## Facts

- Supermicro Computer, Inc., a California manufacturer of computer parts, sold computer motherboards and related parts to Digitechnic, S.A., a French assembler and seller of computer network systems.
- From May 1996 to December 1997, Digitechnic made fourteen purchases from Supermicro, ordering by phone or email; Supermicro shipped the goods to France.
- With each shipment, Supermicro included a sales invoice and a user’s manual containing a limited warranty and limitations of liability, including a consequential-damages waiver.
- Beginning in 1998, Digitechnic reported electrical problems with some parts, including incidents where parts caught fire.
- Digitechnic sought approximately $200,400 in replacement costs and about $6,000,000 in consequential damages; Supermicro refused, asserting Digitechnic’s sole remedy was repair or replacement under its printed terms.
- In December 1998, Digitechnic initiated proceedings in a French commercial court; Supermicro participated, but the parties disputed whether the French matter was limited to interim relief or could provide complete relief.
- On January 20, 2000, while the French case was pending, Supermicro filed a federal declaratory judgment action seeking declarations that the parts were not defective, any failures resulted from misuse, and any remedy was limited to repair or replacement.
- The dispute implicated the CISG; Digitechnic offered evidence it was unaware of Supermicro’s printed disclaimer and limitation terms and would not have contracted on those terms.

## Issues

1. Whether the federal court should exercise discretion under the Declaratory Judgment Act when an earlier-filed, ongoing French proceeding between the same parties addressed the same dispute.
2. Whether summary adjudication was appropriate on the enforceability under the CISG of warranty disclaimers and liability limitations included in invoices and manuals, given evidence the buyer lacked awareness of those terms.

## Decision

- The court denied Supermicro’s motion for partial summary adjudication regarding the validity and enforceability of its disclaimer and limitation terms.
- The court granted Digitechnic’s motion to dismiss or stay, declining to proceed with the declaratory judgment action while the French proceeding was pending.
- The court relied on the discretionary nature of declaratory relief, international comity, the earlier-filed French case, and the unsettled and fact-dependent CISG questions presented.

## Legal Principles

- Federal jurisdiction under the Declaratory Judgment Act is discretionary; a court may decline declaratory relief based on wise judicial administration.
- When substantially similar litigation is first filed and actively proceeding in a foreign forum capable of affording relief, principles of international comity support dismissal or a stay to avoid duplicative proceedings and inconsistent judgments.
- Under the CISG, disputes about whether invoice/manual boilerplate (warranty disclaimers and damage limitations) became part of the parties’ agreement can involve unsettled legal questions and fact questions, including whether the buyer knew of and assented to the terms.
- The presence of unsettled CISG questions and contested evidence about contract formation and notice weighs against resolving enforceability via early dispositive motion in a later-filed U.S. declaratory action.

## Conclusion

The court declined to adjudicate a later-filed declaratory judgment action concerning alleged defects and CISG-based warranty and damages limitations because an earlier French proceeding addressing the same dispute was already underway, and the enforceability of the seller’s printed disclaimer terms raised unsettled, fact-dependent CISG questions better left to the forum already seized of the controversy.


Supermicro Computer, Inc. v. Digitechnic, S.A., 145 F. Supp. 2d 1147 (N.D. Cal. 2001)