FILED
NOT FOR PUBLICATION
MAR 15 2018
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
REDI-CO, LLC, an Oregon limited No. 16-35224
liability company,
D.C. No. 3:15-cv-01810-HZ
Plaintiff-Appellant,
v. MEMORANDUM*
PRINCE CASTLE, LLC, a Delaware
limited liability company,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Oregon
Marco A. Hernandez, District Judge, Presiding
Argued and Submitted March 7, 2018
Portland, Oregon
Before: FISHER, N.R. SMITH, and HURWITZ, Circuit Judges.
Redi-Co, LLC appeals the district court’s decision dismissing this case for
lack of subject matter jurisdiction, because Redi-Co failed to meet the amount in
controversy requirement for diversity jurisdiction. We reverse, and remand.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
The Uniform Commercial Code (U.C.C.) § 1-303(f) provides that “a course
of performance is relevant to show a waiver or modification of any term
inconsistent with the course of performance.” U.C.C. § 1-303(f); Or. Rev. Stat.
§ 71.3030(6) (providing that “course of performance is relevant to show a waiver
or modification of any term inconsistent with the course of performance”); 810 Ill.
Comp. Stat. 5/1-303(f) (same).1 As interpreted by the Oregon and Illinois courts,
U.C.C. § 1-303(f) allows course of performance evidence to be used to prove
waiver of an express term in a contract. Midwest Builder Distrib., Inc. v. Lord &
Essex, Inc., 891 N.E.2d 1, 28 (Ill. App. Ct. 2007) (holding that “under the UCC,
the course of performance is more than an interpretive tool; it may also give rise to
waiver of express contractual terms if those terms are not strictly adhered to”);
Deerfield Commodities, Ltd. v. Nerco, Inc., 696 P.2d 1096, 1111-12 (Or. Ct. App.
1985) (analyzing whether the course of performance at issue amounted to a
“waiver” under Oregon law, but ultimately rejecting the argument on the facts
before the court).
1
The parties’ contract did not contain a choice of law clause. However, the
district court and the parties agree that Oregon and Illinois law are the same on the
issues resolved by the district court. The district court analyzed both Oregon and
Illinois law and determined that both had adopted the U.C.C. provision at issue and
that both states interpreted the provision in the same way. We agree that Oregon
and Illinois law are the same on the issues at hand and thus find it unnecessary to
resolve the choice of law issue.
2
Accordingly, the district court erred in rejecting Redi-Co’s course of
performance evidence as a matter of law. If Redi-Co proves its claim that Prince
Castle waived the damages limitation in the parties’s agreement by demanding
additional units be kept on hand, then Redi-Co could establish damages in excess
of the jurisdictional minimum. This possibility of recovery above the jurisdictional
minimum is sufficient to support jurisdiction. See Pachinger v. MGM Grand
Hotel-Las Vegas, Inc., 802 F.2d 362, 363-64 (9th Cir. 1986) (concluding that to
dismiss a claim for lack of subject matter jurisdiction under the amount in
controversy requirement “[i]t must appear to a legal certainty that the claim is
really for less than the jurisdictional amount” (quoting St. Paul Mercury Indem.
Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938))).
We decline to reach the additional arguments Prince Castle, LLC raises as
alternative grounds to affirm. The district court did not address these issues, so we
remand the case for consideration of these issues in the first instance in the district
court.
REVERSED and REMANDED.
3