author: MEYER, Justice. PAGE, Justice

text:
    In the Matter of the WELFARE OF N.J.S., Child.
    No. A06-2277.
    Supreme Court of Minnesota.
    July 31, 2008.

      Sara L. Martin, Assistant State Public Defender, St. Paul, MN, for appellant N.J.S.
    Lori Swanson, Attorney General, St. Paul, MN, Timothy R. Faver, Beltrami County Attorney, Dana D. Erickson, Assistant Beltrami County Attorney, Bemid-ji, for respondent.
   OPINION

MEYER, Justice.

Appellant N.J.S. was 15 years old when he was charged with second-degree murder, Minn.Stat. § 609.19, subd. 1(1) (2006), for the shooting death of his grandmother. The State of Minnesota filed a motion to certify appellant for adult prosecution under Minn.Stat. § 260B.125 (2006). This statute requires a court to consider six factors in determining whether to certify a juvenile. Id., subd. 4. One of these factors is “the child’s prior record of delinquency.” Id. Appellant had no prior delinquency petitions or adjudications, but the district court considered evidence of his behavioral incidents at school as part of his “prior record of delinquency.” The district court concluded that all six factors weighed in favor of certification and certified appellant for adult prosecution. The court of appeals affirmed. In re Welfare of N.J.S., No. A06-2277, 2007 WL 2417265 (MinnApp. Aug.28, 2007). We affirm the certification for adult prosecution, but we reverse the court of appeals’ determination that school records can be part of the “prior record of delinquency.”

Appellant was born May 14, 1990, and was raised from the age of approximately 18 months by his grandparents and legal guardians, Marilyn and Ted Shutter. In December 2004, the Shutters began taking appellant to the Mississippi Mental Health Center for outpatient treatment. He was seen by a psychologist for individual counseling, and by a nurse practitioner for treatment by medication. He was diagnosed with attention deficit hyperactivity disorder (ADHD), impulse control disorder, and specific learning disability. His intellectual functioning was determined to be below average. In September 2005, after a suicide attempt, appellant was voluntarily admitted to a residential program for approximately one month, during which time he attended the Minnesota Learning Center. While at the program, he again attempted suicide and was sent to Children’s Hospital in Minneapolis where he was medically treated. He was then discharged to his grandparents’ home.

On Thanksgiving day, November 24, 2005, after relatives left his grandparents’ home, appellant was downstairs playing on the computer. When appellant came upstairs, he pretended to take his medication and went to his grandparents’ bedroom. There he took a gun and ammunition, and waited for approximately 15 minutes with the lights off for his grandparents to settle in to watch television in the living room. Then he entered the living room and shot his grandmother in the back of the head while she was watching television. He dropped the gun and called 911. Appellant claimed that he had not intended to kill his grandmother, but rather he had simply shot at the couch with the intent to scare her into giving him the computer password so he could access internet pornography.

Appellant was initially found mentally incompetent to proceed pursuant to Minn. R.Crim. P. 20. When he later became competent, the State moved to certify him as an adult pursuant to Minn.Stat. § 260B.125. The juvenile court ordered a certification study.

At the certification hearing, the State acknowledged that prior to the November 24, 2005, incident appellant had never been charged or adjudicated delinquent. Nicole Kern, a juvenile probation officer, completed a certification study and testified about her recommendation in favor of certification at the hearing. Kern testified about the evidence on each of the six factors that a court must consider in making the certification determination under Minn.Stat. § 260B.125, subd. 4. The six factors are seriousness of the offense, culpability of the child, prior record of delinquency, programming history, adequacy of punishment or programming in the juvenile system, and dispositional options available. Id. Ted Shutter testified that he did not want to see his grandson certified for adult prosecution.

When the State sought to elicit testimony regarding uncharged behavior reflected in school and institutional disciplinary records, appellant objected, arguing that based on the plain language of Minn.Stat. § 260B.125, subd. 4(3), this evidence was not relevant to his “prior record of delinquency” because the behavior did not constitute a crime and because the behavior had never been the subject of a delinquency proceeding. The juvenile court overruled appellant’s objection and received evidence of numerous uncharged incidents reflected in his school and institutional disciplinary records.

The juvenile court issued written findings of fact, conclusions of law, and an order certifying appellant as an adult. With regard to appellant’s prior record of delinquency, it found that although he had no prior delinquency involvement with the juvenile court, his school and institutional records reported behavioral incidents.

The juvenile court found that in elementary school appellant hit his peers when he was teased. Additionally appellant had difficulties with following directions and would at times become oppositional. While attending Bemidji Middle School, appellant was repeatedly caught using the school computers to access internet pornography. Appellant was disciplined for inappropriately using the school computer on six separate occasions. The school attempted to stop appellant’s behavior by limiting his access to computers, but he did not comply with these restrictions. Additionally, appellant was suspended from school at the end of April 2005 for apparently inappropriately touching a female peer.

The juvenile court further found that appellant continued to have problems at Voyageur High School. During the few months appellant attended that school, he was involved in the following five behavioral incidents: In September 2005, appellant left the school without permission. In October 2005, appellant used a teacher’s computer to access internet pornography. On November 8, 2005, appellant left his classroom and was found in the school music room with the lights off. Appellant refused to leave the room and asked to see his doctor because he was “thinking bad thoughts” and wanted to kill himself. The next day, November 9, 2005, appellant again left his classroom and was found in the school music room with the lights off. As appellant was leaving the music room, he struck a peer. Less than a week later, on November 14, 2005, appellant was again found using a teacher’s computer to access internet pornography.

The juvenile court also found that during the eleven days appellant attended the Minnesota Learning Center while at the adolescent unit of the Brainerd Regional Human Services Center, he had six behavioral incidents, including being disciplined once for threatening behavior, once for disrespectful behavior, and four times for noncompliant behavior.

Based on the above findings, the juvenile court concluded that the prior-reeord-of-delinquency factor slightly favored certification. It further concluded that seriousness of the offense and appellant’s history of failed programming weighed heavily in favor of certification. The juvenile court also concluded that appellant’s culpability, and the inadequacy of the juvenile justice system’s available punishment or programming weighed in favor of certification.

On appeal, appellant argued that the plain language of Minn.Stat. § 260B.125, subd. 4(3), prohibited the juvenile court from considering the uncharged behavior reflected in school and institutional disciplinary records when evaluating the prior-record-of-delinquency factor. N.J.S., 2007 WL 2417265 at *2. He further argued that the State had failed to present sufficient evidence that certification was necessary to protect public safety. Id. at *3. The court of appeals affirmed, id. at *4, and we granted review.

I.

The first issue is whether under Minn. Stat. § 260B.125 a juvenile court may consider uncharged behavior reflected in school and institutional disciplinary records when evaluating the prior-record-of-delinquency factor for certification as an adult. We review questions of statutory interpretation de novo. State v. Engle, 743 N.W.2d 592, 593 (Minn.2008). Where the language of a statute is unambiguous, “ ‘the letter of the law shall not be disregarded under the pretext of pursuing the spirit’ ” of the law. State v. McCoy, 682 N.W.2d 153, 158 (Minn.2004) (quoting Minn.Stat. § 645.16 (2006)).

The general rule is that children alleged to have committed an offense remain within the juvenile system. Minn. Stat. § 260B.101, subd. 1 (2006). A juvenile court can certify a child 14 years of age or older for adult prosecution, Minn. Stat. § 260B.125, subd. 1, only if the prosecuting authority demonstrates “by clear and convincing evidence that retaining the proceeding in the juvenile court does not serve public safety,” id., subd. 2(6)(ii). For purposes of the certification hearing, the charges against the child are presumed to be true. In re Welfare of W.J.R., 264 N.W.2d 391, 393 (Minn.1978).

Minnesota Statutes § 260B.125, subd. 4, provides:

In determining whether the public safety is served by certifying the matter, the court shall consider the following factors:
(1) the seriousness of the alleged offense in terms of community protection, including the existence of any aggravating factors recognized by the Sentencing Guidelines, the use of a firearm, and the impact on any victim;
(2) the culpability of the child in committing the alleged offense, including the level of the child’s participation in planning and carrying out the offense and the existence of any mitigating factors recognized by the Sentencing Guidelines;
(3) the child’s prior record of delinquency;
(4) the child’s programming history, including the child’s past willingness to participate meaningfully in available programming;
(5) the adequacy of the punishment or programming available in the juvenile justice system; and
(6) the dispositional options available for the child.

When weighing these six public safety factors, the juvenile court “shall give greater weight to the seriousness of the alleged offense and the child’s prior record of delinquency.” Id.

Appellant argues that the plain language, “prior record of delinquency,” only allows consideration of adjudicated conduct, not behavior problems generally. He defines “delinquency” as “juvenile delinquency,” an offense or a misdemeanor. If we find the statute ambiguous, he argues that we should interpret “delinquency” to include only adjudicated conduct, because penal statutes must be resolved in favor of lenity for the defendant. Appellant further contends that admitting school disciplinary records is problematic because the defendant often has no possibility of challenging or assessing the evidence.

The State argues that a “prior record of delinquency” may encompass unadjudicat-ed conduct. The State asserts that “delinquency” is ambiguous, because it can mean something as vague as “misdeed,” and contends that public policy favors considering nonadjudicated evidence so that juvenile courts can better assess the public safety risk.

The phrase “record of delinquency” is not defined nor is there a definition of the words “record” or “delinquency” in chapter 260B. A “delinquent child” is a child who has violated a federal, state, or local law or who has escaped from a juvenile correctional facility. Minn. Stat. § 260B.007, subd. 6 (2006). The definition of “delinquent child” provides:

“[Delinquent child” means a child:
(1) who has violated any state or local law, except as provided in section 260B.225, subdivision 1 [traffic offenses], and except for juvenile offenders as described in subdivisions 16 to 18 [petty offenses, underage drinking, certain drug offenses];
(2) who has violated a federal law or a law of another state and whose case has been referred to the juvenile court if the violation would be an act of delinquency if committed in this state or a crime or offense if committed by an adult;
(3) who has escaped from confinement to a state juvenile correctional facility after being committed to the custody of the commissioner of corrections; or
(4)who has escaped from confinement to a local juvenile correctional facility after being committed to the facility by the court.

