Trade'N Post v. World Duty Free Americas

• Citation: 2001 ND 116,628 N.W.2d 707
• Decision Date: 14 June 2001
• Docket Number: No. 20000176.,20000176.
• Parties: TRADE `N POST, L.L.C., Plaintiff v. WORLD DUTY FREE AMERICAS, INC., and Ammex Tax & Duty Free Shops West, Inc., Defendants.
• Court: United States State Supreme Court of North Dakota

628 N.W.2d 707

2001 ND 116

TRADE `N POST, L.L.C., Plaintiff v. WORLD DUTY FREE AMERICAS, INC., and Ammex Tax & Duty Free Shops West, Inc., Defendants.

No. 20000176.

Supreme Court of North Dakota.

June 14, 2001.

W. Todd Haggart (argued), Vogel, Weir, Hunke & McCormick, Ltd., Fargo, for plaintiff.

David J. Wallace-Jackson (appeared), Robins, Kaplan, Miller & Ciresi, Minneapolis, MN, for plaintiff.

Charles A. Gilman (argued), S. Penny Windle (appeared), and Kevin J. Burke, Cahill Gordon & Reindel, New York, NY, for defendants.

Stephen W. Plambeck (appeared), Nilles, Hansen & Davies, Ltd., Fargo, for defendants.

SANDSTROM, Justice.

[¶ 1] Invoking N.D.R.App.P. 47, the United States District Court, Northeastern Division for the District of North Dakota, has certified the following questions of law to this Court:

1) Does a private party have the right to bring an action for money damages for a violation of North Dakota's Unfair Discrimination Law (N.D.C.C. § 51-09) under the facts as alleged in Trade `N Post's complaint?

2) Does a private party have the right to bring an action for money damages for a violation of North Dakota's Unfair Trade Practices Law (N.D.C.C. § 51-10) under the facts as alleged in Trade `N Post's complaint?

3) Does North Dakota's common law recognize a claim for relief for wrongful interference with business under the facts as alleged in Trade `N Post's complaint?

[¶ 2] We conclude there is no private right of action for damages under either the Unfair Discrimination Law or the Unfair Trade Practices Law, and we recognize a common law tort claim for unlawful interference with business.

I

[¶ 3] World Duty Free Americas, Inc., and Ammex Tax & Duty Free Shops West, Inc. (collectively referred to as "Ammex"), operate duty-free stores under the trade name "Ammex" at various locations around the country, including a location near the Canadian border crossing at Pembina, North Dakota. Trade `N Post, L.L.C., is a North Dakota limited liability company that opened a competing duty-free store in Pembina in 1998. Trade `N Post alleges Ammex has engaged in anticompetitive and predatory behavior, including charging prices below cost, charging lower prices at its Pembina location than it charges for the same goods at its other North Dakota locations, pressuring major alcohol and tobacco suppliers not to sell their products to Trade `N Post, and pressuring tour bus operators not to stop at Trade `N Post's duty-free store.

[¶ 4] In 1999, Trade `N Post brought suit against Ammex in federal district court, alleging violations of the state and federal antitrust acts, violation of the Unfair Discrimination Law, violation of the Unfair Trade Practices Law, and wrongful interference with business. The federal district court refused to exercise supplemental jurisdiction over the claims based upon the Unfair Discrimination Law, the Unfair Trade Practices Law, and wrongful interference with business, and dismissed those claims without prejudice. The antitrust claims proceeded to discovery.

[¶ 5] Trade `N Post subsequently filed a complaint in state district court realleging the three dismissed claims. Ammex removed the state case to federal district court, thereby returning the three claims to the federal court, and the two pending actions were consolidated. Ammex moved to again dismiss the three claims, and Trade `N Post moved for certification of questions of law to this Court. The federal district court granted the motion to certify questions to this Court under N.D.R.App.P. 47 by an order dated June 13, 2000.

[¶ 6] This Court has jurisdiction under N.D.R.App.P. 47.

II

[¶ 7] Trade `N Post argues this Court should recognize an implied private right of action for damages under the Unfair Discrimination Law, N.D.C.C. ch. 51-09, and the Unfair Trade Practices Law, N.D.C.C. ch. 51-10. We conclude there is no private right of action for damages under either chapter.

