author: SCHUMACHER, Judge.

text:
    Virginia STANSELL, et al., on behalf of themselves and the State of Minnesota, Appellants, v. CITY OF NORTHFIELD, Respondent, Target Stores, a division of Dayton Hudson Corporation, Respondent.
    No. C3-00-708.
    Court of Appeals of Minnesota.
    Nov. 7, 2000.

      Michael B. Chase, St. Paul, for appellants.
    George C. Hoff, Paula A. Callies, Hoff, Barry & Kuderer, P.A., Eden Prairie, for respondent City of Northfield.
    John B. Gordon, Michael A. Ponto, Paul B. Civello, Faegre & Benson LLP, Minneapolis, for respondent Target Stores.
    Considered and decided by SCHUMACHER, Presiding Judge, STONEBURNER, Judge, and HUSPENI, Judge.

       Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

   OPINION

SCHUMACHER, Judge.

Appellants Virginia Stansell, Gary Stan-sell, Judy Swanson, Stephen Swanson, Marilyn Haugen, Georgiana Campbell, Arthur Campbell, and Keith Harrison, on behalf of themselves and the State of Minnesota (the Northfield residents), sued respondent City of Northfield, alleging that the Northfield city council lacked authority to adopt two ordinances that allegedly contradicted an ordinance adopted by the initiative of the voters and that the council’s actions in doing so violated various statutes, including the Minnesota Environmental Rights Act (MERA). Respondent Target Stores, a division of Dayton Hudson Corporation, was granted leave to intervene as a defendant. North-field and Target moved for summary judgment, and the district court granted the motions. On appeal, the Northfield residents challenge only the district court’s rulings that the city council had the authority to adopt the two ordinances and that the council’s actions did not violate MERA. We affirm.

FACTS

In late 1997 or early 1998, Target began to investigate the possibility of building a store in Northfield. At the time, the zoning for the site Target wanted to build on would not allow uses of that nature.. In October 1998, a group of Northfield residents presented an initiative petition to adopt an ordinance permitting development of large-scale retail projects such as the Target store. Attached to the initiative petition, as required by the city charter, was a proposed ordinance. The proposed ordinance, however, was in draft form; it included various comments, questions, and explanations in bracketed italics scattered throughout the text of the ordinance. When the city council did not enact the ordinance in a final form acceptable to the sponsoring committee within 60 days, the sponsoring committee requested that it be put to a vote of the electorate.

The proposed draft ordinance was published three times before the election, the first and third times including the bracketed questions, comments, and explanations, the second time without them. When the voters went to the polls, however, they apparently did not have before them the exact text of a proposed ordinance. Instead, the voters voted yes or no to the following initiative question: “Shall the City of Northfield enact an ordinance to permit planned development zones for large-scale retail establishments in highway commercial districts?” A majority of voters voted yes.

After the election, the city council continued working with Target on the final form of an ordinance that would allow Target to proceed with its project. The city council eventually passed Ordinances 718' and 719. The ordinances differed in some areas from the initiative ordinance proposed by the sponsoring committee.

The Northfield residents sued North-field to prevent the city council from implementing Ordinances 718 and 719, claiming that those ordinances contradicted the initiative passed by the voters, violated several statutes, and were otherwise illegal. The district court granted Target leave to intervene as a defendant. North-field and Target brought separate motions for summary judgment, both of which the district court granted.

ISSUES

1) Do the Northfield residents have standing to challenge the city council’s authority to adopt Ordinances 718 and 719?

2) Did the trial court err in granting Northfield’s and Target’s motions for summary judgment on the MERA claim?

ANALYSIS

On an appeal from summary judgment, we ask whether there are any genuine issues of material fact in dispute and whether the trial court erred in applying the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). We review de novo the district court’s interpretation of the law, including questions of statutory interpretation. Sorenson v. St. Paul Ramsey Med. Ctr., 457 N.W.2d 188, 190 (Minn.1990); Associated Builders & Contractors v. Carlson, 590 N.W.2d 130, 134 (Minn.App.1999), aff'd, 610 N.W.2d 293 (Minn.2000). We view the evidence in the light most favorable to the party against whom summary judgment was granted and accept as true that party’s factual allegations. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993). Summary judgment on a claim is mandatory against a party with the burden of proof who fails to establish an essential element of its claim, because that failure renders all other facts immaterial. Lloyd v. In Home Health, Inc., 523 N.W.2d 2, 3 (Minn.App.1994). We will affirm a grant of summary judgment if it can be sustained on any ground. Winkler v. Magnuson, 539 N.W.2d 821, 828 (Minn.App.1995), review denied (Minn. Feb. 13, 1996).

1. The first issue we address is whether the city council had the authority to adopt Ordinances 718 and 719. If they had no such authority, we need not consider whether the ordinances violated MERA. The threshold question on this issue is whether the Northfield residents have standing to challenge the city council’s authority to adopt the ordinances. Because the district court did not address standing, the Northfield residents question whether this issue is properly before the court, but “[standing may be raised at any time.” Cochrane v. Tudor Oaks Condominium Project, 529 N.W.2d 429, 433 (Minn.App.1995) (citation omitted), review denied (Minn. May 31, 1995).

Although the Northfield residents’ complaint alleges that they are “individuals * * * who have been injured by and have standing to challenge illegal actions by the Northfield City Council,” they do not allege that they have suffered any specific injuries as the result of the city council’s actions. Instead, they seem to be litigating a matter of public interest. Indeed, both their complaint and their brief on appeal claim they are prosecuting this action “on behalf of themselves and the State of Minnesota.”

Persons who wish to bring suit on a matter of public interest must demonstrate “either (1) damages distinct from the public’s injury, or (2) express statutory authority.” Conant v. Robins, Kaplan, Miller & Ciresi, L.L.P., 603 N.W.2d 143, 146 (Minn.App.1999) (citations omitted), review denied (Minn. Mar. 14, 2000). The North-field residents have alleged no distinct damages. As a result, absent statutory authority to sue, they would lack standing.

Minnesota law, however, does include a statute granting the right to sue to challenge a municipality’s land-use actions:

Any person aggrieved by an ordinance, rule, regulation, decision or order of a governing body or board of adjustments and appeals acting pursuant to sections 462.351 to 462.364 may have such ordinance, rule, regulation, decision or order, reviewed by an appropriate remedy in the district court, subject to the provisions of this section.

Minn.Stat. § 462.361, subd. 1 (1998). The Northfield residents may therefore maintain their action if they qualify as “person[s] aggrieved” by the city council’s action.

Neither the statute nor any published Minnesota case defines the term “person aggrieved” for the purpose of Minn.Stat. § 462.361. The term has, however, been defined in the context of other statutes. In order for an “aggrieved party” to have the right to appeal a decision under the Minnesota Administrative Procedure Act, for example, the person must be “injuriously or adversely affected by the judgment or decree when it operates on his rights of property or bears directly upon his personal interest.” In re Getsug, 290 Minn. 110, 114, 186 N.W.2d 686, 689 (1971). This definition has also been applied to other statutes. See, e.g., In re Black, 522 N.W.2d 352, 355 (Minn.App.1994) (interpreting provision of Minn.Stat. § 46.044 allowing “person aggrieved” to obtain judicial review of Commissioner of Commerce’s determination), review denied (Minn. Nov. 29, 1994).

As a matter of statutory construction, we presume that the legislature uses the same words the same way, even in different statutes. Angell v. Hennepin County, 565 N.W.2d 475, 479 (Minn.App.1997), aff'd, 578 N.W.2d 343 (Minn.1998). We therefore interpret the term “person aggrieved” in Minn.Stat. § 462.361 to grant standing to a person when an action by the municipality adversely “operates on his rights of property or bears directly upon his personal interest.” In re Getsug, 290 Minn. at 114, 186 N.W.2d at 689. Because the Northfield residents have not alleged any such particularized injuries, they lack standing to challenge the city council’s authority to adopt Ordinances 718 and 719.

2. The Northfield residents also claim that the ordinances violate the Minnesota Environmental Rights Act (MERA). MERA protects “ah', water, land and other natural resources located within the state from pollution, impairment, or destruction.” Minn.Stat. § 116B.01 (1998). Under the statute, the definition of the term “natural resources” includes “historical resources.” Minn.Stat. § 116B.02, subd. 4 (1998). The term “historical resources” is not defined.

There is no dispute that North-field’s Central Business District is listed on the National Register of Historic Places. But the Northfield residents do not merely claim that the buildings in the district are protected “historical resources.” They also claim that the Central Business District as a functioning economic entity is a protected historical resource.

The Northfield residents cite Chinese Staff & Workers Ass’n v. City of New York, 68 N.Y.2d 359, 509 N.Y.S.2d 499, 502 N.E.2d 176 (1986), as an example of a case where economic and cultural considerations were held protectible under an environmental statute. That case is not much help in determining the scope of “historical resources” for MERA’s purposes, however, because the statute in that case is more expansive than MERA, expressly defining the1 protected “environment” to include “existing patterns of population concentration * * * and existing community or neighborhood character .” Id. at 179.

Because the term “historical resources” is not defined in MERA, the Minnesota Supreme Court has

identified certain factors that should be taken into account in determining whether a building falls under the protection of MERA, looking principally to the criteria used to determine what buildings are included on the National Register of Historic Places * * *.

State by Archabal v. County of Hennepin, 495 N.W.2d 416, 421 (Minn.1993). Although the criteria are quite broad, they do not naturally encompass the economic vitality or way-of-life concerns that the Northfield residents contend are protecti-ble “historical resources.” Read as a whole, the criteria primarily address buildings or other places, which we note are the criteria for inclusion on the National Register of Historic Places. Nonetheless, nothing in the criteria obviously forecloses the Northfield residents’ interpretation, either.

Without specific authority from either Minnesota or other jurisdictions, we must look to general principles of statutory construction to determine whether the Central Business District as a functioning economic entity is a protectible “historical resource.”

If a statute is ambiguous, we must determine and give effect to the intent of the legislature. In determining the legislature’s intent, we may consider the mischief to be remedied by the statute.

In re Estate of Nordlund, 602 N.W.2d 910, 913 (Minn.App.1999) (citations omitted), review denied (Minn. Feb. 15, 2000). When the language of a statute is unclear, a reviewing court should interpret the statute as consistently as possible with the purpose of the act. Huffman v. School Bd. of Indep. Consol. Sch. Dist. No. 11, 230 Minn. 289, 292, 41 N.W.2d 455, 457 (1950). When construing a statute, we may consider “the consequences of a particular interpretation.” Grudnosky v. Bislow, 251 Minn. 496, 498, 88 N.W.2d 847, 850 (1958).

