Opinion ID: 478792
Heading Depth: 2
Heading Rank: 3

Heading: Arkansas Franchise Practices Act

Text: 22 Jenkins's next contention is that the district court erred in determining that he did not have a cause of action based on the Arkansas Franchise Practices Act. The Arkansas Franchise Practices Act, Ark.Stat.Ann. Secs. 70-807 to -818 (Repl.1979) provides for recovery of damages and attorneys' fees from franchisors who violate the Act by terminating a franchise without good cause or without proper notice. The Act was passed in 1977, but the Arkansas courts have not decided any cases which interpret the scope of the Act. 3 The district court relied on two cases holding that the Wisconsin Fair Dealership Act, which has language quite similar to the Arkansas Act, did not apply to manufacturer's representatives. Foerster, Inc. v. Atlas Metal Parts Co., 105 Wis.2d 17, 313 N.W.2d 60, 66-67 (1981); Wilburn v. Jack Cartwright, Inc., 719 F.2d 262, 266 (7th Cir.1983); See also E.A. Dickinson & Associates, Inc. v. Simpson Electric Co., 509 F.Supp. 1241, 1244 (E.D.Wis.1981). While recognizing that these decisions are not controlling in this case, the court found their logic persuasive. A franchisee normally has to pay a franchise fee, buy and keep an inventory of the franchisor's products, and pay for advertising those products and/or pay an advertising fee to the franchisor. Appellant argues that Kent Jenkins Sales, Inc. had the right to sell Angelo's goods within an exclusive territory, and therefore it clearly and unambiguously comes within the definition of a franchise in section 70-808(a). The statute does not define sell, but, as the Seventh Circuit noted in Wilburn, there is a distinction between selling and promoting sales. 719 F.2d at 265. Jenkins did not take title and possession of any of Angelo's products, see Foerster, 313 N.W.2d at 66, and although Jenkins had some authority to negotiate price, he did not have an unqualified authorization to transfer the product at the point and moment of the agreement to sell. Wilburn, 719 F.2d at 265, (quoting Foerster, 313 N.W.2d at 64). Therefore, he would be considered a promoter or solicitor of sales rather than an actual seller of goods. 23 When the highest court in the state has not construed a statute which the federal court must apply, the federal court must determine what the highest state court would probably hold were it called upon to decide the issue. Kifer v. Liberty Mutual Insurance Co., 777 F.2d 1325, 1329 (8th Cir.1985). When this court reviews such an issue, the interpretation of state law by a federal district judge sitting in that forum is entitled to substantial deference unless it is fundamentally deficient in analysis or otherwise lacking in reasoned authority. Dabney v. Montgomery Ward & Co., Inc., 761 F.2d 494, 499 (8th Cir.), cert. denied, --- U.S. ----, 106 S.Ct. 233, 88 L.Ed.2d 232 (1985). The district court's construction of the statute, although not based on Arkansas precedents, is a reasonable one, and we accept it. 24 Reversed and remanded.