Bench & Bar of Minnesota is the official publication of the Minnesota State Bar Association.

Notes & Trends – March 2018


Expungement: Two- and four-year conviction-free period must occur between discharge of sentence and filing of petition. Appellant was convicted in 2000 of misdemeanor and gross misdemeanor harassment restraining order violations. In 2002, he was convicted of third-degree DWI. He filed petitions to expunge the HRO convictions in 2015. At issue is Minn. Stat. §609A.02, subd. 3(a)(3)-(4), which says a petition is allowed if the petitioner was convicted of a petty misdemeanor or misdemeanor and has not been convicted of a new crime for at least two years since discharge of the sentence, or convicted of a gross misdemeanor and not convicted of a new crime for a least four years since discharge of the sentence. The question is whether the waiting periods are only from the discharge date to the end of two/four years, or if they are the two-/four-year periods before the filing of the petition?

Held, the two- or four-year conviction-free waiting period must occur any time between the date the sentence is discharged and the date the expungement petition is filed. Without deciding whether appellant’s petitions should have been granted, the court of appeals concludes that the district court is permitted to consider the petitions, because appellant had no convictions in the two years immediately preceding his misdemeanor HRO expungement petition, and no convictions in the four years immediately preceding his gross misdemeanor HRO expungement petition. State v. C.W.N., __ N.W.2d __, A17-0728, A17-0729, 2018 WL 256738 (Minn. Ct. App. 1/2/2018).

• DWI: Trahan and Thompson do not apply retroactively on collateral review. Appellant was convicted of test refusal before Trahan and Thompson were decided, so he filed a postconviction petition arguing the cases created a new rule with retroactive effect. Trahan and Thompson, applying the United States Supreme Court rule announced in Birchfield v. North Dakota, established that Minnesota’s test refusal statute is unconstitutional with respect to warrantless blood and urine tests. The court of appeals considers whether the new rule is substantive or procedural to determine its retroactive effect.

The court reiterates that a substantive rule narrows the scope of a criminal statute by placing particular conduct beyond the state’s power to punish, while a procedural rule regulates only the manner of determining a defendant’s culpability. The court holds that Trahan and Thompson merely modified the procedure law enforcement must follow before administering blood and urine chemical tests. Now, police must either obtain a search warrant or establish exigent circumstances. Trahan and Thompson do not limit the range of criminal conduct that may be punished, but instead alter the range of acceptable police conduct relating to chemical tests. As a new procedural rule, it may not be applied retroactively. Johnson v. State, __ N.W.2d __, A17-0842, A17-0883, 2018 WL 256745 (Minn. Ct. App. 1/2/2018).

• Restitution: Mandatory restitution for identity theft not a due process violation. Appellant pleaded guilty to identity theft and the district court ordered him to pay the mandatory minimum restitution of $1,000 to each of the 66 victims. On appeal, appellant argues the restitution order violates due process and imposes an unconstitutional fine.

As to procedural due process, the Supreme Court finds that the Matthews balancing test does not apply to a restitution order at a sentencing hearing. The order arises from the criminal process and appellant received the full range of procedural protections afforded to all criminal defendants. Even under Matthews, however, appellant’s claim fails. There was no risk of an erroneous deprivation of a private interest, because appellant expressly admitted the material facts necessary for the restitution order. Appellant also received notice of the mandatory restitution in a pre-plea investigation report and had an opportunity to be heard on his restitution challenges at his sentencing hearing.

With respect to substantive due process, the Supreme Court notes that rational basis review applies because no fundamental right is implicated. The state has a legitimate interest in ensuring that identity theft victims are compensated for losses suffered when their personal information is unlawfully used. The mandatory minimum restitution requirement is not an arbitrary method of compensating the victims, who may never be able to fully account for their losses or harm, because damages are hard to discover and measure in the identity theft context.

Finally, the Supreme Court confirms that the mandatory minimum restitution requirement is not a fine, because it is part of a defendant’s sentence and paid to the victims, not the state. State v. Rey, __ N.W.2d __, A16-0198, 2018 WL 265283 (Minn. 1/3/2018).

• Restitution: Offender’s inability to pay cannot distinguish victim’s right to restitution for appropriate losses. Appellant was convicted of second-degree murder and ordered to pay restitution for funeral expenses and lost wages to the victim’s spouse. Appellant objected, claiming the inability to pay while serving his 366-month sentence. The district court found the items of restitution appropriate, but revoked its restitution order based on appellant’s minimal potential earning capacity in prison.

Minn. Stat. §611A.04 gives a crime victim “the right to receive restitution,” and directs the district court to consider the amount of the victim’s loss and the offender’s ability to pay. The court of appeals rejects appellant’s argument that the statute only confers standing to receive restitution, not an absolute right to receive it. The statute’s language is plain that restitution is a right. The statute gives the court discretion to deny restitution when no economic loss is proven and to determine the proper amount of restitution, but not to deny restitution altogether where there is an appropriate victim with valid expenses requesting a “reasonable” amount of restitution.

Here, the victim’s spouse was an appropriate “victim” under the restitution statute, and the requested items of restitution were appropriate. Denial of all restitution was contrary to the victim’s spouse’s right to restitution. In its ultimate order, the district court considered only the offender’s ability to pay and its findings about the offender’s inability to pay were unsupported by the record. State v. Davis, __ N.W.2d __, A17-1108, 2018 WL 414376 (Minn. Ct. App. 1/16/2018).

• Traffic stop: Driving on lane marking is movement from lane. Appellant challenges both his conviction for DWI and driver’s license revocation, arguing the stop of his vehicle, based on appellant driving on but not over the fog line, was unconstitutional. The court defines “lane,” as used in Minn. Stat. §169.18, subd. 7(a), which makes it a violation to move from one’s traffic lane, as the area between markings, but not the lane markings themselves. Thus, appellant driving on the fog line gave police a reasonable, articulable suspicion of a traffic violation. His conviction and driver’s license revocation are affirmed. Kruse v. Comm’r Pub. Safety, __ N.W.2d __, A17-0552, A17-0564, 2018 WL 312944 (Minn. Ct. App. 1/8/2018).