As Northfield and Target point out, to interpret MERA as the Northfield residents suggest would have far-reaching economic consequences, often conferring a significant economic advantage on businesses that happen to be located in historic buildings or districts — even including, as the facts of this case show, the ability to prevent otherwise lawful competition. Given that both state and federal antitrust law are designed to foster competition, it is unlikely that the legislature intended to impede such economic competition through the unusual vehicle of an environmental protection law. Such laws are designed to accomplish environmental ends, not economic ones. As a result, considering both the mischief sought to be prevented by MERA and the mischief that could be caused by the Northfield residents’ interpretation, it appears that the best interpretation of “historical resources” excludes the economic and cultural factors the Northfield residents seek to protect in the Central Business District.

But that does not conclude our analysis. In order to make out a prima facie ease under MERA,

[fjirst, there must be “a protectible natural resource” * ⅜ ⅜. Second, conduct by the defendant must cause or be likely to cause “pollution, impairment or destruction” * * * of that resource.

State by Schaller v. County of Blue Earth, 563 N.W.2d 260, 264 (Minn.1997) (citations omitted). “Pollution, impairment or destruction” is defined as “any conduct which materially adversely affects or is likely to materially adversely affect the environment.” Minn.Stat. § 116B.02, subd. 5 (1998).

There is no dispute that at the very least, the buildings in the Central Business District are protected “historical resources.” The Northfield residents argue that they have provided detailed expert evidence that demonstrates that the new Target store “is likely to materially adversely affect” those buildings. Kennedy Smith, the Director of the National Main Street Center for the National Trust for Historic Preservation, offered two affidavits in which Smith opined, based both on experience with other communities and a study of Northfield, that opening the new Target store will lead to a decline in sales in the Central Business District, which will lead to merchants going out of business, which will lead to abandoned buildings, which will lead to the physical deterioration of those buildings.

The district court rejected this argument as “speculative and tenuous.” We agree. Because the Northfield residents’ chain of causation relies so heavily on economic considerations that are beyond MERA’s intended scope, their causal chain is too attenuated as a matter of law. If successful, the Northfield residents’ attempt to invoke MERA based on the possible remote effects of economic forces would convert the statute from an environmental protection law to an economic regulation. The Northfield residents’ interpretation of the statute is unreasonable and produces a result that is plainly at variance with the policy of the statute considered as a whole. We need not adopt such an interpretation. See Wegener v. Commissioner of Revenue, 505 N.W.2d 612, 615 (Minn.1993).

DECISION

The district court did not err in granting summary judgment to Northfield and Target.

Affirmed.


source: Caselaw Access Project

author: KLAPHAKE, Judge

license: Public Domain

text:
    Ronald PETERSON, et al., individually and on behalf of all others similarly situated, Appellants, v. BASF CORPORATION, foreign corporation, Respondent.
    No. CX-00-737.
    Court of Appeals of Minnesota.
    Nov. 14, 2000.

      Hugh V. Plunkett, III, Robert K. Shel-quist, Plunkett, Schwartz, Peterson, P.A., and Douglas J. Nil], Douglas J. Nill Law Office, Minneapolis, for appellants.
    Winthrop A. Rockwell, Brian B. O’Neill, Bruce Jones, John P. Mandler, Faegre & Benson, L.L.P., Minneapolis, and Kenneth F. Johannson, Johannson, Rust, Fager-lund, Yon & Stock, P.A., Crookston, for respondent.
    Considered and decided by KLAPHAKE, Presiding Judge, LANSING, Judge, and SCHUMACHER, Judge.
   OPINION

KLAPHAKE, Judge

Appellants brought this New Jersey Consumer Fraud Act claim for fraudulent and unconscionable commercial conduct against respondent BASF Corporation, seeking damages for injuries resulting from BASF’s marketing of two identical herbicides. The district court granted BASF’s motion for summary judgment, concluding that appellants failed to show that there were any genuine issues of material fact. Because fact issues exist as to whether BASF’s marketing was fraudulent or unconscionable commercial conduct under the New Jersey Consumer Fraud Act, we reverse and remand.

FACTS

Appellants, a group of farmers who grow minor crops such as sugar beets and sunflowers, brought this class action against respondent BASF. BASF is incorporated under Delaware law and is headquartered in New Jersey. Among other enterprises, BASF markets and sells agricultural herbicides nationwide. Two of these herbicides, “Poast” and “Poast Plus,” are sold for crops such as flax, beans, sugar beets, sunflowers, alfalfa, and potatoes.

On December 15, 1997, appellants filed suit claiming that BASF engaged in consumer fraud by marketing one herbicide as two different products, selling Poast to them at a premium price, and leading them to believe the less expensive Poast Plus had not been registered with the EPA for use on minor crops.

As support for their claims, appellants presented evidence showing that BASF used different formulation and application instructions on Poast and Poast Plus labels, even though both contained the same active ingredient. BASF then undertook an advertising campaign to stress the fact that Poast was the only product registered for minor crops. In particular, BASF listed Poast Plus in its product brochure as only registered for use on major crops, and mailed farmers a letter stating that Poast Plus should be limited to major crops to “avoid residue problems.” BASF also engaged in a national public relations campaign to stress that use of Poast Plus on minor crops was unlawful and harmful to man and the environment. For example, BASF (I) sent a position paper stating that off-label use of Poast Plus would result in hefty fines; (2) was involved in an article stating that off-label use can be dangerous to consumers and the environment; (3) proceeded to report off-label use of Poast Plus to state regulatory authorities, resulting in some farmers being criminally prosecuted; and (4) misled state agriculture officials about the EPA registration status of Poast Plus.

On March 1, 2000, the district court granted BASF’s motion for summary judgment and dismissed appellants’ New Jersey Consumer Fraud Act claims. This appeal followed.

ISSUES

1. Did the district court properly grant summary judgment, where BASF’s exacting of higher prices from farmers by exploiting the federal herbicide registration process raised genuine issues of material fact?

2. Did the district court abuse its discretion in certifying appellants as a class?

■ ANALYSIS

I.

Summary judgment is properly granted when there are no genuine issues of material fact and either party is entitled to judgment as a matter of law. Minn. R.Civ.P. 56.03. On appeal, “we view the evidence in the light most favorable to the party against whom summary judgment was granted.” Lubbers v. Anderson, 539 N.W.2d 398, 401 (Minn.1995) (citation omitted). “Any doubt as to whether issues of material fact exist is resolved in favor of the party against whom summary judgment was granted.” Id. (citation omitted).

Appellants’ claims against BASF are based on the New Jersey Consumer Fraud Act. The purpose of the act “is aimed basically at unlawful sales and advertising practices designed to induce consumers to purchase merchandise or real estate.” Daaleman v. Elizabethtown Gas Co., 77 N.J. 267, 390 A.2d 566, 568 (1978). The act provides:

The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice[.]

N.J.Stat.Ann. § 56:8-2 (West 1989). The New Jersey Supreme Court has defined “unconscionable” as

an amorphous concept obviously designed to establish a broad business ethic. The standard of conduct that the term unconscionable implies is lack of good faith, honesty in fact and observance of fair dealing.

Cox v. Sears Roebuck & Co., 138 N.J. 2, 647 A.2d 454, 462 (1994) (quotations and citations omitted).

Appellants alleged that BASF unconscionably exploited the regulatory standards and overtly deceived and lied to farmers to conceal the fact that the less expensive Poast Plus was registered with the EPA for the same crops as Poast. The Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) requires herbicides to be registered with the Environmental Protection Agency (EPA). 7 U.S.C. § 136a (1994 & Supp. IV 1998). Through this registration process the EPA also regulates the labeling and packaging of herbicides. Id. This process begins with the manufacturer receiving authorization from the EPA to register the herbicide for use on certain crops. FIFRA then allows the states to require the manufacturer to receive state registration to use the herbicide on certain crops. Appellants alleged that BASF designed a plan to limit the state registration of Poast Plus.

In 1992, BASF received authorization from the EPA to register Poast Plus for all the uses it currently held for Poast, which included both major and minor crops. BASF proceeded to register Poast Plus with the states for use only on major crops. BASF’s registering of one herbicide for use on different crops was specifically permitted by the EPA. 40 C.F.R. § 152.130(b) (1994). Appellants presented evidence, however, to suggest that BASF designed a plan to conceal the fact that Poast Plus was EPA registered for use on minor crops and to discourage any off-label use of Poast Plus. That evidence consisted of BASF’s (1) involvement in publishing articles and newsletters discouraging the use of Poast Plus on minor crops; (2) encouragement of criminal prosecutions for off-label use; and (3) actions in lying to state regulatory authorities about the registration status of Poast Plus. Thus, appellants have shown that a genuine issue of material fact exists as to whether BASF’s system of deceit falls within the broad protection of the New Jersey Consumer Fraud Act.

BASF argues that even if there is a basis under this act, appellants are barred due to their inability to show damages. See N.J.Stat.Ann. § 56:8-19 (West Supp. 2000) (under New Jersey Consumer Fraud Act, party seeking to recover damages must suffer “any ascertainable loss of moneys or property * * * as a result of the use or employment * * * of any method, act, or practice declared unlawful under this act”); Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 541 A.2d 1063, 1068 (1988) (precluding private cause of action under New Jersey Consumer Fraud Act, where no ascertainable loss shown).

BASF relies on the federal labeling law to claim that appellants cannot show damages. BASF argues that even if appellants knew that Poast Plus was federally registered for the same uses as Poast, they could not have used Poast Plus on their minor crops because it was not labeled for such use. See 7 U.S.C. § 136j(a)(2)(G) (1994) (once herbicide is labeled for specific use “[i]t shall be unlawful for any person * * ⅞ to use any registered [herbicide] in a manner inconsistent with its labeling”). BASF’s focus is misplaced, however, because appellants’ claim is based on their lost opportunity to choose whether to buy Poast or the identical, but four dollars per acre cheaper, Poast Plus. This type of a lost opportunity or financial detriment may be sufficient to prove damages.

In Sutton v. Viking Oldsmobile Nissan, Inc., 611 N.W.2d 60 (Minn.App.2000), a case brought under the Minnesota Prevention of Consumer Fraud Act, this court reversed the district court’s determination that no damages had been shown, where

[the plaintiff] testified that if he had known the extent of [the defendant’s] profit on the service contract, he would have negotiated a lower price or refused to buy it. [The plaintiff] therefore either overpaid for the service contract or lost the opportunity to refuse to buy it because of the large profit [the defendant] would make on it.

Id. at 65.

Similarly, in this case appellants claim that they lost the opportunity to refuse to buy Poast because BASF’s marketing scheme and exploitation of federal regulations concealed that Poast Plus was registered for the same uses as Poast. Appellants’ reactions when they learned of BASF’s , scheme constitute circumstantial evidence that these farmers would not have stood idly by and paid inflated fees to BASF.

