McDowell Valley Vineyards, Inc. v. Sabaté USA Inc.

Sabaté USA Inc. (defendant) was the wholly owned, California-based subsidiary of Sabaté SAS (defendant), a wine-cork manufacturer headquartered in France, a country which, like the United States, was signatory to the United Nations Convention on Contracts for the International Sale of Goods (CISG). Sabaté USA Inc. (defendant) marketed its corporate parent’s corks to McDowell Valley Vineyards, Inc. (McDowell) (plaintiff), a California winemaker. Based on Sabaté USA’s representations that the French corks could protect wine against undesirable wine taint, McDowell bought a shipment of the corks and used them to bottle McDowell’s 2000-vintage wines. When McDowell’s customers complained that McDowell’s 2000-vintage wines suffered from wine taint, McDowell passed these complaints on to Sabaté USA, which undertook to investigate the problem on its own and without consulting Sabaté SAS. Throughout this process, Sabaté USA’s correspondence with McDowell used only Sabaté USA’s own letterhead, which listed only Sabaté USA’s California address and telephone number. When this correspondence failed to rectify the wine-taint problem, McDowell sued Sabaté USA and Sabaté SAS for breach of warranty and other business misconduct in a California court. The Sabaté firms removed the case to federal court and moved for summary judgment.