Statutory Wage and Unjust-Enrichment Claims Against the State Do Not “Arise Upon Contract” Under N.D.C.C. ch. 32-12; ch. 32-12.2 Notice Is Jurisdictional

1. Introduction

UND v. Whelan arose from a putative class action filed by Andrew Sangster against the University of North Dakota (“UND”). Sangster alleged UND underpaid flight instructors by compensating only “student contact hours” while requiring additional uncompensated work (e.g., scheduling, pre- and post-flight procedures, recordkeeping, waiting time, and answering student questions). He asserted four counts: (1) Fair Labor Standards Act (“FLSA”) violations; (2) North Dakota wage law violations; (3) unjust enrichment; and (4) conversion.

The decisive procedural fact was undisputed: Sangster did not give the Office of Management and Budget (“OMB”) notice within 180 days under N.D.C.C. § 32-12.2-04(1)(a). He argued notice was unnecessary because his claims were “contractual in nature” and thus fit the State’s consent-to-suit pathway for claims “arising upon contract” under N.D.C.C. ch. 32-12 (with presentment to the relevant agency under N.D.C.C. § 32-12-03). The district court agreed as to the FLSA, state wage, and unjust enrichment claims, and denied dismissal on those counts.

UND sought a supervisory writ, contending the district court lacked subject-matter jurisdiction because the claims were statutory/tort-like, not contractual, and therefore fell under N.D.C.C. ch. 32-12.2’s jurisdictional notice regime.

2. Summary of the Opinion

3. Analysis

3.1 Precedents Cited

A. Supervisory-writ standards and why the Court intervened

• State v. Lee, 2025 ND 148 (quoting Sauvageau v. Bailey, 2022 ND 86): supplied the governing standard—supervisory writs are discretionary, “rarely and cautiously” issued, and appropriate in extraordinary cases where no adequate alternative remedy exists and issues of public importance are presented.
• Dimond v. State Bd. of Higher Educ., 1999 ND 228 and State v. Haskell, 2001 ND 14: supported using supervisory jurisdiction to correct a district court’s refusal to dismiss for lack of subject-matter jurisdiction when state consent-to-suit prerequisites were not met. These cases framed the practical concern: absent immediate review, the State could be forced into costly litigation a court lacks power to entertain.

B. Constitutional and statutory architecture: the State controls “the manner” of suit

• N.D. Const. art. I, § 9: the Court reiterated that while courts are open, suits against the State may be brought only “in such manner…as the legislative assembly may…direct.” This is the constitutional basis for treating statutory prerequisites as jurisdictional gatekeepers.
• Bulman v. Hulstrand Const. Co., 521 N.W.2d 632 (N.D. 1994): used to clarify North Dakota does not recognize absolute sovereign immunity; rather, the Legislature prescribes the conditions under which the State may be sued, and litigants must follow them.
• Voigt v. State, 2008 ND 236: reinforced the strict-compliance principle—parties seeking to sue the State must strictly comply with statutory requirements.

C. Two distinct “permission structures”: contract presentment vs. injury-claim notice

• Messiha v. State, 1998 ND 149: explained the purpose of the contract presentment requirement in N.D.C.C. § 32-12-03—to inform administrators of the amount of a claim and allow investigation and payment/dispute decisions.
• Cooke v. Univ. of N.D., 1999 ND 238: described the policy behind N.D.C.C. ch. 32-12.2—prompt investigation, hazard repair, fair settlement, and fiscal planning.
• Ghorbanni v. N.D. Council on Arts, 2002 ND 22 (and the line of cases following it: Moen v. State, 2003 ND 17, Knutson v. Cnty. of Barnes, 2002 ND 68, Kautzman v. McDonald, 2001 ND 20, Earnest v. Garcia, 1999 ND 196): collectively established (and reaffirmed here) the jurisdictional consequence: absent timely § 32-12.2-04(1) notice, “the court lacks subject matter jurisdiction to entertain the lawsuit.”

D. Statutory-interpretation framework

• Cache Private Capital Diversified Fund LLC v. Braddock, 2025 ND 168 and RMM Props., L.L.L.P. v. City of Minot, 2024 ND 213: provided the de novo review standard and interpretive canons (ordinary meaning, contextual reading, harmonizing related provisions). This methodology supported the Court’s insistence that “contract” in ch. 32-12 not be expanded to swallow the separate “injury” notice regime in ch. 32-12.2.

