate governance provisions, noting among other things that (1) the DaimlerChrysler Supervisory Board would consist of 5 shareholder representatives designated by Daimler-Benz, another 5 from Chrysler, and 10 labor representatives; (2) the DaimlerChrysler Management Board would initially consist of 8 members designated by Daimler-Benz, another 8 from Chrysler, and 2 members from Daimler's non-automotive group;[3] and (3) Schrempp and Eaton would serve as co-CEOs of DaimlerChrysler for three years. The Proxy included a clear standalone clause that stated these initial management structures could change after the merger was consummated. Kerkorian did not concern himself with the Proxy because he had already committed in the SHA to voting for the merger.
The Proxy repeatedly used the term "merger of equals" but did not expressly define it. The term is first used in the Proxy to describe the similar size of the Daimler-Benz and Chrysler constituencies and later used to describe the joint leadership of the new company, as provided in the BCA. The term is used in Eaton's cover letter in a similar fashion. The Proxy also used the term in reference to CSFB's fairness opinion, which compared the proposed merger to earlier strategic combinations not involving a sale of control.
After a media campaign by Daimler-Benz and Chrysler to foster support for the proposed "merger of equals," the Chrysler shareholders voted overwhelmingly (97%) for the merger. Chrysler's shareholders received approximately 42% of DaimlerChrysler's outstanding shares and Daimler-Benz shareholders received approximately 58%. On November 12, 1998, the merger closed consistent with the provisions in the BCA, including those relating to shared corporate governance.
For two years, the composition of the DaimlerChrysler Supervisory Board did not change; 5 of the 10 shareholder representatives were former Chrysler directors. *219 As provided for in the BCA, the DaimlerChrysler Management Board initially consisted of 10 designees from Daimler-Benz and 8 from Chrysler. Because the Management Board acted by consensus rather than through formal votes, the initial disparity between Chrysler and Daimler-Benz designees was not significant. The managers from Chrysler were able to provide their input with regard to all operations of DaimlerChrysler and their opinions were taken seriously. The Integration Committee, a transitional body provided for in the BCA, was formed with 50% of its members from Chrysler and 50% from Daimler-Benz, pursuant to the terms of the BCA. This committee was later renamed the Shareholder Committee. Aljian was a member of the Shareholder Committee until Kerkorian directed him to resign on November 24, 2000. Consistent with the BCA, DaimlerChrysler maintained two operational headquarters, in Stuttgart and Auburn Hills.
Because both Daimler-Benz and Chrysler designees considered the 18-person Management Board to be too large, approximately a year after the merger the Board was reduced to 14 members. Five of the remaining members were Chrysler designees. At the time, neither Aljian nor Kerkorian was concerned about this imbalance. The three Chrysler designees who first left the Management Board were Dennis Pawley (voluntarily retired), Ted Cunningham (asked to resign), and Thomas Stallkamp (fired). Later, on January 26, 2000, Eaton also voluntarily retired. The BCA had stated that Eaton would remain co-CEO for three years, but Eaton chose to depart early for personal reasons. In late 2000, another former Chrysler executive, James Holden, was removed from the Management Board. Holden had been placed in charge of the Chrysler brands after Eaton's retirement and was held responsible for the Chrysler Group's $500 million loss in the third quarter of 2000. Most Board members, including those designated by Chrysler, supported the removal of Holden in light of the Chrysler Group's abysmal performance. At the time of trial, only one executive from Chrysler, Tom Sidlik, remained on the Management Board; four former Chrysler directors served on the Supervisory Board.
In late 2000, the management changes at DaimlerChrysler were widely reported in the press. Because the Germans were taking over a larger share of management control in the new company, there was widespread speculation that, contrary to its billing, the merger between Daimler-Benz and Chrysler had not been a "merger of equals." Around this time, Schrempp agreed to interviews with the London Financial Times and Barron's Magazine. During these interviews, Schrempp made various statements suggesting that, in order to close the merger, he had intentionally misled the public, Chrysler shareholders, and Chrysler management into thinking the Daimler-Benz/Chrysler merger was a "merger of equals," even though he had no intention of sharing control of the combined company with the Americans. For example, in the Financial Times, Schrempp was quoted as saying:
Me being a chess player, I don't normally talk about the second or third move. The structure we have now with Chrysler (as a standalone division) was always the structure I wanted. We had to go a roundabout way but it had to be done for psychological reasons. If I had gone and said Chrysler would be a division, everybody on their side would have said, "There is no way we'll do a deal." But it's precisely what I wanted to do.
