CRIMINAL LAW
JUDICIAL LAW
• MIERA: District court has discretion to deny eligibility even if the petitioner was exonerated. The district court concluded that respondent was eligible for compensation based on exoneration under the Minnesota Imprisonment and Exoneration Remedies Act (MIERA). She was originally convicted of second-degree culpable negligence manslaughter, but the conviction was reversed when the Minnesota Supreme Court found insufficient evidence that she was culpably negligent.
The MIERA requires a district court to determine 1) whether a petitioner was exonerated; 2) whether a petitioner has established their innocence; 3) whether the petitioner meets additional elements for eligibility listed in Minn. Stat. §590.11, subd. 5; and 4) whether, after a hearing at which additional evidence may be presented and considered, the court exercises its discretion and determines the petitioner is eligible for compensation.
The Minnesota Court of Appeals finds the district court properly concluded steps 1 through 3, but did not properly exercise its discretion as required in step 4. The district court held an evidentiary hearing and received additional evidence. After the hearing, the district court made factual findings suggesting respondent was not eligible, as it found that respondent had a significant role in the victim’s death. But the district court improperly interpreted the MIERA as requiring a finding of eligibility based solely on respondent’s exoneration status. Remanded to the district court to exercise its statutory discretion. Back v. State, A20-1098, 2021 WL 2306726 (Minn. Ct. App. 6/7/2021).
• Motor vehicle theft: Tampering with a motor vehicle is a lesser included offense. Police responded to a Dodge Avenger crashed in a ditch, where they found appellant and his girlfriend, who had the registered owner’s permission to use the vehicle. Before the Avenger was towed, an officer took photographs of the scene and items in the vehicle with his cell phone. After appellant left the scene, the officer discovered his cell phone missing and it was found in appellant’s backpack. During this time, officers also responded to a stolen Chevrolet Silverado found less than two miles away from the Avenger crash. Appellant’s DNA was found on the Silverado’s steering wheel. Appellant was convicted of theft of a motor vehicle, theft, and tampering with a motor vehicle.
On appeal, among other arguments the court of appeals rejects, appellant argues that the tampering with a motor vehicle conviction must be vacated because it is a lesser-included offense of motor vehicle theft. The court of appeals agrees. A defendant may be convicted of either the crime charged or an included offense, but not both. An included offense may be a lesser degree of the same crime or a crime necessarily proved if the crime charged is proved. The court asks “whether any element of tampering with a motor vehicle—tampering or entering into or on a motor vehicle—is true for each element of theft of a motor vehicle—taking or driving.” The court finds “driving” a motor vehicle always entails either entering into or on the vehicle or tampering with it. In addition, a person cannot take a motor vehicle without tampering with it. Thus, the court concludes that the elements of tampering with a motor vehicle are necessarily proven when the elements of theft of a motor vehicle are proven. As such, tampering is a lesser-included offense of theft. Appellant’s tampering conviction is reversed, but his theft convictions are affirmed. State v. Kimmes, A20-0793, 2021 WL 2407857 (Minn. Ct. App. 6/14/2021).
Samantha Foertsch
Bruno Law PLLC
samantha@brunolaw.com
Stephen Foertsch
Bruno Law PLLC
stephen@brunolaw.com
EMPLOYMENT & LABOR LAW
JUDICIAL LAW
• Whistleblower claim; retaliation rejected. An employee’s claim for violation of the Minnesota Whistleblower Act did not succeed because the claimant failed to show there was any direct evidence that he was retaliated against for raising concerns about a supervisor’s faulty expense reporting activities. The 8th Circuit affirmed a ruling of U.S. District Court Judge Donovan Frank in Minnesota dismissing the case on grounds that the former employee did not show that the employer retaliated against him for blowing the whistle. Scarborough v. Federated Mutual Insurance Company, 996 F.3d 499 (8th Cir. 04/29/2021).
• ADA, FMLA claims rejected; regular attendance required. An employee who suffered from chronic auto-immune disease was not entitled to sue for wrongful termination for violation of the Americans with Disabilities Act (ADA) or for violation of Family Medical Leave Act (FMLA), on grounds that she was unable to regularly attend her job, which was deemed an “essential function” under the law. A decision of the 8th Circuit Court of Appeals, written by Judge James Loken of Minnesota and affirming a decision of U.S. District Court Judge Ann D. Montgomery of Minnesota, held that the employee was unable to perform the essential function of her job and that the employer did not fail to accommodate her disability, and the FMLA claim failed because there was no “causal connection” between her request for FMLA leave and the termination. Evans v. Cooperative Response Center, Inc., 996 F.3d 539 (8th Cir. 05/04/202).