Minn.Stat. § 260B.007, subd. 6(a). To be a “delinquent child,” a child must have violated a law.

The words “delinquent” and “delinquency” are consistently used in chapter 260B with reference to the violation of laws and the adjudication of petitions alleging such violations. See, e.g., Minn.Stat. § 260B.141, subd. 4 (2006) (referring to petition in juvenile court as “delinquency petition”); Minn.Stat. § 260B.157, subd. 1 (2006) (investigations to be conducted when child is “found to be delinquent”); Minn.Stat. § 260B.198, subd. 1 (2006) (dispositions available “[i]f the court finds that the child is delinquent”). In addition, the chapter’s statement of purpose links being “delinquent” to formal allegations and adjudications: “[t]he purpose of the laws relating to children alleged or adjudicated to be delinquent is to promote the public safety and reduce juvenile delinquency by maintaining the integrity of the substantive law prohibiting certain behavior and by developing individual responsibility for lawful behavior.” Minn.Stat. § 260B.001, subd. 2 (emphasis added). Given that chapter 260B links being “delinquent” to formal allegations and adjudications, we cannot conclude that the use of the word “delinquency” carries the broad meaning of “misdeed.”

Nor does chapter 260B define the word “record,” although it does contain specific provisions concerning the maintenance and disclosure of records made in juvenile court. MinmStat. § 260B.171 (2006). The word “record” is used in the chapter to refer to information created in the juvenile court system through a petition and an adjudication. See, e.g., id., subd. 1(a) (requiring the juvenile court to keep “records pertaining to delinquent adjudications” and to provide copies upon request from another juvenile court, adult court, law enforcement agencies, etc., in certain circumstances).

The colloquial use of the word “record” also informs our decision. See Duluth St. Ry. Co. v. Fid. & Deposit Co. of Md., 136 Minn. 299, 302-03, 161 N.W. 595, 596 (1917) (exploring colloquial use of “holdup” to mean “any form of robbery by the use of force”). We have used the word “record” to mean court records of a criminal history. See, e.g., State v. Henning, 666 N.W.2d 379, 382 (Minn.2003) (using the expression “prior record” to refer to appellant’s criminal history); State v. Hathaway, 379 N.W.2d 498, 504 (Minn.1985) (referring to the “prior record of convictions” referenced in Minn. R.Crim. P. 9.01 simply as “prior records”); State v. Gist, 358 N.W.2d 664, 667 (Minn.1984) (noting that a defendant’s “prior record” is used to determine his criminal history score); State v. Trog, 323 N.W.2d 28, 31 (Minn.1982) (referring to a lack of criminal history as a “clean record”).

We conclude that “prior record of delinquency” unambiguously refers to records of petitions to juvenile court and the adjudication of alleged violations of the law by minors. Applying this definition of “prior record of delinquency” to the case at hand, it is undisputed that appellant’s behavior was not the subject of any petition to the juvenile court, nor was it the subject of any juvenile court adjudication. It was, therefore, error to consider uncharged behavior reflected in school and institutional records when evaluating the prior-record-of-delinquency factor.

II.

Having determined that the district court erred in considering appellant’s school and institutional records as a “prior record of delinquency,” one of the two more heavily weighted factors, we must consider whether the error requires reversal of the district court’s certification order.

This court does not disturb a finding that public safety would be served by certification unless it is clearly erroneous. In re Welfare of D.M.D., 607 N.W.2d 432, 437 (Minn.2000) (citing In re Welfare of J.F.K., 316 N.W.2d 563, 564 (Minn.1982)). As the prior record of delinquency is one of six factors, whether the error requires reversal depends on the weight given to the inadmissible records and the weight given the five other factors.

The district court found that all six factors weighed in favor of certification, but the third factor only slightly so. Appellant argues that the district court clearly erred in finding that all the other factors weighed in favor of certification. We disagree.

It is undisputed that the first factor, “seriousness of the alleged offense,” weighed in favor of certification. There was ample evidence to support the district court’s conclusion that the second factor, “culpability of the child,” weighed in favor of certification, despite appellant’s “significant behavioral and mental impediments” recognized by the district court. Those impediments did not prevent him from planning and carrying out the shooting by himself.

There was also evidence to support a conclusion that the fourth factor, “programming history,” weighed in favor of certification. Appellant demonstrated defiant and uncooperative behavior during his detention and civil commitment, as well as during pre-offense voluntary programming. Appellant argues that these records should not be considered as part of his programming history. We conclude that there was no error in considering these records as part of his programming history.

Likewise, there is evidence to support the district court’s conclusion that the fifth and sixth factors, “adequacy of the punishment or programming available in the juvenile justice system” and “dispositional options available for the child,” weigh in favor of certification. Based on appellant’s programming history, the district court concluded that there would not be enough time to treat him under extended juvenile jurisdiction in any of the juvenile system’s facilities.

We conclude that the district court determination that the five other factors all weighed in favor of certifying appellant for adult prosecution is not clearly erroneous. Because only one factor, the “prior record of delinquency,” weighed against certification, it was not an abuse of discretion to certify appellant for adult prosecution.

Affirmed.

MAGNUSON, C.J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.

PAGE, Justice

(concurring).

I concur in the result. I write separately to note that, while it is clear that NJ.S.’s school and institutional disciplinary records are not “prior records of delinquency,” it is not clear to me that those records could not have been used under MinmStat. § 260B.125, subd. 4, to inform the court’s consideration of factors two and five.

      . The concurrence wonders whether appellant’s uncharged behavior could have been used when evaluating factors two and five (level of culpability and adequacy of punishment or programming available in the juvenile system). This issue was not presented to the courts below or to us and, therefore, we do not address it.

      . A child over 16 who is alleged to have committed first-degree murder is explicitly excluded from the definition of "delinquent child.” Minn.Stat. § 260B.007, subd. 6(b).

      . The court of appeals seemed to indicate that even though the school records are not records of delinquency, they could be used because "Minn.Stat. § 260B.125, subd. 4, does not purport to be an exclusive list of the factors that a district court may consider in determining whether public safety is served by certification.” N.J.S., 2007 WL 2417265 at *2. The statute gives six factors to be considered in deciding whether a particular child should be prosecuted as an adult, and directs that two of them be given greater weight. Minn.Stat. § 260B.125, subd. 4. There is no indication that other factors may be considered — only the obligation to consider the six enumerated factors. Consideration of other factors would risk applying the exception of certification to cases that the legislature intended to remain in juvenile court. We therefore conclude that Minn.Stat. § 260B.125, subd. 4, provides the exclusive list of factors that a court may consider in determining whether public safety is served by certification.


source: Caselaw Access Project

author: GILDEA, Justice.

license: Public Domain

text:
    Margaret MacRAE, trustee for the next of kin of Roderick MacRae, Appellant, v. GROUP HEALTH PLAN, INC., et al., Respondents.
    No. A06-1982.
    Supreme Court of Minnesota.
    July 31, 2008.

      Kay N. Hunt, Lommen, Abdo, Cole, King, Stageberg, P.A., Minneapolis, MN, for appellant.
    Charles E. Lundberg, Bassford, Remele, Minneapolis, MN, for respondent.
    Mark A. Hallberg, Hallberg & McClain, St. Paul, MN, for amicus, Minnesota Association for Justice.
    Diane B. Bratvold, Briggs & Morgan, William M. Hart, Meagher & Geer, P.L.L.P., Minneapolis, MN, for amicus, Minnesota Defense Lawyers Association.
   OPINION

GILDEA, Justice.

Margaret MacRae brought this malpractice action after her husband, Roderick MacRae, died from cancer. The district court dismissed the complaint, finding that Margaret’s claim was barred by the statute of limitations, and the court of appeals affirmed. Because respondents did not meet their burden to show that Margaret incurred compensable damage more than 4 years before she filed this action, we reverse.

The relevant facts in this case are not disputed. On January 15, 2001, Roderick MacRae had a routine physical examination with respondent Dr. Michael Kelly, his primary care physician. During this examination, Dr. Kelly performed a shave biopsy on a lesion on Roderick’s left leg and sent the tissue to the pathology department for analysis. Respondent Dr. Amar Subranaanian analyzed the tissue sample and reported on January 18 that it was a non-cancerous compound nevus.

More than 18 months after the biopsy, on July 31, 2002, Roderick saw Dr. Kelly due to a bulge in Roderick’s right groin. Dr. Kelly diagnosed the bulge as a hernia and referred Roderick to Dr. Steven Mes-titz for a surgical consultation. Roderick eventually decided to have the hernia surgically repaired. In preparation for this surgery, Dr. Kelly performed a pre-opera-tive examination of Roderick on December 9, 2002. According to the expert affidavit submitted by Margaret in this case, “[t]he standard of care requires palpitation of both inguinal [groin] lymph nodes as part of the preoperative physical.” Roderick’s medical records do not indicate that any abnormalities in these lymph nodes were discovered during the December 2002 examination.

On September 15, 2004 — approximately 21 months after his hernia surgery and 44 months after the initial biopsy — Roderick saw Dr. Kelly for swelling in Roderick’s left leg and groin. A CT scan performed that day indicated that the lymph nodes in Roderick’s left groin and pelvic areas were enlarged. Dr. Kelly again referred Roderick to Dr. Mestitz. After two surgical biopsy procedures, Roderick was diagnosed with metastatic malignant melanoma. As a result of this diagnosis, the tissue from the 2001 biopsy of the lesion on Roderick’s left leg was re-examined and found to be a malignant melanoma, not a compound nevus as originally diagnosed. An amended pathology report was filed on November 2, 2004, and Roderick was informed of the misdiagnosis the next day.