We therefore conclude that the issues of whether BASF’s actions rise to the level of fraud or an unconscionable commercial practice under the New Jersey Consumer Fraud Act are issues for a jury to decide. The district court’s grant of summary judgment is reversed and the matter is remanded for further proceedings.

II.

BASF also filed a notice of review, challenging the certification of appellants as a class for purpose of their claims under the New Jersey Consumer Fraud Act. District courts have considerable discretionary power to determine whether a class action is maintainable. Streich v. American Family Mut Ins. Co., 399 N.W.2d 210, 213 (Minn.App.1987), review denied (Minn. Mar. 25, 1987) (citing Forcier v. State Farm Mut. Auto. Ins. Co., 310 N.W.2d 124, 130 (Minn.1981)).

To represent a class in Minnesota, appellants first must satisfy prerequisites of number and common question, and show that the issues are typical and representative of the class. Minn.R.Civ.P. 23.01.

Number

BASF does not dispute that the class is so numerous that joinder is impractical.

Common Questions

“The threshold for [common questions] is not high and requires only that the resolution of the common questions affect all or a substantial number of class members.” Streich, 399 N.W.2d at 214 (citation omitted). Appellants allege that the common questions of law and fact include: (1) whether BASF’s alleged marketing practices violated the New Jersey Consumer Fraud Act; and (2) the amount of damages incurred by potential claimants. The district court did not abuse its discretion in determining that sufficient common questions exist.

Issues Representative and Typical of Class

“The remaining prerequisites are often viewed as a two-pronged approach ‘intended to insure that the claims of the class members are fully presented and vigorously prosecuted.’ ” Id. at 215 (citation omitted).

Typical issues focus on the representative parties and examine whether the parties “have an interest compatible with that of the class sought to be represented.” Ario v. Metropolitan Airports Comm’n, 367 N.W.2d 509, 513 (Minn.1985) (citation omitted). The typical issues requirement “refers to the potential for rivalry and conflict which may jeopardize the interests of the class.” Id. The district court did not abuse its discretion in determining that no such tension likely would occur in this case.

The representative issue requirement means the representative parties’ “interests must coincide with the interests of other class members” and the parties and their counsel will “competently and vigorously prosecute the lawsuit.” Id. (citation omitted). The district court did not abuse its discretion in determining that appellants’ counsel is competent to represent the class. Thus, the requirement of representation is satisfied.

Once appellants have satisfied the four prerequisites of rule 23.01, they must show that their proposed class meets one of the requirements of Minn.R.Civ.P. 23.02. Rule 23.02(c) requires a court to find that common questions predominate over individual questions and that a class action provides a superior method of adjudicating the controversy.

To determine whether common questions of law or fact predominate over individual questions, the court must consider the elements which the plaintiff must establish in order to recover on the claim against the defendant. To predominate, common issues must constitute a significant part of the individual cases.

Streich, 399 N.W.2d at 217 (citation omitted).

Factors to consider in this analysis include “manageability, fairness, efficiency, and available alternatives.” Id. at 218 (citation omitted). “The purpose of the class action has been to take ‘care of the smaller guy.’ ” Id. (citing Dolgow v. Anderson, 43 F.R.D. 472, 485 (E.D.N.Y.1968)). The class action is most often needed in consumer suits where individual claims are small. Forcier, 310 N.W.2d at 130. “[W]here the potential recovery is too small to justify individual litigation, a class action is proper.” Id. (citing Rathbun v. W.T. Grant Co., 300 Minn. 223, 241-42, 219 N.W.2d 641, 653 (1974)).

In Rathbun, the plaintiffs brought a class action to declare the defendant’s installment credit plan usurious. The district court limited the class action to the single issue of usury and further limited the action to the question of liability, exclusive of damages. The supreme court concluded that the class action was a superior method of promoting the public purpose of the usury statute, which was designed to protect those who cannot protect themselves. The court concluded:

All members of the class are entitled to recover the interest charged them. It is unreasonable to assume that they will all litigate individually their just claims.

Id. at 241-42, 219 N.W.2d at 653.

Although management problems inhere in any class action, the district court is vested with broad powers to alleviate any procedural problems which may arise. Forcier, 310 N.W.2d at 130. The reasoning of Rathbun applies equally to promoting the public purpose of consumer fraud statutes to protect those who cannot protect themselves. We therefore conclude that the district court did not abuse its discretion in certifying appellants as a class on their New Jersey Consumer Fraud Act claim.

DECISION

The district court’s grant of summary judgment is reversed and the matter is remanded for further proceedings.

Affirmed in part, reversed in part, and remanded.


author: SABERS, Justice

text:
    2000 SD 140
    In the Matter of the ESTABLISHMENT OF SWITCHED ACCESS RATES FOR U.S. WEST COMMUNICATIONS, INC. U.S. West Communications, Inc., Petitioner and Appellant, v. AT & T Communications of the Midwest Inc., Sprint Communications Company, L.P., MCI Telecommunications Corporation, Telecommunications Action Group and Dakota Telecommunications Group, Intervenors and Appellees.
    No. 21168.
    Supreme Court of South Dakota.
    Argued Sept. 19, 2000.
    Decided Nov. 8, 2000.

      Thomas J. Welk and Tamara A. Wilka of Boyce, Murphy, McDowell & Greenfield, Sioux Falls, SD, Attorneys for petitioner and appellant.
    John S. Lovald of Olinger, Lovald, Rob-bennolt and McCahren Pierre, SD, Attorneys for appellee AT & T.
    Thomas H. Harmon of Tieszen Law Office, Pierre, SD, Attorney for appellee Sprint.
    Andrew Jones, Kansas City, MO, Attorney for appellee Sprint.
    David A. Gerdes of May, Adam, Gerdes and Thompson, Pierre, SD, Attorneys for appellee MCI.
    Robert C. Riter, Jr. of Riter, Mayer, Hofer, Wattier & Brown, Pierre, SD, Attorneys for appellee Tele. Action Group.
    Rolayne Ailts Wiest, Special Assistant Attorney General, Pierre, SD, Attorney for appellee PUC.
   SABERS, Justice

[¶ 1.] The South Dakota Public Utilities Commission (PUC) approved an incremental rate increase for U.S. West’s switched access service over a three-year period. The circuit court affirmed. US West appeals. We affirm.

FACTS

[¶ 2.] Essential to the operation of the telecommunications systems is the switched access service. This “noncompetitive service” facilitates communication between consumers who have chosen different providers for their telephone services. In application, a switched access service rate is charged to the “resell” carrier for originating and terminating access to customers who employ a different carrier. Obviously, this rate has a direct effect on the profits of resell carriers.

[¶ 3.] Historically, U.S. West had foregone revenues from the switched access service it provided to long distance carrier companies. In 1994, U.S. West petitioned the PUC for price regulation and, on March 30, 1994, began charging 3.14 cents per minute for intrastate switched access transactions.

[¶ 4.] On June 12, 1995, U.S. West entered into a stipulation with the PUC and agreed that the rates charged for switched access services would be determined by a price regulation plan and not by rate of return regulation. Furthermore, a price ceiling was to be determined by “using the switched access rules found in ARSD 20:10:27 through 20:10:29.” The duration was also addressed:

The Parties agree ... that this price regulation plan should remain in effect until such time as the Parties shall mutually agree to its termination, revision or amendment. Either U.S. West or the [PUC] may unilaterally terminate this price regulation plan if any authority of the [PUC] necessary for the effective administration of this Stipulation are preempted by federal legislation or federal regulatory order or rule; or by any order of the [PUC] that substantially alters the pricing flexibility provided for in this Stipulation....

[¶ 5.] In 1996, U.S. West determined that it could no longer afford to provide this service at 3.14 cents per minute. US West conducted a cost study and filed it for approval with the PUC on June 24, 1996. The study supported a rate increase of 6.6 cents per minute for switched access service. • Later, on June 13, 1997, pursuant to SDCL 49-31-12.4, U.S. West implemented a rate of 6.4 cents per minute.

[¶ 6.] On July 30, 1996, the following companies were allowed to intervene: Sprint Communications Company; MCI Telecommunications Corporation; Express Communications, Inc., AT & T Communications of the Midwest, Inc.; Telecommunications Action Group (TAG); and Dakota Cooperative Telecommunications, Inc. Express Communications, Inc. later withdrew from the action.

[¶ 7.] A hearing was held before the PUC on October 9-10, 1996. During this hearing, U.S. West presented a second cost study report, which supported a rate increase for switched access service of 6.4 cents per minute, down two-tenths of a cent from its first cost study report. Three PUC staff members proposed a rate of 6.15 cents per minute and U.S. West acceded. US West then sought approval from the PUC for that rate.

[¶ 8.] In a 2-1 vote, the Commission reopened the record on December 19, 1996 based, in part, on its determination that the numbers presented by U.S. West were not verified. AT & T’s motion to disapprove the rate increase and close the docket was granted on January 27, 1997. US West appealed. In reversing and remanding, the circuit court stated that “[t]he Commission did not find that it’s own staffs witnesses were unreliable, unbelievable or not credible.”

the procedure used by the commission to approve the charge for a service which gives due consideration to the public need for adequate, efficient and reasonable service and to the need of the public utility for revenues sufficient to enable it to meet its total current cost of furnishing such service, including taxes and interest, and including adequate provision for depreciation of its utility property used and necessary in rendering service to the public, and to earn a fair and reasonable return upon the value of its property.

[¶ 9.] Based on the circuit court’s reversal, U.S. West implemented the rate of 6.4 cents per minute on June 13, 1997. On July 3, 1997, the PUC issued an Order to reopen the record and specifically rejected the analysis of the PUC staff members. It determined that U.S. West’s responses to data requests were not obtained under oath and its cost study calculations were not independently verified by the PUC staff for accuracy or validity. Based on those determinations, the PUC ordered its staff to conduct an on-site investigation and file its own report. It also required that any additional evidence received be verified by U.S. West employees.

[¶ 10.] On December 1, 1997, U.S. West implemented the rate of 4.14 cents per minute.

[¶ 11.] On September 23, 1998, the PUC found that because the rate increase to 6.15 cents per minute was more than a 100 percent increase, it would constitute a “rate shock” if implemented immediately. It also determined that the increase in access charges would result in a 58.1% decrease of net income to some TAG members. Consequently, the PUC ordered that the rate increase be implemented in increments, as follows:

June 13, 1997 $0.0364;
December 1, 1997 $0.0414;
June 1,1998 $0.0465;
December 1, 1998 $0.0515;
June 1,1999 $0.0565;
December 1, 1999 $0.06095.

