The opinion of the court was delivered by: Legge, U.S. District Judge.
ORDER ON PLAINTIFF'S MOTION FOR PARTIAL SUMMARY ADJUDICATION; AND
DEFENDANT'S MOTION TO DISMISS OR STAY
Plaintiff is a California corporation that manufactures computer
parts. Defendant is a French corporation that assembles and sells computer
network systems. Defendant made fourteen purchases of computer parts from
plaintiff between May 1996 and December 1997. In each of the
transactions, defendant placed an order with plaintiff via phone or
e-mail, and plaintiff shipped the goods to France. Plaintiff included a
sales invoice and a user's manual with each shipment. The sales invoice
and user's manual contained certain terms and conditions, including a
limited warranty and limitations of liability.
Beginning in 1998, defendant allegedly experienced electrical problems
with some of the parts that it had purchased from plaintiff;
specifically, some of the parts caught fire. Defendant demanded $200,400
in replacement costs, and consequential damages of approximately
$6,000,000. Plaintiff rejected the demand and claimed that, based on the
limited warranty contained in the sales invoices and the consequential
damages waiver found in the user's manual, defendant's sole remedy was
the repair and replacement of any malfunctioning parts.
In December 1998 defendant filed an action in France in the Tribunal de
Commerce de Bobginy (the "French Commercial Court.") The French case has
been ongoing since that time and plaintiff has been participating in it.
The parties disagree on the posture and scope of the French case.
Plaintiff contends that it is an "interim relief procedure" that has no
judicial effect. Defendant argues that it is a legal proceeding wherein
the parties can be afforded complete relief.
Plaintiff filed this action on January 20, 2000, more than a year after
the French action began. The complaint seeks a declaration that: (1) the
computer parts were not defective; (2) the parts failed as a result of
defendant's misuse, and (3) even if plaintiff were at fault, defendant's
sole remedy is for repair or replacement. Jurisdiction is based on the
Declaratory Judgment Act; 28 U.S.C. § 2201, et seq.
Plaintiff now moves for partial summary adjudication, solely on the
issue of what remedy is available to defendant. Defendant opposes the
motion for partial summary adjudication, and moves for a stay or
dismissal based on the first-filed French case.
Defendant bases its motion to stay or dismiss on the principle of
"International Abstention." The international abstention doctrine allows
a court to stay or dismiss an action where parallel proceedings are
pending in the court of a foreign nation. See Schwarzer et al., Federal
Civil Procedure Before Trial, ¶ 2:1326.4 (2000). International
abstention is rooted in concerns of international comity, judicial
efficiency and fairness to litigants. Id. In short, the doctrine allows a
court to abstain from hearing an action if there is a first-filed foreign
proceeding elsewhere. Id. The doctrine has been expressly adopted by the
Eleventh and Seventh Circuits. See Turner Entertainment Co. v. Degeto
Film GmbH, 25 F.3d 1512, 1523 (11th Cir. 1994); Finova Capital Corp. v.
Ryan Helicopters, U.S.A. Inc., 180 F.3d 896, 900-901 (7th Cir. 1999).
Under the Act, a district court may decline to exercise jurisdiction
over a declaratory action, even though subject matter jurisdiction is
otherwise proper. See 28 U.S.C. § 2201 (a); Brillhart v. Excess Ins.
Co. of America, 316 U.S. 491, 494, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942).
In enacting the Declaratory Judgment Act, "Congress . . . created an
opportunity, rather than a duty, [for a district court] to grant a new
form of relief to qualifying litigants." See Wilton v. Seven Falls Co.,
515 U.S. 277, 288, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995).
A district court's discretion to decline jurisdiction under the Act is
broader than any abstention doctrine recognized by the U.S. Supreme
Court. In Wilton, the Court explained that "[d]istinct features of the
Declaratory Judgment Act, we believe, justify a standard vesting district
courts with greater discretion in declaratory judgment actions than that
permitted under the `exceptional circumstances' test of ...