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ASANTE TECHNOLOGIES, INC. v. PMC-SIERRA

July 30, 2001

ASANTE TECHNOLOGIES, INC., PLAINTIFF,
v.
PMC-SIERRA, INC., DEFENDANT.



The opinion of the court was delivered by: Ware, District Judge.

ORDER DENYING MOTION TO REMAND AND REQUEST FOR ATTORNEYS' FEES

1. INTRODUCTION

This lawsuit arises out of a dispute involving the sale of electronic components. Plaintiff, Asante Technologies Inc., filed the action in the Superior Court for the State of California, Santa Clara County, on February 13, 2001. Defendant, PMC-Sierra, Inc., removed the action to this Court, asserting federal question jurisdiction pursuant to 28 U.S.C. § 1331. Specifically, Defendant asserts that Plaintiff's 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"). Plaintiff disputes jurisdiction and filed this Motion To Remand And For Attorneys' Fees. The Court conducted a hearing on June 18, 2001. Based upon the submitted papers and oral arguments of the parties, the Court DENIES the motion to remand and the associated request for attorneys' fees.

II. BACKGROUND

The Complaint in this action alleges claims based in tort and contract. Plaintiff contends that Defendant failed to provide it with electronic components meeting certain designated technical specifications. Defendant timely removed the action to this Court on March 16, 2001.

Plaintiff is a Delaware corporation having its primary place of business in Santa Clara County, California. Plaintiff produces network switchers, a type of electronic component used to connect multiple computers to one another and to the Internet. Plaintiff purchases component parts from a number of manufacturers. In particular, Plaintiff purchases application-specific integrated circuits ("ASICs"), which are considered the control center of its network switchers, from Defendant.

Defendant is also a Delaware corporation. Defendant asserts 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. Defendant also maintains an office in Portland, Oregon, where many of its engineers are based. Defendant's products are sold in California through Unique Technologies, which is an authorized distributor of Defendant's products in North America. It is undisputed that Defendant directed Plaintiff to purchase Defendant's products through Unique, and that Defendant honored purchase orders solicited by Unique. Unique is located in California. Determining Defendant's "place of business" with respect to its contract with Plaintiff is critical to the question of whether the Court has jurisdiction in this case.

Plaintiff's Complaint focuses on five purchase orders.*fn1 Four of the five purchase orders were submitted to Defendant through Unique as directed by Defendant. However, Plaintiff does not dispute that one of the purchase orders, dated January 28, 2000, was sent by fax directly to Defendant in British Columbia, and that Defendant processed the order in British Columbia. Defendant shipped all orders to Plaintiff's headquarters in California.*fn2 Upon delivery of the goods, Unique sent invoices to Plaintiff, at which time Plaintiff tendered payment to Unique either in California or in Nevada.

The Parties do not identify any single contract embodying the agreement pertaining to the sale. Instead, Plaintiff asserts that acceptance of each of its purchase orders was expressly conditioned upon acceptance by Defendant of Plaintiff's "Terms and Conditions," which were included with each Purchase Order. Paragraph 20 of Plaintiff's Terms and Conditions provides "APPLICABLE LAW. The validity [and] performance of this [purchase] order shall be governed by the laws of the state shown on Buyer's address on this order." (Contos Decl., Exh. H, ¶ 16.) The buyer's address as shown on each of the Purchase Orders is in San Jose, California. Alternatively, Defendant suggests that the terms of shipment are governed by a document entitled "PMC-Sierra TERMS AND CONDITIONS OF SALE." Paragraph 19 of Defendant's Terms and conditions provides "APPLICABLE LAW: The contract between the parties is made, governed by, and shall be construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein, which shall be deemed to be the proper law hereof . . . ." (Wechsler Decl., Exh. D, ¶ 6.)

Defendant does not deny that Plaintiff maintained extensive contacts with Defendant's facilities in Portland Oregon during. the "development and engineering" of the ASICs. (Amended Supplemental Decl. of Anthony Contos, ¶ 3.) These contacts included daily email and telephone correspondence and frequent in-person collaborations between Plaintiff's engineers and Defendant's engineers in Portland. (Id.) Plaintiff contends that this litigation concerns the inability of Defendant's engineers in Portland to develop an ASIC meeting the agreed-upon specifications. (Id.)

Plaintiff now requests this Court to remand this 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 addition, Plaintiff requests award of attorneys fees and costs for the expense of bringing this motion.

III. STANDARDS

A defendant may remove to federal court any civil action brought in a state court that originally could have been filed in federal court. 28 U.S.C. § 1441 (a); Caterpillar, Inc. v. Williams, 482 U.S. 386, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). When a case originally filed in state court contains separate and independent federal and state ...


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