The PUC also ordered that U.S. West refund or credit its switched access customers the difference between the rate U.S. West implemented on June 13, 1997 (6.4 cents) and the rate the PUC approved effective on the same date (3.64 cents) with 9.62% interest per annum. US West appealed to the circuit court.

[¶ 12.] The circuit court affirmed the PUC’s decision but remanded for reconsideration of two confidential exhibits 154 and 160. After reconsideration, the PUC entered amended findings of fact and conclusions of law consistent with its second decision. The circuit court affirmed. US West appeals.

STANDARD OF REVIEW

[¶ 13.] SDCL 1-26-36 requires this court to afford “great weight to the findings made and inferences drawn by [the PUC] on questions of fact.” It further allows this court to

[R]everse or modify [a PUC] decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions or decisions are:
(1) In violation of constitutional or statutory provisions;
(2) In excess of the statutory authority of the agency;
(3) Made upon unlawful procedure;
(4) Affected by other error of law;
(5) Clearly erroneous in light of the entire evidence in the record; or
(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

Accordingly, we review the administrative agency’s decision without regard to the circuit court’s decision. US West Communications, Inc., 505 N.W.2d at 122 (citation omitted). However, questions of law, including statutory interpretation, are reviewed de novo. Id. (citation omitted).

[¶ 14.] Interpretation of a contract is a question of law, which is reviewed de novo. Hayes v. Northern Hills General Hosp., 1999 SD 28, ¶ 62, 590 N.W.2d 243, 254. If the meaning of the contract language is plain and unambiguous, construction is not necessary. However, if the contract language is ambiguous, the rules of construction apply. See Alverson v. Northwestern Nat’l Cas. Co., 1997 SD 9, ¶ 8, 559 N.W.2d 234, 235. “Whether the language of a contract is ambiguous is ... a question of law.” Enchanted World Doll Museum v. Buskohl, 398 N.W.2d 149, 151 (S.D.1986) (citation omitted).

[¶ 15.] 1. WHETHER THE PUC EXCEEDED ITS AUTHORITY IN ORDERING THE INCREASED SWITCHED ACCESS SERVICE RATE IN INCREMENTS.

[¶ 16.] “Administrative agencies have only such adjudicatory jurisdiction as is conferred upon them by statute.” Kjerstad v. Ravellette Publications, Inc., 517 N.W.2d 419, 423 (S.D.1994).

[¶ 17.] US West claims that there is no express statutory authority authorizing the PUC to order that the increased switched access rate be implemented in increments. Although that is true, it is also true that there is no express statutory authority prohibiting incremental rates. It asserts that SDCL 49-31-4 authorizes the PUC to set “the rate” or “the price” or “a rate” or “a price,” but it does not authorize the PUC to set a “series of staged rates or prices.” US West also argues that the stipulation only permits it to set the price below the ceiling and that the stipulation denies such authority to the PUC. We disagree.

[¶ 18.] SDCL 49-31-4 clearly provides that “[a]ny charge established for the provision of telecommunications services shall be fair and reasonable.” It further requires the PUC to “determine and approve individual prices to be charged for a noncompetitive service[.]” Therefore, the PUC has statutory authority to set the rates charged by U.S. West for its switched access service. This statutory authority is recognized and incorporated into the stipulation agreement entered into between the parties.

[¶ 19.] The statutes and the stipulation entered into expressly guide the PUC in setting the rate. In order to set a “fair and reasonable price,” the PUC is required to “determiné and consider” five factors:

(1) the price of alternative services;
(2) the overall market for the service;
(3) the affordability of the price for the service in the market it is offered;
(4) the impact of the price of the service on the commitment to preserve affordable universal service; and
(5) the fully allocated cost of providing the service.

SDCL 49-31-1.4. This amounts to a legislative “standard of guidance:”

Where the legislature prescribes a standard of guidance for the administrative agency to follow, the necessary implied authority may also be delegated to the administrative agency to carry out the specific purposes prescribed and to exercise the appropriate administrative power to regulate and control.

In re Northwestern Public Service Co., 1997 SD 35, ¶ 23, 560 N.W.2d 925, 929.

[¶ 20.] Summarily, the PUC is required by statutory authority and the stipulation entered into with U.S. West to set a fair and reasonable rate and to consider five factors in so doing. In order to carry out the specific purpose underlying those five factors, the PUC is vested with necessary implied authority. Id.

[¶ 21.] Here, the legislature requires the PUC to consider “the affordability of the price for the service” and the “impact of the price of the service” in order to carry out the specific purpose of “preserving] affordable universal service.” Clearly, the PUC has necessary implied authority to structure a rate increase in increments to diminish the impact of a rate increase of more than 100 percent and to facilitate the affordability of the price of the service.

[¶ 22.] Additionally, the PUC has general statutory authority to supervise and control telecommunications companies. SDCL 49-31-3. This court has determined that the underlying basis for this regulation is to protect the public interest:

Public service commissions are generally empowered to, and are created with the intention that they should regulate public utilities insofar as the powers and operations of such utilities affect the 1 public interest and welfare.

Northwestern Bell Telephone Co. v. Chicago & N.W. Transportation Co., 245 N.W.2d 639, 642 (S.D.1976). Once this purpose is considered with the purpose of “preserving] affordable universal service,” it is clear that the PUC was vested with the necessary implied authority to effectuate those purposes. This statutory authority, in connection with the stipulation entered into between the parties, permits the PUC to impose price increments to protect against “rate shock.” Therefore, its decision to impose U.S. West’s switched access rate in increments was authorized.

[¶ 23.] 2. WHETHER THE PUC WAS CLEARLY ERRONEOUS IN DENYING U.S. WEST COMPENSATION DURING THE TIME PERIOD OF INCREMENTAL RATES.

[¶ 24.] US West argues that the PUC forced it to forego revenue by ordering that the rate increase be “phased-in.” US West rationalizes that the PUC determined that it was entitled to an increased rate of 6.0905 cents per minute; however, it ordered that the rate be gradually implemented to avoid “rate shock.” Consequently, U.S. West claims that the PUC was clearly erroneous in failing to compensate U.S. West for the revenue lost during the “phase-in” time period. It further argues that this error is amplified by the PUC’s order that U.S. West refund, with interest, the difference between the actual rate charged on June 13, 1997 (6.4 cents) and the rate the PUC later approved to be effective on the same date (3.64 cents).

[¶ 25.] The PUC counters by questioning whether this was a “true phase-in.” It concedes that under the “rate of return” regulation, a “true phase-in does not require a company to forego revenues.” However, it argues that this case deals with price regulation and the setting of prices, not rate of return regulation. Therefore, the PUC claims that U.S. West “forfeited a right to what it envisions as lost revenues.”

[¶ 26.] In 1995, U.S. West entered into a stipulation with the PUC. The plain language of the stipulation acknowledges that switched access services would be determined by the price regulation plan, as set forth in SDCL 49-31-1.4, and not by the rate of return process:

10. The prices for the following services will be determined by this price regulation plan:

a. Business and residential local exchange service;
b. Switched access services ....

(emphasis added). Therefore, by its own stipulation, U.S. West’s switched access service is subject to price regulation and not rate of return regulation.

[¶ 27.] As noted by the PUC, the “phase in” language and the effect thereof, as referred to by U.S. West, are associated only with rate of return regulation. Additionally, the cases cited by U.S. West in support of its proposition are restricted to rate of return regulation calculations. Consequently, U.S. West has not shown that it was entitled to the lost revenues associated with the PUC’s gradual increase of the switched access service rate over three, years.

[¶ 28.] 3. WHETHER THE PUC ERRED IN APPLYING SDCL 49-31-1.4.

[¶ 29.] US West claims that the PUC misinterpreted the 1995 stipulation. It claims that the purpose of the stipulation, in regards to switched access rates, was to allow it the “flexibility to price below the price ceiling but never to exceed the rate authorized by the [PUC] model.” It further claims that because it sought to set its rate at the price ceiling, or 6.0905 cents, the stipulation solely controlled this issue and SDCL 49-39-1.4 has no application. Therefore, it argues that (1) the circuit court and PUC erred in interpreting the stipulation to require that “switched access rates must be priced below the ceiling at different times” and that (2) the switched access rate should be set at 6.0905 cents per minute effective June 13,1997.

[¶ 30.] This stipulation was signed on June 12, 1995 by U.S. West and the PUC staff, with subsequent approval from the PUC. Because the parties did not “mutually agree to its termination,” it was still effective at the time the PUC ordered the gradual increase for U.S. West’s switched access service. The language is clear and unambiguous; therefore, construction is not necessary.

[¶ 31.] As indicated, the purpose of the stipulation was to contractually establish that price regulation, versus rate of return regulation, would control the pricing of U.S. West’s switched access services. Sections 11 and 15 of the stipulation further provide that any ceilings established or price changes implemented are to be consistent with SDCL 49-31-1.4:

11. For purposes of this price regula- • tion plan, prices for residence and business basic local exchange and switched access services will have a price ceiling. US West will have the ability to flexibly price these noncompetitive services under the applicable price ceiling as described in this Stipulation, consistent with the provisions of SDCL 49-31-1.1, 49-31-4, 49-31-12, 49-31-12.2 and 49-31-12.4.
15. The price ceiling for switched access services will be determined by using the switched access rules found in ARSD 20:10:27 through 20:10:29. Price changes will be consistent with the requirements of SDCL 49-31-1.4, 49-31-4, 49-31-12, 49-31-12.2 and 49-31-12.4, and the order in Docket No. TC93-108.

(emphasis added). Clearly, the price established under the stipulation was intended as a ceiling which could not be exceeded, not a floor, and the process of setting that floor would be controlled by the PUC’s application of SDCL 49-31-1.4, or by U.S. West, at its option. See discussion at ¶¶ 17,18.

[¶ 32.] As indicated in Issue 1, SDCL 49-31-1.4 establishes five factors that the PUC “shall” consider in determining a fair and reasonable price for a service subject to price regulation. The legislature has specifically allowed the PUC to implement rate increases which, by definition, must include the consideration of five factors. Here, pursuant to the stipulation, the PUC applied the price regulation statute to determine U.S. West’s switched access service rate and its implementation. It is clear from the findings of fact that the PUC considered these five factors, as statutorily required. Therefore, the PUC was not clearly erroneous in applying the five factors of SDCL 49-31-1.4 in this price regulation case.

[¶ 33.] Affirmed.

[¶ 34.] MILLER, Chief Justice, and AMUNDSON, KONENKAMP and GILBERTSON, Justices, concur.

      . SDCL 49-31-1(25) defines "switched access" as "an exchange access service purchased for the origination and termination of interexchange telecommunications services which includes central office switching and signaling, local loop facility, or local transport.”
      It was also defined in U.S. West Communications, Inc. v. Public Utilities Comm'n., 505 N.W.2d 115, 118 n. 2 (S.D. 1993) as "the service that allows local customers to connect to long distance telephone companies. 'Access charges' are charges assessed to the toll provider through which local exchange carriers are compensated for the use of network facilities.”