Roderick died on August 26, 2005. The autopsy report concluded that the cause of death was “extensive metastatic malignant melanoma” that had spread to Roderick’s brain, neck, liver, pancreas, small intestine, adrenal gland, and abdominal wall.

On February 20, 2006, Margaret, as trustee for the next of kin of Roderick, sued Dr. Kelly and Dr. Subramanian — as well as their employers, respondents Group Health Plan, Inc., and HealthPart-ners, Inc. — for medical malpractice. The complaint alleged that Roderick “would have, more likely than not, survived his illness” if the initial 2001 biopsy had been correctly read and that “within four years of the date of this Complaint, Roderick MacRae’s illness progressed to the point where it was no longer more likely that he would have survived his illness.”

The defendants moved for summary judgment, arguing that the 2001 misdiagnosis was a discrete act of negligence and that the medical malpractice suit is therefore barred by the 4-year statute of limitations. In support of their motion, the defendants submitted Roderick’s medical records but did not offer any expert evidence regarding the growth or spread of his melanoma between the 2001 misdiagnosis and the eventual correct diagnosis in 2004.

Margaret responded that her claim is not barred because “the cause of action did not accrue until [Roderick’s] cancer reached the point where he could not survive.” In an affidavit submitted to the district court, a medical expert retained by Margaret indicated that melanoma that originates in the left leg will first become metastatic in the inguinal lymph node. Because no abnormality was noted in these lymph nodes during Roderick’s December 2002 pre-operative examination, the expert concluded that Roderick’s cancer likely had not yet metastasized and he likely would have survived if his cancer had been discovered and treated at that time. In the alternative, Margaret argued that her claim was not barred because the misdiagnosis was part of a course of treatment of Roderick’s leg and skin condition that did not terminate more than 4 years before Margaret commenced the action.

The district court ordered summary judgment for the defendants. The court noted that “[t]here is a ‘longstanding principle that malpractice actions based on failures to diagnose generally accrue at the time of the misdiagnosis, because some damage generally occurs at that time.’ ” (Quoting Molloy v. Meier, 679 N.W.2d 711, 722 (Minn.2004.)) Because “the particular lesion biopsied by Dr. Kelly healed and Dr. Kelly did nothing more for this specific ailment,” the court also found that there was no continuing course of treatment and that the single act rule applied. The court therefore concluded that Margaret’s cause of action accrued on January 17, 2001— the date of the misdiagnosis — and that her “claim is time barred by the applicable statute of limitations.”

Margaret appealed, arguing that her cause of action did not accrue until after December 2002. Margaret argued that she did not suffer legally compensable damage until it became more likely than not that Roderick would not survive his disease, and that this happened within the 4-year limitations period. MacRae v. Group Health Plan, Inc., No. A06-1982, 2007 WL 2417167, at *3 (Minn.App. Aug. 28, 2007). The court of appeals noted that we had previously stated in dicta that a misdiagnosis of cancer caused “ ‘immediate injury in the form of a continually growing cancer, which became more dangerous to the plaintiff each day it was left untreated. The action accrued at the time of misdiagnosis because some damage occurred immediately.’ ” Id. (quoting Molloy, 679 N.W.2d at 722). The court of appeals concluded that these statements “strongly imply that as a matter of law, a misdiagnosis of cancer causes some damage resulting in accrual of a medical-malpractice claim as of the date of misdiagnosis.” Id. Accordingly, the court held that “the district court did not err in concluding that an action for malpractice brought at that time would have withstood a Rule 12.02(e) motion for dismissal on the pleadings and therefore accrued at the time of misdiagnosis,” and it affirmed summary judgment. Id. at *4. We granted Margaret’s petition for review.

I.

This case comes to us on review of the entry of summary judgment. Summary judgment is appropriate where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law.” Minn. R. Civ. P. 56.03. When reviewing dismissal of a claim on summary judgment, we examine the record to determine (1) “whether there are any genuine issues of material fact,” and (2) “whether the district court erred in its application of the law.” Antone v. Mirviss, 720 N.W.2d 331, 334 (Minn.2006).

A.

The parties agree that the factual record is undisputed, so the only issue before us is whether those undisputed facts establish that Margaret’s claim is barred by the applicable statute of limitations. The construction and application of a statute of limitations, including the law governing the accrual of a cause of action, is a question of law and is reviewed de novo. Antone, 720 N.W.2d at 334; State Farm Fire & Cas. v. Aquila Inc., 718 N.W.2d 879, 883 (Minn.2006). Because an assertion that the statute of limitations bars a cause of action is an affirmative defense, the party asserting the defense has the burden of establishing each of the elements. Aquila, 718 N.W.2d at 885.

The statutory limitations period that governs Margaret’s medical malpractice action is set forth in Minn.Stat. § 541.076(b) (2006): “An action by a patient or former patient against a health care provider alleging malpractice, error, mistake, or failure to cure, whether based on a contract or tort, must be commenced within four years from the date the cause of action accrued.” See also Minn.Stat. § 573.02, subd. 1 (2006) (allowing a trustee to maintain a wrongful death action for medical malpractice on behalf of the next of kin if the action is commenced within 3 years of the death and satisfies the timing requirement in section 541.076). Although the limitations period begins to run when the cause of action accrues, the statute does not define when such accrual occurs.

In Dalton v. Dow Chemical Co., 280 Minn. 147, 153, 158 N.W.2d 580, 584 (1968), we construed a statute of limitations similar to the one at issue here and held that a cause of action accrues “at such time as it could be brought in a court of law without dismissal for failure to state a claim.” See also Antone, 720 N.W.2d at 335; Herrmann v. McMenomy & Severson, 590 N.W.2d 641, 643 (Minn.1999). Thus, the limitations period begins to run when the plaintiff can allege each of the essential elements of a claim. Molloy v. Meier, 679 N.W.2d 711, 721 (Minn.2004). The essential elements for medical malpractice claims are: “(1) the standard of care recognized by the medical community as applicable to the particular defendant’s conduct, (2) that the defendant in fact departed from that standard, and (3) that the defendant’s departure from the standard was a direct cause of [the patient’s] injuries.” Plutshack v. Univ. of Minn. Hosps., 316 N.W.2d 1, 5 (Minn.1982); see also Molloy, 679 N.W.2d at 720-22 (stating that a cause of action does not accrue until both the negligent act and the resulting injury have occurred). The parties do not contest, for purposes of summary judgment, that there are no genuine issues of material fact as to the applicable standard of care and whether the defendants departed from that standard in misdiagnosing Roderick’s lesion in 2001. Accordingly, the question presented in this case focuses on when the misdiagnosis caused Roderick (and therefore Margaret) to suffer compensable damages.

B.

Both the district court and the court of appeals relied on our decision in Molloy in concluding that Margaret’s claim was barred by the statute of limitations. The respondents argue that we “definitively held” in Molloy that “some damage” necessarily occurs, and the statutory limitations period necessarily begins to run, at the time of a negligent misdiagnosis of cancer. Amici curiae Minnesota Medical Association and Minnesota Defense Lawyers Association argue that our holding in Fabio v. Bellomo, 504 N.W.2d 758, 762 (Minn.1993), also presumes that “some damage” occurs at the time of a cancer misdiagnosis. We therefore examine these cases to determine whether we have previously held, as the district court and court of appeals appear to have concluded, that, as a matter of law, “some damage” occurs, and a cause of action accrues, immediately upon a negligent misdiagnosis of cancer.

In Fabio v. Bellomo, Fabio alleged that her primary care physician, Dr. Bellomo, noticed a lump in her breast during an examination between 1982 and 1984, and again during an examination in 1986, but that he did not order a mammogram or perform any other medical tests on the lump. 504 N.W.2d at 760. After another doctor noticed the lump during a later examination and ordered a mammogram and biopsy, Fabio was diagnosed with breast cancer. Id. The tumor was surgically removed and Fabio underwent chemotherapy. Id. She subsequently sued Dr. Bellomo for medical malpractice in failing to diagnose the lump during the 1986 examination. Id. The district court granted summary judgment in favor of Dr. Bellomo because Fabio failed to establish that Dr. Bellomo’s negligence during the 1986 examination caused any damages. Id. at 761. The court also denied Fabio’s motion to amend her complaint to include a medical malpractice claim relating to the 1982-84 examination because such a claim was barred by the statute of limitations. Id.

On appeal, Fabio argued that she should have been allowed to amend her complaint to include Dr. Bellomo’s failure to order further testing on the lump during the 1982-84 examination because that conduct was part of a continuing course of treatment. Id. at 761-62. We had previously held that a breach of the applicable standard of care that occurs during a course of treatment for a particular condition is not deemed to have occurred until the patient’s treatment for that condition ceased. See Offerdahl v. Univ. of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn.1988). But we had also held that this “termination of treatment” rule does not apply when a patient’s injury was caused by a single discrete and identifiable act by the physician. See id. at 428-29 Although Fabio attempted to invoke the termination of treatment rule, we held that any claim relating to the 1982-84 examination was barred because that examination was a discrete act and “not part of a continuing course of treatment” with the 1986 examination. Fabio, 504 N.W.2d at 762. We therefore affirmed the district court’s decision not to allow Fabio to amend her complaint to add a claim based on the 1982-84 alleged failure to treat. Id.

