Court Opinion

ID: 9852144
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:25:23.881879+00
Date Added: 2024-06-11T09:22:23.124529
License: Public Domain

UPON PETITION FOR REHEARING
KELLY, Justice.
It was claimed in the petition for rehearing that this court erred in stating that the parties agreed that “the question of the status of Mecca’s operatives also resolves the other issues raised by this appeal.” This quote should be read in the context of the opinion as a whole and especially in connection with the statement in the opinion that “the acts found to be in violation of the statutes were committed within the scope of Mecca employment.” Defendant attempts to equate this case with Kasner v. Gage, 281 Minn. 149, 161 N.W.2d 40 (1968). In Kasner it was held that a principal was not responsible for the intentional tort of its agent where it did not know of the unlawful acts and did not ratify them. In the instant case the trial court found that “Mecca had control over, knowledge of, and derived monetary benefit from the misrepresentations and deceptive practices.” Other findings are tantamount to a finding that Mecca ratified the fraudulent sales practices. Mecca was notified of them by customers and nonetheless retained the benefits of the sale. Thus, Kasner has no application here.
The central issue in this case is whether the solicitors were employees of Mecca and if so, whether the deceptive and fraudulent sales practices were done within the scope of their employment. All of the issues raised by Mecca and the authorities cited by it in this appeal were considered by this court, but were not discussed in our opinion, not only because it was generally agreed in the oral arguments that this central issue would be decisive of all other issues, but also because that was obviously so in light of all the other facts and circumstances.
Counsel for Mecca in his oral argument stated:
“The issues I believe can be summarized as follows. Does this court, the courts of Minnesota, have jurisdiction over this foreign corporation under either the corporate long-arm statute or the long-arm statute requiring the transaction of business within the state as a prerequisite? The second issue is whether Mecca, as a company that transacts business exclusively through the channels of interstate commerce, is it subject to the requirements under Minn.St. 303.03 that a foreign corporation must have a certificate of authority as a prerequisite to doing business in Minnesota? And finally, can Mecca be held liable for the purportedly fraudulent sales practices of solicitors retained by independent contractors? Each of these issues, I believe, must ultimately be resolved by reference to the issue of the relationship between Mecca and the individuals who committed the acts complained of. In other words, there is no jurisdiction over Mecca if the acts committed in Minnesota were not performed on behalf of Mecca and, likewise, there is no basis to require Mecca to obtain a certificate of authority to do business .in the state of Minnesota if it does not in fact transact business in the state through these independent contractors and does not transact business in the state at all other than through the mails. And finally, Mecca cannot be held liable for the acts of persons with whom it has no employment or agency relationship.”
Counsel for the state stated:
“* * * I would like to discuss the issues of the case as the State of Minnesota views them. There are two basic issues actually that underline the whole case. The first issue goes to the sufficiency of the evidence and the second issue goes to Mecca’s responsibility for the conduct of its personnel. Concerning the first issue, the court obviously held that there was sufficient evidence adduced at trial to support its findings. Concerning the second issue of Mecca’s responsibility, if, as the trial court found, *157Mecca is accountable for the acts of its personnel, then the other issues set forth in the state’s brief, and there are three other issues, naturally follow. And those issues are that Mecca is responsible for the fraudulent conduct and the deceptive selling and hiring practices of its personnel and its crew managers; then, Mecca also transacted business in the State of Minnesota and therefore is required to register with the secretary of state as a foreign corporation; and, finally, if Mecca is responsible for these acts, then Minnesota courts have jurisdiction over Mecca Enterprises.”
We did not discuss in the opinion Mecca’s claim that requiring it to obtain a certificate of authority to transact business in this state as a foreign corporation unconstitutionally infringed upon interstate commerce because it seemed to be conceded that if the solicitors were Mecca employees then Mecca had been transacting business in this state so as to require a certificate of authority. The fee charged for such a certificate is nominal. Therefore, a claim that it is a burden can hardly be sustained. The Supreme Court of the United States spoke favorably of it in Union Brokerage Co. v. Jensen, 322 U.S. 202, 209, 64 S.Ct. 967, 972, 88 L.Ed. 1227, 1232 (1944):
“But the Commerce Clause does not cut the States off from all legislative relation to foreign and interstate commerce. * * “The information here sought of all foreign corporations by Minnesota as a basis for granting them certificates to do business within her borders is a conventional means of assuring responsibility and fair dealing on the part of foreign corporations coming into a State. Apart from any question of interference with foreign commerce such a requirement is plainly within the regulatory power of a State. * * * The burden, such as it is, falls on foreign businesses that commingle with Minnesota people, and the burden, a fee of fifty dollars, is sufficiently small fairly to represent the cost of governmental supervision of foreign business enterprises coming into Minnesota. In short, it is a supervisory and not a fiscal measure. As such it imposes costs upon the State which those who are supervised must, as is often the case, themselves pay.

“The Commerce Clause does not deprive Minnesota of the power to protect the special interest that has been brought into play by Union’s localized pursuit of its share in the comprehensive process of foreign commerce.”
While the bare fact that the solicitors here were employees would not necessarily require a finding that Mecca was doing business in the state, the other facts and circumstances present in this case as found by the trial court adequately support its finding that Mecca transacted business within the state.
The petition for rehearing is denied.