      . Price regulation is defined in SDCL 49-31-1.4 as "the procedure used by the [PUC] to approve the charge for an emerging or noncompetitive telecommunications service which is not based on rate of return regulation.”

      . SDCL 49-31-1(18) defines “rate of return regulation” as:

      . TAG members include: Midco Communications, TCIC Communications, TeleTech, First-Tel and Tel Serve.

      . In a dissenting opinion, Commissioner Stof-ferahn stated that the validity of the proposed increase at 6.15 cents had not been challenged. He further argued that while AT & T questioned the cost study results because they were not audited, AT & T did not present any evidence to show that the numbers were wrong nor did they conduct their own audits.

      . This was also done in accordance with SDCL 49-31-12.4, which provides the PUC with the authority to suspend the operation of an increased rate for 180 days.

      . “Rate shock" is a term used to describe “the effect on utility customers when a utility implements a significantly increased rate immediately or in a relatively short time span.”

      . See footnote 4, supra, for a list of the TAG members. Testimony was presented that if the proposed access rate was immediately implemented, the rate would have been one of the ten highest access rates in the nation. The PUC, in its amended findings of fact and conclusions of law, set forth the switched access rate that U.S. West charged in other states:
      Montana: $0.043254
      North Dakota: $0.063725
      Nebraska: $0.066832
      New Mexico: $0.059442
      Wyoming: $0.0469467
      The PUC also found that ”[b]ecause of the duration of the contracts which some resellers have with their respective customers, the costs which resellers would incur would be difficult to pass on to their customers ... although at least one reseller, Midco, is reducing the duration of service contracts it enters into with consumers.”

      .In accordance with the PUC schedule, the rate of $0.06095 is currently being charged to resellers.

      . US West cites Iversen v. Wall Bd. of Educ., 522 N.W.2d 188, 192 (S.D.1994), for the standard of review in this appeal. We do not use the abuse of discretion standard in these instances. In Sopko v. C & R Transfer Co., Inc., 1998 SD 8, ¶ 6, 575 N.W.2d 225, 228, we clarified that proper standard for review in administrative appeals is the clearly erroneous standard.

      . See footnote 3, supra, for the statutory definition of "rate of return regulation.”

      . ARSD 20:10:27:20 provides:
      Switched access rates for a telecommunications company may be phased-in over a period of time if the [PUC] finds the implementation of switched access rates as determined by the rules of chapters 20:10:27 to 20:10:29, inclusive, will result in a significant change in switched access rates or revenues and that a phase-in of rates is in the public interest. The length of any phase-in period shall be determined by the [PUC],
      AT & T argues that this evidences that U.S. West “has stipulated that phase in' would be an appropriate consideration for the [PUC] in pricing U.S. West's switched access.”

      . This Order approved an agreement to gradually increase U.S. West's switched access cost. Under the PUC computer model, U.S. West's cost of switched access was 6.7 cents. However, the initial rate was set at 3.14 cents and was to be subsequently increased by the PUC.
      AT & T argues that under this agreement and the 1995 stipulation, both of which are binding on U.S. West, revenues foregone in the initial stage of the "phase in” were not addressed.


author: Paul H. Anderson Associate Justice

text:
    Sandra E. BESCHEINEN, Relator, v. INDEPENDENT SCHOOL DISTRICT # 181 and Self-Insured/Berkley Administrators, Respondents, and Independent School District # 181 and State Fund Mutual Insurance Company, Respondents, and Special Compensation Fund.
    No. C2-00-1526.
    Supreme Court of Minnesota.
    Nov. 15, 2000.
   ORDER

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that the decision of the Workers’ Compensation Court of Appeals filed August 8, 2000, be, and the same is, affirmed without opinion. See Minn.R.Civ.App.P. 136.01, subd. 1(b).

Employee is awarded $600 in attorney fees.

BY THE COURT:

Paul H. Anderson Associate Justice


author: Alan C. Page Associate Justice

text:
    Mario THYER, Respondent, v. DALLAS STARS HOCKEY CLUB, et al., Relators.
    No. CX-00-1516.
    Supreme Court of Minnesota.
    Nov. 16, 2000.
   ORDER

Based upon all the files, records, and proceedings herein,

IT IS HEREBY ORDERED that the decision of the Workers’ Compensation Court of Appeals filed August 4, 2000, be, and the samé is, affirmed without opinion. See Minn. R. CivApp. P. 136.01, subd. 1(b).

Employee is awarded $600 in attorney fees.

BY THE COURT:

Alan C. Page Associate Justice


author: Edward C. Stringer Associate Justice

text:
    Howard J. MAJERUS, Respondent, v. ENGLE FABRICATION, INC. and State Fund Mutual Insurance Company, Relators.
    No. C1-00-1534.
    Supreme Court of Minnesota.
    Nov. 20, 2000.
    Mark Chapin Hall, Lynn Scharfenberg & Associates, Minneapolis, for relator.
    Raymond R. Peterson, McCoy Peterson, Jorstad & Brabbit, Minneapolis, for respondent.
   ORDER

Based upon all the files, records and proceedings herein,

IT IS HEREBY ORDERED that the above-entitled matter be, and the same is, remanded for reconsideration. The matter comes before us by certiorari upon the relation of Engle Fabrication, Inc. and its workers’ compensation liability insurer, State Fund Mutual Insurance Company, to review an order of the Workers’ Compensation Court of Appeals awarding costs and disbursements to Howard J. Majerus, employee. The record reflects that on July 12, 2000, a petition for the taxation of costs and disbursements was filed on behalf of Majerus with the Workers’ Compensation Court of Appeals. On noting that there had been no objection to the taxation, the Workers’ Compensation Court of Appeals awarded costs and disbursements as claimed. Engle Fabrication and State Fund Mutual assert that they failed to object to the taxation because they never received the petition. Minn.Stat. § 176.285 (1998) provides relief to a party who fails to assert a right within the time prescribed in other provisions of the Workers’ Compensation Act upon a showing of either nonreceipt of papers and notices served by mail or receipt only after unusual or unreasonable delay. See Fuller v. Farmers’ Coop. Oil Ass’n, 322 N.W.2d 359, 361 (Minn.1982). Although an award of costs and disbursements in the absence of an objection is appropriate, given the assertion of nonreceipt of the petition, we conclude that the matter ought to be remanded to the Workers’ Compensation Court of Appeals for purposes of permitting the submission of evidence concerning nonreceipt of the petition filed with the Workers’ Compensation Court of Appeals and permitting the Workers’ Compensation Court of Appeals thereafter to reconsider the order under review in light of such evidence.

BY THE COURT

Edward C. Stringer Associate Justice


author: LANCASTER, J.

text:
    James L. WILSON, Relator, v. COMMISSIONER OF REVENUE, Respondent.
    No. C5-00-824.
    Supreme Court of Minnesota.
    Nov. 22, 2000.

      Mark A. Pridgeon, Edina, for relator.
    Michael Hatch, Atty. Gen., Barry R. Greller, Asst. Atty. Gen., St. Paul, for respondent.
   OPINION

LANCASTER, J.

Relator James Wilson appeals from a tax court order granting summary judgment in favor of the Commissioner of Revenue. The Commissioner found Wilson personally liable for an employment wage levy assessed against Hazardous Waste Controls of Bloomington, Inc. (HWC), a corporation .Wilson founded in January 1994 and ran until it stopped doing business in December 1994. In granting summary judgment, the tax court upheld the Commissioner’s personal assessment against Wilson. Wilson appeals, arguing that summary judgment was inappropriate because the tax court made two legal errors. Wilson first asserts that the court erred in holding that res judicata bars him from arguing that the assessment against him violates the Excessive Fines Clauses of Minn. Const, art. I, § 5, and U.S. Const, amend. VIII. Second, Wilson contends that the statutory scheme under which the Commissioner assessed Wilson’s personal liability does not allow assessment of the total amount of the employee’s tax liability, but limits the assessment to the amount of the state’s actual pecuniary loss. Based on this second argument, Wilson contends that there are disputed issues of fact because the tax court did not calculate the Commissioner’s actual pecuniary loss. We reverse the tax court’s decision and hold that res judicata does not bar Wilson’s excessive fines claim. Accordingly, we remand the case for further proceedings consistent with this opinion.

On May 12, 1994, the Commissioner of Revenue issued a third-party wage levy to Apple Valley Oldsmobile (Valley Olds), requiring it to pay to the State of Minnesota any wages earned by Jay R. Hanson III, an independent contractor who worked at Valley Olds and owed unpaid taxes. See Hazardous Waste Controls of Bloomington, Inc. v. Commissioner of Revenue, Docket No. 6589, 1997 WL 158263, at *1 (Minn.Tax Mar. 17, 1997) {HWC I). After the levy was issued, relator James Wilson, a former Internal Revenue Service collection agent who was at that time working as a tax consultant, contacted the Commissioner and indicated that he represented Hanson. Wilson tried unsuccessfully to negotiate a payment plan for Hanson. Wilson then arranged for his company, HWC, to become the new janitorial service contractor for Valley Olds, and he hired Hanson to work for HWC performing the same services Hanson previously provided directly to Valley Olds as an independent contractor. Now, though, Hanson earned $6 an hour, rather than the $18 he had earned as a contractor for Valley Olds. In addition, the Commissioner could only extract 25% of Hanson’s wages now that he was classified as an employee, as opposed to the 100% that the Commissioner could have demanded when Hanson was an independent contractor. In HWC I, the tax court found that Wilson contrived this new employment arrangement to help Hanson avoid the 100% third-party levy on his earnings. See id. at ⅜4.

The Commissioner issued a wage levy against HWC on September 12, 1994. Wilson failed to respond to the levy. The Commissioner then issued a ‘Wage Levy — No Response Received” letter to Wilson, indicating that if he failed to comply, HWC would be liable for the full amount of Hanson’s tax liability. The letter requested that HWC fill out and return a disclosure form; the form was never returned. Ultimately HWC, via Wilson, made only one payment to the Commissioner. On November 2, 1994, the Commissioner issued HWC an “Order Assessing Liability for Failure to Honor Notice to Employer,” which assessed HWC for $45,352.55, the total amount of Hanson’s tax liability. HWC appealed. On November 4, 1994, the Commissioner issued an “Order Assessing Personal Liability” against Wilson, resulting in Wilson’s personal liability for the failure of HWC to honor the wage levy. Wilson appealed this order, but the Commissioner held the personal assessment appeal in abeyance pending issuance of the tax court’s decision in HWC’s appeal.