In Molloy v. Meier, Molloy asked Dr. Meier to conduct genetic tests on Molloy’s daughter, who was developmentally delayed, to determine whether she had inherited any abnormalities from Molloy. 679 N.W.2d at 714. Dr. Meier intended to order, among other tests, a test for Fragile X syndrome, but the Fragile X testing was never performed. Id. Molloy was informed that the test results were “normal,” but was not told that the Fragile X test had not been performed. Id. Dr. Meier referred the child to Dr. Backus for evaluation. Id. After Molloy asked about the likelihood of conceiving another child with the same defect, Dr. Backus responded that “[her daughter’s] problems were not genetic in origin and the risk that Molloy might give birth to another child like [her daughter] was extremely remote.” Id. Approximately 6 years later, Molloy gave birth to a son who exhibited the same developmental delays as her daughter, and subsequent genetic testing showed that her son had Fragile X syndrome. Id. at 715. Molloy and her daughter were then tested and found to carry the genetic disorder. Id.

Molloy sued the doctors who performed the initial genetic testing, arguing that she would not have conceived her second child if she had known she was a carrier of Fragile X syndrome. Id. The doctors argued that the cause of action was time-barred because “ ‘some damage occurs as a matter of law when the physician fails to make a correct diagnosis and recommend the appropriate treatment.’ ” Id. at 721 (quoting Fabio, 504 N.W.2d at 762). Although we “reaffirm[ed] the long-standing principle that malpractice actions based on failures to diagnose generally accrue at the time of the misdiagnosis, because some damage generally occurs at that time,” we held that under the facts in Molloy, no damage occurred until the second child was conceived. Id. at 722. In reaching this conclusion, we attempted to distinguish Fabio as follows: “The misdiagnosis in Fabio caused the plaintiff immediate injury in the form of a continually growing cancer, which became more dangerous to the plaintiff each day it was left untreated. The action accrued at the time of misdiagnosis because some damage occurred immediately.” Id.

We recognize that our attempt to distinguish Fabio from the facts in Molloy suggested a per se rule that a cause of action for the misdiagnosis of cancer accrues, and the statutory limitations period begins to run, at the time of the negligent misdiagnosis. But Molloy did not involve a cancer misdiagnosis, and our statement that a cause of action accrues immediately upon such a misdiagnosis was not necessary to our holding in that case. That statement therefore is not binding precedent. See Vandenheuvel v. Wagner, 690 N.W.2d 758, 755-56 (Minn.2005); State ex rel. Foster v. Naftalm, 246 Minn. 181, 208, 74 N.W.2d 249, 266 (1956).

Moreover, after re-examining Fabio, we conclude that our attempt to distinguish the facts in Molloy read too much into our decision in Fabio. Our analysis of the statute of limitations issue in Fabio was limited to whether the 1982-84 examination was a discrete act or whether that examination was part of a continuing course of treatment. Fabio, 504 N.W.2d at 762. Thus, our analysis addressed only the date of the negligent act, not the date of any damage resulting from the act. Although it may be possible to infer from our analysis a conclusion that some damage necessarily occurs at the same time as a misdiagnosis of cancer, our review of the briefs submitted in Fabio suggests that neither party addressed the date of damage in their argument regarding the accrual of the cause of action in that case. Accordingly, such an inference would read into our analysis a decision on an issue that was not raised by the parties and that we did not purport to decide. To the extent that our discussion of Fabio in the dicta in Molloy suggests that we adopted a broad rule of law that some damage necessarily occurs at the time of a cancer misdiagnosis, we clarify that these dicta read too much into Fabio. We therefore conclude that we have not previously decided whether a cause of action accrues as a matter of law immediately upon a negligent misdiagnosis of cancer.

II.

Because we have not previously decided whether some damage occurs as a matter of law at the time of a cancer misdiagnosis, we now turn to whether we should adopt such a rule in this case. Courts use different approaches to determine when injury or damage occurs for purposes of accrual of a cause of action. For example, the “occurrence” approach “assumes that nominal damages occur, the cause of action accrues, and the statute of limitations begins to run, simultaneously with the performance of the negligent or wrongful act.” Antone, 720 N.W.2d at 385. The “discovery” approach, on the other hand, provides that a cause of action does not accrue until “the plaintiff knows or should know of the injury.” Id.

Both of these approaches, however, are inconsistent with our long-standing precedent. We have repeatedly held that a negligent act is not itself sufficient for a negligence cause of action to accrue. Dalton, 280 Minn. at 152-53, 158 N.W.2d at 584; Golden v. Lerch Bros., Inc., 203 Minn. 211, 220-21, 281 N.W. 249, 253-54 (1938); see also Offerdahl, 426 N.W.2d at 429 (“Alleged negligence coupled with the alleged resulting damage is the gravamen in deciding the date when the cause of action accrues.” (emphasis added)). We have also held that ignorance of a cause of action does not toll the running of the statutory limitations period. Herrmann, 590 N.W.2d at 643; Dalton, 280 Minn, at 153, 158 N.W.2d at 584.

Accordingly, we have rejected both the occurrence and discovery approaches in favor of a “middle ground”— the “damage” rule of accrual. Antone, 720 N.W.2d at 335-36. Under this approach, a cause of action accrues when some injury or damage from the negligent act actually occurs. Id. at 336; see also Herrmann, 590 N.W.2d at 643 (holding that it is the occurrence of “some” damage, and not “the ability to ascertain the exact amount of damages,” that triggers the accrual of a cause of action and running of the limitations period). The damage triggering the accrual of a negligence cause of action may be any damage caused by the negligent act and is not limited to the damage or cause of action “specifically identified in the complaint.” Antone, 720 N.W.2d at 336. But the damage must be “compensable damage,” not just some abstract damage. Id. (emphasis added); see also K.A.C. v. Benson, 527 N.W.2d 553, 561 (Minn.1995) (noting that “the breach of a legal duty without compensable damages recognized by law is not actionable”).

Thus, consistent with our precedent, in order to justify a rule that a cause of action accrues as a matter of law at the time of a cancer misdiagnosis, we would have to conclude that some legally com-pensable damage necessarily occurs at the time of such a misdiagnosis. We decline to adopt such a broad rule of law. Rather, consistent with our precedent and the precedents in other states that apply a “damage” rule for the accrual of a cause of action, we believe that the limitations inquiry in cancer misdiagnosis cases should be conducted based on the unique record developed in each particular case.

This case-by-case approach is consistent with our precedent suggesting that the continued presence of cancer following a negligent misdiagnosis, by itself, may not be compensable damage. See Leubner v. Sterner, 493 N.W.2d 119, 120 (Minn.1992). In Leubner, a patient claimed that a 6-month delay in the diagnosis of her breast cancer reduced her chance of survival. The issue before us on appeal was whether the patient had established, for purposes of surviving summary judgment, that the misdiagnosis had caused any damages. Id. at 121. We held that the plaintiffs claim failed because she did not present any evidence of any compensable damage that resulted from the continued presence and growth of the cancerous tumor in her body. Id. In considering the unchecked growth of the cancer in the patient’s body as a potential theory of damages, we stated, “[Pjlaintiffs contend that the claimed injury is ‘the enlarged, unchecked tumor.’ But the tumor was removed in February 1988, just as it would have been removed 7 months earlier. It is unclear what the damages would be for removal of a larger rather than a smaller tumor.” Id. We do not construe our language to mean that the continued presence of a cancerous tumor could never give rise to a cause of action. But the result in Leubner suggests that the presence of the tumor is not itself compensable damage.

Additionally, courts in other jurisdictions that apply a “damage” rule of accrual have held, as we suggested in Leubner, that the continued presence of cancer is not itself sufficient for a cause of action to accrue and the statutory limitations period to begin running. In St. George v. Pariser, 253 Va. 329, 484 S.E.2d 888, 889 (1997), a doctor performed a biopsy on a mole and concluded that the tissue was benign. Nearly 2 years later, the tissue was reexamined and found to contain a melanoma in the epidermis. Id. at 889-90. The entire mole was then removed, and the melanoma was found to have spread to the dermis. Id. The record indicated that the melanoma would have been curable if it had been completely removed at the time of the initial biopsy, but that after it spread to the dermis, removal could not ensure that the cancer would not recur in another part of the body. Id. at 890. The Virginia Supreme Court concluded:

[The plaintiff’s] actionable injury was not the generic disease of cancer or the cancer “in situ” which she had when she sought evaluation of the mole in 1991. [The doctor’s] negligence could not have been the cause of that medical condition. [The plaintiffs] injury was the change in her cancerous condition which occurred when the melanoma altered its status as “melanoma in situ,” a biologically benign condition, to “invasive superficial spreading malignant melanoma” in the dermis which allowed the melanoma cells to metastasize to other parts of the body.

Id. at 891. Because the record did not establish that the injury had occurred outside of the limitations period, the court held the doctor had “wholly failed to meet his burden of proof to sustain his statute of limitations plea.” Id.

Similarly, in DeBoer v. Brown, 138 Ariz. 168, 673 P.2d 912, 913 (1983), a doctor biopsied a patient’s lesion in 1976 and diagnosed the tissue as a compound nevus or common wart. But after the patient was diagnosed with a malignant melanoma in April 1980, the tissue from the 1976 biopsy was re-examined and found to be a melanoma. Id. The record indicated that the melanoma had “begun to grow internally sometime during 1979.” Id. The Arizona Supreme Court concluded:

Where a medical malpractice claim is based on a misdiagnosis or a failure to diagnose a condition, the “injury” is not the mere undetected existence of the medical problem at the time the physician misdiagnosed or failed to diagnose it. Nor is the “injury” the mere continuance of the same problem in substantially the same state or the leaving of the patient “at risk” of developing a more serious condition. Rather, the “injury” is the development of the problem into a more serious condition which poses greater danger to the patient or which requires more extensive treatment.

Id. at 914. Applying this rule to the facts before it, the court held that the injury occurred, and the statute of limitations began to run, in 1979, when the lesion began to grow. Id. at 913-15.