• Jury instructions: Limiting instruction on relationship evidence encouraged, but failure to do so sua sponte not automatic plain error. After a jury trial, appellant was convicted of domestic assault and theft of a motor vehicle. Prior to trial, the district court found relationship evidence admissible over appellant’s objection, and the evidence was introduced at trial through the victim’s testimony, without objection. Appellant did not request a limiting jury instruction. Appellant argues that the district court erred in allowing the relationship evidence without giving a limiting instruction sua sponte. The court of appeals reviews the district court’s conduct for plain error. Both parties agree that the district court’s failure to give a limiting instruction sua sponte was plain error, but disagree as to whether the error affected appellant’s substantial rights.

The court concludes, however, that the district court did not commit plain error, citing prior cases holding that a precautionary limiting instruction should be given in relationship evidence cases, even if none has been requested, but adding that the failure to do so may not be plain error under the facts of a particular case. Specifically, the court highlights the Supreme Court’s decision in State v. Taylor, 869 N.W.2d 1 (Minn. 2015), which analogized prior conviction impeachment evidence to Spreigl evidence and held that the district court did not err in failing to provide a sua sponte limiting instruction.

Here, appellant was represented by counsel, did not request a limiting instruction, and made no objection to the lack of instruction. At the pretrial hearing, the district court also conducted a sound analysis of the probative value versus prejudicial effect of the evidence, which is supported by the record. Furthermore, the relationship testimony was brief, limited, and not unduly emphasized. The court holds that the district court did not plainly err in failing to provide a limiting instruction sua sponte in this case. However, the court “again reiterate[s] the strong preference that a district court give a limiting instruction for relationship evidence at the time it is admitted and again during final jury instructions.” State v. Melanson, __ N.W.2d __, A16-1567, 2018 WL 313074 (Minn. Ct. App. 1/8/2018).

• Surreptitious interference with privacy: Proof of entry upon another’s property with intent to intrude upon privacy not required. While staying at his brother’s home, appellant was caught on the garage roof watching his niece’s friend undress for bed. He was convicted of interference with the privacy of a minor, furnishing alcohol to a minor, and disorderly conduct. On appeal, he argues the evidence is insufficient to support his privacy interference conviction because the state did not prove that he entered another’s property “with the intent to intrude upon or interfere with the privacy of a member of the household.”

Minn. Stat. §609.746, subd. 1(e)(2), requires a violation of section 609.746, subd. 1, against a minor. Section 609.746, subd. 1(a) describes surreptitious interference with privacy and includes three elements: (1) entry upon another’s property, (2) surreptitious gazing, staring, or peeping into another’s house; and (3) does so with intent to intrude upon or interfere with the privacy of a member of the household. The court of appeals finds that the statute is ambiguous as to what “does so” in the third element applies to. Looking to former versions of the statute, the court finds that the intent element applies only to the gazing element, and not the entry element. Thus, the state was not required to prove appellant entered his brother’s property with the intent to interfere with the privacy of a member of the household, and appellant’s conviction is affirmed. State v. Pakhnyuk, __ N.W.2d __, A17-0474, 2018 WL 313086 (Minn. Ct. App. 1/8/2018).

• Competency: Competency determined based on greater weight of evidence, without regard to burden of proof. Appellant was charged with fourth-degree criminal sexual conduct and moved for competency and mental examinations. After examinations by two doctors, the district court found appellant competent to stand trial. Minn. R. Crim. P. 20.01, subd. 5(f), requires the district court to determine whether “the greater weight of the evidence” supports a finding of competency. Appellant argues the district court applied a standard that shifted the burden to the defense by relying on the analysis of one doctor who shifted the burden to appellant to produce some evidence of incompetence, instead of requiring the state to demonstrate his competence.

The court of appeals disagrees with appellant, pointing out that neither the competency rule nor cases interpreting the rule include language that assigns to the state the burden of proving a defendant’s competence. The procedural rules do not assign a “burden of proof” in a competency proceeding to the state, defense, or court. “Rather, a district court determines competency… based on the greater weight of the evidence without regard to burden of proof.” The district court applied this standard in appellant’s case. The record also shows that the greater weight of the evidence establishes that appellant was competent to stand trial. State v. Curtis, __ N.W.2d, A17-0373, 2018 WL 414299 (Minn. Ct. App. 1/16/2018).

• 5th Amendment: Compelling provision of fingerprint to unlock seized cellphone not a testimonial communication. Police seized cell phone of appellant, a burglary suspect, and attempted to execute a warrant to search the phone, but were unable to bypass the fingerprint scanner security lock. Appellant refused to provide his fingerprint, but the district court ordered him to do so, and the court of appeals affirmed. At trial, incriminating evidence from appellant’s cell phone was admitted, and the jury found him guilty.

In this case of first impression, the Supreme Court is faced with determining whether the 5th Amendment’s privilege against self-incrimination protects a person from being ordered to provide a fingerprint to unlock a seized cell phone. The Court holds that, because the act of providing a fingerprint to the police to unlock a cell phone elicits only physical evidence from the defendant’s body, and does not reveal the contents of his mind, there is no 5th Amendment violation.

The 5th Amendment bars the state from compelling incriminating oral and physical testimonial communications from a defendant. The United States Supreme Court has drawn a distinction between compelled acts that elicit testimonial responses, such as producing documents as evidence, and compelled acts that make a suspect or accused the source of real or physical evidence, such as providing a blood sample to the police for an alcohol content analysis. The Court notes that providing a fingerprint both exhibits the body and produces documents (the contents of the phone) while communicating some degree of possession, control, and authentication of the phone’s contents.

However, the Court determines that producing a fingerprint is more like exhibiting the body than producing documents, as it involves a display of the physical characteristics of the body, not of the mind, to the police, and is more like a “test” to gather physical characteristics, like a blood sample, voice exemplar, lineup, etc. Furthermore, appellant’s participation in providing his fingerprint was irrelevant to whether his fingerprint actually unlocked the phone—whether his fingerprint unlocked the phone depended instead on whether the fingerprint scanner analyzed the physical characteristics of appellant’s fingerprint and matched the characteristics of the fingerprint programmed to unlock the phone. State v. Diamond, __ N.W.2d __, A15-2075, 2018 WL 443356 (Minn. 1/17/2018).

