Summary: Defendant moved to dismiss plaintiffs' consumer fraud claims, arguing plaintiffs were not "consumers" for purposes of the North Dakota Consumer Fraud Act. Plaintiffs resisted the motion. Finding no North Dakota precedent, the Court certified the question to the North Dakota Supreme Court.

Case Name: Steve Jorgenson, et al. v. Agway, Inc.
Case Number: A3-00-59
Docket Number: 24
Date Filed: 11/1/00
Nature of Suit: 190

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NORTH DAKOTA
SOUTHEASTERN DIVISION

 ORDER OF CERTIFICATION TO THE SUPREME COURT OF NORTH DAKOTA

I. QUESTION OF LAW PRESENTED

Whether North Dakota's Consumer Fraud Act, N.D. Cent. Code Chapter 51-15, may apply to a transaction in which a farmer, who purchased confection sunflower seed for use in cultivating a sunflower crop for subsequent sale, alleges the seed is defective and claims it was marketed and sold in violation of the Act.

II. RELEVANT FACTS AND STATEMENT OF THE CASE

For purposes of submitting ths aforementioned question to the North Dakota Supreme Court, the parties are in essential agreement on the following enumerated facts:

1. Plaintiffs are 90 farmers who bought and planted Agway Royal Hybrid 2073 confection sunflower seed for purposes of cultivation during the 1999 crop year.

2. Plaintiffs have sued Agway under four theories, alleging certain defects in the seed.

3. The four theories advanced by plaintiffs are:
(1) Violation of the deceptive practices provisions of the North Dakota Consumer Fraud Act;

(2) Violation of the false advertising provisions of the North Dakota Consumer Fraud Act;

(3) Breach of implied warranties of merchantability and of fitness for a particular purpose under North Dakota's Uniform Commercial Code; and

(4) Breach of express warranties under North Dakota's Uniform Commercial Code.

4. A copy of plaintiffs' Complaint is attached hereto as Exhibit 1.

5. The defendant moved to dismiss counts one and two pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing that the North Dakota Consumer Fraud Act did not apply, as a matter of law, to the transactions at issue. Plaintiffs resist the motion.

The Court is aware the recitation of facts is truncated. Under the circumstances, however, the Court is not in a position to provide further factual material. This is so given the early stage of litigation; there have been no hearings on this matter, and the parties have not undertaken discovery on this issue. The Court therefore submits that this recitation of essential facts, along with the accompanying documentation and eventual briefing by the parties, provide the information necessary to the Supreme Court in its review of this matter.

Essentially, the Court was presented, at the 12(b)(6) stage, with a question of law on which there is no controlling North Dakota precedent. Defendant asserts that plaintiffs may not, as a matter of law, employ the protections of the North Dakota Consumer Fraud Act, predicating its argument on plaintiffs' alleged status as "merchants" who are therefore not "consumers." Plaintiffs have resisted the motion, arguing that nothing in the language of the Act excludes them from its coverage. While both sides make compelling arguments, both suffer from the same flaw: There is no controlling North Dakota precedent on the question.

This Court has devoted considerable energy and thought to this issue. In so doing, the Court has considered out-of-state precedent, legislative history, the overall language and structure of the Consumer Fraud Act, and the relative public policy arguments made by the parties. After doing so, however, the Court has become convinced that this is a question better answered by the North Dakota Supreme Court, relating as it does to a heretofore uninterpreted North Dakota statute.

The Court has wide discretion to certify questions to state courts. Johnson v. John Deere Co., 935 F.2d 151, 153 (8th Cir. 1991)(citing Perkins v. Clark Equip. Co., 823 F.2d 207, 209 (8th Cir. 1987)). Eighth Circuit courts encourage certification "[i]n the absence of controlling [state court] precedent which would enable . . . [a] sound decision without indulging in speculation or conjecture." Kulinski v. Medtronic Bio-Medicus, Inc., 112 F.3d 368, 372 (8th Cir. 1997); Planned Parenthood, Sioux Falls Clinic v. Miller, 63 F.3d 1452, 1463 (8th Cir. 1995). The North Dakota Supreme Court similarly would prefer to have federal courts such as this certify questions, rather than speculate upon unsettled issues of North Dakota law, leaving parties no recourse in the appellate courts of the state. McKenzie County v. Hodel, 467 N.W.2d 701, 704 (N.D. 1991); see also N.D. R. App. 47. In light of these considerations, and with an eye toward judicial economy, this court would appreciate and invite the guidance of the North Dakota Supreme Court on the foregoing question.

ORDER

Pursuant to Rule 47 of the North Dakota Rules of Appellate Procedure, IT IS HEREBY ORDERED that the above question of law is certified to the North Dakota Supreme Court with the request that it be answered by opinion, to be filed with the Clerk of the United States District Court, 655 First Avenue North, Suite 130, Fargo, North Dakota, 58102. One-half of the costs and fees of certification shall be paid by plaintiffs and one half by defendant. Filing and service of briefs will be governed by the North Dakota Rules of Appellate Procedure, with plaintiffs deemed appellants. IT IS FURTHER ORDERED that the Clerk transmit to the North Dakota Supreme Court the docket sheet of this case file and any portion of the file the North Dakota Supreme Court subsequently requests.

IT IS SO ORDERED.

Dated this _____ day of November, 2000.