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CISG CASE PRESENTATION

United States 20 July 2012 Federal District Court [Maryland] (Nutramax Laboratories, Inc. v. Hosokawa Micron International, Inc.)
[Cite as: http://cisgw3.law.pace.edu/cases/120720u1.html]

Primary source(s) of information for case presentation: Case text

Case Table of Contents


Case identification

DATE OF DECISION: 20120720 (20 July 2012)

JURISDICTION: United States [federal court]

TRIBUNAL: U.S. District Court, Maryland [a federal court of 1st instance]

JUDGE(S): Marvin J. Garbis

CASE NUMBER/DOCKET NUMBER: MJG-11-1991

CASE NAME: Nutramax Laboratories, Inc. v. Hosokawa Micron International, Inc.

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Germany [with U.S. subsidiary]

BUYER'S COUNTRY: United States

GOODS INVOLVED: Production machine (to make soft chew products for animal consumption)


Classification of issues present

APPLICATION OF CISG: Yes. The court notes that the [Buyer] alleges facts sufficient to create a plausible claims that [Seller-U.S.] could be found to be a party to the contract and that the contract will be construed so as to constitute the [Seller-U.S.]'s agreement to be subject to the CISG.

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 1(1)(a)

Classification of issues using UNCITRAL classification code numbers:

1A3 [Contract with incorporated subsidiary of foreign company];

1B1 [Parties in different Contracting States]

Descriptors: Application of Convention ; Internationality ; Scope of convention

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (English): Text presented below; see also 2012 U.S. Dist. LEXIS 100974

Translation: Unavailable

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text

United States District Court for the District of Maryland

Nutramax Laboratories, Inc., Plaintiff vs. Hosokawa Micron International, Inc., et al. Defendants

MJG-11-1991

20 July 2012

OPINION

MEMORANDUM AND ORDER RE: MOTIONS TO DISMISS

The Court has before it the Partial Motion to Dismiss Second Amended Complaint [Document 27] filed by Defendant [Seller-U.S.]. ("the U. S. Company"), the Partial Motion to Dismiss Second Amended Complaint [Document 45] filed by Defendant [Seller-German] ("the German Company”) and the materials submitted relating thereto. The Court has held a hearing and had the benefit of the arguments of counsel.

BACKGROUND

On September 8, 2009, [Buyer] entered into a contract with the [Seller-German] to purchase a "Production Machine" used to make certain "soft chew" products for animal consumption. [Buyer] specified a requirement for the products produced to be within a 3.5% weight tolerance.

1. The "facts" stated herein are as alleged by [Buyer].

A letter dated September 21, 2009, signed by the [Seller-German],agreed by the parties to be incorporated by reference into the September 8, 2009 contract, states that a division of the [Seller – U.S.] will do everything necessary, at its own expense, to meet the 3.5% weight tolerance requirement. This commitment was not fulfilled.

As discussed at the hearing, the Court finds plausible [Buyer]'s contention that the [Seller-U.S.] became a party to the September 8, 2009 contract by virtue of the September 21, 2009 letter. Hence, it is plausibly contended that the [Seller-German] was authorized to commit the [Seller-U.S.] to do what was necessary to make the Production Machine compliant with the weight control requirement.

DISCUSSION

[Buyer] has sued the [Seller-German] and the [Seller-U.S.] under the Maryland Uniform Commercial Code ("UCC") and the United Nations Convention on Contracts for the International Sale of Goods ("CISG"). However, the quotation and letter are both written on the stationery of a division of the [Seller-U.S.]. By the instant motions, the [Seller-German] seeks dismissal of any claims against it based upon the Maryland UCC and the [Seller-U.S.] seeks dismissal of any claims against it based upon the CISG.

A motion to dismiss filed under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a complaint. A complaint must allege sufficient facts to "cross 'the line between possibility and plausibility of entitlement to relief.'" Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007)).

A. The [Seller-German] Motion

As clarified at the hearing, [Buyer] does not contend that the [Seller-German] can be held liable under the Maryland UCC. [Buyer] does contend, however, that the [Seller-German] can be held liable for damages that may be awarded under the Maryland UCC against the [Seller-U.S.].

The Court shall dismiss any claims against the [Seller-German] under the Maryland UCC. The Court is not now addressing the merit, or lack of merit, of [Buyer]'s contention that the [Seller-German] could be held liable for damages awarded against the [Seller-U.S.] under the Maryland UCC. All "Rule" references herein are to the Federal Rules of Civil Procedure.

B. The [Seller-U.S.] Motion

[Buyer] has made a plausible, although hardly compelling, claim that the [Seller-U.S.] could be subject to the CISG. [Buyer] alleges facts sufficient to create a plausible claim that the [Seller-U.S.] could be found to be a party to the September 8, 2009 contract that provides that it is governed by "the law of Germany." [Buyer] also alleges facts sufficient to create a plausible claim that the contract will be construed so as to constitute the [Seller-U.S.]'s agreement to be subject to the CISG - for example, the contention that, by joining an affiliated entity as a party to an existing contract governed by the CISG, the [Seller-U.S.] agreed to be bound by the standards applicable to its affiliated co-contracting party.

CONCLUSION

For the foregoing reasons:

  1. The Partial Motion to Dismiss Second Amended Complaint filed by Defendant [Seller-U.S.] [Document 27] is DENIED.

  2. The Partial Motion to Dismiss Second Amended Complaint filed by Defendant [Seller-German] [Document 45] is GRANTED without prejudice to the ability of [Buyer] to contend that said (applicable law clause in quotation. See Second Am. Compl., Ex. 1, 16.) defendant is liable for any damages that may be awarded against Defendant Hosokawa Micron International Inc.

  3. The case shall proceed pursuant to existing scheduling.

SO ORDERED, on Friday, July 20, 2012.

/s/__________
Marvin J. Garbis
United States District Judge

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Pace Law School Institute of International Commercial Law - Last updated July 24, 2012
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