Impuls I.D. Intern., S.L. v. Psion-Teklogix, Inc.

• Decision Date: 22 November 2002
• Docket Number: No. 01-7541-CIV.,01-7541-CIV.
• Citation: 234 F.Supp.2d 1267
• Parties: IMPULS I.D. INTERNACIONAL, S.L., Impuls I.D. Systems, Inc., and Psiar, S.A., Plaintiffs, v. PSION-TEKLOGIX INC., Defendant.
• Court: U.S. District Court — Southern District of Florida

234 F.Supp.2d 1267

IMPULS I.D. INTERNACIONAL, S.L., Impuls I.D. Systems, Inc., and Psiar, S.A., Plaintiffs, v. PSION-TEKLOGIX INC., Defendant.

No. 01-7541-CIV.

United States District Court, S.D. Florida.

November 22, 2002.

COPYRIGHT MATERIAL OMITTED

Paul Huck Jr., Esq, Joel Davidow, Esq., for Defendant.

John P. Kelley, Esq., David F. Nickel, Esq., for Plaintiffs.

FINAL ORDER OF DISMISSAL

ZLOCH, Chief Judge.

THIS MATTER is before the Court upon the Defendant, Psion-Teklogix Inc.'s Motion, And Memorandum, For Dismissal Under Rule 12(b)(2), Summary Judgment Under Rule 56(c), Or Dismissal On Forum Non Conveniens Grounds (DE 10). The Court has carefully reviewed said Motion, the entire court file and is otherwise fully advised in the premises. The Court heard oral argument from counsel on May 21, 2002.

I. Background

A. Parties

The parties in the above-styled cause are as follows. Plaintiff Impuls I.D. Internacional, S.L. (hereinafter "Impuls-Spain") is a Spanish corporation that develops, markets and sells computer products throughout Europe and Latin America. (Compl.¶¶ 5, 13.) Plaintiff Psiar, S.A. (hereinafter "Psiar") is an Argentine corporation that distributes computer products in Argentina. (Compl.¶¶ 7, 10.) Plaintiff Impuls I.D. Systems, Inc. (hereinafter "Impuls-US") is a Florida corporation that is responsible for distributing products for Impuls-Spain throughout Latin America. (Compl.¶¶ 6, 14.) The Court will refer to the Plaintiffs collectively as "the Plaintiffs," or individually as necessary.

The Defendant, Psion-Teklogix, Inc. (hereinafter "the Defendant") is an Ontario-based Canadian corporation. (DE 10, Def's Mots. And Mem. For Dismissal Under Rule 12(b)(2), Summ. J. Under Rule 56(c), Or Dismissal On Forum Non Conveniens Grounds, Conway Aff. ¶ 2.) The Plaintiffs' Complaint alleges that the Defendant is a Delaware corporation with its principle place of business in Kentucky. (Compl.¶ 8.) However, the Kentucky-based corporation is a subsidiary of the Defendant, not the Defendant. (DE 10, Conway Aff. ¶¶ 6-7.)

B. The Facts

The above-styled cause arises out of an alleged oral contract (hereinafter the "contract") entered into by Impuls-Spain and Psiar, on the one hand, and Psion PLC and Psion Enterprise Computing, Ltd., on the other hand, on June 21, 2000. Psion PLC is the British parent company of Psion Enterprise Computing, Ltd., also a British company. Neither Psion PLC nor Psion Enterprise Computing, Ltd. is a defendant in the above-styled cause.

Prior to June 21, 2000 Impuls-Spain developed, marketed and sold computer products in Latin America. Due to its desire to expend its business, Impuls-Spain became interested in purchasing the assets of Psiar. Impuls-Spain's business plan was to merge with Psiar to distribute certain computer products manufactured by Psion PLC and Psion Enterprising Computing, Ltd. throughout Latin America. To this end, the President of Psiar and the Executive Vice-President of Impuls-Spain met with representatives of Psion PLC and Psion Enterprise Computing, Ltd. in London, England on June 21, 2000. The Plaintiffs allege that they proposed their business plan to Psion PLC and Psion Enterprising Computing, Ltd., wherein the Plaintiffs would purchase computer merchandise from Psion Enterprising Computing, Ltd. to be distributed throughout Latin America. Central to the Plaintiffs' business plan was the arrangement that all merchandise bought by the Plaintiffs would be delivered to Impuls-US in Fort Lauderdale. Under the contract, Psiar would place orders with Psion Enterprising Computing, Ltd., and then the computer products would be shipped to Impuls-US in Florida. From Florida, the computer products would be distributed throughout Latin America. The Plaintiffs further allege that from July 2000 until December 2000, Psion Enterprising Computing, Ltd. followed the provisions of the contract and merchandise was shipped to Impuls-US in Florida.