A

[¶ 8] The Unfair Discrimination Law prohibits a company from selling identical products for different prices at different locations in the state, if done for the purpose of destroying a competitor's business:

Unfair discrimination in purchase and sale of commodities. Any person, firm, company, association, corporation, or limited liability company, foreign or domestic, doing business in this state and engaged in the production, manufacture, or distribution of any commodity in general use, that, for the purpose of destroying the business of a competitor in any locality, intentionally shall discriminate between different sections, communities, or cities of this state by selling such commodity at a lower rate in one section, community, or city than is charged therefor by said party in another section, community, or city, after making due allowance for the difference, if any, in the grade or quality and in the actual cost of transportation from the point of production, if a raw product, or from the point of manufacture, if a manufactured product, is guilty of unfair discrimination.

N.D.C.C. § 51-09-01. Violation of this provision is a class A misdemeanor. N.D.C.C. § 51-09-02. In addition, N.D.C.C. § 51-09-04 gives the attorney general broad authority to investigate suspected violations and to pursue civil remedies in the name of the State:

Authority of attorney general to investigate and prosecute unfair discrimination when complaint is made. If a complaint is made to the attorney general that any person is guilty of unfair discrimination committed for any of the purposes enumerated in section 51-09-01, the attorney general shall investigate the matter complained of, and for that purpose the attorney general may subpoena witnesses, administer oaths, take testimony, and require the production of books or other documents belonging to the person complained against. If, in the attorney general's opinion, sufficient grounds exist therefor, the attorney general shall prosecute an action in the name of the state of North Dakota to annul the charter, if the person complained against is a corporation or limited liability company, or to revoke the permit or license of the person complained against.

[¶ 9] The Unfair Trade Practices Law prohibits the sale of goods below cost, if done with the intent to lessen competition, restrain trade, or create a monopoly:

Unfair advertising, offer to sell, or sale. Any advertising, offer to sell, or sale of any merchandise, either by retailers or wholesalers, at less than cost as defined in this chapter, which has the intent or the effect of inducing the purchase of other merchandise or of unfairly diverting trade from a competitor or otherwise injuring a competitor, impairs and prevents fair competition, injures public welfare, and is unfair competition and contrary to public policy and the policy of this chapter, where the result of such advertising, offer, or sale is to tend to deceive any purchaser or prospective purchaser, or substantially to lessen competition, or unreasonably to restrain trade, or to tend to create a monopoly in any line of commerce.

N.D.C.C. § 51-10-03. Violation of the Unfair Trade Practices Law constitutes a class A misdemeanor. N.D.C.C. § 51-10-05. The attorney general has broad investigatory powers under N.D.C.C. ch. 51-10. See N.D.C.C. §§ 51-10-05.1, 51-10-05.2, 51-10-05.3. Either the attorney general or any person injured by a violation of N.D.C.C. ch. 51-10 may sue for injunctive relief:

Injunctional relief may be had in addition to other penalties—Duty to commence actions. In addition to the penalties provided in this chapter, the courts of this state are invested with the jurisdiction to prevent and restrain violations of this chapter by injunctional proceedings. The attorney general and the several state's attorneys shall institute suits in behalf of this state, to prevent and restrain violations of the provisions of this chapter. Any person damaged, or who is threatened with loss or injury, by reason of a violation of the provisions of this chapter, is entitled to sue for and have injunctive relief in the district court against any damage or threatened loss or injury by reason of a violation hereof.

N.D.C.C. § 51-10-06.

B

[¶ 10] Trade `N Post concedes these code provisions do not expressly provide a private action for damages. It argues, however, we should imply a private right of action for damages under both chapters.

[¶ 11] We have previously employed the four-part test enunciated in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), when determining whether a private right of action should be implied under a federal statute. See Kershaw v. Reichert, 445 N.W.2d 16, 17 (N.D.1989); Hillesland v. Federal Land Bank Ass'n, 407 N.W.2d 206, 208 (N.D.1987); R.B.J. Apartments, Inc. v. Gate City Sav. & Loan Ass'n, 315 N.W.2d 284, 287 (N.D.1982). The Cort test provides:

"In determining whether a private remedy is implicit in a statute not expressly providing one, several factors are relevant. First, is the plaintiff `one of the class for whose especial benefit the statute was enacted,' ...—that is, does the statute create a federal right in favor of the plaintiff? Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? ... Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff? ... And finally, is the cause of action one traditionally relegated to state law, in an area basically the concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law?"

Hillesland, 407 N.W.2d at 208 (quoting Cort, 422 U.S. at 78, 95 S.Ct. 2080).

[¶ 12] Although we have not previously addressed the issue, courts in other jurisdictions have applied the Cort test when determining whether there is an implied private right of action under a state statute. See, e.g., Lock v. Schreppler, 426 A.2d 856, 864 (Del.S...