Plaintiffs also assert that StarLink's contamination of the general
food corn supply constitutes a public nuisance. Beyond defendants'
argument that they lacked control over the alleged nuisance, discussed
above, they assert that plaintiffs cannot establish special harm. At the
outset, we note the limited depth of review courts typically undertake on
a motion to dismiss a public nuisance claim. "The pleading requirements
are not strenuous because the `concept of common law public nuisance
elude[s] precise definition.' . . . The unreasonableness of the
defendant's actions and the substantialness of the right invasion, which
lead to the determination of nuisance, are questions of fact for the
jury." Gilmore v. Stanmar, Inc., 633 N.E.2d 985, 993 (Ill. App. 1st
Dist. 1994) (citations omitted).
To state a claim, plaintiffs must allege "an unreasonable interference
with a right common to the general public." Restatement § 821B(1). The
Restatement sweeps broadly in defining a "public right," including "the
public health, the public safety, the public peace, the public comfort or
the public convenience." Restatement § 821B(2)(a). Contamination of the
food supply implicates health, safety, comfort and convenience, and
certainly satisfies this permissive standard.
To state a private action for public nuisance, plaintiffs must also
demonstrate that they have been harmed differently than the general public.
Restatement § 821C. The harm must be of a different type, not merely a
difference in severity or imposing a disproportionate share of the burden
on plaintiffs. Among the Restatement's specific examples are physical harm
to chattels, § 821C comment d, and pecuniary loss to businesses,
§ 821C comment h. Both are present here.
The closest analogy and most pertinent discussion is in Burgess v. M/V
Tamano, 370 F. Supp. 247, 250 (D. Me. 1973). There, commercial fisherman
alleged that an oil spill harmed local waters and marine life. The court
found that although fishing the waters was a right of the general
public, it affected commercial fishermen differently because they depended
on it for their livelihood. This was consistent with "the general
principle that pecuniary loss to the plaintiff will be regarded as
different in kind `where the plaintiff has an established business making
commercial use of the public right with which the defendant interferes .
. . '" Id., quoting Prosser, Law of Torts, § 88 at 590 (4th ed.
1971). Here, plaintiffs are commercial corn farmers. While the general
public has a right to safe food, plaintiffs depend on the integrity of the
corn supply for their livelihood.
Defendants maintain that because plaintiffs purport to represent a group
so numerous as a nationwide class of corn farmers, their damages cannot be
considered special or unique. But the special damages requirement does not
limit the absolute number of parties affected so much as it restricts the
types of harm that are compensable. Class actions and special damages are
not mutually exclusive. See, e.g., Burgess, 370 F. Supp. 251 (sustaining
public nuisance claims by two classes and dismissing a third based on the
types of harm alleged). Commercial corn farmers, as a group, are affected
differently than the general public.
VI. North Carolina Unfair Trade Practices Act
Plaintiffs next allege that Aventis' handling of StarLink violated the
NCUTPA, N.C. Gen. Stat. § 75-1.1. Like many other states, the North
Carolina legislature left the definition of deceptive trade practices
purposefully vague, with the intention that courts construe it broadly.
Johnson v. Phoenix. 266 S.E.2d 610, 620 (N.C. 1980). The dispute here,
however, is not over whether any particular practice is illegal under the
statute, but the statute's geographic reach. None of the named plaintiffs
is from North Carolina. Nor does the complaint allege that any of them
conduct business in North Carolina. Although the proposed nationwide
class would certainly include North Carolina residents, it is axiomatic
that the named plaintiffs must show personal injuries to state a claim
and cannot rely on harm to unnamed class members. Lewis v. Casey,
518 U.S. 343, 357 (1996).
Defendants argue that the North Carolina statute only applies to
in-state harms. To apply the statute extraterritorially, they contend,
would offend the federal Constitution's due process and full faith and
credit clauses. Plaintiffs, on the other hand, characterize this as
nothing more than a choice-of-law problem. Because Aventis is
headquartered in North Carolina, they reason, the unfair practices are
likely centered there. Applying the "most significant relationship"
rule, North Carolina's trade practice law should apply.*fn17 So long as
the conduct affects North Carolina commerce at all, plaintiffs maintain,
even out-of-state injuries are compensable. These positions oversimplify
matters. It is possible for a state to constitutionally regulate in-state
conduct that has out-of-state effects. See, e.g., Avery v. State Farm
Mutual Automobile Ins. Co., 746 N.E.2d 1242, 1254-55 (Ill. App.5th Dist.
