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I'm going out on a limb here, but I say it's false. More than likely, this was a result of a gross misreading of Minn. Stat. 325F.37, which governs the sale of "cotton duck" — a plain woven cotton fabric. (You knew that, right?)
Still, this question gave me an excuse to visit snopes.com, the best urban legend researchers in the business. The duck issue isn't addressed, but I did learn that "Fargo" was not based on a true story, post-it notes were invented from a glue that no one could find a use for and suicide rates do not rise during the winter holidays.
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