finding that Indiana had a materially greater interest in the litigation than New York because the franchisee was incorporated and located in Indiana, its witnesses and documents were there, the contract negotiations occurred in Indiana, and the contract was, in part, performed in Indiana; New York’s only connection was that the defendant was incorporated there
How later courts described this case
- finding that Indiana had a materially greater interest in the litigation than New York because the franchisee was incorporated and located in Indiana, its witnesses and documents were there, the contract negotiations occurred in Indiana, and the contract was, in part, performed in Indiana; New York’s only connection was that the defendant was incorporated there
- commenting on "dealing with the black hole of legislative ambiguity” and noting that, “[a]s a practical matter, this process of reasoning by analogy often is flawed by overdependence on the law of other jurisdictions within the circuit”
- noting that, under Indiana law, excess inventory requirements may constitute an indirect franchise fee if the inventory is illiquid, but a normal sales quota will not be a franchise fee under the bona fide wholesale price exception
- determining that Indiana franchise law expressed fundamental policy, and that protection under Indiana fran- chise law may not be waived
Written by the judges who cited it.
The opinion
RIPPLE, Circuit Judge,
dissenting.
The task that the court undertakes in this case is indeed a most difficult one. At the heart of this litigation are the Indiana franchise laws — legislation that has been subject to little relevant interpretation by the Indiana courts. This statutory scheme is important to the State of Indiana. It embodies crucial policy choices affirmatively made by the legislature in an effort to balance, in a way that makes sense in the commercial and social life of Indiana, the freedom to enter into contracts and the need to regulate the practices of the franchise industry. In undertaking the task of deciding this appeal, the court resolves definitively two issues of statutory interpretation: (1) whether the Indiana franchise laws would recognize the choice of law clause in the contract; (2) whether “good cause” in the statutory scheme refers only to problems with the performance of the franchisee. With respect to both questions, the court does not have, as it never has when it deals with Indiana law, the assistance of legislative history. Nor does it have any significant judicial interpretation from the Indiana courts. It must therefore turn to analytical tools that are far less precise — reliance on bits and pieces of statutory language, analogous case law from other jurisdictions, and the pronouncements of United States district judges sitting in the State of Indiana.
All of these devices are legitimate tools of the jurist faced with the task of dealing with the black hole of legislative ambiguity. Indeed, they are often the only tools available. However, they do have their distinct infirmities. The perils of relying on bits and pieces of statutory language cut adrift from their moorings in the statute are well known and need little elaboration here. Reasoning by analogy to the case law developed in other jurisdictions is perilous because we do not know whether those jurisdictions made the same policy choices as did Indiana. 1
It certainly is appropriate to give significant weight to the views of our colleagues on the district bench in Indiana. See PPG Indus., Inc. v. Russell, 887 F.2d 820, 823 (7th Cir.1989). We must remember, however, that at times this practice amounts to the blind leading the blind. For reasons not entirely clear to me, Indiana has not given federal district courts within the state the power to certify questions of state law to the Indiana courts and, consequently, the judges of those courts must do the best they can without such assistance. 2 *143 The majority appears to recognize the hazards of depending on the pronouncements of district judges under these circumstances because, while relying on such a methodology with respect to the choice of law question (despite the uncertainty as to how all the district judges who have ruled on the matter would decide the issue before us), 3 the majority pointedly declines to follow the district court’s interpretation of the statute with respect to the good cause termination argument.
