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United States 30 January 2001 Federal District Court [California] (Supermicro Computer v. Digitechnic)
[Cite as: http://cisgw3.law.pace.edu/cases/010130u1.html]

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

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Case identification

DATE OF DECISION: 20010130 (30 January 2001)

JURISDICTION: United States [federal court]

TRIBUNAL: U.S. District Court, Northern District of California, San Francisco Division [federal court of 1st instance]

JUDGE(S): Charles A. Legge


CASE NAME: Supermicro Computer Inc. v. Digitechnic, S.A. and Carri Systems, d/b/a Digitechnic

CASE HISTORY: Unavailable

SELLER'S COUNTRY: United States (plaintiff)

BUYER'S COUNTRY: France (defendant)

GOODS INVOLVED: Computer parts

Case abstract

UNITED STATES: Federal District Court for Northern District of California, 30 January 2001
(Supermicro Computer Inc. v. Digitechnic, S.A.)

Case law on UNCITRAL texts (CLOUT) abstract no. 617

Reproduced with permission of UNCITRAL

Abstract prepared by Peter Winship, National Correspondent

The issue before the court was whether a buyer's claim that goods were nonconforming should be dismissed before trial because a term in the seller's invoices limited its obligation with respect to the quality of the goods.

On fourteen occasions a manufacturer of computer parts with its place of business in California sold computer parts to an assembler and distributor of computer network systems with its place of business in France. On each occasion the French enterprise placed orders by telephone or electronic mail and the US manufacturer shipped the goods to France together with an invoice and a user's guide. The invoice and user's guide set out terms and conditions, including terms limiting the warranty given and the liability of the seller for any breach. When it experienced problems with some parts, the buyer demanded damages for its losses and brought suit in France. The seller subsequently brought suit in the United States seeking a declaratory judgment that it was not liable because of the contract terms.

The court dismissed the seller's claim without prejudice to the right to raise the claim in a later action. The court found that the Convention applied because the parties had their places of business in two different Contracting States, CISG article 1(1)(a). It concluded that while article 35 CISG addressed the seller's obligation with respect to the conformity of the goods, the Convention did not address the disclaimer of this obligation. Noting that the "mirror image" approach to contract formation allowed the court to inquire into the subjective intent of the parties (CISG art. 8), the court stated that the disclaimer might not be effective if the buyer established that it did not know of the disclaimer. Because the French court would address this issue, the court decided that this uncertainty was one of several reasons for not exercising its discretion.

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Classification of issues present

APPLICATION OF CISG: Yes [Agreement silent on choice of law; Article 1(1)(a) applied]


Key CISG provisions at issue: Dicta references to Articles 8 ; 35 [Also identifies possible Article 4 and Article 19 issues]

Classification of issues using UNCITRAL classification code numbers:


Descriptors: Unavailable

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Editorial remarks

EDITOR: Albert H. Kritzer

Court dismissed the action without prejudice because of pending parallel action in France filed in December 1998 (Tribunal de Commerce de Bobginy)

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Citations to other abstracts, case texts and commentaries


English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=740&step=Abstract>


Original language (English): Text presented below; see also 2001 U.S. Dist. LEXIS 7620; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=740&step=FullText>

Translation: Unavailable


English: [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 8 para. 12; Keith A. Rowley, "The Convention on the International Sale of Goods", in: Hunter ed., Modern Law of Contracts, Thomson/West (03/2007) §§ 23:2, 23:5, 23:9

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Case text

Supermicro Computer Inc. v. Digetechnic, S.A. and Carri Systems dba Digitechnic

No. C-00-0224-CAL

U.S. District Court for the Northern District of California, San Francisco Division

30 January 2001


Order on plaintiff's motion for partial summary adjudication and defendant's motion to dismiss or stay.

Now before the court are plaintiff's motion for partial summary adjudication and defendant's motion for a dismissal or stay of this action. The motions have been briefed, argued and submitted for decision. The court has reviewed the record of the case, the moving and opposing papers on these motions, the arguments of counsel, and the applicable authorities.

I. Plaintiff ["seller"] is a California corporation that manufactures computer parts. Defendant ["buyer"] is a French corporation that assembles and sells computer network systems. [Buyer] made fourteen purchases of computer parts from [seller] between May 1996 and December 1997. In each of the transactions, [buyer] placed an order with [seller] via phone or e-mail, and [seller] shipped the goods to France. [Seller] included a sales invoice and a user's manual with each shipment. The sales invoice and User's manual contained certain terms and conditions, including a limited warranty and limitations of liability.

Beginning in 1998, [buyer] allegedly experienced electrical problems with some of the parts that it had purchased from [seller]; specifically, some of the parts caught fire. [Buyer] demanded $ 200,400 in replacement costs, and consequential damages of approximately $ 6,000,000. [Seller] rejected the demand and claimed that, based on the limited warranty contained in the sales invoices and the consequential damages waiver found in the user's manual, [buyer's] sole remedy was the repair and replacement of any malfunctioning parts.