• FMLA claim upheld; no failure to accommodate. An assembly line worker who sued his former employer for adverse employment action based upon his asthma and scoliosis was entitled to pursue a claim under the Family Medical Leave Act (FMLA), although a failure-to-accommodate claim under the ADA was dismissed on grounds of failure to exhaust administrative remedies before the Equal Employment Opportunity Commission (EEOC), although a parallel state law claim was allowed to proceed. The 8th Circuit affirmed in part and reversed in part a lower court ruling and allowed the FMLA and state disability discrimination claims to proceed. Weatherly v. Ford Motor Company, 994 F.3d 940 (8th Cir. 04/19/2021).
• FLSA; overtime pay claims denied. Claims for unpaid overtime wages under the Fair Labor Standards Act (FLSA) were rejected by the 8th Circuit on behalf of paramedics and emergency medical technicians (EMTs). The 8th Circuit held that the lower court did not err in holding that the defendant city properly paid overtime wages to static, “single-job paramedics” under a complex formula, and that the “dual job paramedics,” who were cross-trained to do firefighting and emergency services work, were partially exempt from overtime pay under the fire suppression provision of the statute, 29 U.S.C. §203(y). Zimmerli v. The City of Kansas City, 996 F.3d 857 (8th Cir. 05/06/2021).
• “Rare” case exception not justiciable; cannot be raised initially on appeal. A workers compensation claimant could not raise a “rare” exception to the treatment parameters promulgated by the Department of Labor & Industry for the first time on an appeal. Overturning a decision of the workers compensation court of appeals, the Supreme Court held that the exception to and the treatment parameters was not justiciably raised if not properly raised in the lower tribunal proceeding and could not be raised initially on appeal, while also holding that the record upheld the compensation judge’s determination that the employee’s medical treatment exceeded the promulgated standards. Leuthard v. Independent School District 912 – Milaca, 958 N.W.2d 640 (Minn. 04/28/2021).
• Indemnification; county attorney, sheriff not entitled. A county attorney and sheriff were not entitled to indemnification from the state under the state tort claims act, Minn. Stat. §3736, in connection with a federal lawsuit brought against them by a tribe for interference with the band’s law enforcement jurisdiction. Upholding a lower court decision, the Minnesota Court of Appeals held that the county attorney and county sheriff performing routine prosecutorial and law enforcement duties are not considered to be “employees of the state” in order to be entitled to statutory indemnification. Walsh v. State, 2021 WL 1847739 (8th Cir. 05/10/2021) (unpublished).
• Unpaid wages; untimely payment may warrant penalty. An employee who claimed untimely payment of earned wages and commissions was entitled to pursue his claim for a penalty under Minn. Stat. §181.13, due to the untimely payment of amounts that were actually earned as well as the claimant’s entitlement to commissions for work done on various other accounts. Reversing a decision of the lower court, the Minnesota Court of Appeals held that the claim was actionable and could proceed, although the trial court’s refusal to allow the claimant to amend its complaint to include a claim of age discrimination was proper. Lacek v. Evolutionary Systems Corp., 2021 WL 1604668 (Minn. Ct. App. 04/26/2021) (unpublished).
• Interest on retirement account; returning employee not entitled. An employee who left her job in the public sector and then later returned to work there was not entitled to interest that had accrued on her combined service annuity. Affirming an administrative agency decision, the court of appeals held that the interest was not required under Minn. Stat. §356.30, subd. 1 (c) in the circumstances. In re MSRS General Employees Retirement Plan Retirement Benefit of Johnson, 2021 WL 1605112 (Minn. Ct. App. 04/26/2021) (unpublished).
• Pension payment; ineligible for unemployment benefits. The amount of a pension contributed to by an employer prior to, but not during, the base period, should be included in the calculations of unemployment compensation benefits. The court of appeals held that the “plain language” of the unemployment statute supported a determination by an unemployment law judge (ULJ) to offset unemployment benefits by the amount of the pension that was actually contributed to by the base-period employer. Jacobson v. County of Dakota, 2021 WL 1525203 (Minn. Ct. App. 04/196/2021) (unpublished).