In Barron's, Schrempp was quoted as saying:
*220 We said in spirit it was a merger of equals, but in our minds we knew how we wanted to structure the company, and today I have it. I have Daimler, and I have divisions.
Schrempp did not deny making these statements and never issued a correction or demanded a retraction.
B. Procedural History
A few months after these interviews were made public in late 2000, Tracinda filed suit against Daimler-Benz, DaimlerChrysler, and DaimlerChrysler executives Schrempp, Manfred Gentz, and Hilmar Kopper[4] (collectively DaimlerChrysler).[5] In its complaint, Tracinda alleged violations of Sections 10(b), 14(a), and 20(a) of the Securities Exchange Act of 1934 (and SEC Rules 10b-5 and 14a-9 promulgated thereunder) and Sections 11, 12(a)(2), and 15 of the Securities Act of 1933. Tracinda also alleged common law fraud and civil conspiracy. Prior to trial, Tracinda voluntarily dropped its '33 Act claims. In addition, DaimlerChrysler successfully moved to dismiss Tracinda's civil conspiracy claim, and Kopper successfully moved for dismissal of the action against him, based on lack of personal jurisdiction. DaimlerChrysler unsuccessfully moved for summary judgment on statute of limitations grounds, but its motion to strike Tracinda's jury demand was granted. A bench trial commenced on the remaining claims (for common law fraud and '34 Act violations under §§ 10, 14, and 20) against the remaining defendants (Daimler-Benz, DaimlerChrysler, Schrempp, and Gentz).
After a 13-day bench trial, the District Court issued a 123-page opinion with 51 pages of factual findings; the factual findings are not challenged on appeal. In its post-trial opinion, the District Court made numerous rulings, including (1) dismissing Gentz for lack of personal jurisdiction, (2) concluding that Tracinda could allege its § 14 claim, (3) entering judgment for DaimlerChrysler on Tracinda's oral misrepresentation claims under § 10 and § 14 because Tracinda failed to prove DaimlerChrysler made any false or misleading oral statements, (4) entering judgment for DaimlerChrysler on Tracinda's written misrepresentation claims under § 10 and § 14 because Tracinda failed to prove DaimlerChrysler made any false or misleading written statements,[6] (5) concluding that, even if Tracinda did show that DaimlerChrysler's oral or written statements were false or misleading under § 10 or § 14, those misrepresentations would not *221 have been material to Tracinda, a sophisticated party with insider information, (6) entering judgment for DaimlerChrysler on Tracinda's "control person" claim under § 20, as that claim is predicated on a primary violation of the federal securities law (such as a violation of § 10 or § 14) and Tracinda failed to prove a primary violation at trial, and (7) entering judgment for DaimlerChrysler on Tracinda's common law fraud claim, as that claim requires a showing of misrepresentation, and misrepresentation was not proven at trial.
Of these rulings, Tracinda appeals only the District Court's decision with respect to the § 14 written misrepresentation claim. Specifically, Tracinda alleges that the District Court erred (1) by concluding that DaimlerChrysler's statements were not false or misleading, (2) by applying a subjective standard rather than an objective one in assessing the materiality of the alleged misrepresentations, and (3), along a similar line, by requiring Tracinda to prove reliance, which is not an element of a § 14(a) claim. Tracinda also appeals the District Court's orders granting DaimlerChrysler's motion to strike the jury demand and Kopper's motion to dismiss for lack of personal jurisdiction.[7]
On cross-appeal, DaimlerChrysler challenges two other rulings by the District Court. DaimlerChrysler asserts that the District Court abused its discretion by levying a half-million dollar discovery sanction against DaimlerChrysler absent bad faith and particularized proof of costs and fees. DaimlerChrysler also contends that, if the District Court's judgment is not affirmed in all respects, this Court should reverse the District Court's denial of DaimlerChrysler's motion for summary judgment on statute of limitations grounds.
II. DISCUSSION
Subject matter jurisdiction was premised on Section 27 of the Securities Exchange Act of 1934, 15 U.S.C. § 78aa, Section 22 of the Securities Act of 1933, 15 U.S.C. § 77v; 28 U.S.C. § 1367, and 28 U.S.C. § 1331 and § 1332. We have appellate jurisdiction pursuant to 28 U.S.C. § 1291 and § 1294(1). Tracinda's appeal and DaimlerChrysler's cross-appeal are timely under 28 U.S.C. § 2107 and FED. R.APP. P. 4(a)(1)(A) and 4(a)(3).
