## Facts

- Asante Technologies, Inc., a Delaware corporation based in California, manufactured network switchers and purchased ASICs from PMC-Sierra, Inc.
- PMC, a Delaware corporation, maintained major operations in British Columbia, Canada (headquarters, sales/marketing, warehouse, and most design/engineering) and also had an engineering office in Oregon.
- The parties used “Prototype Product Limited Warranty Agreements” containing detailed technical specifications; these documents were issued from Canada and executed there.
- At PMC’s direction, Asante submitted most purchase orders to a California distributor (Unique Technologies); one order went directly to PMC in Canada; ASICs were delivered to Asante in California.
- Asante communicated frequently with PMC engineers in Oregon during development.
- Contract forms conflicted on governing law: Asante’s purchase orders referenced California law; PMC’s sales documentation referenced British Columbia law.
- Asante alleged the ASICs did not conform to agreed specifications and asserted tort and contract claims (including breach of contract and breach of express warranty) without invoking the CISG.
- PMC removed the case from California state court to federal court, asserting federal-question jurisdiction because the CISG governed; Asante moved to remand and sought attorneys’ fees.

## Issues

1. Whether the CISG governed Asante’s contract-based claims such that the action “arises under” federal law for removal jurisdiction under 28 U.S.C. § 1331.
2. Whether the parties’ competing choice-of-law clauses (California vs. British Columbia) constituted an effective opt-out of the CISG under CISG Article 6.
3. For CISG Articles 1(1)(a) and 10, which of PMC’s places of business had the closest relationship to the contract and its performance, and whether the California distributor altered that analysis.
4. Whether remand and attorneys’ fees under 28 U.S.C. § 1447(c) were warranted.

## Decision

- The court held the CISG is self-executing federal law and governed the contract and warranty claims within its scope.
- The court determined PMC’s relevant place of business under CISG Article 10 was in Canada because Canada had the closest relationship to the contract and performance (including issuance of specifications and execution of warranty agreements).
- The court concluded the distributor was an independent intermediary, not PMC’s agent for purposes of the contractual undertakings sued upon, and did not convert the transaction into a purely domestic sale.
- The court ruled that generic references to California or British Columbia law, without express exclusion of the CISG, did not opt out under CISG Article 6.
- The court denied Asante’s motion to remand and denied Asante’s request for attorneys’ fees.

## Legal Principles

- A self-executing U.S. treaty is federal law; claims governed by such a treaty may support federal-question jurisdiction under 28 U.S.C. § 1331 even if pleaded under state-law labels.
- The CISG applies to contracts for the sale of goods between parties with places of business in different Contracting States (CISG Art. 1(1)(a)).
- When a party has multiple places of business, the relevant place is the one with the closest relationship to the contract and its performance (CISG Art. 10).
- Parties may exclude the CISG only by clear agreement; a general choice-of-law clause selecting the law of a Contracting State, without expressly excluding the CISG, is insufficient (CISG Art. 6).
- Use of an independent distributor does not displace the CISG where the lawsuit rests on contractual undertakings running directly between the buyer and the seller.
- Attorneys’ fees on remand are generally inappropriate where removal had an objectively reasonable basis under 28 U.S.C. § 1447(c).

## Conclusion

The court held that the CISG governed the buyer’s contract-based claims because the seller’s Canadian place of business had the closest relationship to the contract and the parties did not clearly opt out; removal on federal-question grounds was proper and no attorneys’ fees were awarded.


Asante Techs., Inc. v. PMC-Sierra, Inc., 164 F. Supp. 2d 1142 (N.D. Cal. 2001)