Williams v. Smith, 2012 Minn. LEXIS 393

James Williams sued the University of Minnesota and coach Tubby Smith for negligent misrepresentation arising from Williams' prospective employment negotiations.
The University moved to dismiss, arguing lack of subject-matter jurisdiction and failure to state a claim; the district court granted dismissal except for Williams' negligent misrepresentation claim against Smith, and a jury later awarded damages to Williams.
The court of appeals reversed on the negligent misrepresentation claim, holding it was not premised on the University’s employment decision and could be tried; the case proceeded to trial against Smith and the University.
The Supreme Court granted review to decide (1) whether subject-matter jurisdiction exists to address the negligent misrepresentation claim and (2) whether a duty of care exists in arm’s-length negotiations with a government representative and whether reliance is justifiable.
The majority held the district court had jurisdiction and that no duty of care exists in arm’s-length negotiations between Williams and Smith; Williams’ negligent misrepresentation claim failed as a matter of law.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Subject-matter jurisdiction over the claim	Williams argues the claim falls outside certiorari review and lies in tort.	University argues the claim is a contract-based challenge reviewable only by certiorari.	District court had jurisdiction; claim not subject to certiorari review.
Whether a duty of care exists in arm's-length government employment negotiations	Williams contends Smith owed a duty due to misrepresentation in negotiations.	Smith/University contend no such duty in arm's-length, sophisticated-party negotiations.	No duty of care owed; negligent misrepresentation claim fails.
Whether reliance was justifiable in the absence of a duty	Williams reasonably relied on Smith's authority representations to resign from OSU.	Without a duty, reliance is not actionable.	Not addressed as dispositive; duty absence controls liability.

Mulroy v. Wright, 185 Minn. 84 (1931) (government officials owe duty when providing accurate information relied upon)
Northemaire Prods., Inc. v. Cnty. of Crow Wing, 309 Minn. 386 (1976) (public policy favors liability when government information is relied upon; access to information)
Caritas Family Servs., 488 N.W.2d 282 (Minn. 1992) (duty when agency undertakes to disclose information; not all contexts require duty)
Florenzano v. Olson, 387 N.W.2d 168 (Minn. 1986) (duty extends in professional or fiduciary relationships)
City of North Oaks v. Sarpal, 797 N.W.2d 18 (Minn. 2011) (wrongful government conduct requires more than simple government action)
Jewell Belting Co. v. Village of Bertha, 91 Minn. 9 (1903) (contractual authority presumptions; distinguished from negligent misrepresentation)
Smith v. Brutger Cos., 569 N.W.2d 408 (Minn. 1997) (limits on recognizing negligent misrepresentation across contexts)
Valspar Refinish, Inc. v. Gaylord’s, Inc., 764 N.W.2d 359 (Minn. 2009) (addressed whether negligent misrepresentation can arise in arm’s-length commercial transactions)