Samantha Foertsch

Stephen Foertsch

Bruno Law




At-will employment; salary plan not modified. A group of at-will management employees could not have their bonuses capped after higher amounts were agreed to as part of a compensation plan in an employment agreement they signed with their employer. The 8th Circuit Court of Appeals held that the compensation plan constituted an offer to enter into a unilateral contract, and the employer could not modify it after the managers had begun their performance. Boswell v. Panera Bread Company, 879 F.3d 296 (8th Cir. 1/5/2018).

• Discrimination claims; gender, religion rejected. A terminated employee who claimed that he was discriminated against because of his gender and due to his religion was not entitled to pursue his claim. Affirming summary judgment, the 8th Circuit Court of Appeals held that the employer articulated legitimate, non-discriminatory reasons for firing the employee and those reasons were not pretextual. Roone v. Rock-Tenn Converting Company, 878 F.3d 1111 (8th Cir. 1/9/2018).

• Severance benefits; ERISA plan prevails. A former employee who sued to recover severance benefits through a plan under the Employee Retirement Income Security Act (ERISA), which guaranteed benefits when there was a material reduction in the employee’s duties, lost his claim. The 8th Circuit Court of Appeals upheld summary judgment for the employer because the employee lacked good reason to quit, and the employer did not breach any fiduciary duty by misstating or omitting any material information to the employee. Boyd v. ConAgra Foods Inc., 879 F.3d 314 (8th Cir. 1/5/2018).

• Driving rules; truckers lack standing. A group of commercial drivers who challenged a new federal administrative rule requiring medical certification and testing for sleep apnea were not allowed to pursue their claim. The 8th Circuit Court held that the truckers lacked standing because they were not able to show that the rule caused any harm to them. Owner-Operator Independent Driver’s Association v. Dept. of Transportation, 878 F.3d 1099 (Minn. App. 1/5/2018).

• Licensing law; challenger’s “braiding” claim rejected. A state law requiring hair braiders to be licensed as barber cosmetologists was upheld by the 8th Circuit. The measure was naturally related to protecting public health and safety and not impermissibly over-broad or vague. Niang v. Carroll, 879 F.3d 70 (8th Cir. 1/11/2018).

• Teaching contracts; nonrenewal overturned. The nonrenewal of annual public school teaching contracts by the Centennial School District was reversed by the court of appeals. It held that the teachers possessed continuing contract rights for renewal under Minn. Stat. §123A.40, subd. 5 because they completed three consecutive years of teaching in one school district followed by a single probationary year in the current district. Long v. Independent School District No. 332, Mora, 2018 WL 492635 (Minn. Ct. App. 1/22/2018) (unpublished).

• Teacher training; license application granted. An application for a special education teaching license was required to be granted to an educator whose out-of-state training license was for a curriculum not similar to the training program in Minnesota that the applicant sought. Reversing a ruling of the Minnesota Board of Teaching, the Minnesota Court of Appeals held that the application should be granted because the applicable law, Minn. Stat. §122A.23, subd. 2, does not require that an out-of-state teaching license have a similar training program to one in Minnesota. In re Application of Baker, 2018 WL 313097 (Minn. Ct. App. 1/8/2018) (unpublished).

• Defamation dismissal; admissions upheld. Responses by an employee to a request for admissions were fatal to a claimant’s defamation lawsuit. Upholding a ruling of the Hennepin County District Court, the appellate court ruled that the admission barred claims of defamation by her co-workers as well as assault. Ivers v. Cub Foods, 2018 WL 414371 (Minn. Ct. App. 1/16/2018) (unpublished).

• FELA; dismissal reversed. A railroad employee injured in a vehicle accident was entitled to pursue his claim for on-the-job injury under the Federal Employers’ Liability Act (FELA). Reversing a ruling of the Hennepin County District Court, the Minnesota Court of Appeals held that there were material fact disputes regarding the employer’s insistence that the worker drive a vehicle needing response, in violation of the railroad’s own policy. Mead v. BNSF Ry. Co., 2018 WL 414318 (Minn. App. 1/16/2018) (unpublished).

• Disability discrimination; no “interactive” duty. An employer was not obligated to engage in an “interactive” process with a disabled employee seeking a reasonable accommodation under the Minnesota Human Rights Act. The Minnesota Court of Appeals upheld dismissal of the lawsuit by the Becker County District Court. McBee v. Team Indus. Inc. 2018 WL 414306 (Minn. App. 1/16/2018) (unpublished).

• Unemployment compensation; unauthorized early departure bars claim. An employee who left work early without permission and failed to disclose the early departure, along with falsifying his time sheet, was denied unemployment compensation benefits. Affirming a decision by an unemployment law judge (ULJ), the appellate court held that the employee committed “disqualifying misconduct.” Elkhatib v. E.A. Sween Co., 2018 WL 313094 (Minn. App. Ct. 01/8/18) (unpublished).


• Supreme Court cases. The Minnesota Supreme Court began February by taking under advisement pair of workplace-related cases; decisions are expected on them this spring or summer. In St. Jude Medical, Inc. v. HealthCenter, No. 16-2015, argued February 6, the Court will decide whether an injunction may be issued to prevent competition under a restrictive covenant that mandates such relief, even though the trial court found no irreparable harm and refused to enjoin the ex-employee, a decision that was reversed and remanded by the court of appeals. In Holtshander v. Granite City Roofing, Inc., No. 17-0955, heard without oral argument the following day, the justices are considering the standards for setting aside a stipulated workers compensation award due to an unforeseen “substantial change” in the employee’s medical condition.