In December 1998 [buyer] filed an action in France in the Tribunal de Commerce de Bobginy (the "French Commercial Court.") The French case has been ongoing since that time and [seller] has been participating in it. The parties disagree on the posture and scope of the French case. [Seller] contends that it is an "interim relief procedure" that has no judicial effect. [Buyer] argues that it is a legal proceeding wherein the parties can be afforded complete relief.

[Seller] filed this action on January 20, 2000, more than a year after the French action began. The complaint seeks a declaration that: (1) the computer parts were not defective; (2) the parts failed as a result of [buyer's] misuse, and (3) even if [seller] were at fault, [buyer's] sole remedy is for repair or replacement. Jurisdiction is based on the Declaratory Judgment Act; 28 U.S.C. 2201, et. seq.

[Seller] now moves for partial summary adjudication, solely on the issue of what remedy is available to [buyer]. [Buyer] opposes the motion for partial summary adjudication, and moves for a stay or dismissal based on the first-filed French case.

II. [Buyer] bases its motion to stay or dismiss on the principle of "International Abstention." The international abstention doctrine allows a court to stay or dismiss an action where parallel proceedings are pending in the court of a foreign nation. See Schwarzer et. al., Federal Civil Procedure Before Trial, P 2:1326.4 (2000). International abstention is rooted in concerns of international comity, judicial efficiency and fairness to litigants. Id. In short, the doctrine allows a court to abstain from hearing an action if there is a first-filed foreign proceeding elsewhere. Id. The doctrine has been expressly adopted by the Eleventh and Seventh Circuits. See Turner Entertainment Co. v. Degeto Film GmbH, 25 F.3d 1512, 1523 (11th Cir. 1994); Finova Capital Corp. v. Ryan Helicopters, U.S.A. Inc., 180 F.3d 896, 900-901 (7th Cir. 1999).

The Ninth Circuit has not ruled on international abstention. While the facts of this case appear to fit neatly with the doctrine as expressed by the Turner and Finova courts, it is unnecessary for this court to go that far. Instead, [buyer's] motion can be resolved by considering the discretionary nature of the jurisdiction of this court under the Declaratory Judgment Act.

A. Under the Act, a district court may decline to exercise jurisdiction over a declaratory action, even though subject matter jurisdiction is otherwise proper. See 28 U.S.C. 2201(a); Brillhart v. Excess Ins. Co. of America, 316 U.S. 491, 494, 86 L. Ed. 1620, 62 S. Ct. 1173 (1942). In enacting the Declaratory Judgment Act, "Congress ... created an opportunity, rather than a duty, [for a district court] to grant a new form of relief to qualifying litigants." See Wilton v. Seven Falls Co., 515 U.S. 277, 288, 132 L. Ed. 2d 214, 115 S. Ct. 2137 (1995).

A district court's discretion to decline jurisdiction under the Act is broader than any abstention doctrine recognized by the U.S. Supreme Court. In Wilton, the Court explained that "distinct features of the Declaratory Judgment Act, we believe, justify a standard vesting district courts with greater discretion in declaratory judgment actions than that permitted under the 'exceptional circumstances' test of Colorado River and Moses H. Cone." See Wilton, 515 U.S. at 286 (1995).

In determining whether to exercise its discretion not to hear a case, a court must first "determine whether there are any independent claims in the case that exist apart from purely declaratory relief, that is, claims that would continue to exist if the request for a declaration simply dropped from the case." See Provident v. Snodgrass, 147 F.3d 1163, 1167-68 (9th Cir. 1998). In other words, if a claim for money is brought along with the declaratory claim, the court has no discretion to decline jurisdiction. Id. Next, the court must then consider the factors that guide the exercise of its discretion as set out by the Supreme Court in Brillhart and Wilton.

In the present action, there are no independent claims. The only claim is one for declaratory relief. See Complaint, P 1. Thus, it is appropriate for the court to take the next step and consider the Brillhart/Wilton factors that guide its discretion.

The "touchstone" factors are that a district court should "avoid needless determination of state law issues; it should discourage litigants from filing declaratory actions as a means of forum shopping; and it should avoid duplicative litigation." See Government Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1225 (9th Cir. 1998). Those factors are not exclusive. Other factors that should be considered, depending on the circumstances, include "whether the declaratory action will settle all aspects of the controversy" or "whether the use of a declaratory action will result in entanglement between the federal and state court systems." Id. at n. 5. In addition, a district court can also consider "the convenience of the parties, and the availability and relative convenience of other remedies." Id. Applying those factors here leads to the conclusion that this court should decline to hear this case in deference to the case being adjudicated in France.