We agree with the reasoning of the Virginia and Arizona courts and conclude that the continued presence of cancer — by itself — is not evidence of compen-sable damage in a malpractice action for negligent misdiagnosis. As we indicated in Molloy, we have long recognized that “some damage” usually occurs at the time of a misdiagnosis. 679 N.W.2d at 722. But we also acknowledged in Molloy that this general principle is not applicable to every case. Id. Given the complexities associated with the development of a disease like cancer, and the variety of ways that such a disease may manifest itself in a particular patient, we cannot say that some compensable damage necessarily occurs as a matter of law at the time of every negligent misdiagnosis of cancer. To adopt a blanket rule that such damage occurs as a matter of law at the time of a misdiagnosis of cancer would turn our “damage” rule of accrual into an “occurrence” rule for this narrow class of cases. We decline to adopt such a rule in this case. Rather, as in other medical malpractice cases, we conclude that a court must determine when a cause of action accrues in cases of misdiagnosis of cancer by looking at the unique circumstances of the particular case to determine when some compensable damage occurred as a result of the alleged negligent misdiagnosis.

III.

Having declined to adopt a blanket rule that “some damage” occurs as a matter of law at the time of a cancer misdiagnosis, we must determine whether the respondents in this case established that Roderick suffered some compensable damage more than 4 years before Margaret commenced her medical malpractice action. Margaret argues that no compensable damage can occur in a cancer misdiagnosis case until it is more likely than not that the patient will not survive the disease. Based on the affidavit testimony of her medical expert that the results of Roderick’s preoperative examination in December 2002 indicate that he likely would have survived his melanoma if it had been properly treated at that time, Margaret argues that her claim is timely under such a rule.

Margaret supports her argument with cases in which we have rejected several theories of damage or potential damage that may result from a misdiagnosis of cancer. Margaret cites Leubner, where, while considering whether the patient had established that any damages were caused by the negligent act, we declined to recognize “negligent aggravation of a preexisting condition” as a legally compensable injury. 493 N.W.2d at 122. She also relies on Fabio. In Fabio, as in Leubner, we considered whether there was sufficient evidence of causation to sustain Fabio’s malpractice claim arising from the 1986 examination. Fabio, 504 N.W.2d at 762-63. We rejected “loss of chance” due to reduced life expectancy and increased risk of recurrence as a theory of compensable damages, and reaffirmed our rejection of “negligent aggravation of a preexisting condition.” Id.

We agree that a patient suffers compensable damage from a negligent misdiagnosis of cancer when it becomes more likely than not that he will not survive the disease. But we do not agree that this is the only possible compensable damage in such eases. As we have previously recognized, the accrual of a cause of action for professional malpractice is not limited to the damage or cause of action “specifically identified in the complaint.” Antone, 720 N.W.2d at 336. Although the continued presence of a patient’s cancer alone might not be compensable damage, the progression of the disease may require the patient to undergo a different course of treatment or to incur additional medical expenses. Moreover, the continued presence of the cancer may cause the patient to suffer pain, loss of bodily functions, or some other damage. Any of these developments, and undoubtedly other scenarios that we have not mentioned, could be a compensa-ble injury that would result in the accrual of a cause of action for medical malpractice if that injury is substantiated by evidence in the record.

We therefore decline Margaret’s invitation to hold that no compensable damage can occur in a cancer misdiagnosis case until it is more likely than not that the patient will not survive the disease. As we held above, the determination of the accrual of a cause of action for negligent misdiagnosis of cancer must be based on the facts and circumstances of each case. Where the record reflects that some damage was suffered because of the negligent act, the cause of action has accrued for statute of limitations purposes.

In this case, the district court made a legal conclusion that the cause of action accrued and the statute of limitations began to run at the time of the misdiagnosis. Based on this conclusion, the court did not make any findings regarding whether there is an issue of material fact as to when Roderick suffered a legally compensable injury caused by the misdiagnosis of his cancer. Based on our own review of the record, we conclude that respondents did not establish that Roderick suffered some damage more than 4 years before February 20, 2006, when Margaret commenced this action. Respondents did not offer any expert evidence regarding the growth or spread of Roderick’s melanoma between the 2001 misdiagnosis and the eventual correct diagnosis in 2004. They instead supported their motion with copies of Roderick’s medical records. But those records do not establish that Roderick suffered damage from the misdiagnosis before February 20, 2002 (4 years before this action was commenced).

Respondents also point to the affidavit of the expert Margaret retained to support their argument that Roderick incurred some damage after the January 18, 2001, misdiagnosis. Specifically, respondents point to this expert’s acknowl-edgement that Roderick’s disease had a “natural progression” from the time of the misdiagnosis. But the question is whether the natural progression of the cancer had consequences that constitute compen-sable damages before February 20, 2002, and the record is barren on that issue.

In sum, based on our review of the record we hold that respondents have not met their burden of establishing that Roderick suffered compensable damages from the misdiagnosis prior to February 20, 2002. We therefore reverse the decision of the court of appeals and remand to the district court for further proceedings consistent with this opinion.

Reversed and remanded.

MAGNUSON, C.J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.

      . A nevus is "[a] birth mark or a small growth on the skin, appearing before or shortly after birth, consisting of either blood vessels or skin and connective (supporting) tissue. A nevus is usually pigmented. Same as a mole.” 3 J.E. Schmidt, Attorneys’ Dictionary of Medicine and Word Finder N-95 (1995).

      . According to the American Academy of Dermatology:
      Melanoma is a cancer of the pigment producing cells in the skin, known as mela-nocytes. * * * Normal melanocytes reside in the outer layer of the skin and produce a brown pigment called melanin, which is responsible for skin color. Melanoma occurs when melanocytes become cancerous, grow, and invade other tissues.
      Melanoma begins on the surface of the skin where it is easy to see and treat. If given time to grow, melanoma can grow down into the skin, ultimately reaching the blood and lymphatic vessels, and [sjpread around the body (metastasize), causing life-threatening illness. It is curable when detected early, but can be fatal if allowed to progress and spread.
      American Academy of Dermatology, Malignant Melanoma, http://www.aad.org/public/ publications/pamphlets/sun_mali gnant.html (last visited July 16, 2008).

      . The district court stated that "[o]n January 17, 2001, Dr. Subramanian’s pathology report stated that * * * the left leg specimen was a compound nevus” and that the misdiagnosis of Roderick's lesion "occurred on or about January 17, 2001.” But it appears that the tissue sample from Roderick's biopsy was received by the pathology department on January 17 and that the report and diagnosis were made on January 18.

      . Margaret appears to have abandoned her argument that there was a continuing course of treatment. See MacRae v. Group Health Plan, Inc., No. A06-1982, 2007 WL 2417167, at *2 n. 1 (Minn.App. Aug. 28, 2007).

      . The present wrongful death action was commenced on February 20, 2006, less than 6 months after Roderick’s death. Thus, the only question in this case is whether the action satisfies the timing requirement in -Minn. Stat. § 541.076.

      . The dissent in Fabio would have construed the 1982-84 examination as part of a continuing course of treatment with the 1986 examination. 504 N.W.2d at 765 (Gardebring, J., dissenting) ("I can only conclude that there was a continuing course of treatment * * *.’’) We have no occasion in this case to address the continuing course of treatment rule because Margaret did not appeal the district court's finding that there was no continuing course of treatment. We therefore treat the date of the misdiagnosis of Roderick's lesion, January 18, 2001, as the date of the negligent act relevant to this case.

      . Skin is comprised of two parts: an outer layer called the epidermis, and a deeper layer called the dermis. See 4 Schmidt, supra, at S-l24-25.

      . Amicus curiae Minnesota Association for Justice suggests that our rules governing the accrual of a cause of action ''require!] that plaintiff have a meaningful opportunity to have knowledge of the facts upon which the claim is based and that accrual cannot occur until all the elements of the cause of action can be established.” (First emphasis added.) This language implies a "discovery” rule of accrual, which we have consistently declined to adopt. See Antone, 720 N.W.2d at 335-36; Herrmann, 590 N.W.2d at 643; Dalton, 280 Minn. at 152-53, 158 N.W.2d at 584. We again reject such a rule today and emphasize that the relevant inquiry is not when the plaintiff has knowledge of damage caused by the misdiagnosis of cancer, but rather when such damage occurs within the patient's body.


author: ANDERSON, G. BARRY, Justice.

text:
    Charles RISDALL, et al., Appellants, v. BROWN-WILBERT, INC., et al., Defendants, Christopher C. Brown, et al., Respondents.
    No. A06-1233.
    Supreme Court of Minnesota.
    July 31, 2008.

      Peter A. Roller, Moss & Barnett, Scott D. Hillstrom, Guardian Law Group, LLC, Minneapolis, David J. Morrissey, Gonzaga University Law School, Spokane, WA, for Appellant.
    Kay N. Hunt, Lommen Abdo, George E. Antrim, III, Minneapolis, for Respondents.
    Michele M. Owen, Christopher Michael Kaisershot, Asst. Atty. General, St. Paul, for Amicus Curiae.
   OPINION

ANDERSON, G. BARRY, Justice.

Appellants Charles Risdall, Len Dozier, and John Risdall (as personal representative of the estate of Mary Risdall) sued defendant Brown-Wilbert, Inc., and respondents Christopher C. Brown and funeral.com, Inc., seeking damages and rescission of purchases of funeral.com stock. The district court granted appellants’ motion for summary judgment. The court of appeals reversed, holding that appellants’ state law claims were preempted by federal law. Risdall v. Brown-Wilbert, Inc., 733 N.W.2d 827, 832, 834 (Minn.App.2007). We reverse the decision of the court of appeals and remand for further proceedings.