Marshall H. Tanick

Meyer, Njus & Tanick



• 9th Circuit holds CWA can apply to pollution that travels through groundwater. The U.S. Court of Appeals for the 9th Circuit held that Clean Water Act (CWA) penalties can apply to pollution that travels through groundwater, a decision that adds to a growing body of divided federal case law on the issue. Although the CWA only applies to discharges of pollutants to surface waters, about half the courts that have addressed this issue have concluded that if a discharge of pollutants to groundwater subsequently migrates through the groundwater and ends up in a jurisdictional surface water, this constitutes a de facto discharge to the surface water that requires an NPDES permit. The case before the 9th Circuit involved a municipal wastewater treatment plant in West Maui, Hawaii, which discharged treated sewage into a series of wells for disposal to groundwater. The wells were located about half a mile from the ocean, and the court found that there was a direct “undeniable” hydrological connection between the groundwater and the ocean, which allowed a large proportion of the sewage to be transported by the groundwater and enter the ocean. The 9th Circuit held that even though the CWA only protects surface waters rather than groundwater, and even though Maui was not releasing its wastewater directly into the Pacific, if “the pollutants are fairly traceable from the point source to a navigable water such that the discharge is the functional equivalent of a discharge into the navigable water,” the discharge is subject to the CWA and prohibited without an NPDES permit.

On a related note, the EPA issued a notice on 2/12/2018 seeking public comment on whether the agency should clarify or revise its prior statements regarding the type of discharge at issue in the 9th Circuit case—discharges from point sources that reach jurisdictional surface waters via groundwater with a direct hydrologic connection to jurisdictional surface water—and if so, how. EPA will be receiving comments until 90 days after the notice is published in the federal register. Haw. Wildlife Fund v. Cnty. of Maui, No. 15-17447 (9th Cir., 2/1/2018).

• U.S. Supreme Court rules challenges to the Waters of the United States Rule belong in federal district courts. On 1/22/2018, the Supreme Court unanimously held that challenges to the Waters of the United States (WOTUS) Rule were required to be brought in federal district courts. The decision, Nat’l Ass’n of Mfrs. v. Dep’t of Def., written by Justice Sotomayor, abrogates an October 2015 6th Circuit Court of Appeals decision that issued a nationwide stay of the rule. 2018 WL 491526 (2018).

In 2015 the, Environmental Protection Agency (EPA) and the Army Corps of Engineers promulgated the WOTUS Rule to define which waters fell under the jurisdiction of the Clean Water Act (CWA). 33 U.S.C. §1251, et seq. CWA provides seven categories of EPA actions for which review lies directly and exclusively in the federal courts of appeals. In this case, the relevant EPA actions were “approving or promulgating any effluent limitation or other limitation,” §1369(b)(1)(E), and EPA actions “issuing or denying any permit,” §1369(b)(1)(F).

First, the Court rejected the government’s argument that the WOTUS Rule fell within the effluent limitations exception of subparagraph (E) of § 1369(b)(1). It held that the rule is not an “effluent limitation” as defined in §1369(11); it is simply a regulatory definition for a statutory term. Furthermore, the Court held that the rule is not an “other limitation” because it does not impose restrictions on the discharge of pollutants. Second, the Court rejected the argument of the permitting exception of subparagraph (F) of § 1369(b)(1). The Court held that the rule neither issues nor denies a permit under §1342, but only defines the jurisdictional boundaries of EPA’s authority to issue or deny a permit. For those reasons, the Court held that courts of appeals do not have exclusive jurisdiction to review the WOTUS Rule, thereby reversing the judgment of the 6th Circuit Court of Appeals. Now, challenges to the WOTUS Rule must be heard in district courts, following the Administrative Procedure Act.

The result of this ruling is that the 6th Circuit’s nationwide stay will be lifted, which would have put the WOTUS Rule into effect across a majority of the country. However, on 1/31/2018, EPA finalized a rule proposed in November 2017 that adds an “applicability date” to the WOTUS Rule, postponing the implementation of the rule by two years. The delay was put into effect to buy EPA time as it drafts a proposal to repeal and replace water regulations to define Waters of the United States in a more conservative light, closely aligned with Justice Scalia’s plurality “continuous connection” test from Rapanos v. United States, 547 U.S. 715, 742 (2006). EPA has stated it intends to issue a draft proposal to replace the rule in the first quarter of this year, and to finalize the rule by the end of this year. In the meantime, the definition of WOTUS will remain unclear, reverting back to the CWA text directly, case law, and agency guidance that has led to this confusion in the first place. Nat’l Ass’n of Mfrs. v. Dep’t of Def., 2018 WL 491526 (2018).


• PUC Keeps Enbridge Line 3 contested case on schedule, notwithstanding delayed EIS adequacy finding. On 1/10/2018, the Minnesota Public Utilities Commission (PUC) issued an order directing the administrative law judge (ALJ) presiding over the contested case proceeding on the applications for a certificate of need and route permit for the proposed Enbridge Energy, LLC (Enbridge) Line 3 Pipeline project to provide her final report by 4/23/2018, and to not delay resolution of the contested case proceedings until the final environmental impact statement (EIS) for the project has been found adequate.

The PUC order is just the latest step in what has been a drawn-out process involving Enbridge’s applications for a certificate of need and route permit for its Line 3 Pipeline project. The project dates to April 2015, when Enbridge first applied for a certificate of need. The project calls for installing 337 miles of 36-inch diameter pipe, along with associated facilities, from the North Dakota-Minnesota border to the Minnesota-Wisconsin border. The proposed pipeline would replace and take a different route from the current Line 3 pipeline, which also extends across Minnesota. Enbridge also applied for a routing permit at the same time it applied for a certificate of need.

In August 2015, the PUC referred both the certificate of need docket and the routing permit docket to the Minnesota Office of Administrative Hearings to hold a contested case on the merits of the applications. In addition, the PUC, in February 2016, authorized the Department of Commerce (DOC) to prepare an EIS for the project. The PUC established 12/11/2017 as the deadline for the PUC to make an adequacy determination on the DOC’s EIS, and 4/30/2018 as the deadline for the ALJ to issue a final report on the Line 3 need and route applications.