Marshall H. Tanick
Meyer, Njus & Tanick
mtanick@meyernjus.com
ENVIRONMENTAL LAW
JUDICIAL LAW
• U.S. Supreme Court rules in favor of small refinery exemptions from renewable fuel standards. On 6/25/2021, the U.S. Supreme Court issued its opinion for HollyFrontier Cheyenne Ref., LLC v. Renewable Fuels Ass’n, which addressed the issue of whether small refineries that had received exemptions from renewable fuel mandates may request, and receive, an extension of the exemption, even if the refineries’ original exemption had lapsed.
In 2005 and 2007, Congress created the Renewable Fuel Standard (RFS) program, which requires fuel refineries to blend a certain volume of renewable fuels into the petroleum-based transportation fuel they produce. 42 U.S.C. §7545 et seq. When Congress created the program, it also added exemptions from RFS mandates for small refineries through the year 2011. Id. §7545(o)(9)(A)(i). Further, Congress directed the Environmental Protection Agency (EPA) to extend the exemption for small refineries for an additional two years if those small refineries “would be subject to a disproportionate economic hardship if required to comply” with the RFS mandates. Id. §7545(o)(9)(A)(ii)(II). Finally, Congress left open the possibility of an extension of the exemption for small refineries by stating that “[a] small refinery may at any time petition the [EPA] for an extension of the exemption under [the previous section] for the reason of disproportionate economic hardship.” Id. §7545(o)(9)(B)(i).
At issue in this case was EPA’s granting of exemptions to three small refineries, HollyFrontier Woods Crossing, Wynnewood Refining, and HollyFrontier Cheyenne, which stopped receiving extensions through 2010, 2012, and 2015, respectively. In 2017 and 2018, all three refineries requested economic hardship exemptions, and all three exemptions were granted. A group of renewable fuel producers objected, and the 10th Circuit Court of Appeals vacated EPA’s decision, concluding that the refineries were ineligible for an “extension” of their exemptions because all three had allowed their exemptions to lapse at some point in the past.
In reversing the 10th Circuit on a 6-3 vote, the Supreme Court held that small refineries may receive an “extension” of the economic hardship exemption, even if there was a lapse in coverage. The Court agreed with the renewable fuel producers that the key word “extension” was used in its temporal sense—referring to an increase in time. However, the Court disagreed that an “extension” implicitly imposes a requirement of continuity.
Justice Gorsuch, who authored the opinion, reasoned the small refinery exemptions were consistent with “ordinary usage” of seeking an extension of time after a lapse by stating, “Think of the forgetful student who asks for an ‘extension’ for a term paper after the deadline has passed, the tenant who does the same after overstaying his lease, or parties who negotiate an ‘extension’ of a contract after its expiration.”
The Court also cited and contrasted other Congressional statutes that require “extensions” to be “consecutive” or “successive,” and concluded that the absence of any modifying language within the RFS statute shows that continuity is not required.
Furthermore, the Court pointed to the language within subparagraph (B)(i) authorizing small refineries to seek hardship exemptions “at any time.” 42 U.S.C. §7545(o)(9)(B)(i). The Court noted that “‘[a]t any time’ does not connote a demand for some rigid continuity so much as its opposite—including the possibility that small refineries might apply for exemptions in different years in light of market fluctuations and changing hardship conditions, whether consecutively or otherwise.” Gorsuch continues, “Instead, more naturally, it means exactly what it says: [a] small refinery can apply for (if not always receive) a hardship extension ‘at any time.’”
Finally, the Court granted that both parties offered sound arguments behind the possible legislative purpose, but that neither the statute’s text, structure, nor history provides sufficient guidance to choose with confidence between the parties’ competing narratives and metaphors; and that therefore, the Court’s “analysis can be guided only by the statute’s text—and that nowhere commands a continuity requirement.” HollyFrontier Cheyenne Ref., LLC v. Renewable Fuels Ass’n, (2021 U.S. LEXIS 3399; 2021 WL 2599433; No. 20-472).
• Minnesota Court of Appeals affirms PUC’s Enbridge Line 3 certificate of need. In June the Minnesota Court of Appeals of Minnesota issued an opinion affirming the Minnesota Public Utilities Commission’s (PUC) determinations to (i) approve the revised final environmental-impact statement (FEIS); (ii) grant a certificate of need to Enbridge for the Line 3 Project; and (iii) grant a routing permit for Enbridge’s Line 3 project.