In September 2000, Psion PLC acquired Teklogix, Inc., a Canadian company, which became the Defendant, Psion Teklogix, Inc. In December 2000, the Plaintiffs received an e-mail communication from Mr. Mike Rose, President of the Defendant informing them that all contracts would be terminated in ninety (90) days and that the Defendant was reorganizing its distribution plan. The Plaintiffs explained that this strategy was unacceptable because it would destroy their business plan. The Defendant offered the Plaintiffs the option of continuing as a reseller, which the Plaintiffs refused. Believing that the actions of the Defendant constituted a breach of the contract reached on June 21, 2000, the Plaintiffs filed suit in the United States District Court for the Southern District of Florida.

C. The Counts

The Court notes that for purposes of the discussion below it is necessary to describe each individual count of the Complaint. In Count I, Impuls-Spain and Psiar allege breach of contract against the Defendant. In Count II, Impuls-US alleges breach of contract against the Defendant. In Count III, Impuls-Spain and Psiar assert promissory estoppel against the Defendant.

II. Discussion

At the outset, the Court notes that "[j]urisdiction to resolve cases on the merits requires both authority over the category of claim in suit (subject-matter jurisdiction) and authority over the parties (personal jurisdiction), so that the court's decision will bind them." Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 577, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999). "Jurisdiction is power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause." Ex parte McCardle, 74 U.S. (7 Wall.) 506, 514, 19 L.Ed. 264 (1868). Therefore, the Court will address the question of its jurisdiction over the above-styled cause before proceeding to the other issues raised by the parties.

A. Subject Matter Jurisdiction

1. Federal Question Jurisdiction

The Plaintiffs allege that this Court has subject matter jurisdiction over the above-styled cause pursuant to 28 U.S.C. § 1331 in that the above-styled cause arises under a treaty of the United States. (Compl.¶ 1.) Specifically, the Plaintiffs allege that the above-styled cause arises under the United Nations Convention on Contracts for the International Sale of Goods because all the parties to the contract have their places of business in Contracting States. 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) (hereinafter the "CISG"); see Compl. ¶ 3.¹ A "Contracting State" is a country that has become a party to the CISG. The United States, Spain, Argentina, and Canada are all Contracting States. The United Kingdom, however, is not a Contracting State. The Defendant contends that the CISG does not apply and that there is no federal question present in the above-styled cause because the contract was entered into by Psion PLC and Psion Enterprise Computing, Ltd., both of which have their places of business in the United Kingdom, a non-Contracting State. The Defendant further contends that subsequent changes of parties to the contract cannot render the CISG applicable.

The Court notes that "[i]n construing a treaty, as in construing a statute, [courts] first look to its terms to determine its meaning." United States v. Alvarez-Machain, 504 U.S. 655, 663, 112 S.Ct. 2188, 119 L.Ed.2d 441 (1992). Article 100 of the CISG states that "[t]his Convention applies to the formation of a contract only when the proposal for concluding the contract is made on or after the date when the Convention enters into force in respect of the Contracting States referred to in subparagraph (1)(a) or the Contracting State referred to in subparagraph (1)(b) of article 1." CISG, art. 100(1). As noted above, the "proposal for concluding" the contract was made on June 21, 2000 in London, England between Impuls-Spain, a Spanish corporation, Psiar, an Argentine corporation, and both Psion PLC and Psion Enterprise Computing, Ltd., each of which are corporations of the United Kingdom. The United Kingdom was not a signatory to the CISG at the time "when the proposal for concluding the contract" was formulated. Therefore, the language of Article 100 supports the Defendant's contention that the contract in question here is not governed by the CISG.

The Court finds further support for the contention that the CISG does not apply from Article 1(2) of the CISG. Article 1(2) states that "[t]he fact that the parties have their places of business in different States is to be disregarded whenever this fact does not appear either from the contract or from any dealings between, or from information disclosed by, the parties at any time before or at the conclusion of the contract." CISG, art. 1(2). Therefore, to the extent that the Defendant, a Canadian corporation located in a Contracting State, is now a party to the contract is a fact that "is to be disregarded" because it was not known to the parties "at any time before or at the conclusion of the contract." In other words, what the parties knew when they concluded the contract of June 21, 2000 was that the United Kingdom was not a signatory to the CISG and that the CISG would not apply. See John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention § 41 at 76 (2d ed.1991) (hereinafter Honnold, Uniform Law).

Based upon a careful reading of the terms of the CISG, the Court finds that it does not govern the contract.

Next, the Court notes that it may also look at the "history of negotiation and practice" under the CISG to determine whether it governs the contract. Alvarez-Machain, 504 U.S. at 665, 112 S.Ct. 2188; see also Bishop v. Reno, 210 F.3d 1295, 1299 (11th Cir.2000) ("In construing treaties, `we may look beyond the written words...