The opinion of the court was delivered by: SAMUEL CONTI, Senior District Judge
ORDER DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND
DISMISSING CASE WITHOUT PREJUDICE
McDowell Valley Vineyards, Inc. ("Plaintiff" or "McDowell")
brought this action against Sabaté USA Inc., Sabaté SAS,
Sabaté SA, Sabaté Diosos Group SA, and Does 1-100 ("Defendants"
in The Superior Court for the County of
Napa, California, alleging causes of action for, among others,
breach of contract, breach of express and implied warranties, and
fraud. Plaintiff's Complaint at 1 ("Compl.").
Presently before the Court is Defendants' motion for partial
summary judgment. The Court, having reviewed the parties' submissions, finds that it lacks subject matter jurisdiction over
this matter and hereby DENIES in its entirety Defendants' motion
for summary judgment and DISMISSES the case without prejudice.
Because Plaintiff is the non-moving party, the following
allegations are taken from Plaintiff's submissions and will be
assumed as true for purposes of the present motion.
Plaintiff is a California corporation in the business of
producing and selling premium wines, with its principal place of
business in Napa County, California. Compl. at 1. Defendants are
engaged in the manufacture, marketing, distribution and sale of
closures used for closing wine bottles. Id. at 2. These
closures are non-agglomerated corks known by the trade name of
Defendants marketed the Altec closures to Plaintiff and a
number of other wineries. Id. at 3. According to Plaintiff,
Defendants' advertising materials made the following
representations regarding the Altec closures: (1) Altec closures
prevent cork taint;*fn2 (2) the closures were "without risk
of cork taint"; (3) the closures offered "near perfect protection
against cork taint"; (4) there is "no cork taint" with these
closures; (5) the Altec closure is "the only pure cork which is
capable of relieving wine producers from the risk of cork taint";
and (6) the closures were free from defects and of a type and
quality fit for bottling premium quality wine. Compl. at 3. Additionally, Bill
Crawford and Gary Leonard, Plaintiff's president and purchasing
manager, respectively, were told specifically by representatives
of Sabaté that the Altec closure would prevent cork taint. Id.
Based on these representations, Plaintiff purchased
approximately 287,000 Altec closures from Defendants in June of
2000 for a total purchase price of roughly $33,000. Id. at 4.
Plaintiff used the Altec closures in bottling several of its
wines in July, August, and October of 2000. Id.
According to Plaintiff, it began to develop concerns with the
Altec closures in early 2001, which Plaintiff immediately
expressed to Defendants. Id. Defendants appeased these concerns
by again representing that the Altec closures would perform as
In the fall of 2001 and spring of 2002, Plaintiff received
reports that a high percentage of its wines bottled with Altec
closures were suffering from cork taint. Id. As a result,
Plaintiff was forced to recall a significant number of these
wines from its buyers at a great expense to Plaintiff. Id. at
4-5. Plaintiff alleges that the recall is attributable to the
Altec closures being defective and the presence of an
unacceptable level of TCA in the closures. Id. at 6.
In December of 2003, Plaintiff brought suit in The Superior
Court for the County of Napa, California against Defendants
alleging eight causes of action: (1) breach of contract; (2)
breach of express warranty; (3) breach of implied warranty; (4)
fraud; (5) negligent misrepresentation; (6) negligence; (7) unfair business practices under California Business and
Professions Code section 17200 et seq.; and (8) strict
liability. Compl. at 1. Defendants timely removed the action to
Federal Court based on federal question jurisdiction, under
28 U.S.C. § 1441(b). Notice of Removal at 2.
Defendants now move the Court to grant partial summary
judgment. Defendants' Memorandum in Support of Motion for Partial
Summary Judgment at 25 ("Defs' Mem."). For reasons that will be
discussed more fully below, the Court hereby DENIES Defendants'
motion and DISMISSES the case without prejudice.
The federal courts have "original jurisdiction over all civil
actions arising under the Constitution, laws or treaties of the
United States." 28 U.S.C. § 1331.
A Federal Court may examine the question of subject matter
jurisdiction sua sponte. See Steel Company v. Citizens for
a Better Environment, 523 U.S. 83, 94 (1998). Federal Courts
must normally determine issues of subject matter jurisdiction
before considering a case on its merits. Id. When a court lacks
jurisdiction, the "only function remaining to the court is that