Association of Equipment Manufacturers v. Burgum, No. 18-1115 (8th Cir. 2019)Annotate this Case
The Eighth Circuit affirmed the district court's grant of a preliminary injunction enjoining North Dakota Senate Bill 2289, which regulates relationships between manufacturers and farm equipment dealers. The court held that the State has not carried its burden of showing a significant and legitimate public purpose underlying Senate Bill 2289. Therefore, the district court did not err in concluding that the manufacturers were likely to succeed on the merits of their Contract Clause claim. In this case, the manufacturers cannot reasonably be said to have had a fair and appreciable warning of an impending intervention into their agreements.
Court Description: Colloton, Author, with Shepherd and Stras, Circuit Judges] Civil Case - preliminary injunction. District court's grant of preliminary injunction of enforcement of North Dakota statute regulating relationships between manufacturers and farm equipment dealers, North Dakota Senate Bill 2289, sought by manufacturers, claiming likelihood of success on a claim of violations under the Contract Clause of the U.S. Constitution, is affirmed. The manufacturers could not reasonably foresee any impending intervention into their agreements, as the regulations go beyond regulation of coercive and discriminatory practices; they enlarge dealer reimbursements; and they impair obligations of contract. The State failed to show the legislation furthered a significant and legitimate public purpose and failed to demonstrate the requisite guarantee that it provides more than benefit to special interests. A state is required to demonstrate more than a conceivable or incidental public purpose for impairing the obligation of contracts. Judge Shepherd dissents.