As the Mall of America (MOA) in Bloomington celebrates its 30th anniversary this month, the iconic site for shopping and other activities and pursuits looks back on a legacy of three decades of litigation.
By Marshall H. Tanick
The 5.6 million-square-foot megamall, about 25% larger than the original site, contains approximately 520 stores, 60 restaurants, and 12,300 parking spaces, welcoming in excess of 40 million shoppers and fun-seekers annually. It’s earned its self-proclaimed billing as a “major U.S. brand” and “one of the most visited tourist destinations in the world” dating back to its opening on August 11, 1992.
It also has been the subject of varied lawsuits. No matter how large a few other malls, including the mammoth South China Mall in Dungan, China (thrice the size of the Bloomington building), they will probably never top the legal cases the MOA has witnessed in its 30 years of existence.
Anniversary Appeal
Anniversaries have been notable in the Mall’s litigation legacy. One case was a ruling by the Minnesota Court of Appeals a few weeks before the facility’s fifth anniversary, 25 years ago. In Cedar Fair v. Minntertainment Co., 2007 WL 1674830 (Minn. Ct. App. June 12, 2007) (unpublished), the court upheld an arbitration award of nearly $4 million against the operator of the Camp Snoopy amusement park for terminating an arrangement with the manager of the facility.
An arbitrator granted the owner of the rights to the Camp Snoopy characters $3.7 million as a “termination payment” under its management agreement with the mall, plus $282,000 in legal fees and costs. A Hennepin County district court rejected a challenge to the award on multiple grounds under the Uniform Arbitration Act, Minn. Stat. sec. 572.19, and the court of appeals affirmed.
Because arbitration awards “are highly favored in Minnesota,” an “extremely narrow” review was invoked. Under that standard, the arbitrator properly found no breach by the Camp Snoopy Company in how it handled the rights to the Snoopy characters and that there was no “fraud [that]… procured the arbitration award.”
The Snoopy suit was one of the first in a long line of Mall litigation, some of jurisprudential importance and historical interest.
Triple Trouble
One of the most high-profile and ponderous sources of litigation involving the Mall was a troubling dispute between business partners with ownership interests in the facility. Known as the “Triple Five” litigation, the stream of cases was in existence for a long span in the mall’s adolescence, dating back to the fall of 1999.
The lawsuits centered around a claimed violation of fiduciary obligations and usurpation of business opportunity, leading to a ruling by U.S. District Court Judge Paul Magnuson granting equitable relief, the imposition of a constructive trust, and disgorgement of profits by one of the entities that acquired an additional interest in the facility, unbeknownst to its partners. The judge also removed the managing general partner and replaced it with a different entity.
The 8th U.S. Circuit Court of Appeals affirmed most of the key rulings by Judge Magnuson, while reversing a few others in Triple Five of Minnesota, Inc. v. Simon, 404 F.3d 1088 (8th Cir. 2005). Addressing a “complicated series of transactions,” the court upheld a ruling by Magnuson of a breach of fiduciary duty by one of the partners to another for failing to disclose negotiations to sell its interest to a related party and usurping a partnership opportunity by not disclosing those transactions.
But the appellate court diverged from Judge Magnuson’s approach in equitable relief, imposing a constructive trust in favor of one of the parties, giving it an opportunity to purchase the interest of the other, and changing the partnership distribution from 50/50 to 80/20, which the appellate tribunal deemed “an abuse of discretion.” The management fee should be distributed on an even basis because “the partnership has always been a 50/50 partnership and should remain that way.”
Removal of one party as a managing partner in favor of another was proper because the ousted managing partner “did not conduct itself in a manner befitting a managing partner who had a heightened duty to protect the interest of its partner.”
Meanwhile, the litigation continued before Judge Magnuson, raising a number of remedial issues. In one of his rulings, the judge noted that “the public interest play[s] a pivotal role” in framing injunctive relief because the mall is “such a significant landmark in the state of Minnesota.”
Therefore, Judge Magnuson suspended a 20-day buy-sell evaluation, pending further legal rulings to determine which entity should be entitled to buy out the other to own the mall. Teachers Insurance & Annuity Assoc. of America v. Mall of America, 2006 WL 1888491 (D. Minn. 2006) (unpublished).
Excess Expression
Another litigation highlight of the Mall’s early years involved a ruling by the Minnesota Supreme Court, which found that animal rights protestors used excessive expression in violating the private property rights of the Mall owners in State v. Wicklund, 589 N.W.2d 793 (Minn. 1999).
The case arose when a group of protesters, peacefully picketing at the mall to dissuade customers from patronizing a facility that sold fur products, was charged with criminal trespass.
A Hennepin County district court dismissed the prosecution under the freedom of speech provision in Article I, Sec. 3, of the Minnesota Constitution. But the court of appeals disagreed, and the Supreme Court affirmed.
Because they were protesting on private property, their actions were not protected by the First Amendment to the U.S. Constitution. Nor does the parallel provision of the Minnesota Constitution provide for “more expansive protection for free speech” than under the federal Constitution. Unwilling to “go beyond those protections offered by the First Amendment,” the Court found insufficient evidence of “state action” to transform privately owned property into public property for purposes of invoking constitutional protection. The Wicklund case has been the most prominent one of its genre, but not the only criminal case at the Mall. Another was State v. Shepard, 2016 WL 4262819 (Minn. Ct. App. Aug. 15, 2016) (unpublished), which arose out of a protest at the mall against the Canadian government’s abrogation of treaty rights and attracted about 1,000 people to the facility. A protestor refused to leave the premises after being asked to do so by police, and she was charged with trespassing under Minn. Stat. §69.605, subd. 3(b)(3), which yielded a conviction by a jury in Hennepin County and a 30-day stayed sentence. Her appeal—grounded in claims of insufficient evidence, inadmissible hearsay, and denial of her right to witnesses—was rejected by the court of appeals, which ruled that although some hearsay evidence was “erroneously admitted,” it constituted “harmless” error and did not prove dispositive, because the defendant had been allowed ample opportunity to challenge the contested testimony and there was no “reasonable likelihood” that admission of the testimony substantially affected the verdict.
