Carnival Obm Case

Amandine DESERT

International Business Law

Case Asante Technologies, Inc. v. PMC-Sierra, Inc.

Facts :

Asante Technologies, Inc., is a Delaware corporation, having its primary place of business in Santa Clara County, California. Asante Technologies produces network switchers (a type of elec-tronic components used to connect multiple computers to one another and to the Internet). Asante Technologies purchases components parts from a number of manufacturers. In particular, it pur-chases the control center of its network switchers from PMC-Sierra.

PMC-Sierra, Inc., is also a Delaware corporation. However, its corporate headquarters, in¬side sales and marketing office, public relations department, principal warehouse and most design and engineering functions were located in Burnaby, British Colombia, Canada. PMC-Sierra also maintains an office in Portland, Oregon, where many of its engineers are based.

PMC-Sierra sells its product in California trough Unique Technologies, which is an author-ized distributor of PMC-Sierra products in North America. Unique Technologies is located in Cali¬fornia. Asante bought the PMC-Sierra's products trough Unique Technologies, which was provided by PMC-Sierra.

Asante Technologies' complaint focuses on five purchase orders. Four of the five purchases were submitted to PMC-Sierra trough Unique as directed by PMC-Sierra. One of the purchase or-ders, dated January 28, 2000, was sent directly to PMC-Sierra in British Colombia. PMC-Sierra shipped all orders to Asante's headquarters in California. Upon delivery of the goods, Unique sent invoices to Asante Technologies, at which time Asante tendered payment to Unique either in Cali-fornia or in Nevada.

The plaintiff, Asante Technologies, filed an action in the Superior Court for the Sate of Cali-fornia, on February 13, 2001. The plaintiff want to use the U.S. Law. Asante Technologies contends that the defendant failed to provide it with electronic components.

PMC-Sierra is the defendant. PMC-Sierra remove the action, asserting federal question jur-isdiction, to the District Court for the Northern District of California on March 16, 2001. PMC-Si-erra asserts that Asante Technologies' claims for breach of contract and breach of express warranty are governed by the United Nations Convention on Contracts for the International Sale of Goods ("CISG").

Asante Technologies disputes jurisdiction and filed a motion to remand this action back to the Superior Court of the County of Santa Clara, asserting lack of subject matter jurisdiction.

Determining PMC-Sierra's "place of business" with respect to its contract with Asante Tech-nologies is critical to the question of whether the Court has jurisdiction in this case.

Issue:

Whether the U.S. Federal Court had jurisdiction to apply the CISG.

Rule of law :

A defendant may remove to federal court any civil action brought in a state court that origin-ally could have been filed in federal court. When a case originally filed in state court contains separ-ate and independent federal and state law claims, the entire case may be removed to federal court.

The determination of whether an action arises under federal law is guided by the "well-pleaded complaint" rule. The rule provides that removal is proper when a federal question is presented on the face of the complaint. However, in areas where federal law completely preempts state law, even if the claims are purportedly based on state law, the claims are considered to have arisen under federal law. Defendant has the burden of establishing this removal is proper.

The Convention on Contracts for the International Sale of Goods ("CISG") is an internation-al treaty which has been signed and ratified by the United States and Canada. The CISG establish "substantive provisions of law to govern the formation of international sales contracts and the rights and obligations of the buyer and the seller." The CISG applies "to contracts of sale of goods between parties whose places of business are in different States, when the States are Contracting States." Article 10 of the CISG provides that "if a party has more than one place of business, the place of business is that which has the closest relationship to the contract and its performance."

Conclusion :

In this case, PMC-Sierra (the defendant), asserts that the District Court for the Northern Dis¬trict of California has jurisdiction to hear this case. The United States Code dictates that the "dis¬trict courts shall have original jurisdiction of all civil actions arising under the Constitutions, laws, or treaties of the United States." It means that the District Court for the Northern District of Califor¬nia has jurisdiction to apply the CISG provisions. Specifically, PMC-Sierra contends that the con¬tract claims at issue necessarily implicate the CISG, because the contract is between parties having their places of business in two nations which have adopted the CISG treaty.

Although the United States Code gives district courts original jurisdiction over every civil action that "arises under the Constitutions, laws, or treaties of the United States", an individual may only enforce a treaty's provisions when the treaty is self-executing, that is, when it expressly or im-pliedly creates a private right of action. The question here is to know if a district court can apply a treaty, when a party ask it.

=> In this case, PMC-Sierra ask to the Court to apply the CISG. Actually, the CISG properly creates a private right of action. Therefore, if the CISG properly applies to this action, federal juris-diction exists. So the court has the jurisdiction to apply the CISG.

The contract in question is between parties from two different contracting states. The CISG only applies when a contract is "between