A. Jury Trial Waiver
In granting DaimlerChrysler's motion to strike Tracinda's jury demand, the District Court concluded that the Stockholder Agreement entered into by Tracinda, Kerkorian, Daimler-Benz and Chrysler contained a broadly worded jury trial waiver that covered the claims brought by Tracinda against Defendants. The District Court determined that, in light of the business sophistication of all parties involved, the waiver was entered into knowingly and voluntarily. The District Court also found that the waiver covered the individual defendants, Schrempp and Gentz, who are not parties to the agreement.[8] The District Court based these conclusions on ordinary agency principles that we have previously applied when interpreting agreements to arbitrate.
Although Tracinda does not contest that the jury waiver covers Daimler-Benz and Chrysler, Tracinda asks us to remand for a jury trial involving both corporate and individual *222 defendants because it claims that parallel trials involving common issues of fact and law (a bench trial for the corporate defendants and a jury trial for the individual defendants) would be unworkable and in violation of the Seventh Amendment. DaimlerChrysler argues in opposition that the District Court correctly construed the SHA by applying the jury waiver to all defendants. DaimlerChrysler contends that the District Court applied the appropriate constitutional standard for assessing the validity of the jury waiver and that it was appropriate for the District Court to look to the arbitration clause cases for ordinary agency and equitable estoppel principles.
To decide this issue, we must determine whether a valid contractual jury waiver provision, which applies to a signatory corporation, will also apply to a non-signatory officer acting as an agent of the signatory corporation.
1. Non-Signatory Agents
Because Tracinda has not challenged the District Court's findings that the jury waiver was valid and that Schrempp was an agent of Daimler-Benz, we are left to determine whether the District Court correctly construed the jury waiver provision to cover the non-signatory agent of the signatory principal.[9]
The right to a jury trial in a civil case is a fundamental right expressly protected by the Seventh Amendment to the United States Constitution. Aetna Ins. Co. v. Kennedy, 301 U.S. 389, 393, 57 S.Ct. 809, 81 L.Ed. 1177 (1937); Bouriez v. Carnegie Mellon Univ., 359 F.3d 292, 294 (3d Cir.2004). The question of a waiver of a constitutional right, including the Seventh Amendment right to a jury trial, is a federal question controlled by federal law. See Brookhart v. Janis, 384 U.S. 1, 4, 86 S.Ct. 1245, 16 L.Ed.2d 314 (1966); In re City of Phila. Litig., 158 F.3d 723, 726 (3d Cir. 1998). Federal courts apply federal law in determining whether a contractual jury trial waiver is enforceable. See K.M.C., Inc. v. Irving Trust Co., 757 F.2d 752-56 (6th Cir.1985). Using federal law to determine the jury trial right assures "the uniformity in its exercise which is demanded by the Seventh Amendment." Simler v. Conner, 372 U.S. 221, 222, 83 S.Ct. 609, 9 L.Ed.2d 691 (1963) (per curiam).
Because the "right of jury trial is fundamental, courts indulge every reasonable presumption against waiver." Aetna, 301 U.S. at 393, 57 S.Ct. 809; Collins v. Gov't of Virgin Islands, 366 F.2d 279, 284 (3d Cir.1966). Nevertheless, as with other constitutional rights, the Supreme Court has long recognized that a private litigant may waive the right to a jury trial in a civil case. Commodity Futures Trade Comm'n v. Schor, 478 U.S. 833, 848-849, 106 S.Ct. 3245, 92 L.Ed.2d 675 (1986); In re City of Phila. Litig., 158 F.3d 723, 726 (3d Cir. 1998); Nat'l Equip. Rental, Ltd. v. Hendrix, 565 F.2d 255, 258 (2d Cir.1977); see also FED.R.CIV.P. 38. To be valid, a jury waiver must be made knowingly and voluntarily based on the facts of the case. Brookhart, 384 U.S. at 4-5, 86 S.Ct. 1245; Hendrix, 565 F.2d at 258; 8 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE ¶ 38.14 (3d ed. 1997 & Supp.2005); see also First Union Nat'l Bank v. United States, 164 F.Supp.2d 660, 663 (E.D.Pa. 2001) (listing factors).
Tracinda does not challenge the District Court's finding that the contractual jury waiver was entered into knowingly and *223 voluntarily. Rather, Tracinda argues that the District Court erred as a matter of law by applying an agency principle used in arbitration clause cases such as Pritzker v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 7 F.3d 1110, 1115 (3d Cir.1993), to hold that Schrempp, a non-signatory agent, is covered by the waiver. Tracinda points out that, while all reasonable presumptions should be construed against jury waivers, Collins, 366 F.2d at 284, courts have construed arbitration agreements in light of the Federal Arbitration Act (FAA) policy that "any doubts concerning the scope of arbitral issues should be resolved in favor of arbitration . . . ." Pritzker, 7 F.3d at 1114-15. Tracinda contends that, by relying on arbitration clause cases, the District Court applied a presumption in favor of jury waiver, when in fact the Seventh Amendment requires a presumption against waiver.
