Mechanical Marketing, Inc v. Sixxon Precision Machinery Co, Ltd et al

Filing 143

ORDER denying 103 Defendant's Motion for Summary Judgment. Signed by Judge Edward J. Davila on 1/31/2013. (ejdlc3, COURT STAFF) (Filed on 1/31/2013)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION
MECHANICAL MARKETING, INC.,

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United States District Court
For the Northern District of California

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Plaintiff,

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v.
SIXXON PRECISION MACHINERY CO.,
ITD., TAIWAN,
Defendant.

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Case No.: 5:11-CV-01844 EJD
ORDER DENYING DEFENDANT’S
MOTION FOR SUMMARY
JUDGMENT

[Re: Docket No. 103]

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Plaintiff Mechanical Marketing, Inc. (“Plaintiff” or “MMI”) brings the instant contract16
related action against Defendant Sixxon Precision Machinery Co., Ltd., Taiwan (“Defendant” or
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“Sixxon”). Presently before the Court is Defendant’s Motion for Summary Judgment on its
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counterclaim. See Docket Item No. 103. The Court found this matter suitable for decision without
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oral argument pursuant to Civil Local Rule 7-1(b) and vacated the corresponding hearing date
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accordingly. Having fully reviewed the parties’ papers, the Court will deny Defendant’s Motion for
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Summary Judgment for the reasons explained below.
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I.

Background

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On November 9, 2010, Plaintiff filed the instant action in Santa Cruz County Superior
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Court. See Notice of Removal, Docket Item No. 1. In addition to several breach of contract–related
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claims, Plaintiff asserted a cause of action alleging that Defendant had violated California’s
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Independent Wholesale Sales Representatives Contractual Relations Act (“IWSR Act”), California
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Case No.: 5:11-CV-01844 EJD
ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

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Civil Code § 1738.11 et. seq. On April 15, 2011, Defendant removed the action to this Court on the

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basis that the Court has original jurisdiction under 28 U.S.C § 1332 based on diversity of

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citizenship of the parties. 1 On October 20, 2011, Defendant filed its Answer and Counterclaim to

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Plaintiff’s Complaint which included a counterclaim for a declaratory judgment that Defendant did

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not violate the IWSR Act. See Docket Item No. 43.

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In an Order dated February 29, 2012, the Court granted Plaintiff’s Motion for Leave to File

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a First Amended Complaint. See Docket Item No. 64. On March 9, 2012, Plaintiff filed its First

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Amended Complaint; this complaint alleged only breach of contract–related claims and not the

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IWSR Act violation claim. See Docket Item No. 65. Defendant’s Answer and Counterclaims to

United States District Court
For the Northern District of California

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Plaintiff’s First Amended Complaint, filed March 27, 2012, nevertheless contained the same

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declaratory judgment counterclaim related to the IWSR Act. See Docket Item No. 66. On October

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8, 2012, Defendant filed the present motion seeking summary judgment on its declaratory

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judgment counterclaim. See Docket Item No. 103.

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II.

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Discussion
Article III of the United States Constitution restricts federal courts to decide only “cases” or

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“controversies.” U.S. Const. art. III, § 2. While the Declaratory Judgment Act allows a federal

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court to “declare the rights and other legal relations of any interested party seeking such

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declaration, whether or not further relief is or could be sought,” such power is limited to “a case of

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actual controversy within [the court’s] jurisdiction.” 28 U.S.C. § 2201. In deciding if the case or

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controversy requirement is satisfied, a court must look to “whether the facts alleged, under all the

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circumstances, show that there is a substantial controversy, between parties having adverse legal

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interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”

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MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007) (quotation omitted). “The

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controversy must be definite and concrete, touching the legal relations of parties having adverse

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legal interests.” Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 240–41 (1937);

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Plaintiff is a California corporation with its principal place of business in California; Defendant is an entity
incorporated and with its principal place of business in Taiwan. Notice of Removal ¶¶ 2–4. The amount in controversy
exceeds $75,000. Id. ¶ 1.

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Case No.: 5:11-CV-01844 EJD
ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

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see also Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1339 (Fed. Cir. 2008) (“[A] case or

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controversy must be based on a real and immediate injury or threat of future injury that is caused

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by the defendants—an objective standard that cannot be met by a purely subjective or speculative

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fear of future harm.”).

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Defendant contends that there is a case or controversy as to whether Defendant violated the
IWSR Act. Defendant’s basis for declaratory judgment and Article III jurisdiction alleged in the

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counterclaim is the following: “[T]he controversy is ripe because not only has [Plaintiff] threatened

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to bring a claim under the IWSR Act, it has already done so.” Def.’s Reply in Supp. of Mot. for

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Summ. J. 3. While it is true that Plaintiff had brought the ISRW Act claim in its original complaint,

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United States District Court
For the Northern District of California

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Plaintiff has voluntarily dismissed that claim without prejudice. See Order Granting Pl.’s Mot. for

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Leave to File First Am. Compl., Docket Item No. 64 (granting Plaintiff’s request to amend its

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complaint so as to drop the claim of an ISRW Act violation); First Am. Compl.; Pl.’s Answer to

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Def.’s First Am. Countercl. ¶ 18, Docket Item No. 68. Defendant’s contention is that Plaintiff may

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or may not bring such a claim in the future. This fails to establish with certainty that there will arise

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a dispute over an ISRW Act violation. The Court also notes that Defendant has provided

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insufficient evidence to support its assertion that Plaintiff has threatened to bring an IWSR Act

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claim. Accordingly, Defendant’s counterclaim does not present a case or controversy of “sufficient

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immediacy and reality” so as to warrant the issuance of a declaratory judgment. MedImmune, Inc.

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549 U.S. at 127.

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III.

Order
Based on the foregoing, Defendant’s Motion for Summary Judgment is DENIED.

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IT IS SO ORDERED.

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Dated: January 31, 2013

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_________________________________
EDWARD J. DAVILA
United States District Judge

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Case No.: 5:11-CV-01844 EJD
ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT