Court Opinion

ID: 9499119
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:38:23.02117+00
Date Added: 2024-06-11T17:59:17.823908
License: Public Domain

MELLOY, Circuit Judge,
concurring in part and dissenting in part.
I concur in the majority’s opinion with the exception of the affirmance of the award of four-and-a-half years of lost profits to Wingert. I believe that such an award is not authorized by the Minnesota Termination of Sales Representatives Act.
The Act requires companies to provide sales representatives with 180 days’ notice before terminating an agreement. If proper notice is not given, remedies are available to the sales representatives. Subdivision 4, titled “Rights upon termination,” requires the payment of commissions that would have been earned during the 180-day notice period if notice had been properly given. In a different subsection, the Act lists additional remedies that can be awarded by an arbitrator. The Minnesota Supreme Court has adopted the principle that when a statute provides a new right and a corresponding remedy, that remedy is generally exclusive. Davis & Michel v. Great N. Ry. Co., 128 Minn. 354, 151 N.W. 128, 129 (1915) (“[I]n those cases where a right, not existing at common law, is created by statute, and a remedy for its enforcement is also provided ... the remedy so prescribed is generally held exclusive.”); Lom v. Itasca County, 2002 WL 264658, *4 (Minn.Ct.App. Feb.26, 2002) (citing Davis for the same proposition) (unpublished). Accordingly, we should be cautious in presuming that additional, unspecified remedies are available.
Although Wingert was serving as a sales representative, its role was similar to that of a distributor in that Wingert made its money by selling goods manufactured by another company. In Sofa Gallery, Inc. v. Stratford Co., 872 F.2d 259 (8th Cir.1989), we held that a furniture distributor with an at-will contract with a manufacturer had no legitimate expectation of lost profits after the distribution agreement was terminated. We stated:
We agree with the district court that Sofa Gallery is not entitled to recover its lost future profits even if Stratford did breach its duty to give reasonable notice. Sofa Gallery’s business arrangement with Stratford was terminable at *747will and thus, as the district court correctly noted, it “had no legitimate expectation that it should profit from the Stratford line after the termination.”
Id. at 263. Like the plaintiff in Sofa Gallery, Wingert would be entitled to no lost profits after termination but for the Act which provides for 180 days of commissions. Neither the Act nor the legislative history provided to us make any mention of lost profits after the statutory notice period.
In the absence of any explicit reference in the statute to lost profits, the majority supports its holding by looking to an unpublished decision of the Minnesota Court of Appeals and to subdivision 5 of the Act. I disagree with the majority’s interpretation of both of these sources.
As the majority notes, in RIO/Bill Blass, the Minnesota court did award damages for a time not included in the notification period. 1998 WL 27299 at *1. However, that award was given in an entirely different context. The sales representative in RIO/Bill Blass was awarded commissions that had been earned before the statutory termination period. This award was a logical result as the Minnesota legislature certainly did not intend the Act to preclude sales representatives from receiving commissions to which they had a contractual right. However, an award for commissions actually earned before termination is dramatically different than an award for future profits after the statutory notice period. In this regard, it is important to note that the parties did not negotiate any fixed term for their oral contract and that the Act required Paramount to provide only 180 days’ notice of termination. Thus, the award of four-and-a-half years of lost profits binds the interests of the parties far longer than the time period contemplated by their contract or the Act.
I am also not persuaded by the majority’s assertion that the damages award is “supported by the plain language of the Act.” In listing the remedies that can be awarded by an arbitrator, the Act lists “reinstatement of the sales representative agreement, or damages” on a separate line from “payment of commissions due.” The majority takes this to mean that all types of damages are appropriate, including the lost profits awarded here. I disagree with this interpretation for several reasons.
The majority cites Cody v. Hillard for the proposition that “[a] statutory provision should not be interpreted to make other provisions meaningless or superfluous.” However, Cody also instructs that “[sjtatutes are to be interpreted as a whole .... ” 304 F.3d at 776. A reasonable reading of the whole Act reflects the legislature’s intent to provide a base level of protection for sales representatives.
If the primary concern is that we not “effectively excise” any portion of the statute, I believe the majority’s interpretation causes more harm than it prevents. The majority has held that the word “damages” in subdivision 5(b)(2) entitles Wingert to lost profits for a five-year period. Since “lost commissions” are certainly a subset of “lost profits,” the majority’s interpretation effectively excises subdivision 5(b)(3) referencing “payment of commissions.”
More importantly, an interpretation that limits damages to the statutory notice period does not render superfluous subdivision 5. If Wingert was owed commissions earned before the statutory notice period, it would be entitled to those commissions, as was the sales representative in RIO/Bill Blass. Additionally, if Wingert had other, viable causes of action, such as the tortious interference and breach of contract claims that were dismissed in this case, those could also result in additional damages.
Companies that terminate sales agreements must provide 180 days’ notice before doing so. If they fail to provide such *748notice, they must provide the same level of compensation, in the form of commissions, that they would have been obligated to provide if notice had been properly given. I find no support in the statute for the interpretation that the failure to provide 180 days’ notice subjects the company to potentially limitless liability in the form of future lost profits. Although four-and-a-half years of lost profits were awarded here, the majority’s interpretation of the Act could lead to future claims of lost profits for ten years, twenty years, or for the entire projected career of the sales representative.
I believe such a result is unreasonable. The Minnesota legislature has cautioned us that in “ascertaining the intention of the legislature the courts may be guided by the ... presumption! ]” that “[t]he legislature does not intend a result that is ... unreasonable.” Minn.Stat. § 645.17. In my opinion, a more reasonable interpretation of the Act limits damages resulting from violations of the Act to the 180-day period where notice was required.
For the foregoing reasons, I respectfully concur in part and dissent in part.