E. Why statutory wage claims do not become contract claims merely because employment is contractual

• State ex rel. Cleveringa v. Klein, 249 N.W. 118 (N.D. 1933), Lillethun v. Tri-County Elec. Coop., 152 N.W.2d 147 (N.D. 1967), and Kaisershot v. Gamble-Skogmo, Inc., 96 N.W.2d 666 (N.D. 1959): were acknowledged for the general doctrine that existing law may be read into contracts. But the Court treated that doctrine as a rule of contract interpretation, not a mechanism to reclassify a lawsuit based on statutory rights into a “contract” action for jurisdiction.
• Ghorbanni v. North Dakota Council on the Arts, 2002 ND 22 (quoting Phillips v. Butterball Farms Co., 531 N.W.2d 144 (Mich. 1995)): delivered the core distinction: statutory claims do not “stem from any term agreed upon by the contracting parties, but from public policy now expressed in a statute.” The Court used this to reject Sangster’s “incorporation” theory as jurisdictional bootstrapping.
• Out-of-state wage/FLSA sovereign-immunity decisions reinforced the same classification principle:
  • King v. State, 614 N.W.2d 341 (Neb. 2000): FLSA overtime disputes are “rights created by federal law,” not contract-based.
  • Allen v. Fauver, 768 A.2d 1055 (N.J. 2001): rejecting “bootstrapping”; a complaint alleging FLSA violations “is statutory” even if a CBA exists.
  • Nuñez v. Indiana Dep't of Child Servs., 817 F.3d 1042 (7th Cir. 2016): embedding statutory requirements into employment relationships does not equal waiver via contract.
  • Cockrell v. Bd. of Regents of New Mexico State Univ., 45 P.3d 876 (N.M. 2002): direct FLSA claim not contract-based.
  • Commonwealth v. Luzik, 524 S.E.2d 871 (Va. 2000): FLSA wage recovery not pleaded “in the style of a contract claim.”
• Three Aces Props. LLC v. United Rentals (North America), Inc., 2020 ND 258: supplied the standard elements of breach of contract and supported the Court’s pleading-based observation: Sangster did not allege a specific contractual term, did not plead “contract/agreement/breach,” and sought statutory remedies (liquidated damages and fees “as provided by the FLSA,” and double wages under N.D.C.C. § 34-14-09.1).

F. Unjust enrichment: not automatically “contract” for sovereign-immunity purposes

• Ritter, Laber & Assocs., Inc. v. Koch Oil, Inc., 2004 ND 117: the Court relied on this articulation of unjust enrichment as an equitable doctrine based on quasi/constructive contract implied by law, typically used “in the absence” of an express or implied-in-fact contract.
• Sangster invoked older “implied contract” sovereign-immunity-waiver cases: Little v. Burleigh Cnty., 82 N.W.2d 603 (N.D. 1957), Stark Cnty. v. State, 160 N.W.2d 101 (N.D. 1968), and Ford Motor Co. v. State, 231 N.W. 883 (N.D. 1930). The Court distinguished them as not addressing an unjust enrichment claim seeking unpaid wages premised on intentional wrongdoing and statutory nonpayment.
• The Court used cross-jurisdiction authorities to frame unjust enrichment as classification-dependent: Robinson v. Colo. State Lottery Div., 179 P.3d 998 (Colo. 2008), Dep't of Human Servs. ex rel. Palmer v. Unisys Corp., 637 N.W.2d 142 (Iowa 2001), and Hydro Conduit Corp. v. Kemble, 793 P.2d 855 (N.M. 1990). These supported a “case-by-case” pleading examination: where unjust enrichment is predicated on tortious/intentional misconduct, it is not properly treated as contract.

3.2 Legal Reasoning

A. The Court’s organizing move: preserve the Legislature’s two-track regime

The opinion treats N.D.C.C. ch. 32-12 (contract claims) and N.D.C.C. ch. 32-12.2 (“Claims Against the State” for “injury”) as distinct waivers/conditions of suit. If statutory wage and tort-tinged equitable claims could be re-labeled as “contract” merely because an employment relationship exists, then the 180-day OMB notice requirement would be easy to evade—undermining the Legislature’s chosen “manner” of suit under N.D. Const. art. I, § 9.

B. Statutory wage rights vs. bargained-for terms

The Court accepted the general proposition that existing law can be read into contracts (State ex rel. Cleveringa v. Klein; Lillethun v. Tri-County Elec. Coop.; Kaisershot v. Gamble-Skogmo, Inc.), but it refused to let that doctrine control jurisdictional classification. The controlling question became: did the claim “stem from any term agreed upon by the contracting parties” or does it arise from “public policy now expressed in a statute” (Ghorbanni v. North Dakota Council on the Arts, quoting Phillips v. Butterball Farms Co.)?

Applying that distinction, the Court emphasized Sangster’s pleading choices and remedies sought: he alleged statutory violations, sought statutory liquidated damages and fees, and did not identify any contractual pay term breached. That made the claims statutory—not contract—placing them outside ch. 32-12.

