Minn. Supreme Court Upholds Class Action Certification for Peterson v. BASF

March 12, 2004

The Minnesota Supreme Court recently upheld an appellate court decision in applying the New Jersey Consumer Fraud Act on a nationwide basis by virtue of the certification of a nationwide class.

“While the Supreme Court’s decision is disappointing, it appears that the Court dodged the substantive issue on this point and decided it on a procedural basis,” said Laura Kotelman, regional manager and senior counsel for the Property Casualty Insurers Association of America (PCI). “Because of this, the decision may ultimately not have as negative an impact as it could have had.”

Additionally, a House bill currently under consideration in the state legislature is designed to address the issue of which state’s statute of limitations apply in a Minnesota court action involving applying the law of one or more other states.

In the original case of Peterson v. BASF Corp., a group of farmers filed a consumer fraud class action lawsuit asserting that BASF misled and deceived them about the use of a herbicide manufactured by the defendant and steered them into purchasing a more expensive product. The district court certified the farmers as a nationwide class of plaintiffs to bring suit under the New Jersey Consumer Fraud Act. BASF petitioned for class action decertification and was rejected by an appellate court. BASF sought review of the ruling and took the case to the Minnesota Supreme Court.

PCI filed an amicus brief illustrating the consequences of the appeals court’s failure to consider whether New Jersey had any material connection or legitimate interest in the claims of the non-New Jersey class members. The brief demonstrated that a proper choice of law analysis would conclude consumer fraud laws of all 50 states would apply, therefore not certifying the farmers as a nationwide class.

In its February decision, the Minnesota Supreme Court concluded BASF failed to raise the issues of class certification and the application of New Jersey law to all the claims in the class when the issues were ripe for review and therefore waived its opportunity to have the issues considered.

Meanwhile, Rep. Paul Kohls has introduced a House bill (H.F. 2444) to establish rules for deciding which state’s statute of limitations would apply in a Minnesota court action that involves applying the law of one or more other states.

“Conflict of laws” is the legal term for situations where more than one state or country’s laws could apply and a court has to decide which law governs. A key provision is that the bill preserves certain actions where the claim arises out of state and the plaintiff resides in Minnesota. It seeks to keep Minnesota from being a “dumping ground” for nationwide class actions because it has a longer statute of limitations period than many other states.

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