The DOC issued the final EIS for the project on 8/17/2017, and on 12/14/2017, the PUC issued an order finding four deficiencies in the final EIS that would need to be addressed before the PUC would consider it to be adequate. In response to the PUC’s decision on the EIS, the ALJ granted a motion made by several parties to the contested case proceeding to adjust the schedule for briefing and for issuing a final ALJ report, making the schedule contingent upon the date of an eventual PUC order finding the final EIS to be adequate. Other parties opposed extending the contested case schedule, and the PUC met to consider the matter.

In its January 10 order, the PUC rejected the ALJ’s extension of the contested case schedule and directed the ALJ to issue its final report by 4/23/2018. The PUC noted that while an EIS adequacy determination is required before the PUC can take final action on Enbridge’s applications, an adequacy determination is not a prerequisite to an ALJ report in a contested case. The PUC recognized “the value of the EIS to all interested persons as a tool for evaluating the proposed project” during the contested case. However, in this case, where the final EIS had been available to the parties for several months, where the deficiencies the PUC identified in the final EIS were relatively minor, and where the statutory timelines for completing environmental review had already been extended, the PUC concluded that the opposing parties’ need for the minimal additional information that might be produced in a revised final EIS was outweighed by the need for timely decision making. In the Matter of the Application of Enbridge Energy (PUC Docket Nos. PL-9/CN-14-916 and PL-9/PPL-15-137).

Jeremy P. Greenhouse
The Environmental Law Group, Ltd.

Jake Beckstrom Vermont Law School, 2015

Erik Ordahl Mitchell-Hamline School of Law, 2017 



• 28 U.S.C. §1367(d); “Tolling” of statute of limitations. In a 5-4 decision authored by Justice Ginsburg, the United States Supreme Court held that 28 U.S.C. §1367(d)’s tolling provision “pauses the clock” on statutes of limitations until 30 days after a state law claim is dismissed by a federal court, rejecting the counter-argument that the statute was best interpreted as providing only a 30-day grace period to re-file following dismissal. It is noteworthy that the Minnesota Supreme Court reached the same conclusion eight years ago in Goodman v. Best Buy, Inc., 777 N.W.2d 755 (Minn. 2010). Artis v. District of Columbia, ___ S. Ct. ___ (2018).

• Claims for breach of retirement benefits; preliminary injunction granted. Amending her earlier “provisional” ruling that had granted the plaintiffs a preliminary injunction through 1/31/2018, Judge Nelson granted the plaintiffs’ motion for a preliminary injunction pending adjudication on the merits or a further order of the court, rejecting the defendants’ argument that the plaintiffs’ “few month[]delay in filing suit” belied their claims of irreparable harm, and finding that the plaintiffs had demonstrated “fair ground for litigation,” the threatened loss of health insurance benefits established irreparable harm, the balance of harms favored the plaintiffs, and that the public interest favored issuance of the injunction. Pacheco v. Honeywell Int’l Inc., ___ F. Supp. 3d ___ (D. Minn. 2017), appeal docketed, (8th Cir. 1/2/2018), order amended and superseded, ___ F. Supp. 3d ___ (D. Minn. 2018).

• Motions to vacate judgment and for leave to amend denied. Chief Judge Tunheim denied the plaintiffs’ motion to vacate the judgment in favor of the defendants pursuant to Fed. R. Civ. P. 59 and 60, and also rejected the plaintiffs’ argument that he had erred in entering judgment for the defendants without first ruling on the plaintiff’s “oral motion for leave to amend.” Chief Judge Tunheim found that counsel’s statement at argument that the plaintiffs “should have the opportunity to amend the pleading” was not an “oral motion to amend,” and that even if plaintiffs had made the alleged “oral motion,” that motion would not have complied with the Local Rules. Lusk v. Akradi, 2018 WL 626525 (D. Minn. 1/30/2018).

• Motion to dismiss affirmative defenses under Twombly and Iqbal denied. Finding that the plaintiff’s “motion to dismiss” counterclaim pursuant to Fed. R. Civ. P. 12(b)(6) was properly characterized as a motion to strike, Judge Frank denied that motion, concluding that “the Iqbal/Twombly standard does not apply to affirmative defenses.” Continental Ins. Co. v. Daikin Applied Ams. Inc., 2018 WL 626528 (D. Minn. 1/30/2018).

• Attorney’s fee-related affidavit not subject to expert disclosure requirements. Where prevailing FLSA plaintiffs sought attorney’s fees, and the defendant obtained an affidavit from a local attorney which asserted that the requested hourly rates did not reflect prevailing market rates in the Twin Cities, Judge Nelson rejected the plaintiffs’ argument that the affidavit should not be considered because the attorney had never been identified as an expert witness under Fed. R. Civ. P. 26(a)(2)(B), finding that she was “unaware of any rule requiring a party supporting or opposing a petition for attorneys’ fees to formally serve an expert report.” Harris v. Chipotle Mexican Grill, Inc., 2018 WL 617972 (D. Minn. 1/29/2018).

• Motion to dismiss unjust enrichment claim denied. Concluding that an unjust enrichment claim could be alleged despite the existence of an express contract, Judge Wright denied the defendant’s motion to dismiss that claim, finding that the “Federal Rules of Civil Procedure expressly permit a party to plead alternative or inconsistent claims or defenses.” Mono Advertising, LLC v. Vera Bradley Designs, Inc., ___ F. Supp. 3d ___ (D. Minn. 2018).

• Motion for Rule 11 sanctions denied. While granting the defendants’ motion to dismiss the plaintiffs’ claims under Fed. R. Civ. P. 12(b)(6) on the basis of res judicata, Judge Ericksen denied the defendants’ motion for sanctions pursuant to Fed. R. Civ. P. 11, finding that the plaintiffs “had raised reasonable challenges” to several of the elements of the res judicata defense. Midwest Diability Initiative v. JANS Enters., Inc., 2017 WL 6389685 (D. Minn. 12/13/2017).