C. Unjust enrichment turned on the “predicate wrong” alleged

Although unjust enrichment is sometimes described as quasi-contractual, the Court focused on Sangster’s allegations of deliberate, systematic, willful, bad-faith exploitation. Using the “predicate wrong” approach reflected in Robinson v. Colo. State Lottery Div., the Court treated these allegations as indicative of a claim not grounded in contract law. Therefore, N.D.C.C. ch. 32-12 did not authorize the unjust enrichment count either.

D. The jurisdictional consequence was automatic once classification was resolved

Once the Court concluded the claims were not “arising upon contract,” Sangster’s conceded failure to provide timely OMB notice under N.D.C.C. § 32-12.2-04(1)(a) compelled dismissal for lack of subject-matter jurisdiction under the rule repeatedly stated in Ghorbanni v. N.D. Council on Arts and its companion cases.

3.3 Impact

A. Practical impact on wage-and-hour suits against North Dakota and its entities

• Reclassification rule with teeth: Wage-and-hour claims pleaded under the FLSA and North Dakota wage statutes are treated as statutory “injury” claims, not contract claims, even when employment is governed by offer letters, handbooks, policies, or collective instruments.
• Jurisdictional trapdoor: Failure to meet the 180-day OMB notice requirement is not a waivable procedural defect; it defeats subject-matter jurisdiction. Class actions magnify the risk because early dismissal avoids high discovery and notice costs—one reason the Court found supervisory intervention appropriate.
• Pleading cannot change substance: The opinion signals skepticism toward “contract dressing” of statutory wage claims. Plaintiffs may need to: (i) timely comply with ch. 32-12.2; and/or (ii) plead and prove a genuine, term-based breach-of-contract theory (if one exists), rather than relying on “laws are incorporated into the contract.”

B. Broader doctrinal impact: unjust enrichment against the State is fact-sensitive

The Court’s treatment of unjust enrichment rejects a categorical “quasi-contract equals contract waiver” approach. Instead, it points toward a classification inquiry driven by the underlying allegations (e.g., intentional wrongdoing vs. mistaken payment). That will influence how litigants plead equitable counts against state defendants and how courts allocate them between ch. 32-12 presentment and ch. 32-12.2 notice.

C. Institutional impact: expanded use-case for supervisory writs in consent-to-suit disputes

By relying on Dimond v. State Bd. of Higher Educ. and State v. Haskell, the Court reinforces that supervisory relief is available when jurisdictional consent-to-suit prerequisites are misapplied and continued litigation would impose irrecoverable burdens on the State.

4. Complex Concepts Simplified

• Supervisory writ: A discretionary, extraordinary order by the Supreme Court directing a lower court to correct a serious error when ordinary appeal is inadequate. Here, it was used to stop litigation the district court allegedly had no power to hear.
• Sovereign immunity / consent to suit (North Dakota version): North Dakota’s constitution allows the Legislature to set the conditions for suing the State. If those conditions are not met, the case cannot proceed.
• Subject-matter jurisdiction: A court’s power to hear a category of cases. Under the Court’s prior decisions, missing § 32-12.2-04(1) notice means the court lacks that power—so the case must be dismissed.
• Two different “pre-suit” requirements:
  • N.D.C.C. § 32-12-03 (contract presentment): present a contract-based money claim to the relevant agency and allow ten days for refusal/inaction.
  • N.D.C.C. § 32-12.2-04(1)(a) (injury notice): notify OMB within 180 days of discovering the injury, with specified details.
• “Arising upon contract” vs. “statutory rights”: A contract claim enforces a term the parties agreed to. A statutory claim enforces duties the legislature imposed as public policy. The Court held wage statutes create the rights being enforced here.
• Unjust enrichment (quasi-contract): An equitable restitution theory used when there is no enforceable contract term covering the benefit. But it is not always treated as “contract” for waiver purposes; courts look at the underlying wrongful conduct alleged.

5. Conclusion

UND v. Whelan, 2026 ND 19 solidifies a bright, jurisdictional boundary in North Dakota’s consent-to-suit framework: claims to recover unpaid wages under the FLSA and North Dakota wage statutes do not “arise upon contract” for purposes of N.D.C.C. ch. 32-12, and unjust enrichment will not be treated as contract-based when pleaded as deliberate, systematic wrongdoing. The practical consequence is decisive: without timely N.D.C.C. § 32-12.2-04(1)(a) notice to OMB, courts lack subject-matter jurisdiction and must dismiss. The decision both channels future wage-and-hour litigation against the State into the 180-day notice regime and signals the Court’s willingness to use supervisory writs to prevent ultra vires, high-burden litigation against state entities.