Chateau Des Charmes Wines Ltd. v. Sabate Usa, Inc

328 F.3d 528 (9th Cir. 2003)

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Nature of the Case

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Facts

D manufactures and sells special wine corks that it claims will not cause wines to be spoiled by “cork taint,” a distasteful flavor that some corks produce. It sells these corks through a wholly owned California subsidiary, Sabaté USA. P, a winery from Ontario, Canada, agreed to purchase a certain number of corks at a specific price. The parties agreed on payment and shipping terms. No other terms were discussed, nor did the parties have any history of prior dealings. Later, P placed a second telephone order for corks on the same terms. P ordered a total of 1.2 million corks. They were shipped to Canada in eleven shipments. On the face of each invoice was a paragraph in French that specified that “Any dispute arising under the present contract is under the sole jurisdiction of the Court of Commerce of the City of Perpignan.” On the back of each invoice, a number of provisions were printed in French, including a clause that specified that “any disputes arising out of this agreement shall be brought before the court with jurisdiction to try the matter in the judicial district where Seller's registered office is located.” P duly took delivery and paid for each shipment of corks. The corks were then used. P noticed that the wine bottled with D's corks was tainted by cork flavors. P filed suit in federal district court in California against D for breach of contract, strict liability, breach of warranty, false advertising, and unfair competition. D filed a motion to dismiss based on the forum selection clauses. The district court held that the forum selection clauses were valid and enforceable and dismissed the action. This appeal ensued.