Considering that the "loss of the right to a jury trial is a necessary and fairly obvious consequence of an agreement to arbitrate," Snowden v. CheckPoint Check Cashing, 290 F.3d 631, 638 (4th Cir.2002), and that the "submission of a case to arbitration involves a greater compromise of procedural protections than does the waiver of the right to trial by jury," Gurfein v. Sovereign Group, 826 F.Supp. 890, 921 (E.D.Pa.1993) (Pollak, J.), some commentators consider it curious that courts apply a presumption in favor of an arbitration clause but against a mere jury waiver provision.[10] Nevertheless, the tension between the cases favoring arbitration clauses and those disfavoring jury waivers does not affect the propriety of the District Court's reliance here on arbitration cases such as Pritzker. The reason for this is that, in Pritzker and similar arbitration clause cases, it is traditional agency principles of who is bound by an agreement and not the FAA's favoring of arbitration over a jury trial which determined who was bound by the agreement to arbitrate.
In Pritzker, pension plan trustees brought an ERISA action against three defendants a brokerage firm that traded on behalf of the pension plan, the brokerage firm's wholly owned subsidiary, which provided the pension plan with investment advice, and an individual broker who serviced the pension plan's accounts. The trustees alleged violations, arising out of the cash management accounts opened with the brokerage firm. Because each cash management agreement between the pension plan and the brokerage firm contained an arbitration clause, all defendants moved to compel arbitration, despite the fact that only the brokerage firm, and not the wholly owned subsidiary or the individual broker, was a party to the cash management agreements. The District Court denied the motion to compel arbitration and the defendants appealed. On appeal, the trustees defended the District Court's ruling by urging that they could not be compelled to arbitrate because two of the three defendants the subsidiary and the broker were not signatories to any agreement containing an arbitration clause. We rejected this argument and reversed the order of the district court based on "traditional agency theory" principles. Pritzker, 7 F.3d at 1121. Specifically, we stated that, "[b]ecause a principal is bound under the terms of a valid arbitration clause, its *224 agents, employees, and representatives are also covered under the terms of such agreements." Id.
Relying on Pritzker, the District Court rejected Tracinda's argument that the individual defendants, who did not sign the agreement containing the jury waiver, were not bound by it. The District Court held that the jury waiver covered both the signatory corporations and its nonsignatory officers and directors. This was a proper determination not of whether the jury waiver was knowing and enforceable, Tracinda conceded that but of who, under traditional agency principles, was bound by that agreement.
The Pritzker rule that nonsignatory agents may invoke a valid arbitration agreement entered into by their principal is well-settled and supported by other decisions of this Court. See Barrowclough v. Kidder, Peabody & Co., 752 F.2d 923, 938-39 (3d Cir.1985), overruled on other grounds by Pritzker, 7 F.3d at 1115 n. 5 (holding that contingent beneficiaries' "inchoate and derivative claims should not entitle them to maintain separate litigation in a forum that has been waived by the principal beneficiary."); Isidor Paiewonsky Assocs., Inc. v. Sharp Props., Inc., 998 F.2d 145, 155 (3d Cir.1993) (holding that an arbitration agreement between a landlord and a "head tenant" also covered a subtenant, who was not a party to the agreement, where the head tenant and subtenant had interests that were "directly related"); E.I. DuPont de Nemours & Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S., 269 F.3d 187, 198-99 (3d Cir.2001) (reaffirming that "[t]raditional principles of agency law may bind a non-signatory to an arbitration agreement.")[11]
