Metropolitan Sports Facilities Commission v. General Mills, Inc.

FOLEY, Judge

(dissenting).

I respectfully dissent. In 1984 the legislature repealed Minn.Stat. § 473.568.

Minnesota Statutes 1982, section 473.568, is repealed. This repeal is based solely upon the continued effectiveness of the agreement * * * entered into by the Metropolitan Sports Facilities Commission and the purchaser * * * of tickets. Such agreements shall remain in effect throughout their terms * * *.

1984 Minn.Laws ch. 607, § 2. The repeal’s conditional language is an attempt by the legislature to force a contractual position on both the Commission and General Mills.

Because the Commission is a government agency, the legislature may properly control the Commission’s contractual obligations. General Mills, however, is a private corporation. It may enter, modify or breach contracts as it chooses. A private party’s freedom to contract is protected by the due process clauses of the Minnesota and United States Constitutions. State v. International Harvester Co., 241 Minn. 367, 372, 63 N.W.2d 547, 551-52 (1954). The legislature may not interfere with freedom of contract unless it is necessary to invoke the state’s police power to protect the public interest. Id.; see Berman v. Parker, 348 U.S. 26, 32, 75 S.Ct. 98,102, 99 L.Ed. 27 (1954) (explanation of the state’s police power).

Here, there are no police power issues. The legislature’s attempted enforcement of the ticket purchase agreement is not necessary to protect the public interest and, thus, interferes with freedom of contract in violation of General Mills’ due process rights. Representative Paul Ogren acknowledged this problem during hearings on the proposed repeal before the House Committee on Regulated Industries.

Representative Ogren: Mr. Chairman, Representative Jacobs, first of all the state cannot force General Mills to maintain that contract. Under no circumstance, it doesn’t matter how you word this law, if they want to back out they can back out.

[Unidentified]: The language [in the re-pealer] does not mention General Mills. Representative Ogren: Absolutely, we do not. Also, everything after the middle of the second line where it says the section is repealed is nonlegal language, is not binding in any sense.

Hearing on H.F. 1501 Before the Committee on Regulated Industries (Feb. 20, 1984). I fully concur with Representative Ogren’s remarks.

The legislature cannot force General Mills to continue the contract absent General Mills’ consent. Even if there is a public interest in televising football games, the legislature’s interference is unnecessary to protect that interest. If General Mills consents to continue the contract and then breaches it, however, it will be subject to civil liability in court.

The legislature’s attempt to control General Mills’ contractual obligations under the ticket purchase agreement also offends separation of powers principles. The conditional repeal required a legislative interpretation of the following language in the agreement:

1. This Agreement * * * shall not be effective and General Mills shall have no further purchase commitments in the event Section 473.568 is finally determined * * * to be unconstitutional and void, or * * * is otherwise ineffective except in the case of a repeal thereof based solely upon the continued effectiveness of this Agreement.

General Mills argued to the trial court that the agreement’s repeal reference is ambiguous. General Mills offered extrinsic evidence supporting an interpretation that General Mills’ consent was necessary to prevent the agreement’s termination upon repeal of Minn.Stat. § 473.568.

Whether the agreement’s repeal reference is ambiguous and whether General Mills’ consent was necessary for the continued effectiveness of the agreement are matters of contract law. Resolution of these issues is the judiciary’s function. The legislature exceeded its authority when it interpreted the agreement’s repeal reference as not requiring General Mills’ consent to the continued effectiveness of the agreement upon repeal of Minn.Stat. § 473.568.

I would find the repeal reference ambiguous.

A contract is ambiguous if it is susceptible to more than one interpretation based on its language alone. * * * The initial question of whether a contract is ambiguous is a question of law to be decided by the trial court, and therefore this court on appeal is not bound by the trial court’s determination.

Lamb Plumbing & Heating Co. v. Kraus-Anderson of Minneapolis, Inc., 296 N.W.2d 859, 862 (Minn.1980) (citations omitted). Here, the repeal reference can be interpreted to either require General Mills’ consent, or permit the legislature to dictate the agreement’s continued effectiveness upon repeal.

If a contract is ambiguous, extrinsic evidence is admissible to aid in construction. Nord v. Herreid, 305 N.W.2d 337, 340 (Minn.1981). If “the extrinsic evidence is conclusive and undisputed and renders the meaning of the contract clear,” construction is a question of law. Town & Country Shopping Center v. Swenson Furniture Co., 261 Minn. 100, 104, 110 N.W.2d 525, 528 (1961). Here, General Mills offered extrinsic evidence that General Mills’ understanding at the time of contract formation was its consent was required to continue the agreement upon repeal of Minn.Stat. § 473.568. No other evidence was offered.

I would hold a conditional repeal of Minn. Stat. § 473.568 is unconstitutional because it violates both freedom of contract and separation of powers principles. I would also reverse the trial court’s finding that the repeal reference is unambiguous and direct it to find General Mills’ consent is necessary for the agreement’s continued effectiveness upon repeal.