Josh Jacobson

Law Office of Josh Jacobson 



• State court decision satisfied ICWA and MIFPA. Under the Indian Child Welfare Act, termination of parental rights requires a finding “supported by evidence beyond a reasonable doubt, including testimony of qualified expert witnesses, that the continued custody of the child by the parent or Indian custodian is likely to result in serious emotional or physical damage to the child.” The Minnesota Indian Family Preservation Act (MIFPA) imposes a similar standard and requires that the state “make diligent efforts to locate and present to the court a qualified expert witness designated by the Indian child’s tribe.” On appeal from a termination of parental rights, the mother argued that the tribe’s expert was not qualified and that the expert’s testimony did not support the district court’s finding of likely serious emotional or physical damage. In affirming, the Minnesota Court of Appeals explained that MIFPA precludes challenges to a tribe’s expert and that the district court was allowed to consider the entire record in making its finding.

In a strong rebuke of the district court proceedings, Judge Jesson concurred, calling upon state courts and agencies to better observe ICWA’s heightened standards. In the Matter of the Welfare of the Children of S.R.K., No. A17-1194, 2017 WL 6273152 (Minn. App. Ct. 12/11/2017).

• Acquisition of trust land for gaming purposes did not violate the IRA and IGRA. Under the Indian Reorganization Act (IRA), the Department of the Interior can acquire new lands for certain Indian tribes. Under the Indian Gaming Regulatory Act (IGRA), an Indian tribe can operate a casino on newly acquired lands if the department determines that the casino “would be in the best interest of the Indian tribe and its members[] and would not be detrimental to the surrounding community,” and “the Governor of the State . . . concurs in the determination.” After a seven-year process, the department acquired trust lands for the North Fork Rancheria to conduct gaming activities. Numerous anti-gaming organizations and a neighboring Indian tribe contested the department’s decision under both acts.

The Court of Appeals for the District of Columbia upheld dismissal on summary judgment. With respect to the IRA, it relied on the administrative record to reject arguments that the North Fork Rancheria was not a tribe for which the department could acquire land. The court also rejected IGRA arguments that the department erred in determining that the casino would not be detrimental to the surrounding community, holding that the department could consider positive impacts to the community and could give less weight to the neighboring tribe’s competition argument, because the tribe was outside the surrounding community. Stand Up for California v. U.S. Dep’t of Int., 879 F.3d 1177 (D.C. Cir. 2018).

Jessica Intermill 

Peter J. Rademacher

Hogen Adams PLLC



• Mortgage foreclosure; dual-tracking; notice of lis pendens. Homeowners defaulted on their mortgage loan and applied to their mortgagee’s servicer for a loan modification or repayment plan. The servicer ultimately denied the homeowners’ request for modification or a repayment plan, and commenced foreclosure proceedings. The home was sold to the mortgagee bank at the sheriff’s sale, subject to a six-month redemption period. Two days before the expiration of the redemption period, the homeowners filed a lawsuit claiming that the mortgagee’s servicer failed to fully evaluate their loan modification application and referred their mortgage to foreclosure while their loss mitigation/loan modification application was still pending, in violation of Minnesota Statutes §582.043.

However, the homeowners did not file a notice of lis pendens on the property until approximately two months after their redemption period expired, in violation of Minnesota Statutes §582.043, Subd. 7(b), which states that failure to record a lis pendens before the expiration of the redemption period creates a “conclusive presumption” that the servicer complied with the requirements of Section 582.043. The servicer and mortgage company removed the lawsuit to federal court, and the district court granted summary judgment in favor of the servicer/mortgage company. The district court held that even if the homeowners could establish excusable neglect for the late recorded lis pendens, it would not excuse their failure to comply with the statutory lis pendens deadline.

The homeowners appealed and the 8th Circuit Court of Appeals certified the following question to the Minnesota Supreme Court: “May the lis pendens deadline contained in Minn. Stat. §582.043, subd. 7(b) be extended upon a showing of excusable neglect pursuant to Minn. R. Civ. P. 6.02?” The Minnesota Supreme Court answered the certified question in the negative. The Minnesota Constitution and statutes prohibit court rules from abridging, enlarging, or modifying the substantive rights of any litigant. Courts may never use the rules of civil procedure to create substantive law. The Court ruled that using Rule 6.02 excusable neglect to extend the lis pendens deadline would alter underlying substantive rights. Because the statute creates a “conclusive presumption” that the servicer complied with the statutory requirements if the lis pendens is not timely recorded, extending that deadline would affect the servicer’s substantive rights. Litterer v. Rushmore Loan Management Services, LLC for U.S. Bank National Association, 905 N.W.2d 623 (Minn. 2018).

• Real estate broker license; mortgage broker license; contract for commission. A Pennsylvania company (broker) entered into a broker agreement with a Minnesota mobile home park (park owner) to provide services as a real estate broker and mortgage broker. At the time of the contract, the broker was not licensed by the Department of Commerce as a real estate broker or a mortgage broker. The broker assisted the park owner in refinancing its mortgage on the property. After closing on the refinance, the broker learned that it needed to be licensed to perform the brokerage services it had just provided. The broker then applied for, and received, a mortgage broker license from the Department of Commerce. The park owner refused to pay the broker’s commission because of the licensing issue. The broker sought to compel arbitration in Pennsylvania pursuant to the broker agreement. The park owner commenced action in Minnesota to have the broker agreement declared void. The broker sought to compel arbitration pursuant to the agreement and dismiss the action. The district court ruled that the broker agreement was not void and compelled arbitration pursuant to the clause in the broker agreement. The park owner appealed.

There is no dispute that Minnesota Statutes Chapter 82 prohibited the broker from performing the services it performed without a license, and that performing the services without a license constituted a gross misdemeanor. The question before the court of appeals was whether the prohibition was for the protection of the public, or whether it pertained to mere administrative duties such as raising revenue. If the prohibition was to protect the public, the contract is treated as unlawful and void. The court of appeals noted that the Minnesota Supreme Court has already held that the provisions in Chapter 82 were enacted in the public interest to prevent abuses by unqualified or unreliable real estate brokers and salesmen. The court of appeals also noted that the Legislature has expressly declared that no person may bring or maintain an action in the courts of this state for collecting compensation for the performance of any of the acts for which a license is required, unless that person alleges and proves that it was a duly licensed broker at the time the cause of action arose. Therefore, the court of appeals reversed the district court and held that persons who engage in this type of service without a license cannot enforce their contractual right to compensation in court, and that the broker agreement was invalid as to the violating party. However, the court of appeals remanded to the district court to determine which, if any, of the services provided by the broker fell outside of the statutory licensing requirements. Woischke v. Stursberg & Fine, Inc., ___ N.W.2d ___, A17-0408, 2018 WL 414304 (Minn. Ct. App. 2018).

