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Law School Case Brief

Asante Techs. v. PMC-Sierra, Inc. - 164 F. Supp. 2d 1142 (N.D. Cal. 2001)

Rule:

The Convention on Contracts for the International Sale of Goods (CISG) only applies when a contract is between parties whose places of business are in different states. 15 U.S.C.S. app., art. 1(1)(a). If this requirement is not satisfied, a defendant cannot claim jurisdiction under the CISG.

Facts:

Plaintiff, Asante Technologies Inc., was a corporation having its primary place of business in California. Defendant, PMC-Sierra, Inc., asserted that, at all relevant times, its corporate headquarters, inside sales and marketing office, public relations department, principal warehouse, and most design and engineering functions were located in Burnaby, British Columbia, Canada. In the present complaint instituted in the Superior Court of the County of Santa Clara, plaintiff Asante contended that defendant PMC-Sierra failed to provide it with electronic components meeting certain designated technical specifications. Defendant removed the action to the United States District Court for the Northern District of California, San Jose Division. Plaintiff now moved to remand the action back to the Superior Court of the County of Santa Clara pursuant to 28 U.S.C. § 1447(c), asserting lack of subject matter jurisdiction. In its answer, defendant contended that the United States District Court for the Northern District of California, San Jose Division has jurisdiction to hear the presence case pursuant to 28 U.S.C. § 1331, which stipulated that the "district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." Specifically, Defendant contended that the contract claims at issue necessarily implicated Convention for the International Sale of Goods (CISG), because the contract was between parties having their places of business in two nations which have adopted the CISG treaty.

Issue:

Did the United States District Court for the Northern District of California, San Jose Division have jurisdiction to hear the present case since the contract claims at issue necessarily implicated CISG?

Answer:

Yes.

Conclusion:

The court found that the CISG applied because defendant's place of business was in Canada. Further, the parties did not effectuate an "opt out" of application of the CISG. Defendants choice of applicable law adopted the law of British Columbia, and the CISG was the law of British Columbia. Further, even plaintiff's choice of law generally adopted the laws of the State of California. California was bound to the CISG by the Supremacy Clause of the United States Constitution. Finally, the well-pleaded complaint rule did not preclude removal. The complaint on its face did not refer to the CISG. However, the CISG preempted state laws addressing formation of a contract of sale and the rights and obligations of the seller and buyer arising from the contract. Therefore, plaintiff’s motion was denied.

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