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Law School Case Brief

Amco Ukrservice & Prompriladamco v. Am. Meter Co. - 312 F. Supp. 2d 681 (E.D. Pa. 2004)

Rule:

In applying Griffith's hybrid approach, the United States District Court for the Eastern District of Pennsylvania begins with an "interest analysis" of the policies of all interested states and then, based on the results of that analysis, proceed to characterize the case as a true conflict, false conflict, or unprovided-for case. A true conflict exists when the governmental interests of both jurisdictions would be impaired if their law were not applied. On the other hand, there is a false conflict if only one jurisdiction's governmental interests would be impaired by the application of the other jurisdiction's law. When interest analysis identifies a false conflict, resolving the choice-of-law issue becomes relatively straightforward because the court applies the law of the only interested jurisdiction. The resolution of a true conflict is a more complex process. In an action for breach of contract, the court both weighs the competing governmental interests and apply §§ 6, 188 of the Restatement (Second). 

Facts:

In an action filed by plaintiff Ukrainian corporations (corporations) seeking over $ 200 million in damages for the breach of two joint venture agreements entered into with defendant Pennsylvania company (company), the parties filed cross-motions for summary judgment. The parties entered into two joint venture agreements under which the company allegedly promised to provide the corporations with all of the gas meters and related piping that they could sell. The corporations sued after the company's president effectively terminated the joint ventures by stopping a shipment of goods that was on its way to Ukraine and by refusing to extend credit to the corporations.

Issue:

Was defendant American Meter entitled to judgment against both plaintiffs as a matter of law because the joint venture agreements were unenforceable under both the United Nations Convention on Contracts for the International Sale of Goods ("CISG") and Ukrainian commercial law?

Answer:

No

Conclusion:

The parties' motions for summary judgment were denied in the Ukrainian corporations' breach of contract action. The court held that the company was not entitled to summary judgment on its claim that the joint venture agreements were invalid under the United Nations Convention on Contracts for the International Sale of Goods (CISG) and Ukrainian law. The court held that although the CISG may have governed discrete contracts for the sale of goods that the parties had entered pursuant to the joint venture agreements, it did not apply to the agreements themselves. American Meter was not entitled to summary judgment because the CISG did not apply to the joint venture agreements and because, under Pennsylvania's choice of law regime, Pennsylvania law, and not Ukrainian law, governed the plaintiffs' claims. The court further held that under Pennsylvania's choice of law rules, because Pennsylvania's interest would have been harmed by applying Ukraine's law that might invalidate the agreements, and no identified Ukrainian interest would be impaired by enforcing the agreements, a false conflict was presented, and therefore Pennsylvania law applied.

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