STATE ex rel. PRUITT v. NATIVE WHOLESALE SUPPLY
2014 OK 49
| Okla. | 2014Background
- AG sued Native Wholesale Supply (NWS) for violations of the Master Settlement Agreement Complementary Act seeking disgorgement of NWS's gross receipts totaling $47,767,795.20.
- District court on remand granted summary judgment to AG; NWS appealed; this Court retained the appeal.
- Native Wholesale Supply I held that Oklahoma had personal jurisdiction over NWS and subject-matter jurisdiction, despite Native American identity of participants in the distribution channel.
- Post-remand, the dispute centers on whether the settled-law-of-the-case facts from Native Wholesale Supply I bind the district court and whether a jury trial was warranted.
- The AG relied on undisputed records (Exhibits 5 and 6) showing substantial gross receipts from sales of contraband Seneca cigarettes to Oklahoma wholesalers.
- Statutes at issue provide that disgorgement of profits/gross receipts is an available remedy for violations of the Complementary Act, and that the remedies are cumulative.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether remand court was bound by settled facts | AG: settled-law of the case binds district court on summary judgment. | NWS: settled facts not controlling; jury trial rights may apply and issues remain fact-specific. | Yes; the district court was bound by the settled-law-of-the-case conclusions on remand. |
| Whether NWS was entitled to a jury trial | AG: no constitutional right to jury on statutory disgorgement claim; merits determined on summary judgment. | NWS: unsettled factual questions warrant jury consideration. | No; no jury trial right for the MSACA disgorgement claim; summary judgment proper. |
| Whether AG is entitled to summary judgment/disgorgement amount as a matter of law | AG: undisputed records show at least $47,767,795.20; relief authorized by §360.8(G). | NWS: contested allocation; need to separate federal taxes and costs; not all receipts should be disgorged. | Yes; the AG is entitled to disgorgement of $47,767,795.20. |
| Whether the MSACA applies to NWS transactions with Muscogee Creek Nation Wholesale | AG: MSACA applies; NWS knew/should have known about violative distributions. | NWS: applicability was unsettled at the time; jury should decide knowledge. | Disputed knowingness questions remain; summary judgment upheld on other grounds; but this issue informs knowledge determination. |
| Whether settled-law supports treating contraband distributions as the basis for disgorgement | AG: circuit-wide policy supports disgorgement to fund Tobacco Settlement Endowment. | NWS: settled law did not predefine the amount or whether all receipts are subject to disgorgement. | Disgorgement of gross receipts is authorized and appropriate under the statute and settled law. |
Key Cases Cited
- State ex rel. Edmondson v. Native Wholesale Supply, 2010 OK 58, 237 P.3d 199 (Okla. 2010) (established personal jurisdiction and subject-matter jurisdiction in related context)
- Native Wholesale Supply v. State of Oklahoma, 131 S. Ct. 2150 (U.S. 2011) (certiorari denial; related confirmation of appellate ruling)
- World-Wide VW v. Woodson, 444 U.S. 286 (1980) (stream-of-commerce due process framework)
- Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987) (stream-of-commerce plus additional forum-directed conduct required)
- Grand River Enterprises Six Nations, Ltd. v. Oklahoma ex rel. Edmondson, 308 P.3d 1057 (Okla. Civ. App. 2013) (escrow and MSACA issues; later cert denied)