On March 17, 1997, in HWC I, the tax court sustained the Commissioner’s assessment against HWC. See id. at ⅜2. HWC never appealed. On April 24, 1997, the Commissioner denied Wilson’s appeal of the personal liability assessment. Wilson appealed this denial to the tax court.

The Commissioner brought a motion in limine requesting that the tax court exclude certain evidence because it related to issues already decided in HWC I. Among the evidence the Commissioner sought to exclude was evidence relating to: whether HWC was liable for Hanson’s tax liability; whether the amount of the liability was different from Hanson’s full tax liability; and whether HWC had a full and fair opportunity to raise and argue the constitutionality of the assessment — specifically whether the assessment was an excessive fine. In an order dated May 5, 1999, the tax court granted the Commissioner’s motion in limine relying on the doctrines of collateral estoppel and res judicata to exclude various pieces of evidence. See Wilson v. Commissioner of Revenue, Docket No. 6918, 1999 WL 285896, slip op. at 1, 4-8 (Minn.Tax May 5,1999).

The tax court ultimately granted summary judgment in favor of the Commissioner, upholding the personal assessment against Wilson. See Wilson v. Commissioner of Revenue, Docket No. 6918, 2000 WL 306677, slip op. at 1 (Minn.Tax March 14, 2000). Wilson appeals to this court from the tax court’s grant of summary judgment.

Wilson and the Commissioner agree on the legal issues presented in this appeal. First, did the tax court err in applying res judicata to bar Wilson’s claim that the assessment against him is an excessive fine in violation of Minn. Const, art. I, § 5, and U.S. Const, amend. VIII? Second, did the tax court err in concluding that Minn. Stat. § 270.101 (1994) authorizes the Commissioner to assess against Wilson the full amount of Hanson’s tax liability rather than the actual pecuniary loss suffered by the Commissioner?

When reviewing a grant of summary judgment, this court must decide whether any issues of material fact exist and whether the lower court made any errors in its application of the law. See Care Inst., Inc.—Roseville v. County of Ramsey, 612 N.W.2d 443, 445 (Minn.2000). We review tax court decisions only to determine whether the decision is supported by sufficient evidence and is in conformity with the law. See id. In this case, the facts are essentially uncontested and the only questions are questions of law. Specifically, we must consider whether res judicata was appropriately applied, a question of law which we review de novo. See id. at 446. Additionally, Wilson raises a question of statutory construction, also a question of law subject to de novo review. See Koehnen v. Dufuor, 590 N.W.2d 107, 109 (Minn.1999).

The doctrine of res judicata bars a claim where litigation on a prior claim involved the same cause of action, where there was a judgment on the merits, and where the claim involved the same parties or their privies. See Beutz v. A.O. Smith Harvestore Prods., Inc., 431 N.W.2d 528, 531 (Minn.1988); Youngstown Mines Corp. v. Prout, 266 Minn. 450, 466, 124 N.W.2d 328, 340 (1963). In addition, the party against whom res judicata is applied must have had a full and fair opportunity to litigate the matter in the prior proceeding. See Dorso Trailer Sales, Inc. v. American Body and Trailer, Inc., 482 N.W.2d 771, 774 (Minn.1992). If those requirements are met, res judicata bars not only claims as to matters actually litigated, but also as to every matter that might have been litigated in the prior proceeding. See Care Inst., 612 N.W.2d at 447; Beutz, 431 N.W.2d at 531; Youngstown Mines Corp., 266 Minn. at 466, 124 N.W.2d at 340.

Res judicata exists “in order to relieve parties of the burden of relitigat-ing issues already determined in a prior action, that a party may not be ‘twice vexed for the same cause.’” Beutz, 431 N.W.2d at 531 (quoting Shimp v. Sederstrom, 305 Minn. 267, 270, 233 N.W.2d 292, 294 (1975)). The doctrine of res judi-cata reflects courts’ disfavor with multiple lawsuits for the same cause of action and wasteful litigation. See, e.g., Charboneau v. American Family Ins. Co., 481 N.W.2d 19, 21 (Minn.1992); Mattsen v. Packman, 358 N.W.2d 48, 50 (Minn.1984). Despite the strong policies supporting res judica-ta, this court will not apply the doctrine rigidly but will reject the rule when its application contravenes an overriding public policy. See AFSCME Council 96 v. Arrowhead Reg’l Corrections Bd., 356 N.W.2d 295, 299 (Minn.1984); see also Brown v. Felsen, 442 U.S. 127, 132, 99 S.Ct. 2205, 60 L.Ed.2d 767 (1979) (“Because res judicata may govern grounds and defenses not previously litigated, however, it blockades unexplored paths that may lead to truth. * * * It therefore is to be invoked only after careful inquiry.”).

The tax court found that the elements of res judicata were satisfied and held that Wilson could not raise his excessive fines claim. See Wilson v. Commissioner of Revenue, Docket No. 6918, 1999 WL 285896, slip op. at 8 (Minn.Tax May 5, 1999). Specifically, the court found that HWC I resulted in a judgment on the merits, a finding not disputed by Wilson. Additionally, the court found privity between Wilson and HWC, also not disputed by Wilson. Finally, the tax court found that the excessive fines claim could have been litigated in the first case, but HWC failed to do so. Wilson disputes this finding. He argues that the tax court did not have jurisdiction to hear constitutional arguments in HWC I and therefore his claim could not have been litigated.

This court recognizes “the general rule that a judgment rendered by a court which lacks jurisdiction to hear a case does not have the effect of res judica-ta.” Hauser v. Mealey, 263 N.W.2d 803, 808 (Minn.1978). When the jurisdictional limits would not have allowed a party to raise a matter at a prior proceeding, then that matter is not one that “might have been litigated” in the original suit. See id. The question here is a variation on the theme, though. There were jurisdictional limits, but the limits could arguably have been circumvented.

The legislature created the tax court as an administrative agency of the executive branch. See Minn.Stat. § 271.01, subd. 1 (1998); see also In re McCannel, 301 N.W.2d 910, 919 (Minn.1980) (recognizing the tax court as “essentially an administrative agency, deriving its power from a grant by the legislature”). The tax court has limited jurisdiction and no original jurisdiction to hear constitutional matters. See Erie Mining Co. v. Commissioner of Revenue, 343 N.W.2d 261, 264 (Minn.1984); see also Minn.Stat. § 271.01, subd. 5 (1998). However, in In re McCannel this court held that a tax court has subject matter jurisdiction to hear constitutional claims if the case comes to it from the district court. In re McCannel, 301 N.W.2d at 919-20; see also Erie Mining Co., 343 N.W.2d at 264. In essence, the district court transfers its legal and equitable powers to the tax court, thereby giving the tax court jurisdiction to hear constitutional issues.

In Erie Mining Co., this court approved of a process whereby a tax court could gain jurisdiction over constitutional matters even if a case originated in tax court. See 343 N.W.2d at 264. If the tax court stays proceedings and refers the case to the district court for determination of the constitutional issue, and if after declining to make a constitutional determination the district court refers the case back to the tax court, the tax court may then exercise jurisdiction over the constitutional issue. See id. (“If any party raises a constitutional issue, the tax court should stay the proceedings and refer the constitutional question to the district court. The district court may either decide the constitutional issue or refer the matter back to the tax court which will then have subject matter jurisdiction” over the constitutional matters); see also, e.g., Murray v. Timmons, Docket No. C1-97-5261-R, 1999 WL 305224, at *1 (Minn.Tax May 11, 1999). Parties need not rely on the tax court to initiate this process, but may file a motion to trigger the “Erie Shuffle,” as the process has become known. See, e.g., Murray, 1999 WL 305224, at *1 (“Plaintiffs brought a motion before this Court for transfer of the above referenced case back to District Court. * * * The purpose of this transfer motion * * * is to add constitutional claims to Plaintiffs’ amended complaint.”); L.G.S.R.G. Partnership v. O’Connor, Docket No. 97-567, 1998 WL 765701, at *1 (Minn.Tax Oct. 30, 1998) (“Plaintiffs now move to stay further proceedings in Tax Court and transfer this action back to district court because the due process claim was not first raised in district court * * *.”).

In Wilson’s case, the tax court found that Wilson could have assured that his constitutional argument was heard but failed to do so because his excessive fines claim was raised in HWC I, but HWC never requested that the court initiate the “Erie Shuffle.” Accordingly, the tax court held that res judicata barred Wilson’s argument because it might have been litigated in HWC I.

We decline to adopt the tax court’s holding. “An administrative agency’s jurisdiction * * * is limited and is dependent entirely upon the statute under which it operates.” McKee v. County of Ramsey, 310 Minn. 192, 195, 245 N.W.2d 460, 462 (1976). The tax court has limited jurisdiction and may not hear constitutional claims unless a case originates in district court and is transferred to the tax court, or unless the tax court follows the procedure described above. As with any claim, res judicata does not operate to bar claims over which an administrative agency did not have jurisdiction. Cf. McKee, 310 Minn. at 195, 245 N.W.2d at 462 (“[R]es judicata will not operate as to those claims which were not raised and over which the administrative agency did not have jurisdiction.”). Although the tax court may ultimately gain the jurisdictional power to decide constitutional issues, it nonetheless is an administrative agency that is part of the executive and not the judicial branch and was created for a limited purpose and with limited jurisdiction. Until the tax court or the parties successfully take the initiative to trigger the procedure colloquially known as the “Erie Shuffle” and thereby extend the court’s jurisdiction to hear constitutional claims, we hold that such matters are not of the type that “might have been litigated.” In this case, we decline to except pre-“Erie Shuffle” tax court decisions from the general rule that res judicata does not govern claims that an administrative agency had no jurisdiction to address in the first instance. Therefore, we reverse the tax court’s decision to apply res judicata to bar Wilson’s excessive fines claim.

In view of our disposition, we decline to address the other issues raised by Wilson.

Reversed and remanded.

      . For purposes of this appeal, the most significant evidentiary exclusions are:
      D. Evidence that HWC’s liability is other than $45,352.55, adjusted for any amounts paid on the account, as determined by the Court in Hazardous Waste Controls of Bloomington, Inc. v. Commissioner of Revenue, Docket No. 6589 (Minn. Tax Mar. 17, 1997) * * * or such lesser amount as the Commissioner determines;
      E. Evidence that HWC did not have a full and fair opportunity in the HWC Case to raise and argue the issue of whether the amount of the Levy constitutes an “excessive fine” or whether it violates any constitutional provisions * ⅜ *.

        Wilson v. Commissioner of Revenue, Docket No. 6918, 1999 WL 285896, slip op. at 2 (Minn.Tax May 5, 1999).