• Adverse possession. Property owner took title to two parcels of real estate in 1997, along with an easement for ingress and egress over another parcel. However, the property owner claimed that instead of an easement, the purchase intended to include, and should have included, that other parcel (the disputed parcel). The property owners farmed all three parcels after the sale for over 15 years, including the disputed parcel. During the 15-year period the property owner farmed the disputed parcel, the fee owner of the disputed parcel (along with a neighboring parcel) mortgaged the disputed parcel in 2008. In 2012, the neighbors granted a “corrective deed” conveying the disputed parcel to the property owner. The property owner paid the neighbor $754 in real estate taxes to reimburse the neighbor, who had been paying on the disputed parcel since 1997. The mortgage on the disputed parcel subsequently was foreclosed and ultimately purchased by a third party. The property owner brought suit against the third party purchaser in 2016 claiming adverse possession of the disputed parcel. The district court granted summary judgment against the property owner and held that because the property owner had an easement on the disputed parcel, the property owner’s use of the disputed parcel was permissive, and not hostile. The property owner appealed. The court of appeals reversed and remanded. The court of appeals ruled that the property owner had alleged use of the disputed parcel beyond ingress and egress that the easement allowed. Therefore, the alleged use was hostile. The third party argued that the 15-year use period was interrupted by the property owner accepting a deed to the disputed parcel in 2012. The court of appeals disagreed and held that acceptance of the corrective deed by the property owner, and reimbursing the neighbor for taxes the neighbor had paid on the disputed parcel, recognized that the property owner had the superior title and therefore did not interrupt the hostility or continuity of their adverse possession claim. The third party also argued that the mortgage foreclosure of the disputed parcel interrupted the hostility and continuity requirements. The court of appeals disagreed and noted that the property owner’s possession of the property constituted notice of his claim of title to the mortgagee and the mortgagee’s assigns. Moreover, a foreclosure sale does not interrupt the continuity of the adverse possession. Finally, the fact that the property owner did not pay real estate taxes for the five years preceding the adverse possession claim was not fatal because the disputed parcel was not assessed separately for taxes, and because it constituted only a small percentage of the overall neighboring assessed parcel. Therefore, the court of appeals reversed the ruling of the district court and remanded to the district court to determine the material disputes of fact over whether the property owner obtained title to the disputed parcel by adverse possession. Compart v. Wolfstellar, ___ N.W.2d ___, A17-0705, 2018 WL 414349 (Minn. Ct. App. 2018).

• Authority of housing court; residential rental housing. Hennepin County petitioned the Hennepin County Housing Court to enjoin certain alleged prostitution- and drug-related activity at a residential property, to require the owner to evict all tenants at the property, and to prohibit the owner of the property, or anyone else, from occupying the property for one year. The property owner alleged, and the county did not dispute, that the property owner occupied the property and did not rent it to anyone. The housing court referee recommended a judgment in favor of the county, and the district court signed the recommended order. The property owner appealed, claiming that the housing court did not have authority to decide the matter because the property was not “rental housing” as required for the housing court to decide the matter. The court of appeals agreed with the property owner and reversed the district court. The court of appeals held that Minnesota Statutes §484.013, Subd. 1 grants the housing court the authority to hear and determine only matters “related to residential rental housing.” The county argued that Subdivision 2 of the same statute expanded upon the types of matters the housing court has the authority to hear and decide, including “criminal and civil proceedings relating to violations of any state, county or city health, safety, housing, building, fire prevention or housing maintenance code.” The court of appeals rejected this expansive reading of Subdivision 2 and held that Subdivision 2 defines the class of housing-court cases described in Subdivision 1, and does not expand upon them. The court of appeals noted that under the county’s interpretation of Subdivision 2, the housing court would have the authority to decide criminal and civil proceedings that have nothing to do with residential rental housing, rendering Subdivision 1 entirely meaningless. County of Hennepin by Freeman v. 6131 Colfax Lane, Minneapolis, ___ N.W.2d ___, A17-0831, 2018 WL 577742 (Minn. Ct. App. 2018).

Michael Kreun

Beisel & Dunlevy PA



• Property tax: Failure to pay property taxes not fatal to adverse possession claim. Appellants James Compart and Diana Compart own Parcels A and B (A being directly north of B, both 5 acre square parcels), and respondents Justin Wolfstellar and Janeen Wolfstellar own Parcel C (12 acre property to the east of A and B). Both the Comparts and the Wolfstellars claim an ownership interest in Parcel D (3 acre L-shaped property that is the southern border of B and C and western border of A and B). Parcels C and D together form one tax parcel. The Comparts brought a lawsuit in 2016, alleging adverse possession of Parcel D. The Wolfstellars claimed that the adverse possession claims fails, as the possession was not hostile for the full 15 years and the Comparts failed to pay property taxes as required under Minn. Stat. §541.02. The Comparts argued that Parcel D is not real estate assessed as tracts or parcels separate from other real estate, and thus it was not necessary for them to pay the property taxes to prevail on their adverse possession claim. The Minnesota Supreme Court previously held that plaintiffs are exempt from the requirement to pay taxes in cases in which the disputed land was not assessed separately for tax purposes. Ehle v. Prosser, 197 N.W.2d 458, 460 (Minn. 1972). However, if the adverse possession is substantially all of the tax parcel, then the requirement to pay taxes applies. Grubb v. State, 433 N.W.2d 915, 920 (Minn. Ct. App. 1988). The court of appeals held that because the Comports are claiming adverse possession of 20% of the tax parcel, the requirement to pay property taxes does not bar their claim of adverse possession. Compart v. Wolfstellar, No. A17-0705, 2018 Minn. App. LEXIS 67 (Minn. Ct. App. 1/16/18).