2001). The question is whether the NCUTPA does so. On the other hand,
even if conflicts rules would choose North Carolina law, whether
plaintiffs have stated a claim under the North Carolina statute is a
separate issue. So, before tackling any constitutional or choice-of-law
problem, we examine the statute itself.
The NCUTPA states, in relevant part:, "(a) Unfair methods of
competition in or affecting commerce, and unfair or deceptive acts or
practices in or affecting commerce, are declared unlawful. (b) For
purposes of this section, `commerce' includes all business activities,
however denominated." N.C. Gen. Stat § 75-1.1. This language reflects
a 1977 amendment that removed the phrase "within this state," leaving the
text without any geographic limitations. North Carolina courts have
addressed neither the impact of this amendment, nor the NCUTPA's
extraterritorial reach in general. Looking to local federal courts'
interpretations, we find two distinct characterizations. The amendment
extended the statute "to the limits of North Carolina's long-arm
statute," Broussard v. Meineke Discount Muffler Shops, Inc.,
945 F. Supp. 901, 917 (W.D.N.C. 1996), or "to the full extent permissible
under conflicts of law principles and the Constitution." Hardee's Food
Sys., Inc., v. Beardmore, 1997 U.S. Dist. LEXIS 9671 at *7 (E.D.N.C. June
6, 1997). This disparity has led, in turn, to disagreement about whether
the statute requires an in-state injury. See, e.g., `In' Porters, S.A.
Hanes Printables, Inc., 663 F. Supp. 494, 501 (M.D.N.C. 1987)
(requiring substantial effect on in-state business operations); Hardee's
Food Sys., Inc., v. Beardmore, 1997 U.S. Dist. LEXIS 9671 at *8-9
(E.D.N.C. June 6, 1997) (no in-state injury requirement).
Plaintiffs, relying on Hardee's, argue that `In' Porters is no longer
good law. In fact, Hardee's is the only opinion we have found that
rejects `In' Porters' reasoning, whereas several other decisions have
expressly endorsed it. See, e.g., Broussard, 945 F. Supp. at 917; Merck &
Co. v. Lyon, 941 F. Supp. 1443, 1463 (M.D.N.C. 1996); Dixie Yarns, Inc.
v. Plantation Knits, Inc., 1994 WL 910955 at *2-3 (W.D.N.C. July 12,
1994). Because these are co-equal district courts (interpreting state
law), we consider them each as persuasive authority. Notably, the only
court outside of North Carolina to consider this issue relied on `In'
Porters. and it did so after Hardee's. See Lithuanian Commerce Corp. v.
Sara Lee Hosiery, 47 F. Supp.2d 523, 537 (D.N.J. 1999).
In construing this statute, the `In' Porters court looked to external
sources. First, it sought to harmonize the NCUTPA with North Carolina's
long-arm statute, N.C. Gen. Stat § 1-75.4(4), which allows personal
jurisdiction in cases involving foreign acts only if an injury occurs
within North Carolina and the party was in, or had products in, North
Carolina commerce at the time. 663 F. Supp. at 501. Second, it looked to
the standards for applying the federal Sherman Act extraterritorially,
which require that the foreign acts have a substantial effect on
plaintiff's domestic operations. Id., citing Rose v. Vulcan Materials Co.,
194 S.E.2d 521 (N.C. 1973) (Sherman Act decisions instructive in
determining the full reach of North Carolina's unfair trade act). Both
analogies suggested that plaintiffs must establish a substantial effect on
in-state operations — an in-state injury — to state a NCUTPA
claim. Moreover, the court noted, such an interpretation was consistent
with constitutional due process and commerce clause concerns.
