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McDOWELL VALLEY VINEYARDS, INC. v. SABATÉ USA INC.

November 1, 2005.

MCDOWELL VALLEY VINEYARDS, INC., a California corporation, Plaintiff,
v.
SABATÉ USA INC., SABATÉ SAS, SABATÉ SA, SABATÉ DIOSOS GROUP SA, and DOES 1 through 100, inclusive, Defendants.



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
I. INTRODUCTION
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" or "Sabaté")*fn1 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.

  II. BACKGROUND

  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 Altec. Id.

  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. at 3-4.

  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 advertised. Id.

  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.

  III. LEGAL STANDARD

  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 of ...


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