Wave Form Systems, Inc. v. AMS Sales Corporation et al

Filing 35

ORDER denying Plaintiff's request to certify two questions of law to the Minnesota Supreme Court (Written Opinion). Signed by Judge Ann D. Montgomery on 2/5/2015. (TLU)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Wave Form Systems, Inc.,
Plaintiff,
v.

ORDER
Civil No. 14-3976 ADM/TNL

AMS Sales Corporation and
American Medical Systems, Inc.,
Defendants.
______________________________________________________________________________
Karla M. Vehrs, Esq., Lindquist & Vennum PLLP, Minneapolis, MN, on behalf of Plaintiff.
Kirk W. Reilly, Esq., Gray Plant Mooty Mooty & Bennett, PA, Minneapolis, MN, on behalf of
Defendants.
______________________________________________________________________________
On January 28, 2015, Wave Form Systems, Inc. (“Wave Form”) filed a letter [Docket
No. 30] petitioning this Court to certify two questions of law to the Minnesota Supreme Court.
On February 4, 2015, a responsive letter [Docket No. 34] from AMS Sales Corporation and
American Medical Systems, Inc. was filed opposing certification. For the reasons given below,
Wave Form’s request is denied.
The questions of law Wave Form poses for certification pertain to the applicability of the
Minnesota Franchise Act (“MFA”) to the parties’ 2012 Mobile Provider Agreement (“MPA”).
Wave Form requests certification on the following questions:
Does the Minnesota Franchise Act, Minn. Stat. § 80C.01 et seq., apply to
franchisees located outside of Minnesota when (1) the sale or offèr to sell the
franchise is made in Minnesota consistent with Minn. Stat, § 80C.19, and (2) the
parties' contract does not waive or have the effect of waiving compliance with the
Minnesota Franchise Act?

and

Does a required payment for services constitute a "franchise fee" under Minn.
Stat. § 80C.01 subd. 9 only if it lacks a reasonable business purpose?
When there is doubt as to local law, the federal court is not required to certify the
issue to the state supreme court. See Lehman Brothers v. Schein, 416 U.S. 386, 390-91
(1974). Rather, use of the certification procedure “rests in the sound discretion of the
federal court.” Id. at 391; Allstate Insurance Co. v. Steele, 885 F. Supp. 189, 193 (D.
Minn. 1995).
On December 22, 2014, Wave Form’s request for preliminary injunctive relief
was denied. In its Memorandum Opinion and Order [Docket No. 27], the Court
recognized the applicability of the MFA was “murky.” Mem. Op. Order 16. For
purposes of that motion, however, the question of the MFA’s applicability was not
squarely before the Court. Additionally, while limited, there is relevant caselaw on the
MFA’s applicability to the parties’ MPA.
District Courts are competent to decide issues of state law and every doubtful
question does not require certification to the Supreme Court. Hatfield, by Hatfield v.
Bishop Clarkson Memorial Hosp., 701 F.2d 1266, 1271 (8th Cir. 1983). Therefore, the
Court declines to exercise its discretion to certify and instead will rely on principals of
statutory construction and judicial guidance to resolve these questions.
BY THE COURT:

s/Ann D. Montgomery
ANN D. MONTGOMERY
U.S. DISTRICT JUDGE
Dated: February 5, 2015

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