B. While there are no "state" law issues present here, there is the analogous situation of issues of international law. The parties agree that the United Nations Convention on Contracts for the International Sale of Goods (hereinafter "CISG") governs their transactions. See United Nations Convention on Contracts for the International Sale of Goods, opened for signature April 11, 1980, S. Treaty Doc. No. 9, 98th Cong., 1st Sess. 22 (1983) 19 I.L.M. 671, reprinted at, 15 U.S.C. app. 52 (1997). When two foreign nations are signatories to the CISG, as are the United States and France, the CISG governs contracts for the sale of goods between parties whose places of business are in these different nations. See CISG, Art. 1. A contract governed by the CISG may include a choice of law provision. If, as here, the agreement is silent as to choice of law, the CISG applies if both parties are located in signatory nations. See CISG art. 1; also Delchi Carrier SpA v. Rotorex Corp., 71 F.3d 1024, 1027, n.1 (2nd Cir. 1995). Thus, the provisions of the CISG directly control. The case law interpreting and applying the CISG is sparse. Id. at 1028. As one court which wrestled with the treaty put it, "despite the CISG's broad scope, surprisingly few cases have applied the Convention in the United States." See MCC-Marble Ceramic Center, Inc., v. Ceramica Nuova D'Agostino, S.p.A., 144 F.3d 1384, 1389 (11th Cir. 1998).

Application of the CISG here requires a court to resolve an issue of first impression. To wit, the court must determine whether a warranty disclaimer in a purchase order is valid under the CISG. The court has no controlling authority on this issue. [Seller] contends that Article 35 of the CISG permits warranty disclaimers such as the one at issue. Article 35 however, deals with a seller's obligation to deliver conforming goods. It does not discuss disclaimers. If anything, a disclaimer in this case might not be valid because the CISG requires a "mirror-image" approach to contract negotiations that allows the court to inquire into the subjective intent of the parties. See CISG, Art. 8; also MCC-Marble Ceramic, 144 F.3d at 1389. Here, [buyer] has submitted evidence that it was not aware of the disclaimer and that it would not have purchased the goods had it been aware of the disclaimer. If the [buyer] was not aware of the disclaimer, then it may not have been valid. Given that this issue of law is unsettled, this factor weighs against this court exercising its discretion to hear the matter in favor of the French court that already has the issue before it.

[Seller] does not explain why, after participating in the French proceeding for more than one year, a declaratory relief action here is necessary. [Buyer] has adduced evidence which demonstrates that it does not intend to bring an action in the United States.

Moreover, there is additional evidence that [seller] filed this action after receiving an adverse preliminary ruling in the French case. All of this indicates that [seller], after participating in the foreign action, initiated this proceeding in the hopes of obtaining a more favorable result in its home forum.

C. The record also shows that if this court hears this action, it will undoubtedly lead to duplicative litigation. [Seller] has been participating in the French proceeding for more than one year. While the scope and effect of that proceeding is disputed, it is clear that it is litigation involving the same parties and the same disputed transaction. The record of these motions, and the court's own research, demonstrate that the French Commercial Court is a court of competent jurisdiction to hear this dispute and render an enforceable final judgment. French Commercial Courts hear disputes between merchants concerning transactions governed by commercial law. Commercial actions in France, such as the one here, "must" be brought before the Commercial Court in the first instance. See "France: Civil Actions and Procedure" Martindale-Hubbell International Law Digest, p. FRA-12 (1998). French Commercial Court proceedings can result in a final, enforceable judgment. See M. Dakiolias, Court Performance Around the World: A Comparative Perspective, 2 Yale Human Rts. & Dev. L.J. 87, 119 (1999). Its judgments can be appealed. Id. at 122. While the parties dispute the posture of the French proceeding, it is clear that the French court has made a substantial investigation into the facts of this dispute. It would be unnecessarily duplicative for this court to rule on issues already addressed by the French court.

Issuing the declaratory judgment requested by [seller] would not "settle all aspects of the controversy" pending in the French case. Such a judgment could also lead to conflicts between the French and U.S. legal systems if the parties attempt to enforce inconsistent judgments.

D. The "convenience" factors discussed in Brillhart and Wilton also militate in favor of declining jurisdiction. All of the evidence concerning the malfunctioning computer parts, including many of the witnesses, are in France. A remedy is available in the French Commercial Court. And the parties have been proceeding there for over a year.

III. This court has the discretion to either stay or dismiss the action. See Wilton, 515 U.S. at 290. A dismissal without prejudice is the preferable course here. If either party ultimately prevails in France, as appears likely, then no action in this forum will be necessary.

For the reasons discussed, [seller's] motion for partial summary adjudication is DENIED, and [buyer's] motion to dismiss is GRANTED. [Seller's] later motion for discovery is DENIED as moot. The action is dismissed without prejudice.


Dated: January 30, 2001

Charles A. Legge
United States District Judge

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Pace Law School Institute of International Commercial Law - Last updated January 9, 2008
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