Sanmina Corporation v. Dialight PLC

Background

Sanmina and Dialight entered a Manufacturing Services Agreement in March 2016. Dialight sent purchase orders, and Sanmina manufactured and delivered products or materials. The agreement gave Dialight 15 business days after receiving a shipment to reject noncompliant products. It also required payment of invoices within 30 days of shipment, while allowing either party to withhold amounts disputed in good faith.

After the relationship ended, Sanmina claimed that Dialight owed approximately $5.3 million for delivered goods and materials. Sanmina moved for partial summary judgment—a ruling without a trial when no genuine dispute of important fact exists—on that accounts-receivable claim. In its March 14, 2023 opinion, the court denied summary judgment on the claim, finding that Dialight had identified evidence creating a factual dispute, including testimony that Sanmina billed for goods that were not delivered and that Dialight rejected some goods after inspection.

Motion for Reconsideration

Sanmina asked the court to reconsider the denial of summary judgment. It argued that the court had overlooked evidence showing no timely rejection notice for any invoice in the claim. Dialight argued that the record still contained factual disputes. It relied on testimony and documents concerning invoices for undelivered goods, rejected goods, written reports, whether the disputed invoices concerned “Products” or “Materials” under the agreement, and whether some goods arrived after the agreement was terminated.

The court rejected Dialight’s reliance on Ronan Sheehy’s testimony and a Sanmina email chain as sufficient to create a factual dispute about timely rejection of the specific invoices at issue. The court explained that the testimony did not establish timely rejection of those shipments, and the email chain did not clearly concern the accounts-receivable claim or timely rejection.

The court found, however, that testimony from Dan Harris and Angel Escamilla showed other factual disputes. The evidence raised questions about whether the disputed invoices concerned “Products” subject to the agreement’s 15-day rejection rule or “Materials” not subject to that rule. It also raised a question about whether the goods were received after the agreement ended, which could affect whether the 15-day rule applied.

Ruling

The court held that limited reconsideration was warranted to correct a clear error in the earlier opinion. It concluded that the earlier opinion should not have stated, as a factual matter, that Dialight had timely rejected goods underlying Sanmina’s accounts-receivable claim.

The court therefore granted in part Sanmina’s motion for reconsideration and vacated the portion of the earlier opinion finding that Dialight had timely rejected any goods underlying the claim. In all other respects, the court denied Sanmina’s motion. It declined to grant Sanmina summary judgment because factual disputes remained, and it stated that Dialight could present those disputes to a jury.

The court also ordered the parties to submit a joint letter proposing redactions and next steps. The opinion was filed under seal in both related cases, viewable only by the parties and the court.