Respondent funeral.com was incorporated in the fall of 1999 for the purpose of developing a comprehensive funeral website. The company’s chief executive officer, respondent Christopher Brown, also served as president of defendant Brown-Wilbert, Inc., a family-owned, closely-held company that manufactures and sells concrete burial vaults and cremation products. On March 2, 2000, funeral.com issued a private placement memorandum (PPM1) for the sale of funeral.com stock. In March and April of 2000, Charles Risdall, Len Dozier, and Mary Risdall purchased shares of funeral.com stock in the amounts of $70,000, $100,000, and $50,000, respectively. PPM1 disclosed that the shares were not registered and were offered pursuant to the registration exemption for sales of stock to “accredited investors” as defined in Regulation D, 17 C.F.R. §§ 230.501-508 (2007), a regulation promulgated by the Securities and Exchange Commission (SEC) under the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 77a-77aa (2000). Charles Risdall, Len Dozier, and Mary Risdall acknowledged in their subscription agreements that they had been advised that the shares had not been registered and were offered pursuant to exemptions from registration. The parties agree that the stock was offered under the registration exemption found in Rule 506 of Regulation D, 17 C.F.R. § 230.506.

On May 17, 2000, funeral.com issued a second private placement memorandum (PPM2) for the sale of funeral.com stock. Information concerning PPM2 was posted on the Internet, circulated via e-mail, and mailed to potential investors, despite the fact that offers and sales are disqualified from the Rule 506 registration exemption if the issuer or a person acting on its behalf “offerfe] or sell[s] the securities by any form of general solicitation or general advertising,” 17 C.F.R. 230.502(c); see 17 C.F.R. 230.506(b)(1) (providing that offers and sales must satisfy all the terms and conditions of 230.501 and 230.502 to qualify for the Rule 506 registration exemption). In an affidavit filed with the district court, Christopher Brown stated that no sales were made under PPM2. Funeral.com issued a third private placement memorandum on July 20, 2000, and, according to Brown, funeral.com subsequently “quit trying to raise money.”

In a letter dated August 3, 2000, the SEC notified funeral.com that it had learned that the company or affiliated persons were “offering securities to potential investors without registering the offers under the federal securities laws” and that the SEC was “not aware of any exemption applicable to [these] offerings.” The SEC directed funeral.com either to cease sending e-mails regarding the offering and remove the offering from the Internet or to provide the SEC a written response demonstrating the company’s compliance with the Securities Act. Counsel for funeral.com informed the SEC that although information regarding a private placement offering had been circulated via e-mail and posted on the Internet, the company had removed the information from the Internet and no one who had contacted the company in connection with the online postings had actually purchased shares of funeral.com stock. According to funeralxom’s counsel, the company would not accept subscriptions from investors who had requested a copy of the private placement memorandum through the online postings and would “make every effort to ensure that its offering efforts remain limited and focused and that investors are not sought or identified through any form of general solicitation.”

Appellants Charles Risdall, Len Dozier, and John Risdall (as personal representative of the estate of Mary Risdall) brought an action against defendant Brown-Wilbert and respondents Christopher Brown and funeral.com in Ramsey County District Court in 2003, alleging consumer fraud, negligence, common law fraud, securities fraud, and unjust enrichment, and seeking rescission of the stock purchases. Appellants and respondents moved for summary judgment. Appellants argued, in part, that they were entitled to rescind the stock purchases under Minn.Stat. § 80A.23, subd. 1 (2006), because respondents sold unregistered securities in violation of Minn.Stat. § 80A.08 (2006). According to appellants, the stock offering did not qualify for the Minn.Stat. § 80A.15, subd. 2(h) (2006), exemption from registration because respondents violated a condition of the exemption by engaging in general solicitation and advertising.

The district court granted appellants’ motion for summary judgment against respondents Christopher Brown and funeral.com and ordered that appellants be repaid the amounts of the stock purchases plus interest and attorney fees. The court concluded that (1) federal law did not preempt appellants’ claim, (2) the sales under PPM1 and the offers under PPM2 were integrated into a single offering, and (3) respondents’ solicitations in connection with PPM2 disqualified the sales under PPM1 from any registration exemption. The court denied appellants’ motion for summary judgment against defendant Brown-Wilbert and respondents’ motion for summary judgment. At appellants’ request, the court subsequently dismissed with prejudice all of appellants’ remaining claims against respondents and defendant Brown-Wilbert. The court entered final judgment in appellants’ favor on May 31, 2006, and respondents appealed.

The court of appeals reversed the district court’s grant of summary judgment to appellants. Risdall, 733 N.W.2d at 832, 834. Noting that funeral.com intended for PPM1 to be exempt from registration under Regulation D, the court concluded “that an offering purporting to be exempt under Regulation D is governed exclusively by federal law, and any claim under state law relating to the offering is therefore preempted.” Id. at 832. In dicta, the court explained that even if it were to “conclude that an offering must actually comply with Regulation D for federal law to preempt state-law claims relating to the offering,” it “would nonetheless reverse the district court’s grant of summary judgment * * * because * * * funeral.com complied with Regulation D in its sale of securities to [appellants].” Id. at 832-33. According to the court, PPM1 and PPM2 were not integrated into a single offering because it was undisputed that “no sales were made under PPM2” and “an offering under which no sales are made cannot be integrated with another offering under Regulation D.” Id. at 833. Finally, the court also stated in dicta that even if appellants’ claims were not preempted by federal law, the sales of securities were exempt from Minnesota’s registration requirement under Minn.Stat. § 80A.15, subd. 2(h). Id. at 834. We granted appellants’ petition for review.

Appellants argue that they are entitled to rescission of their purchases of funeral.com stock under Minn.Stat. § 80A.23, subd. 1, which states that “[a]ny person who sells a security in violation of section[ ] 80A.08 * * * is liable to the person purchasing the security, who may sue either in equity for rescission upon tender of the security or at law for damages if that person no longer owns the security.” Minnesota Statutes § 80A.08 prohibited the offer or sale of unregistered securities in Minnesota unless “the security or transaction is exempted under section 80A.15 or * * * it is a federal covered security.” The outcome of this case turns on our resolution of the following two issues: (1) whether federal law preempts state registration requirements with respect to securities that purport to be, but are not in fact, federal covered securities; and (2) whether a securities offer must result in a sale in order to be integrated under Minn. Stat. § 80A.15, subd. 2(h)(10), and Rule 502 of Regulation D, 17 C.F.R. § 230.502.

I.

The threshold issue in this case is whether federal law preempts state registration requirements with respect to securities that purport to be, but are not in fact, federal covered securities, because if we resolve that issue affirmatively, then appellants’ claims are preempted and we must affirm the decision of the court of appeals. In determining whether a state statute is preempted by federal law, the “sole task is to ascertain the intent of Congress.” Cal. Fed. Sav. & Loan Ass’n v. Guerra, 479 U.S. 272, 280, 107 S.Ct. 683, 93 L.Ed.2d 613 (1987). “The clearest indication of such Congressional intent is express language; if Congress expressly preempts state action, the matter is settled.” Dahl v. Charles Schwab & Co., 545 N.W.2d 918, 922 (Minn.1996).

A.

The Supremacy Clause of the United States Constitution provides that the “Constitution, and the Laws of the United States * * * made in Pursuance thereof * * *, shall be the supreme Law of the Land.” U.S. Const, art. VI, cl. 2. The Securities Act of 1933, 15 U.S.C. §§ 77a-77aa, regulates the registration and distribution of securities. The National Securities Markets Improvement Act of 1996 (NSMIA), Pub.L. No. 104-290, § 102, 110 Stat. 3416, 3417-20 (1996), amended the Securities Act to provide for partial preemption of state registration requirements. See 15 U.S.C. § 77r. As amended, section 77r(a) reads, in part, as follows:

Except as otherwise provided in this section, no law, rule, regulation, or order, or other administrative action of any State or any political subdivision thereof—
(1) requiring, or with respect to, registration or qualification of securities, or registration or qualification of securities transactions, shall directly or indirectly apply to a security that—
(A) is a covered security; or
(B) will be a covered security upon completion of the transaction * * *.

15 U.S.C. § 77r(a). Therefore, federal law preempts any state registration requirement with respect to “a covered security,” id., and Minnesota law recognized the preemptive effect of section 77r(a) by exempting “federal covered securities]” from the state’s securities registration requirement, Minn.Stat. § 80A.08.

The Securities Act states that “[a] security is a covered security with respect to a transaction that is exempt from registration under this subchapter pursuant to * * * Commission rules or regulations issued under section 77d(2) of this title.” 15 U.S.C. § 77r(b)(4)(D). Because section 77d(2), in turn, exempts from registration “transactions by an issuer not involving any public offering,” 15 U.S.C. § 77d(2), a security that does not involve a public offering is a “covered security.” Thus, all state registration requirements with respect to a security that does not involve a public offering are preempted by federal law, and federal law exempts such a security from registration. Under this framework, a security that does not involve a public offering is not subject to either federal or state registration requirements.

Under the private offering exemption found in Rule 506 of Regulation D, “[o]f-fers and sales of securities by an issuer that satisfy [certain requirements] shall be deemed to be transactions not involving any public offering within the meaning of [15 U.S.C. § 77d(2) ].” 17 C.F.R. § 230.506(a). Rule 506 requires that “offers and sales must satisfy all the terms and conditions of §§ 230.501 and 230.502,” 17 C.F.R. § 230.506(b)(1), and one of the conditions of section 230.502 is that “neither the issuer nor any person acting on its behalf shall offer or sell the securities by any form of general solicitation or general advertising,” 17 C.F.R. § 230.502(c).

The court of appeals disregarded the plain language of 15 U.S.C. § 77r and Rule 506 in concluding that federal law preempts state registration requirements with respect to securities that merely purport to be covered securities. See Risdall, 733 N.W.2d at 832. The preemption provision of section 77r applies to “a security that * * * is a covered security.” 15 U.S.C. § 77r(a)(l)(A) (emphasis added). Additionally, under 15 U.S.C. § 77r(b)(4)(D), “[a] security is a covered security with respect to a transaction that is exempt from registration under this subchapter pursuant to * * * Commission rules or regulations issued under section 77d(2) of this title.” (Emphasis added.) Finally, Rule 506 provides that the private offering exemption applies to “[ojffers and sales of securities by an issuer that satisfy the conditions ” set forth in the rule, 17 C.F.R. § 230.506(a) (emphasis added), and that “[t]o qualify for an exemption under this section, offers and sales must satisfy all the terms and conditions of §§ 230.501 and 230.502,”17 C.F.R. § 230.506(b) (emphasis added). Thus, the plain language of 15 U.S.C. § 77r and Rule 506 indicates that federal law only preempts state registration requirements with respect to securities that actually qualify as federal covered securities.