Tracinda, however, attempts to cast doubt on Pritzker and similar cases by citing to our decision in Bel-Ray Co. v. Chemrite Ltd., 181 F.3d 435 (3d Cir.1999). In Bel-Ray, a New Jersey manufacturer, alleging various business torts against its South African distributor, brought suit to compel arbitration in New Jersey based on arbitration agreements entered into by the manufacturer and a predecessor of the distributor. The manufacturer also alleged claims against various officers and directors of the distributor and sought to compel arbitration against them. The distributor and the individual defendants objected to arbitration. We held that the distributor was bound to arbitrate, Bel-Ray, 181 F.3d at 440-443; however, we also held that the individual defendants were not bound to arbitrate as they were not signatories to the arbitration agreements, id. at 444-446. We discussed Pritzker and a similar case, Letizia v. Prudential Bache Sec., 802 F.2d 1185 (9th Cir.1986), but distinguished those cases because, like the instant case, they involved nonsignatory agents who sought to invoke an arbitration agreement entered into by their corporate principal, whereas Bel-Ray involved nonsignatory agents who sought to avoid their principal's agreement to arbitrate. Bel-Ray, 181 F.3d at 444. This is not a "distinction without a difference." DuPont, 269 F.3d at 202 (discussing the related concept of equitable estoppel as applied in the arbitration context and noting that courts are willing to estop a signatory from avoiding an arbitration clause but are reluctant to enforce an arbitration *225 clause against a nonsignatory who seeks to avoid it); see also Thomson-CSF, S.A. v. Am. Arbitration Assoc., 64 F.3d 773, 779 (2d Cir.1995) (same). In the instant action, Schrempp, a nonsignatory agent, seeks to invoke the jury waiver provision in the agreement entered into by his corporate principal, Daimler-Benz. Therefore, Pritzker and Letizia are similar to the case before us and Bel-Ray is distinguishable.[12]
Tracinda also relies on Paracor Fin. Inc. v. Gen. Elec. Capital Corp., 96 F.3d 1151 (9th Cir.1996) and Hulsey v. West, 966 F.2d 579 (10th Cir.1992) (per curiam). However, like Bel-Ray, these cases are distinguishable. In Paracor, the Court of Appeals for the Ninth Circuit did not allow a nonsignatory third-party financier and its CEO to invoke a jury waiver provision in a purchase agreement where they were not agents of the contracting party. 96 F.3d at 1166. Clearly Paracor is distinguishable from Pritzker and the instant action, where the non-signatories were agents of the signatory principals. In Hulsey, on a loan guarantor's petition for writ of mandamus in which he sought to reinstate his jury demand, the Court of Appeals for the Tenth Circuit held that the nonsignatory guarantor was not bound by a jury waiver provision in an amendment to a loan agreement between the borrower and lender. 966 F.2d at 583. The court in Hulsey did not allow the signatory to enforce the waiver provision against the resistant nonsignatory who was being sued in his personal capacity. Therefore, Hulsey is also distinguishable.
As set out above, we conclude that, when a valid contractual jury trial waiver provision applies to a signatory corporation, the waiver also applies to nonsignatory directors and officers seeking to invoke the waiver as agents of the corporation. This rule is consistent with the concept that corporations can "act only through agents and employees." Bel-Ray, 181 F.3d at 444; see also In re Mulco Prods., Inc., 123 A.2d 95, 103 (Del.Sup.Ct.1956) ("It is axiomatic that a corporation by structural necessity must act, if it acts at all, through its agents."), aff'd sub nom. Mulco Prods., Inc. v. Black, 127 A.2d 851 (Del.1956);[13]Nat'l Risk Mgmt., Inc. v. Bramwell, 819 F.Supp. 417, 434 (E.D.Pa. 1993). If we did not allow nonsignatory agents of a signatory corporation to invoke a valid contractual jury waiver provision, such an "agreement would be of little practical value," Trott v. Paciolla, 748 F.Supp. 305, 309 (E.D.Pa.1990), as "it would be too easy to circumvent the agreements by naming individuals as defendants instead of the entity" itself, Roby v. Corp. of Lloyd's, 996 F.2d 1353, 1360 (2d Cir.1993). See also Arnold v. Arnold Corp., 920 F.2d 1269, 1281 (6th Cir.1990) ("[I]f appellant can avoid the practical consequences of an agreement to arbitrate by naming nonsignatory parties as [defendants] in his complaint. . . the effect of the rule requiring arbitration would, in effect, be nullified.") (quotation marks and citations omitted).[14]
*226 2. Laches
Next, we address Tracinda's alternate argument that the District Court should have barred DaimlerChrysler's motion to strike Tracinda's jury demand on the basis of laches. Because laches is an equitable doctrine, we review the District Court's decision for abuse of discretion. See Holmes v. Pension Plan of Bethlehem Steel Corp., 213 F.3d 124, 134 (3d Cir. 2000). In order to successfully assert the defense of laches, Tracinda must show (1) "inexcusable delay" by DaimlerChrysler, and (2) "prejudice" to Tracinda "as a result of the delay." Santana Prods., Inc. v. Bobrick Washroom Equip., Inc., 401 F.3d 123, 138 (3d Cir.2005).
DaimlerChrysler moved to strike Tracinda's jury demand approximately three years after Tracinda filed it. Tracinda had demanded a jury trial against the individual defendants but not against the corporate defendants. DaimlerChrysler's motion