The murder case State v. Trevino,2015 WL 1401464 (Minn. Ct. App. March 30, 2015) (unpublished), rev. denied (Minn. June 30, 2015) concerned a felony murder conviction of a husband for killing his wife while in the midst of marital difficulties and contemplating divorce. The couple had had dinner at the Mall, where the wife managed a clothing store. She was later found dead in the Mississippi River in St. Paul. The evidence, while wholly circumstantial, was “sufficient to sustain [the] conviction” for felony murder.
Security Suits
Some security practices at the Mall were made accessible to the public under the Minnesota Government Data Practices Act in Northwest Publications, Inc. v. City of Bloomington, 499 N.W.2d 509 (Minn. Ct. App. 1993).
The Minnesota Court of Appeals, reversing a Hennepin County District Court judge, held that portions of a written arrangement between mall security personnel and the Bloomington Police Department were subject to disclosure under the act. Although parts of the protocols may be nonpublic “security information” withheld from disclosure, other provisions are public data that are not “inextricably intertwined” with protected material and may be declassified through a “relatively simple separation” of data.
A number of other lawsuits at the Mall have dealt with other efforts to maintain security on the site. In Gold Star Taxi and Transportation Service v. Mall of America Co., 987 F. Supp. 741 (D. Minn. 1997), federal claims by minority-owned taxi cab drivers of racial discrimination by mall security guards were rejected by U.S. District Court Judge Paul Magnuson.
Racial slurs allegedly made by the guards were repugnant, but were “too infrequent and sporadic” to support discrimination claims. Other alleged misbehavior by security guards, while inappropriate, “did not impede” the taxi drivers in plying their trade.
Similarly, a claim of mistreatment by a security officer of an Asian-American youth involved an altercation with a Mall patron was rejected in Kor v. Mall of America Companies, Inc., 2000 WL 558067 (Minn. App. 2000) (unpublished). Affirming a ruling by a Hennepin County District Court judge, the court of appeals found no evidence to “support a claim of disparate treatment” by a security guard.
A discrimination case that piffled out was Amin v. Macy’s, Inc., 212 WL 5941792 (Minn. Ct. App. Nov. 28, 2012) (unpublished), in which a newly hired employee at the Macy’s store claimed that he was discriminated against because of his disability that prevented him from standing on one of his legs for a long period of time and that Macy’s refused “multiple requests” for a stool to sit on while he was working there at the retail sales. Although the claim suffered from “several facial immunities,” coupled with procedurally deficient response to a motion to dismiss, the case was fatally infected by being “time barred” in both the Americans with Disabilities Act (ADA) and the counterpart Minnesota Human Rights Act. The court did, however, point out that the claimant might be able to proceed under the Workers Compensation Act as he alleged that his leg disability became worse during his period of employment and that route constitutes the soul remedy for injuries arising out of the course of employment.”
Injury Issues
Injuries to patrons also form a recurrent theme of mall litigation. In Mitchell v. Mall of America, 2005 WL 1020870 (Minn. Ct. App. 2005) (unpublished), a visitor who slipped and fell on a staircase at the mall, possibly due to a spilled liquid substance, had his case dismissed by a Hennepin County District Court judge. The court of appeals affirmed.
The case could not be maintained because, even if a spill existed, there was insufficient evidence of “constructive knowledge or foreseeability” by the mall. The fatal flaw was the lack of evidence that the spill “existed for a long enough time” to furnish notice to the mall, as required for most slip-and-fall litigation in Minnesota.
But a shopper who broke her arm when she fell backwards over a decorative brick railing on a crowded walkway in the Camp Snoopy amusement park prevailed in her personal injury suit in Nagel v. Minntertainment, 2000 WL 782013 (Minn. Ct. App. 2000) (unpublished).
The court of appeals upheld an $114,570 negligence verdict by a Hennepin County District Court jury. The court permitted expert testimony from an industrial engineer that a hazardous condition existed on the walkway because the low barricade was not protected by “safety fencing.”
Another personal injury case arising out of the amusement rides at the MOA also failed in Nash v. MAOC Mall Holding, LLC, 2110 WL 1657951 (Minn. Ct App. April 27, 2010) (unpublished). The negligence lawsuit, relating to injuries suffered in a Paul Bunyan log chute water ride at the facility, was dismissed on summary judgment by the district court and the appellate court affirmed.
In doing so, it rejected the claimant’s proposed testimony by an expert witness on an amusement ride safety because the expert proposed testimony supposedly dealt with the design of the ride, rather than the negligent operation and maintenance of it, which was the focus of the complaint.
Further, the expert’s report was “conclusory statements” which failed to establish the “applicable standard of care” to amusement park operations.
Since its inception 30 years ago, the Mall has been a landmark — indeed an icon — in Minnesota. As these cases reflect, it also has left its mark on Minnesota jurisprudence.
Marshall H. Tanick is an attorney with the Twin Cities law firm of MEYER NJUS TANICK.