B.

Our plain language interpretation of 15 U.S.C. § 77r and Rule 506 is in accord with the decisions of the majority of courts that have considered this issue. In Brown v. Earthboard Sports USA, Inc., for example, the United States Court of Appeals for the Sixth Circuit held “that NSMIA preempts state securities registration requirements only with respect to securities that actually qualify as ‘covered securities’ under federal law.” 481 F.3d 901, 912 (6th Cir.2007). The Sixth Circuit observed that if it were “to hold that NSMIA preempts state regulation wherever offerings merely purport to be filed pursuant to a valid federal registration exemption, * * * state registration requirements could be avoided merely by adding spurious boilerplate language to subscription agreements suggesting that the offerings were ‘covered.’ ” Id. at 911.

Similarly, the United States District Court for the Eastern District of Arkansas relied on a plain reading of 15 U.S.C. § 77r(a) in concluding as follows:

The statute that sets forth the scope of federal preemption of state securities laws is limited; it only applies to state laws or regulations that directly or indirectly apply to a “covered security” or a security that “will be a covered security upon the completion of the transaction.” Thus, the only way to assert federal preemption is to first show that an exemption from federal registration actually applies.

Hamby v. Clearwater Consulting Concepts, 428 F.Supp.2d 915, 920-21 (E.D.Ark.2006) (quoting 15 U.S.C. § 77r(a)(1)); see also Grubka v. WebAccess Int’l, Inc., 445 F.Supp.2d 1259, 1270 (D.Colo.2006) (“Nowhere does the statute indicate that a security may satisfy the definition [of a covered security] if it is sold pursuant to a putative exemption. If Congress had intended that an offeror’s representation of exemption should suffice it could have said so, but did not.”); Buist v. Time Domain Corp., 926 So.2d 290, 296 (Ala.2005) (“[U]n-der Rule 506 exemption and preemption are functionally equivalent.”); Apollo Capital Fund, LLC v. Roth Capital Partners, LLC, 158 Cal.App.4th 226, 70 Cal.Rptr.3d 199, 220 (2007) (“[W]e are persuaded that the analysis and reasoning in Brown [are] correct, and we adhere to its conclusion that NSMIA preempts state securities registration requirements only with respect to securities that actually qualify as ‘covered securities’ under federal law.”).

In concluding that federal law preempts state registration requirements with respect to securities that merely purport to be covered securities, the court of appeals relied on Pinnacle Communications International, Inc. v. American Family Mortgage Corp., 417 F.Supp.2d 1073, 1087 (D.Minn.2006), in which the United States District Court for the District of Minnesota held that “[w]hen an offering purports to be exempt under federal Regulation D, any allegation of improper registration is covered exclusively by federal law.” Ris-dall, 733 N.W.2d at 832. But the Pinnacle court offered no justification for its conclusion other than to cite Temple v. Gorman, 201 F.Supp.2d 1238, 1243-44 (S.D.Fla. 2002), and Lillard v. Stockton, 267 F.Supp.2d 1081, 1116 (N.D.Okla.2003). 417 F.Supp.2d at 1087. The court in Lil-lard, in turn, also relied on the decision in Temple. 267 F.Supp.2d at 1116.

The United States District Court for the Southern District of Florida held in Temple that “[r]egardless of whether the private placement actually complied with the substantive requirements of Regulation D or Rule 506, the securities sold to Plaintiffs are federal ‘covered securities’ because they were sold pursuant to those rules.” 201 F.Supp.2d at 1244. The court in Temple relied on a House of Representatives Commerce Committee report accompanying NSMIA. Id. at 1243 (citing H.R.Rep. No. 104-622, at 32 (1996), as reprinted in 1996 U.S.C.C.A.N. 3877, 3894-95). But “[w]hen a statute is clearly worded,” as in this case, “we generally do not consider legislative history.” Hutchinson Tech., Inc. v. Comm’r of Revenue, 698 N.W.2d 1, 8 (Minn.2005). Consistent with the plain language of 15 U.S.C. § 77r and Rule 506 and with the decisions of the majority of courts that have considered this issue, we hold that federal law does not preempt state registration requirements with respect to securities that purport to be, but are not in fact, federal covered securities.

II.

Having concluded that federal law does not preempt state registration requirements with respect to securities that purport to be, but are not in fact, federal covered securities, we next address whether the sales under PPM1 and the offers under PPM2 can be integrated into a single offering for purposes of determining whether the state registration exemption applies. The issue we must resolve is whether a securities offer must result in a sale in order to be integrated under Minn. Stat. § 80A.15, subd. 2(h)(10), and Rule 502(a) of Regulation D, 17 C.F.R. § 230.502(a). If integration occurs, then respondents are not entitled to the state exemption provided in Minn.Stat. § 80A.15, subd. 2(h).

One of the conditions of Rule 502 is that “neither the issuer nor any person acting on its behalf shall offer or sell the securities by any form of general solicitation or general advertising.” 17 C.F.R. § 230.502(c). Appellants concede that the funeral.com stock purchased under PPM1 was initially exempt from registration, but they argue that respondents’ unlawful solicitations and advertising in connection with PPM2 retroactively rendered the exemption unavailable because PPM1 and PPM2 were part of a single offering under the integration doctrine. Respondents argue, in contrast, that the sales of stock under PPM1 cannot be integrated with the offers under PPM2 because no sales resulted from the latter. The court of appeals adopted the reasoning of respondents, stating in dicta that “[ujnder the plain language of the federal regulation, an offering under which no sales are made cannot be integrated with another offering under Regulation D.” Risdall, 733 N.W.2d at 833.

The SEC has explained that [t]he integration doctrine seeks to prevent an issuer from improperly avoiding registration by artificially dividing a single offering into multiple offerings such that Securities Act exemptions would apply to the multiple offerings that would not be available for the combined offering. Revisions of Limited Offering Exemptions in Regulation D, Securities Act Release No. 8828, Investment Company Act Release No. 27,922, 72 Fed.Reg. 45,116, 45,129 (proposed Aug. 10, 2007). Minnesota Statutes § 80A.15, subd. 2(h)(10), incorporates Rule 502 as the statutory basis for the doctrine of integration in Minnesota, providing that “[t]he determination whether offers and sales made in reliance on the exemption set forth in paragraph (h) shall be integrated with offers and sales according to other paragraphs of this subdivision shall be made according to the integration standard set forth in Rule 502 of Regulation D.” The Rule 502 integration standard reads as follows:

All sales that are part of the same Regulation D offering must meet all of the terms and conditions of Regulation D. Offers and sales that are made more than six months before the start of a Regulation D offering or are made more than six months after completion of a Regulation D offering will not be considered part of that Regulation D offering, so long as during those six month periods there are no offers or sales of securities by or for the issuer that are of the same or a similar class as those offered or sold under Regulation D, other than those offers or sales of securities under an employee benefit plan as defined in rule 405 under the Act * * *.

17 C.F.R. § 230.502(a). The Note to Rule 502(a) also sets forth the following five-factor test:

The following factors should be considered in determining whether offers and sales should be integrated for purposes of the exemptions under Regulation D:
(a) Whether the sales are part of a single plan of financing;
(b) Whether the sales involve issuance of the same class of securities;
(c) Whether the sales have been made at or about the same time;
(d) Whether the same type of consideration is being received; and
(e) Whether the sales are made for the same general purpose.

17 C.F.R. § 230.502(a) Note. The Note to Rule 502(a) cites Securities Act Release No. 4552 as the source of the five-factor test, 17 C.F.R. § 230.502(a) Note, and Release No. 4552 included the word “offerings” rather than the word “sales” in the first, second, third, and fifth factors of the test, Non-Public Offering Exemption, Securities Act Release No. 4552, 27 Fed.Reg. 11,316, 11,317 (Nov. 16,1962). As included in the Note to Rule 502(a) of Regulation D, however, those factors are expressed with the word sales instead. 17 C.F.R. § 230.502(a) Note.

A.

The starting point for determining whether a securities offer must result in a sale in order to be integrated is Minn.Stat. § 80A.15, subd. 2(h)(10), which is the statutory basis for integration in Minnesota and which incorporates the integration standard set forth in Rule 502. The paramount goal of statutory interpretation “is to ascertain and effectuate the intention of the legislature,” and if the language of a statute is unambiguous, “the letter of the law shall not be disregarded under the pretext of pursuing the spirit.” Minn.Stat. § 645.16 (2006). Minnesota Statutes § 80A.15, subd. 2(h)(10), provides that “[t]he determination whether offers and sales made in reliance on the exemption set forth in paragraph (h) shall be integrated with offers and sales according to other paragraphs of this subdivision shall be made according to the integration standard set forth in Rule 502 of Regulation D.” (Emphasis added.) The use of the phrase “offers and sales,” as opposed to the single word “sales,” suggests that the Minnesota legislature did not intend to exclude offers that do not result in sales from being integrated. It appears, therefore, that respondents’ unlawful offers in connection with PPM2 can be integrated with their sales of funeral.com stock to appellants under PPM1 based on the plain text of the state statute.

B.