The Hardee's court found the text's lack of any geographic restraints
controlling. It noted other cases sustaining NCUDTA claims, where
plaintiffs had minimal North Carolina operations. 1997 U.S. Dist. LEXIS
9671 at *8-9, citing Jacobs, 891 F. Supp. at 1111-12 (allowing suit by
out-of-state franchisees against North Carolina franchiser) and
Broussard, 945 F. Supp. at 917-18 (sustaining action against North
Carolina trucking company by plaintiffs from several different states).
And it found the additional profits defendants achieved by engaging in
the alleged practices were a sufficient impact on local commerce.
We believe `In' Porters reflects the better interpretation. North
Carolina courts have found that "the purpose of G.S. 75-1.1 is to provide
a civil means to maintain ethical business standards of dealings between
persons engaged in business and the consuming public within this state,"
United Virginia Bank v. Air-lift Assoc., 339 S.E.2d 90, 93 (N.C. App.
1986), quoted in `In' Porters, 663 F. Supp. at 502 (emphasis in `In'
Porters). It was designed to address "primarily local concerns." ITCO
Corp. v. Michelin Tire Corp., 722 F.2d 42, 48 n. 9 (4th Cir. 1983).
Plaintiffs point out that Illinois courts have found that the state had
an interest in regulating the conduct of local businesses, even as to
foreign consumers, and permitted out-of-state consumers to invoke
Illinois' consumer protection statute. Avery, 746 N.E.2d at 1255. North
Carolina courts have not ascribed such an intention to their
legislature. Instead of emphasizing defendants' conduct, they have found
that the statute focuses on
"the impact the practice has on the
marketplace." Marshall v. Miller, 276 S.E.2d 397, 403 (N.C. 1981). The
relevant marketplace is North Carolina. Plaintiffs also point out that
the NCUTPA does not require contractual privity. Although this is true,
courts have frequently cited a direct contractual relationship with an
in-state party as the nexus justifying their application of their local
statute to that out-of-state plaintiff. See Jacobs, 891 F. Supp. at
1111; Broussard, 945 F. Supp. at 917-18. Plaintiffs here have alleged no
such contact with any North Carolinian.
If, as Hardee's found, incremental profits by an in-state defendant
alone were sufficient effect on in-state commerce to trigger the statute,
that would dramatically extend its reach.
Were that the case, every product manufactured and
sold, directly or indirectly, in North Carolina to
foreigners which later turn out to be defective would
create an unfair competition cause of action whether
or not the injured party had ever directed its
commercial efforts toward, or even set foot in this
Dixie Yarns, 1994 WL 910955 at *2. We also note that the two cases the
Hardee's court primarily relied upon both applied the `In' Porters
standard, emphasized the continuing contact plaintiffs had with North
Carolina, and made express findings of in-state harm. Jacobs, 891 F. Supp.
at 1111; Broussard, 945 F. Supp. at 917-18.
Following `In' Porters' use of the long-arm analogy, we examine whether
plaintiffs' contact with North Carolina would sustain personal jurisdiction
there. The answer is decidedly no. Plaintiffs have not pled any contact
with North Carolina. They have not alleged that they buy or sell any goods
there, have any contact with a North Carolina company, or engage in any
North Carolina commerce whatsoever. Because the named plaintiffs have not
alleged that they experienced any harm within North Carolina, they cannot
state a claim under the NCUTPA.
VII. Tennessee Consumer Protection Act
Plaintiff McCormack adds an additional claim under the TCPA, T.C.A.
§§ 47-18-101 et seq., alleging that Aventis engaged in deceptive trade
practices. Defendants assert that this claim must be dismissed because
McCormack does not allege he had any consumer transaction with Aventis.
The CPA is worded broadly:
Any person who suffers an ascertainable loss of money
or property, real, personal, or mixed, or any other
article, commodity, or thing of value wherever
situated, as a result of the use or employment by
another person of an unfair or deceptive practice
declared to be unlawful by this part, may bring an
action individually to recover actual damages.
T.C.A. § 47-18-109(a)(1). Nothing in its text requires privity or
restricts relief solely to direct purchasers.