      . HWC I makes clear that HWC did in fact raise the excessive fines claim: "Appellant also argues that the assessment constitutes an excessive fine and violates several constitutional provisions. We find no merit to Appellant's argument. Moreover, we find that Appellant’s constitutional attack is not properly before us.” HWC I, 1997 WL 158263, at *5.

      . Wilson also raises other- arguments against the application of res judicata. However, because we conclude that res judicata was inappropriately applied since the tax court had no jurisdiction in HWC I to hear HWC’s constitutional claims, we do not address Wilson's other arguments.


author: GILBERT, Justice. PAGE, Justice

text:
    Lyn M. DUCLOUX, Petitioner, Appellant, v. EMPIRE EXECUTIVE COACHES, INC., Respondent, Commissioner of Economic Security, Respondent.
    No. C1-00-299.
    Supreme Court of Minnesota.
    Nov. 30, 2000.
    Peter B. Knapp, William Mitchell Law Clinic, St. Paul, for appellant.
    Oak Meadows, Inc., St. Paul, respondent/Employer — pro se.
    Kent E. Todd, Minn. Dept, of Economic Security, St. Paul, for Respondent-Commissioner.
   OPINION

GILBERT, Justice.

Petitioner, Lyn M. Ducloux, sought review by the court of appeals of the Commissioner of Economic Security’s (Commissioner) decision to deny her reemployment insurance benefits. The court of appeals dismissed the case for lack of jurisdiction because Ducloux failed to timely serve the Commissioner and other parties involved with the petition for the writ of certiorari as required by MinmStat. § 268.105, subd. 7(a) (Supp.1999). Ducloux now seeks review of the court of appeals’ decision arguing that timely service of a conformed writ of certiorari should satisfy the statutory requirement.

The issues presented are identical to those decided today in Harms v. Oak Meadows, 619 N.W.2d 201 (Minn.2000). Based on our decision in Harms, we affirm the court of appeals’ decision to discharge the writ of certiorari and dismiss Ducloux’s appeal.

Affirmed.

PAGE, Justice

(concurring specially).

I concur in the result with reluctance. I write separately to note that, in addition to elevating form over substance, see Harms v. Oak Meadows, 619 N.W.2d 201, 203 (Minn.2000) (Anderson, Paul H., J., concurring specially), it is counterintuitive that service of the petition for a writ of certiorari triggers review while service of a copy of the writ itself does not.


author: GILBERT, Justice. PAUL H. ANDERSON, Justice PAGE, Justice

text:
    Donna M. HARMS, Petitioner, Appellant, v. OAK MEADOWS, Respondent, Commissioner of Economic Security, Respondent.
    No. CX-00-298.
    Supreme Court of Minnesota.
    Nov. 30, 2000.

      Peter B. Knapp, William Mitchell Law Clinic, St. Paul, for appellant.
    Empire Executive Coaches, Inc. St. Paul, respondent/employer — Pro Se.
    Kent E. Todd, Minn. Dept, of Econ. Sec., St. Paul, for Respondent-Commissioner.
   OPINION

GILBERT, Justice.

Petitioner, Donna M. Harms, sought review by the court of appeals of the Commissioner of Economic Security’s (Commissioner) decision to deny her reemployment insurance benefits. The court of appeals dismissed the case for lack of jurisdiction because Harms failed to timely serve the Commissioner and other relevant parties with the petition for a writ of certiorari as required by Minn.Stat. § 268.105, subd. 7(a) (Supp. 1999). Harms now seeks review of the court of appeals’ decision arguing that timely service of a conformed writ of cer-tiorari should satisfy the statutory requirement.

The issue presented is whether the court of appeals had jurisdiction over petitioner’s appeal. Jurisdiction is a question of law that we review de novo. See Kellar v. Von Holtum, 605 N.W.2d 696, 700 (Minn.2000). This case also involves statutory interpretation. Statutory interpretation is a question of law that we review de novo. See Koehnen v. Dufuor, 590 N.W.2d 107, 108-09 (Minn.1999).

Harms worked as a cook for Oak Meadows for approximately one month before she quit. Harms could not physically perform all of the duties required by her job, and stress and depression were causing her to be ill. After a series of appeals, the Commissioner’s representative denied Harms’ reemployment insurance benefits. Notice of the decision was mailed on January 28, 2000. Harms filed a petition for writ of certiorari with the Minnesota Court of Appeals on February 23, 2000, and a writ of certiorari was issued that same day. Harms mailed copies of the conformed writ and a statement of the case to the Commissioner’s office on February 24, 2000. On March 9, 2000, the Commissioner filed a motion to discharge the writ on the grounds that Harms did not timely serve the Commissioner with the petition for writ of certiorari as required by Minn. Stat. § 268.105, subd. 7(a). Harms filed the petition and it was served on the Commissioner the following day. However, the service fell outside the statutory period of 30 days. The court of appeals granted the Commissioner’s motion to discharge the writ and Harms now appeals that decision.

Minnesota Statutes § 268.105 sets forth the appeals process for reemployment insurance benefits cases. Subdivision 7(a) provides court of appeals’ jurisdiction for review of the Commissioner’s decisions. It states,

The Minnesota court of appeals shall, by writ of certiorari to the commissioner, review the decision of the commissioner!;,] provided a petition for the writ is filed with the court and a copy is served upon the commissioner and any other involved party within 30 calendar days of the mailing of the commissioner’s decision.

Minn.Stat. § 268.105, subd. 7(a).

The word “shall” in the statute indicates that review by the court of appeals is not discretionary. See Minn.Stat. § 645.44, subd. 16 (1998) (“ ‘Shall’ is mandatory.”). However, review by the court of appeals is limited by a proviso requiring the petition for the writ to be filed with the court and a copy to be served on the Commissioner and other parties within 30 days of the mailing of the Commissioner’s decision. See MinmStat. § 268.105, subd. 7(a).

Harms argues that timely serving the Commissioner with the actual writ issued satisfies the same purpose that serving the Commissioner with the petition for the writ would serve. In particular, Harms argues that the Commissioner and other parties were provided adequate notice of the appeal.

In support of her argument, Harms has cited several cases involving various statutes and court rules concerning appeal procedures in reemployment insurance cases. All of the cases cited are distinguishable from the case at hand, and none of them involve a violation of the particular statute at issue here.

We conclude that Minn.Stat. § 268.105, subd. 7(a) is clear and unambiguous as applied to the facts of this case. The court of appeals’ jurisdiction to review the case is limited by the specific language in a proviso contained in MinmStat. § 268.105, subd. 7(a), which provides that a copy of the petition for writ of certiorari be served upon the Commissioner and any other involved party. The rules of statutory interpretation require that “[provisos shall be construed to limit rather than to extend the operation of the clauses to which they refer.” Minn.Stat. § 645.19 (1998). The clear and unambiguous language of the proviso in Minn.Stat. § 268.105, subd. 7(a) mandates that review is only allowed if the petition for the writ is timely served upon the proper parties. Where a statute is not ambiguous in its application, “the letter of the law shall not be disregarded under the pretext of pursuing the spirit.” Minn.Stat. § 645.16 (1998). Thus, because the statute is unambiguous, it is not necessary for us to speculate as to what the legislature’s intent was.

In that Harms did not serve the Commissioner with the petition for writ of cer-tiorari within 30 days of the mailing of the Commissioner’s decision, we hold that the court of appeals’ dismissal of Harms’ petition was proper.

Affirmed.

PAUL H. ANDERSON, Justice

(concurring specially).

I concur in the reasoning and the result reached by the majority. Under the rules we must apply to the interpretation of statutes, MinmStat. § 268.105, subd. 7(a), is clear and free from ambiguity. The statute limits review to those situations where the petition for writ of certiorari is timely served upon the proper parties. Nevertheless, application of the statute in the context of the facts before us has aspects of elevating form over substance and denies Harms any meaningful review. This is an unfortunate result, but one mandated by the statute. I have no doubt that the commissioner was fully aware in a timely manner of Harms’ intent to pursue an appeal. I urge the legislature to revisit Minn.Stat. § 268.105, subd. 7(a), to ascertain whether service of a copy of the writ of certiorari satisfies the intent of the statute.

PAGE, Justice

(concurring specially).

I join in the special concurrence of Justice Paul H. Anderson.

      . Gonsior v. Alternative Staffing, Inc., 383 N.W.2d 654 (Minn.1986); Henry v. Minnesota Pub. Utils. Comm'n, 365 N.W.2d 770 (Minn.1985); In re Ultraflex Enters., 494 N.W.2d 89 (Minn.App.1992). In Gonsior and Henry, the issue was a violation of the Minnesota Rules of Civil Appellate Procedure. In re Ultraflex was a court of appeals case that also involved a rule violation but the party had complied with the governing statute that was controlling.


author: LANSING, Judge

text:
    Kurt ERICKSON as Parent and Natural Guardian, of Maranda Rae Erickson, a minor Child, and Kurt Erickson, Appellant, v. Rhonda Jean FULLERTON, Respondent, HealthPartners, o/b/o MinnesotaCare, Respondent.
    No. C8-00-607.
    Court of Appeals of Minnesota.
    Nov. 28, 2000.

      Duane E. Arndt, Kathryn K. Smith, Arndt & Benton, P.A., Minneapolis, MN, (for appellant).
    Roger H. Gross, Gislason & Hunter, L.L.P., Minnetonka, MN, (for respondent Fullerton).
    Richard M. Hagstrom, Troy J. Seibert, Zelle, Hoffmann, Voelbel & Gette, LLP, Minneapolis, MN; and Anne L. Johnson, HealthPartners, Inc., Bloomington, MN, (for respondent HealthPartners).
    Considered and decided by KLAPHAKE, Presiding Judge, LANSING, Judge, and SCHUMACHER, Judge.
   OPINION

LANSING, Judge

The district court granted HealthPart-ners, on behalf of MinnesotaCare, a statutory cost-of-care lien against an injured minor’s settlement with a responsible third party. The minor’s guardian challenges the lien’s statutory and constitutional validity when applied to proceeds of an injured person who has not been fully compensated. On this record, we decline to reach the constitutional issue, and because Minn.Stat. § 62A.095 (1996), which restricts subrogation rights for “health plans,” does not apply to the Minnesota-Care program, we affirm.

FACTS

Maranda Erickson sustained serious head injuries in a car-pedestrian accident in December 1997. Her father, Kurt Erickson (Erickson), as guardian, sued the car’s driver and submitted a claim to his insurer for underinsured motorist benefits.

At the time of the accident, Maranda Erickson was covered by a health insurance policy issued by HealthPartners through the MinnesotaCare program. The MinnesotaCare program is a subsidized health-care program established by statute. See Minn.Stat. § 256L.01-.18 (Supp.1997). To qualify for Minnesota-Care, an applicant must meet certain income and program guidelines and pay sliding-scale premiums.

