Sanmina-Sci Corp. v. Pace USA CA6

I. BACKGROUND

Pace USA, LLC supplied television set-top boxes to satellite television provider DirecTV throughout the early 2000s. (Distinguishing among the several Pace entities is not important to resolving this appeal.) DirecTV was Pace’s customer. When DirecTV ordered boxes, Pace would contract with a manufacturing company to build them. Sanmina was one of the contract manufacturers. It made the boxes at its plant in Guadalajara, Mexico. In late 2011, Pace decided to obtain its boxes from a different Guadalajara-based manufacturer (a company called Flextronics), which led to the agreements at issue here. Pace needed manufactured boxes to fill existing orders from DirecTV, and Sanmina needed to sell the excess components it would no longer need once Pace started using another manufacturer. Pace and Sanmina entered into several contracts to accomplish those things. The contracts were formed not in the traditional way, by formal offer and acceptance, but rather by an informal process allowed under the Uniform Commercial Code: purchase orders and invoices were exchanged that specified quantities and prices; the parties’ course of dealing and applicable Commercial Code provisions…