Because the state statute incorporates the federal integration standard, we must also examine Rule 502(a). The parties dispute whether Rule 502(a) requires that a securities offer result in a sale in order to be integrated. When interpreting a regulation, we first determine whether it “is clear or ambiguous on its face.” In re Cities of Annandale Maple Lake NPDES/SDS Permit Issuance for the Discharge of Treated Wastewater, 731 N.W.2d 502, 516 (Minn.2007). If the words of the regulation are unambiguous, the regulations plain meaning “‘shall not be disregarded under the pretext of pursuing the spirit.’” Id. (quoting Minn.Stat. 645.16). “[A] regulation is ambiguous if it is unclear or reasonably susceptible to more than one reasonable interpretation.” Id. at 517.

Rule 502(a) seems to contemplate the integration of offers that do not result in a sale, providing in a Note that “[t]he following factors should be considered in determining whether offers and sales should be integrated for purposes of the exemptions under Regulation D.” 17 C.F.R. § 230.502(a) Note (emphasis added). Furthermore, the safe harbor of Rule 502(a) applies to “[o]ffers and sales” that are made more than 6 months before the start or after the completion of a Regulation D offering. 17 C.F.R. § 230.502(a) (emphasis added). If the applicability of the Rule 502 integration standard were limited to offers that result in a sale, then the “offer” language used in Rule 502(a) and its Note would be superfluous.

On the other hand, because four of the five factors delineated in the Note to Rule 502(a) refer only to “sales” and the remaining factor refers to consideration “being received,” 17 C.F.R. § 230.502(a) Note, the five factors cannot be applied as written to determine whether an offer that did not result in a sale should be integrated. Additionally, Rule 502(a) states that “[a]ll sales that are part of the same Regulation D offering must meet all of the terms and conditions of Regulation D,” 17 C.F.R. § 230.502(a) (emphasis added), and the Note to Rule 502(a) states that “the determination as to whether separate sales of securities are part of the same offering (i.e., are considered integrated) depends on the particular facts and circumstances,” 17 C.F.R. § 230.502(a) Note (first emphasis added). We conclude that Rule 502(a) is ambiguous because it is “reasonably susceptible to more than one reasonable interpretation.” Annandale Maple Lake, 731 N.W.2d at 517.

The five-factor test included in the Note to Rule 502(a) was previously set forth in Securities Act Release No. 4552, which used the word “offerings” rather than the word “sales.” Non-Public Offering Exemption, Securities Act Release No. 4552, 27 Fed.Reg. at 11,317. When Regulation D was published for comment, the SEC quoted the factors of Securities Act Release No. 4552 as the factors to be considered “in determining whether offers and sales * * * should be integrated” and noted that “[i]n those instances where the safe harbor provision is not available, the factors set forth in Securities Act Release No. 4552 discussed above would be applicable.” Revision of Exemptions from Registration for Transactions Involving Limited Offers and Sales, Securities Act Release No. 6339, 46 Fed.Reg. 41,791, 41,797 (proposed Aug. 18, 1981). As included in the Note to Rule 502(a), however, the five-factor test includes the word “sales.” Revision of Exemptions from Registration for Transactions Involving Limited Offers and Sales, Securities Act Release No. 6389, 47 Fed.Reg. 11,251, 11,264 (Mar. 16, 1982) (codified at 17 C.F.R. § 230.502(a)). We are unpersuaded by the conclusion of the court of appeals that “[s]uch a deliberate change in the language of the SEC’s integration test cannot be dismissed as having ‘no significance.’ ” Risdall, 733 N.W.2d at 833. If the modification of the five-factor test’s language from “offerings” to “sales” was intended to preclude an offer that does not result in a sale from being integrated, then the phrase “offers and sales” would have been eliminated from the other portions of Rule 502(a) and its Note as well. We do not believe that the evolution of the five-factor test reflects an intention to limit the applicability of the integration test to offers that result in sales.

When an agency’s regulation is ambiguous, “we will give deference to the agency’s interpretation and will generally uphold that interpretation if it is reasonable.” Annandale Maple Lake, 731 N.W.2d at 515. The SEC has indicated that the five-factor test set forth in Securities Act Release No. 4552, which used the word “offerings” rather than the word “sales,” remains the governing integration standard. As recently as August of 2007, the SEC explained, “In 1982, we included the five factors and established an integration safe harbor in Rule 502(a). We stated that the five factors relevant to the question of integration are [the five factors listed in Securities Act Release No. 4552].” Revisions of Limited Offering Exemptions in Regulation D, Securities Act Release No. 8828, Investment Company Act Release No. 27,922, 72 Fed.Reg. at 45,130. Likewise, the SEC has stated that Securities Act Release No. 4552 sets forth the prevailing five-factor test for integration. Sonnenblick, Parker & Selvers, SEC No-Action Letter, 1986 WL 66490, at *1 (available Jan. 1, 1986) (“The Division considers the factors enumerated in Securities Act Release No. 4552 to be relevant to a determination of whether a series of transactions must be integrated for purposes of registration under the 1933 Act.”). In light of the SEC’s interpretation of Rule 502(a) and Securities Act Release No. 4552, we interpret the Note to Rule 502(a) as containing the same factors as Securities Act Release No. 4552. When the word “offerings,” as is used in Securities Act Release No. 4552, is substituted for the word “sales” in the first, second, third, and fifth factors of the test set forth in the Note to Rule 502(a), much, though not all, of the ambiguity in the integration test disappears.

The language of Minn.Stat. § 80A.15, subd. 2(h)(10), suggests that the Minnesota legislature did not intend to exclude offers that do not result in sales from being integrated under Minnesota law, and the SEC has suggested that it did not intend to effect a change in the integration test when it substituted the word “sales” for the word “offerings” in the Note to Rule 502(a). Because the integration test of Rule 502, as incorporated in Minnesota law, is best interpreted as not containing a sales requirement, we hold that a securities offer need not result in a sale in order to be integrated.

III.

Neither party sought review on the issue of whether the district court erred in concluding, as a matter of law, that PPM1 and PPM2 should be integrated under the five-factor test set forth in Securities Act Release No. 4552 and the Note to Rule 502(a) of Regulation D. Furthermore, the court of appeals did not consider the issue given its conclusions that federal law preempts appellants’ state law claims and that, even if appellants’ state law claims were not preempted, the offering under PPM2 could not be integrated with the sales under PPM1. Accordingly, we remand to the court of appeals for further proceedings.

Reversed and remanded.

MAGNUSON, C.J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.

      . Effective August 1, 2007, Minnesota Statutes §§ 80A.01-.31 (2006) were repealed and replaced by the Uniform Securities Act (2002) (codified at Minn.Stat. §§ 80A.40-.90 (2006)). Act of May 11, 2006, ch. 196, art. 1, §§ 1, 51-52, 2006 Minn. Laws 34, 35, 91. But because "[t]he predecessor act exclusively governs all actions or proceedings that are pending on [August 1, 2007,] or may be instituted on the basis of conduct occurring before August 1, 2007,” Minn.Stat. § 80A.90(a), this case is governed by Minn.Stat. §§ 80A.01-.31.

      . The United States Court of Appeals for the Second Circuit described the purpose of NSMIA as follows:
      The primary purpose of NSMIA was to preempt state “Blue Sky” laws which required issuers to register many securities with state authorities prior to marketing in the state. By 1996, Congress recognized the redundancy and inefficiencies inherent in such a system and passed NSMIA to preclude states from requiring issuers to register or qualify certain securities with state authorities.

        Lander v. Hartford Life & Annuity Ins. Co., 251 F.3d 101, 108 (2d Cir.2001).

      . The exemption for "federal covered securities]” under the Uniform Securities Act is found at Minn.Stat. § 80A.49.

      . Likewise, Minn.Stat. § 80A.08 exempted from the Minnesota registration requirement a security that “is a federal covered security."

      . As noted earlier, one of the conditions of section 230.502 is that "neither the issuer nor any person acting on its behalf shall offer or sell the securities by any form of general solicitation or general advertising.” 17 C.F.R. § 230.502(c).

        . Even if we were to consider the Commerce Committee report, we would find that it supports our holding in this case. The drafters of the report explained that “securities sold in private transactions under [15 U.S.C. § 77d(2)] would be 'covered securities,’ and thus preempted, if offered or sold pursuant to a Commission rule or regulation adopted under such section.” H.R.Rep. No. 104-622, at 32, as reprinted in 1996 U.S.C.C.A.N. at 3894-95 (emphasis added). The Temple court concluded that securities that merely purport to be exempt from registration are sold "pursuant to” an exemption, 201 F.Supp.2d at 1243-44, but "pursuant to” is defined as "[i]n compliance with,” "in accordance with,” "as authorized by,” and "under,” Black’s Law Dictionary 1272 (8th ed.2004). In light of these definitions, the Commerce Committee report actually suggests that compliance with the private offering exemption is required for federal law to preempt Minnesota’s registration requirements.

      . Other courts have relied on the language of Securities Act Release No. 4552 rather than the language of the Note to Rule 502(a). In SEC v. Cavanagh, for example, the United States Court of Appeals for the Second Circuit quoted Securities Act Release No. 4552, not the Note to 17 C.F.R. § 230.502(a), as "[t]he SEC standard for integrating transactions.” 445 F.3d 105, 112 n. 17 (2d Cir.2006). Likewise, in Johnston v. Bumba, the United States District Court for the Northern District of Illinois quoted Securities Act Release No. 4552 as the test "commonly used in determin-tag whether apparently separate offerings should be treated as one integrated offering” and observed that Securities Act Release No. 4552 was "reprinted” in the Note to Rule 502. 764 F.Supp. 1263, 1272 (N.D.Ill.1991). See also Donohoe v. Consol. Operating & Prod. Corp., 982 F.2d 1130, 1140 (7th Cir.1992); SEC v. Ishopnomarkup.com, Inc., No. 04-CV-4057, 2007 WL 2782748, at *4 (E.D.N.Y. Sept. 24, 2007); Argentinian Recovery Co. v. Bd. of Dirs. of Multicanal S.A., 331 B.R. 537, 547 (S.D.N.Y.2005).