Erickson, his insurer, and the car’s driver negotiated a settlement. Erickson notified HealthPartners of the settlement and petitioned the court for approval of a minor’s settlement. In response, Health-Partners filed a lien statement listing more than $63,000 in payments for Maranda Erickson’s accident-related medical care. The district court granted HealthPart-ners’s motion to enforce statutory lien rights under Minn.Stat. § 256L.03, subd. 6.

Erickson appeals, contending that (1) the lien statute should not apply because the settlement amount did not fully compensate Maranda Erickson for her accident-related injuries; and (2) the Equal Protection provisions of the Minnesota and United States Constitutions prevent application of section 256L.03, subdivision 6, when the injured person has not been fully compensated.

ISSUES

I. Did the district court err in granting HealthPartners’ motion to enforce its statutory cost-of-care lien rights against the minor settlement?

II. Is the equal-protection challenge properly before this court?

ANALYSIS

I

In his primary argument, Erickson claims the statutory lien rights afforded to HealthPartners through MinnesotaCare in Minn.Stat. § 256L.03, subd. 6 (Supp. 1997), have been limited by Minn.Stat. § 62A.095 (1996), which regulates subrogation rights in a “health plan.” Under section 62A.095, no health plan may include subrogation or reimbursement rights that apply before an injured person has received full compensation for his or her injuries. HealthPartners disputes that this restriction on subrogation rights for health plans applies to MinnesotaCare’s statutory-lien rights.

The interpretation of a statute and its application to undisputed facts raise questions of law this court reviews de novo. Meister v. Western Nat’l Mut. Ins. Co., 479 N.W.2d 372, 376 (Minn.1992). The purpose of statutory construction is to ascertain and give effect to the legislature’s intent. Minn.Stat. § 645.16 (1998). When the words of a statute, in their application to an existing situation, are clear and unambiguous, we must give effect to their plain meaning. Id.

MinnesotaCare is a state program established to promote access to health care services. Minn.Stat. § 256L.02, subd. 1 (Supp.1997). The statute authorizes the state to contract with managed-care plans to provide a prepaid health plan for healthcare services covered under the Minneso-taCare program. See Minn.Stat. § 256L.12, subd. 1 (Supp.1997). The state contracted with HealthPartners to provide health-care coverage to Maranda Erickson under the MinnesotaCare program.

Within the chapter establishing and defining the MinnesotaCare program, the legislature provided for a statutory cost-of-care lien. Minn.Stat. § 256L.03, subd. 6. The state and its managed-care plans have a lien on an enrollee’s causes of action arising from an occurrence that resulted in MinnesotaCare payments:

When the state agency provides, pays for, or becomes liable for covered health services, the agency shall have a lien for the cost of the covered health services upon any and all causes of action accruing to the enrollee * * * as a result of the occurrence that necessitated the payment for the covered health services. All liens under this section shall be subject to the provisions of section 256 .015. For purposes of this subdivision, “state agency” includes authorized agents of the state agency.

Minn.Stat. § 256L.03, subd. 6. By specifically incorporating section 256.015, the MinnesotaCare lien provisions mandate that the injured person receive at least one-third of the net recovery. Minn.Stat. § 256.015, subd. 5 (1996). The distribution process in section 256.015 first deducts reasonable costs of collection (including attorney fees), then deducts the “full amount” of public assistance, and then directs that the remaining amount be paid to the injured person. Id. Even though the “full amount” of the assistance is deductible, the deduction may not reduce the injured person’s guaranteed one-third of the net recovery. Id.

Erickson argues that application of MinnesotaCare’s lien is further restricted by a subrogation provision in chapter 62A, governing accident- and health-insurance policies, that prevents a health plan from enforcing subrogation or similar reimbursement rights unless an insured has made full monetary recovery:

Subdivision 1. Applicability. No health plan shall be offered, sold, or issued to a resident of this state, or to cover a resident of this state, unless the health plan complies with subdivision 2.
Subd. 2. Subrogation clause; limits. No health plan described in subdivision 1 shall contain a subrogation, reimbursement, or similar clause that provides subrogation, reimbursement, or similar rights to the health carrier issuing the health plan, unless:
(1) the clause provides that it applies only after the covered person has received a full recovery from another source[.]

Minn.Stat. § 62A.095, subds. 1, 2 (1996).

For three reasons, we reject Erickson’s argument. First, section 256L.03, subdivision 6, does not incorporate or refer to section 62A .095, and section 62A.095 does not incorporate or refer to section 256L.03, subdivision 6. See Northland Country Club v. Commissioner of Taxation, 308 Minn. 265, 271, 241 N.W.2d 806, 809 (1976) (court cannot supply language that legislature omitted). Second, section 256.015, the distribution formula specifically incorporated into section 256L.03, subdivision 6, conflicts with section 62A.095 by requiring that the full amount of public assistance be deducted unless it leaves the injured person with less than a third of the net recovery. See Minneapolis-St. Paul Sanitary Dist. v. City of St. Paul, 240 Minn. 434, 437, 61 N.W.2d 533, 536 (1953) (plain language of statute must be given effect; a reviewing court looks outside statute only to resolve an ambiguity, not to create one). And third, MinnesotaCare does not fit within the definition of “health plan” as it is used in section 62A.095. The “health plan” that must make subrogation rights contingent on full monetary recovery is defined as

a policy or certificate of accident and sickness insurance as defined in section 62A.01 offered by an insurance company licensed under chapter 60A * ⅜ *.

Minn.Stat. § 62A.011, subd. 3 (Supp. 1997). Section 62A.01 similarly defines “policy of accident and sickness insurance” as any policy insuring against loss or damage by sickness, bodily injury or death by accident. Minn.Stat. §§ 62A.01, subd. 1, 60A.06, subd. l(5)(a) (1996).

Even if we did not attach significance to the recurring use of the word policy and accepted that the certificate issued by MinnesotaCare could be included within the definition of insurance, MinnesotaCare is not “offered by an insurance company” licensed under chapter 60A. Cf Minn.Stat. § 62A.011, subd. 3. The MinnesotaCare program is offered by the state for the benefit and welfare of its citizens. This plain meaning of MinnesotaCare as a “program,” rather than a “health plan,” is reinforced by the statutory references within the MinnesotaCare provisions that consistently refer to “MinnesotaCare program”—not “health plan”—to describe MinnesotaCare. See, e.g., Minn.Stat. §§ 256L.02-.05, .07-12, .17-18 (Supp. 1997). The MinnesotaCare program does not fall within the narrow definition of “health plan.”

Although not specifically raised by Erickson, we recognize that in contracting with “managed care plans” such as Health-Partners to provide MinnesotaCare services, the state establishes a connection to a health plan. But we do not believe that those contractual relationships change the analysis. HealthPartners is acting as an authorized agent of the state as allowed under the MinnesotaCare provisions. The State of Minnesota does not become an insurance company offering a “health plan” by virtue of its contractual relationships with providers. See Minn.Stat. § 256L.12 (Supp.1997).

We also reject Erickson’s subsidiary argument that the MinnesotaCare program has been incorporated into chapter 62A through another provision, Minn. Stat. § 62A.045 (Supp.1997). Section 62A.045 governs the rights of the state (and contracting managed-care providers) to recover payments from other health insurers who may have priority for payment of the medical expenses. The language of the section, which grants the state the “rights of payment and appeal of an adverse coverage decision,” id. (b) (emphasis added), does not extend to cost-of-care liens. In addition, this section provides a separate definition of “health plan” that does not include MinnesotaCare. Id. (e). By its terms, this provision has no application to determining subrogation rights against a MinnesotaCare enrollee’s cause of action.

Because section 62A.095 does not apply to limit the statutory-lien rights of Health-Partners, the district court correctly granted HealthPartners’ motion to enforce its lien.

II

Erickson also raises an Equal Protection challenge under the United States and Minnesota Constitutions. Although Erickson raised his statutory arguments in his original petition, he did not allege unconstitutionality. Erickson first raised his arguments of unconstitutionality in a supplemental memorandum opposing Health-Partners’ motion to enforce the lien. The record contains no evidence that Erickson notified the attorney general of his constitutional challenge in the district court, as required under Rule 24.04 of the Minnesota Rules of Civil Procedure, and the state’s agency relationship with HealthPartners does not obviate the notice. See Appeal of Leary, 272 Minn. 34, 46-47, 136 N.W.2d 552, 560 (1965) (requiring notice even when state’s agent is party if not represented by attorney general). The district court did not address Erickson’s constitutional argument in its order. See State ex rel. Grobe v. Oak Ctr. Creamery Co., 269 Minn. 505, 509, 131 N.W.2d 621, 624 (1964) (equating lack of notice in district court to jurisdictional flaw).

On appeal, Erickson did notify the attorney general of his claims. We recognize that proper notice in the district court is not an absolute precondition to appellate consideration of important constitutional issues that are adequately briefed by the parties. See Specialized Tours, Inc. v. Hagen, 392 N.W.2d 520, 536 n. 15 (Minn.1986) (reviewing constitutionality of statute despite procedural flaws in notice). But we decline to review this constitutional challenge because it was neither adequately raised nor considered in the district court and the appellate record is insufficient for review. See State v. Odenbrett, 349 N.W.2d 265, 269 (declining in a criminal case to reach constitutional issue on privacy rights because not adequately raised or considered in district court and inadequately presented on appeal). Both federal and state equal-protection challenges “begin with the mandate that all similarly situated individuals shall be treated alike ⅜ * Scott v. Minneapolis Police Relief Ass’n, 615 N.W.2d 66, 74 (Minn.2000). The question whether two classes are similarly situated involves consideration of the structure and makeup of the two classes, in light of the purpose of the statute. State v. Northwestern Preparatory Sch., Inc., 228 Minn. 363, 365-66, 37 N.W.2d 370, 371 (1949).

The record in this case is insufficient to establish whether Erickson is similarly situated to one who contracts with a private, nonsubsidized health-care plan. Among other things, the record contains only general statements about MinnesotaCare’s premium and financial structure. The record does not establish the specific method or source of funding for Erickson’s healthcare coverage, the range or basis for MinnesotaCare’s premiums, or the premium amount paid by Erickson and the similarity or dissimilarity of these premiums to those that would be paid for a nonsubsi-dized health-care plan. Without this type of evidence, we cannot adequately address or determine whether Erickson is similarly situated to one who contracts with a private, nonsubsidized health-care plan.

DECISION

Because section 62A.095 does not limit the cost-of-care lien rights granted to the MinnesotaCare program under section 256L.03, subdivision 6, the district court did not err in granting HealthPartners’ motion to enforce these lien rights against the minor settlement.

Affirmed.