• Property tax: Motion to amend denied; property not clearly identified. Petitioner, Jim Bern Co., filed a motion to amend its property tax petition filed 4/28/2017. Bern’s original petition described the petitioned property as “contiguous parcels which are developed and operated as a single project: PID Nos.: 02-28-22-44-0056, 02-28-22-44-0074, 02-28-22-44-0075 and 02-28-22-44-0093.” The single project described is Georgetown Park. However, the four PID numbers are only the four corners. There are 34 other parcels that make up the Georgetown Park. Thus, Bern filed a motion to amend petition to clarify the “the project.” According to Minn. Stat. §278.02, a property tax petition shall “clearly identify” the land involved “in concise language.” Under Minn. R. Civ. P. 15.01, a motion to amend should freely be granted, except where prejudice would result. Marlow Timberland, LLC v. Lake Co., 800 N.W.2d 637, 639–40. However, to amend a petition after the passage of a statute of limitations, the claim must arise out of the same conduct, transaction, or occurrence set forth in the original pleading. Minn. R. Civ. P. 15.03. Bern contends that the motion should be granted because the single project clearly and concisely describes all of Georgetown Park; thus, by adding the other 34 PID numbers to the petition, there is no new claim with a different transaction. However, the tax court disagreed. The court held that the plain meaning of the original petition clearly, though mistakenly, identified four parcels of land and not the entire project. Furthermore, the relation back to the original pleading date for same transactions is only for “ordinary statute of limitations” and not statutory causes of action. Therefore, the motion to amend was denied. Jim Bern Co. v. Ramsey Co., No. 62-CV-17-2723 (Minn. Tax 1/9/18).

• Property tax: Decision on remand. The Minnesota Tax Court issued a lengthy decision in a long-running and procedurally complicated property tax dispute. The underlying issue was the value of a shopping center in Dakota County. In the tax court’s initial decision, the court determined that the assessed value of the subject property understated its market value for the relevant valuation dates. In that decision, the tax court rejected the cost method of valuation because of the age of the subject property; rejected the properties offered by the taxpayer’s expert appraiser as comparable; and rejected both experts’ analyses under the income approach. On appeal, the Minnesota Supreme Court affirmed the findings concerning gross building area and the rejection of the taxpayer’s expert’s sales comparison approach. KCP Hastings, LLC v. Cty. of Dakota, 868 N.W.2d 268, 273-74 (Minn. 2015). The Court remanded, however, to correct the erroneous rejection of the taxpayer’s expert’s discounted-cash-flow (DCF) approach and related failure to consider the income approach to value.

Following remand, the court accepted supplemental evidence and held an evidentiary hearing before issuing finding of facts and conclusions of law and its order. Both parties moved for amended findings of fact; in response to the motions for amended findings, the tax court corrected a clerical error and permitted further consideration of the dispute. At issue in the reconsideration was the DCF; in particular, the county requested that the amended findings of fact show the “various calculations performed” in the court’s discounted-cash-flow (DCF) approach. Instead, the court provided the parties with specific parameters from which the parties could make their own DCF calculations. The court suggested that the parties agree on the result—or, failing agreement, that each party submit its separate calculations to the court based on the parameters provided by the court. The parties agreed. The parties were unable to reach agreement, and the taxpayer proved unable to prepare a discounted-cash-flow approach using the court’s parameters. The county was able to complete a discounted-cash-flow approach; the taxpayer preserved its objections to the court’s findings of fact and conclusions of law on remand, but agreed that the values reached under the county’s approach accurately reflected the court’s findings of fact. After another consultation with the parties, the court entered its most recent findings of fact and conclusions of law, along with its order. The court again found that the assessed value of the subject property understated its market value as of each valuation date. KCP Hastings, LLC v. Dakota Co., Nos. 19HA-CV-11-2713 et al. (Minn. Tax. 1/11/18).

• Statute of limitations; John Doe summons and foreign reporting requirements. Section 6501 sets out the rule that the Service must assess tax within three years of the date a tax was due, or the date the return was actually filed, whichever is later. There are some exceptions to that rule, though, and in this case, the court reconciled two such exceptions. The exceptions at issue: First, the period of limitations is suspended beginning six months after the service of a John Doe summons and ending with the final resolution of that summons. A second exception provides that the IRS may assess tax within six years after a return is filed “[i]f the taxpayer omits from gross income an amount properly includible therein and… such amount (I) is attributable to one or more assets with respect to which information is required to be reported under section 6038D…, and (II) is in excess of $5,000.” Section 6038D requires reporting related to “specified foreign financial assets” and has a dollar threshold of $50,000 that is disregarded for certain purposes. Section 6038D was added in the year 2010, and is effective for taxable years beginning after 3/18/2010. Section 6501(e)(1)(A)(ii) was added in the same Act as 6038D, but has a different effective date, applying to returns filed after 3/18/2010, and also to “returns filed on or before… [3/18/2010] if the period specified in section 6501 of the Internal Revenue Code of 1986 (determined without such regard to such amendments) for assessment of such taxes has not expired as of such date.” Id. sec. 513(d).

In this summary judgment motion, the court began by noting that the notice of deficiency was timely only if the six-year statute applied. Applying plain language and endeavoring to “[g]ive effect to in the key phrase before [it]”, the court held for the taxpayer. The court reasoned that because Sec. 6501(e)(1)(A)(ii) applies only to omissions from gross income of amounts attributable to assets with respect to which the reporting requirement of I.R.C. sec. 6038D is applicable, it is effective only for tax years with respect to which the reporting requirement of I.R.C. sec. 6038D is effective. Applying that reasoning here, the court determined that the longer statutory period did not apply and the taxpayer was entitled to summary judgment. Rafizadeh v. Comm’r, No. 4398-15, 2018 WL 264204 (T.C. 1/2/18).

Morgan Holcomb
& Matthew Wildes 

Mitchell Hamline School of Law


Comments are closed on this post.

Articles by Issue

Articles by Subject