## Facts

- American Mint LLC, a Pennsylvania company owned by a German parent, marketed collectible coins in the United States while credit-card transactions were processed in Germany.
- GOSoftware, Inc., a Georgia corporation, sold “RiTA” software intended to facilitate credit-card billing.
- Plaintiffs sought to buy RiTA in 2003 and alleged they informed GOSoftware the software would be installed and used in Germany and needed to work with German numeric formatting (comma/decimal conventions).
- Plaintiffs alleged GOSoftware assured compatibility, but after installation in Germany the software allegedly mishandled German numeric conventions, causing erroneous charges and resulting corrective bank charges and related losses.
- Plaintiffs sought roughly $981,758–$982,000 in damages, including bank charges, lost profits, and attorneys’ fees.
- The software license agreement contained (1) a Georgia choice-of-law clause and (2) a limitation-of-liability provision capping damages at approximately \$10,995 (about the contract price).
- Plaintiffs argued the CISG governed due to the international character of the transaction and that CISG Article 74 permitted recovery of consequential losses despite the contractual cap.

## Issues

1. Whether the claims arose under the CISG so as to support federal question jurisdiction under 28 U.S.C. § 1331, given that the written contract appeared to be between U.S. entities and contained a Georgia choice-of-law clause.
2. Whether diversity jurisdiction existed under 28 U.S.C. § 1332 when the contract’s limitation-of-liability clause capped legally recoverable damages below the jurisdictional threshold.

## Decision

- The court granted the defendant’s Rule 12(b)(1) motion and dismissed the action for lack of subject-matter jurisdiction.
- The court held federal question jurisdiction was not established because the CISG did not govern on the pleaded and supported facts, where the immediate contracting parties were a U.S. buyer and a U.S. seller and the German entities were not adequately shown to be contract parties.
- The court held diversity jurisdiction failed because, given the contractual damages cap, the amount in controversy did not exceed \$75,000.

## Legal Principles

- The CISG, as a U.S. treaty, can provide federal law for § 1331 jurisdiction when a claim properly arises under it.
- A generic choice-of-law clause selecting the law of a CISG Contracting State does not, by itself, exclude the CISG; exclusion requires an affirmative opt-out.
- CISG applicability turns on the identities of the contractual buyer and seller; the CISG applies to contract parties (buyers and sellers) and does not extend to nonparties based solely on corporate relationships.
- For diversity jurisdiction, the amount in controversy is measured by legally recoverable damages; an enforceable contractual limitation of liability can reduce the amount below the jurisdictional minimum and require dismissal.

## Conclusion

The court dismissed the case for lack of subject-matter jurisdiction because the CISG did not apply where the contract was not shown to be an international sale between parties in different states, and because the contract’s limitation-of-liability clause capped recoverable damages well below the diversity jurisdiction threshold.


Am. Mint LLC v. GOSoftware, Inc., No. 1:04-CV-650, 2006 WL 42090 (M.D. Pa. Jan. 6, 2006)