Case 10-1. ASANTE TECHNOLOGIES, INC. v. PMC-SIERRA, RE: IRAC MEMORANDUM, IBL CASE BRIEF

(Note: this is one way of many ways to IRAC the case, as mentioned in class)

TO: Professor Jasper Kim

FROM: Student

DATE: April 18, 2011

ISSUES: (1) Whether federal jurisdiction attach to claims governed by CISG? (2) Were the parties from two “different [CISG] states”? (3) Whether the parties’ choice of law clause excludes the CISG? (4) Whether the “well-pleaded complaint rule” prevent the assumption of federal jurisdiction (Note: this last issue is not so important from an IBL perspective)?RULES: The general rules are (1) 28 USC §1331(a) gives US district courts jurisdiction over claims that arise under “treaties of the US.” (2) CISG applies when the parties are from two “different [CISG] states” (per CISG, article 1) whereby the “place of business” with the “closest relationship” dictates which state PMC-Sierra (defendant) is associated with. Also, a distributor is generally not a legal entity of the parent company. (3) CISG is the law of both California and BC (because of federal supremacy rules). (4) The well-pleaded complaint rule says that a federal cause of action arises only when the plaintiff’s well-pleaded complaint raises issues of federal law. The introductory text of CISG says that it is meant to establish uniform rules to promote international trade.APPLY: Here in this case (1) CISG is a US treaty and therefore US district courts may hear complaints that arise under it. (2) Unique Tech. is a distributor and Asante is not bound by its actions. The transaction was thus between Asante and PMC-Sierra, both from different CISG contracting states, so CISG applies. Even though four out of five purchase orders were via Unique (California), Unique was a mere distributor, not a legal entity of PMC-Sierra. And even though PMC-Sierra did have an Oregon entity with engineers, the vast majority of its company (PR, HR, sales, marketing, etc) were in its BC (Canada) headquarters, not Oregon (3) Even if the parties’ choice of law contract clause adopted “California law.” California law, however, includes the CISG; so the CISG is not excluded (ie, CISG/treaty law is part of California state and US federal laws). (4) While Asante’s complaint only refers to California law, the CISG is actually that law. This is because the CISG is a federal treaty that is meant to preempt all state laws.

(This can be seen from the CISG statement that it is meant to establish uniform international trade rules.)CONCLUSIONS: (1) Yes, federal jurisdiction attach to claims governed by CISG? (2) Were the parties from two different CISG states (2) Yes, the parties from two different CISG states (3) No, the parties’ choice of law clause does not exclude the CISG? (4) No, the well-pleaded complaint rule prevent the assumption of federal jurisdiction Therefore, CISG governs, U.S. federal courts have jurisdiction, and Asante’s motion to remand the case to state court is denied.