express exclusion of the CISG. The Court finds that the particular choice
of law provisions in the "Terms and Conditions" of both parties are
inadequate to effectuate an opt out of the CISG.
Although selection of a particular choice of law, such as "the
California Commercial Code" or the "Uniform Commercial Code" could amount
to implied exclusion of the CISG, the choice of law clauses at issue here
do not evince a clear intent to opt out of the CISG. For example,
Defendant's choice of applicable law adopts the law of British Columbia,
and it is undisputed that the CISG is the law of British Columbia.
(International Sale of Goods Act ch. 236, 1996 S.B.C. 1 et seq. (B.C.).)
Furthermore, even Plaintiff's choice of applicable law generally adopts
the "laws of" the State of California, and California is bound by the
Supremacy Clause to the treaties of the United States. U.S. Const. art.
VI, cl. 2 ("This Constitution, and the laws of the United States which
shall be made in pursuance thereof; and all treaties made, or which shall
be made, under the authority of the United States, shall be the supreme
law of the land.") Thus, under general California law, the CISG is
applicable to contracts where the contracting parties are from different
countries that have adopted the CISG. In the absence of clear language
indicating that both contracting parties intended to opt out of the
CISG, and in view of Defendant's Terms and Conditions which would apply
the CISG, the Court rejects Plaintiff's contention that the choice of law
provisions preclude the applicability of the CISG.
D. Federal Jurisdiction Based Upon the CISG Does Not Violate the
Well-Pleaded Complaint Rule
The Court rejects Plaintiff's argument that removal is improper because
of the well-pleaded complaint rule. The rule states that a cause of
action arises under federal law only when the plaintiff's well-pleaded
complaint raises issues of federal law. Gully v. First National Bank,
299 U.S. 109, 112, 57 S.Ct. 96, 81 L.Ed. 70 (1936); Louisville &
Nashville R. Co. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126
(1908). Anticipation of a federal preemption defense, such as the defense
that federal law prohibits the state claims, is insufficient to establish
federal jurisdiction. Gully, 299 U.S. at 116, 57 S.Ct. 96. Even where
both parties concede that determination of a federal question is the only
issue in the case, removal is improper unless the plaintiffs complaint
establishes that the case "arises under" federal law. Caterpillar, Inc.
v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987).
It is undisputed that the Complaint on its face does not refer to the
CISG. However, Defendants argue that the preemptive force of the CISG
converts the state breach of contract claim into a federal claim.
Indeed, Congress may establish a federal law that so completely preempts
a particular area of law that any civil complaint raising that select
group of claims is necessarily federal in character. Metropolitan Life
Ins. Co. v. Taylor, 481 U.S. 58, 62, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987)
(holding that Employee Retirement Income Security Act (ERISA) preempts an
employee's common-law contract and tort claims arising from employer's
insurer's termination of disability benefits, establishing federal
jurisdiction); Avco Corp. v. Aero Lodge No. 735, Int'l Ass'n. of
Machinists, 390 U.S. 557, 560, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968)
(holding that section 301 of Labor Management Relations Act (LMRA)
preempts any state cause of action for violation of contracts between an
employer and a labor organization).
It appears that the issue of whether or not the CISG preempts state law
is a matter of first impression. In the case of federal statutes, "[t]he
whether a certain action is preempted by federal law is one of
congressional intent. The purpose of Congress is the ultimate
touchstone." Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 45, 107 S.Ct.
1549, 95 L.Ed.2d 39 (1987) (internal quotations and citations omitted).
Transferring this analysis to the question of preemption by a treaty, the
Court focuses on the intent of the treaty's contracting parties. See
Husmann v. Trans World Airlines, Inc., 169 F.3d 1151, 1153 (8th Cir.
1999) (finding Warsaw Convention preempts state law personal injury
claim); Jack v. Trans World Airlines, Inc., 820 F. Supp. 1218, 1220
(N.D.Cal. 1993) (finding removal proper because Warsaw Convention
preempts state law causes of action).
In the case of the CISG treaty, this intent can be discerned from the
introductory text, which states that "the adoption of uniform rules which
govern contracts for the international sale of goods and take into
account the different social, economic and legal systems would contribute
to the removal, of legal barriers in international trade and promote the
development of international trade." 15 U.S.C.App. at 53. The CISG
further recognizes the importance of "the development of international
trade on the basis of equality and mutual benefit." Id. These objectives
are reiterated in the President's Letter of Transmittal of the CISG to
the Senate as well as the Secretary of State's Letter of Submittal of the
CISG to the President. Id. at 70-72. The Secretary of State, George P.
Sales transactions that cross international boundaries
are subject to legal uncertainty-doubt as to which
legal system will apply and the difficulty of coping
with unfamiliar foreign law. The sales contract may
specify which law will apply, but our sellers and
buyers cannot expect that foreign trading partners
will always agree on the applicability of United
States law. . . . The Convention's approach provides
an effective solution for this difficult problem. When
a contract for an international sale of goods does not
make clear what rule of law applies, the Convention
provides uniform rules to govern the questions that
arise in making and performance of the contract.
Id. at 71. The Court concludes that the expressly stated goal of
developing uniform international contract law to promote international
trade indicates the intent of the parties to the treaty to have the
treaty preempt state law causes of action.