If the court had used all the tools at its disposal, one might have to conclude that, while the issues are indeed close calls, the court had done all that it could with the materials at hand. However, unlike our colleagues in the district court, we can do more. Indeed, there are very clear signs that the legislature of Indiana, and, by their passage of a constitutional amendment, the people of Indiana, would like us to do more. By two separate provisions of law, Indiana has made it clear that it very much cares that ambiguities in the law of the state be clarified on a regular basis by the supreme court of the state. The legislature has enacted a statute that permits this court to certify a controlling question of state law to the Supreme Court of Indiana. 4 More recently, the constitution of the state has been amended to ensure that the Supreme Court of Indiana has sufficient control of its own docket to permit it to spend the time needed to clarify important points of state law in civil litigation. 5
Of course, we cannot — and indeed should not — certify every issue on which there is some ambiguity. After all, the constitution gives us independent responsibility for the adjudication of cases properly within our diversity jurisdiction. Moreover, we must be respectful of the workload of our colleagues in the state courts. Nevertheless, despite these considerations, we must balance these concerns against the manifest concern of Indiana that it be allowed to develop its own jurisprudence. A good starting point in striking that balance would be to identify those areas of state jurisprudence where there is a particular need or manifest state interest in controlling the development of the law. We also ought to attempt to identify those areas where the very nature of the litigation makes it evident that a good number of the cases will be brought in the federal courts and where, unless certification is used to resolve major issues, the federal courts, simply by virtue of the choice of forum, will have a virtual monopoly over the development of the law in that field. 6 When these two concerns are present, there is an especially good case for certification.
Such a situation exists in the present case. We are not dealing here with some esoteric, nonrecurring question of common law. Rather, we are dealing with the interpretation of a statutory scheme enacted by the state legislature to deal with an important area of commerce that has been the scene in modern of times of much abuse and where the need for a careful balance between freedom of contract and governmental regulation is particularly acute. It is also an area where the very nature of the litigation — often involving national franchisors and local franchisees and sig *144 nificant amounts of money — makes diversity jurisdiction quite probable. Under these circumstances, certification of the controlling points of law is, in my view, the appropriate course. Accordingly, I respectfully dissent.
. As a practical matter, this process of reasoning by analogy often is flawed by overdependence on the law of other jurisdictions within the circuit. This overdependence is quite natural because the circuit judges are more familiar with the law of the other states within their circuit. However, we must acknowledge that, as Justice Schaefer of the Illinois Supreme Court pointedly reminded us, "[tjhere is no element of sovereignty in a federal judicial circuit.” Schaefer, Reducing Circuit Conflicts, 69 A.B.A. J. 452 , 454 (April 1983). It is simply an administrative subdivision of the federal judiciary. A state within the circuit need not see policy matters the same way as the other states grouped together by the Congress for the purpose of administering federal law. We must be careful not to permit our dependence on analogous sources of interpretation to result in a "law of the circuit” with respect to a matter of state law. See Chang v. Michiana Telecasting Corp., 900 F.2d 1085, 1087 (7th Cir.1990) (“We certify questions to ensure that 'the law we apply is genuinely state law, and not a federal court’s perception of what state judges ought to hold.' ”) (quoting Covalt v. Carey Canada Inc., 860 F.2d 1434, 1441 (7th Cir.1988)) (emphasis supplied by Covalt court).
. See Ind.Code Ann. § 33-2-4-1 (providing statutory authorization for the Supreme Court of Indiana to answer certified questions from the Supreme Court of the United States, any United States circuit court of appeals, and the court of *143 appeals of the District of Columbia, but omitting any reference to the United States district courts); Indiana Rule of Appellate Procedure 15(0) (incorporating the statutory authorization).
. See cases cited supra, p. 133, note 1. To the degree these cases exhibit differing views among the district judges of Indiana, the case for certification is indeed stronger.
. See supra note 2.
. See Ind. Const. art. 7, § 4 (West Supp.1989) (before the 1988 amendment to this section, the appellate jurisdiction of the Supreme Court of Indiana extended to criminal cases in which a sentence of greater than ten years was imposed; the section as amended reduces the scope of appellate jurisdiction to cases in which a sentence of greater than fifty years was imposed.
.Cf. Covalt v. Carey Canada Inc., 860 F.2d 1434, 1440 (7th Cir.1988) (issue concerning the interplay between a “discovery rule" of limitations for disease based tort actions and Indiana’s ten year statute of repose was certified to the Indiana Supreme Court in a situation where the law of asbestos litigation in Indiana had been developed exclusively through federal diversity cases).