To first address the issue of the adequacy of the FEIS, the court agreed with the PUC’s finding that the revised FEIS was adequate in that it addressed the deficiencies previously put forth by the court when it reversed the PUC’s previous FEIS adequacy determination. See In re Application of Enbridge Energy, Ltd. P’ship for Certificate of Need, 930 N.W.2d 12 (Minn. Ap. 2019). Specifically, the court concluded that the PUC sufficiently explained how the revised FEIS adequately addressed the potential impacts of leaking oil into the Lake Superior watershed, which the court found to be one of the key deficiencies in the original FEIS approved by the PUC. Further, the court found that the additional analysis in the revised FEIS determined that an oil spill in the eastern-most watercourse crossing in Minnesota would impact resources in the Lake Superior watershed, but likely wouldn’t reach the lake itself. This finding helped the court conclude that the revised FEIS was adequate and reasonable on the basis of the record.
In addressing the issue of granting a certificate of need for the Line 3 project, the court found that the PUC was correct in granting a certificate of need, that the PUC sufficiently explained its decision, and that its decision was reasonably supported by the record. The court found that the PUC appropriately applied and satisfied the need-criteria rule provided for under Minnesota Rule 7853.0130. Under the need-criteria rule, the PUC shall grant a certificate of need if it determines that the four criteria provided for are met. Specifically, the PUC must determine whether: (i) denial of the certificate would adversely affect the adequacy, reliability, or efficiency of future energy supply; (ii) there is a more reasonable and prudent alternative to the proposed facility; (iii) the societal consequences favor allowing the proposed facility; and (iv) the proposed facility will comply with applicable policies, rules, and regulations.
In applying the need-criteria rule, the court determined that it could not interfere with PUC’s decision to grant a certificate of need because (i) the court could not conclude that either the PUC’s findings on the energy-demand forecasts provided by Enbridge, nor PUC’s ultimate conclusion that replacement Line 3 is necessary to ensure the adequate, reliable, and efficient supply of energy resources, were unreasonable or lacking support in the record; (ii) a more reasonable and prudent alternative to the proposed Line 3 has not been demonstrated by a preponderance of evidence on the record; (iii) although the court states reasonable minds may differ regarding the balancing of societal harms, the question before the court was whether the PUC’s assessment of the societal consequences of Line 3 was reasonable, and the court concluded it was; and (iv) it has not been demonstrated on the record that the design, construction, or operation of the proposed Line 3 will fail to comply with the relevant policies, rules, and regulations of other state and federal agencies and local governments.
Finally, in addressing the granting of a routing permit for Line 3, the court reviewed whether the PUC’s rejection of in-trench replacement and its ultimate approval of the routing permit was appropriate using the substantial evidence test—specifically, whether the PUC adequately explained its decision, and whether that explanation was reasonable on the basis of the record.
The court found that the PUC’s rejection of in-trench replacement was appropriate and adequately explained because the existing in-trench replacement routes crossed multiple Native American Reservations and required appropriate easements to do so. The existing easements in place are set to expire in 2029, and the Leech Lake Band of Ojibwe, grantors of one of the easements, has refused to grant any extension of the easement. Therefore, the court found that the PUC adequately explained its decision not to order in-trench replacement of Line 3, and that such decision was reasonable on the basis of the record. Finally, the court held that the PUC, in granting the routing permit, adequately explained its choice of which route to grant a permit for, and that such choice was reasonable on the basis of the record. In re Enbridge Energy, Nos. A20-1071, A20-1072, A20-1074, A20-1075, A20-1077, 2021 Minn. App. LEXIS 232 *; 2021 WL 2407855 (6/14/2021).
• Minnesota Court of Appeals affirms MPCA denial of contested case and variance for Minntac mine. On 6/28/2021, the Minnesota Court of Appeals affirmed an order of the Minnesota Pollution Control Agency (MPCA) denying the requests of United States Steel Corporation for a contested case hearing (CCH) and a variance from groundwater quality standards. The case involved the MPCA’s 2018 reissuance of the National Pollutant Discharge Elimination System/State Disposal System (NPDES/SDS) permit for the tailings basin at U. S. Steel’s Minntac taconite processing facility on the Iron Range. U. S. Steel, the environmental advocacy group WaterLegacy, and the Fond du Lac Band of Lake Superior Chippewa each appealed the permit, and the court of appeals consolidated the three appeals. In its first decision (Minntac I), the court of appeals agreed with U. S. Steel that the Class 1 water quality standards upon which the permit’s groundwater limits were based did not apply to groundwater. As a result, the court remanded the permit and did not reach U. S. Steel’s other two appeal issues: MPCA’s denial of the CCH and variance requests. The court in Minntac I also agreed with WaterLegacy and the Fond du Lac Band that MPCA’s decision that there were no surface water discharges from the Minntac basin was not supported by substantial evidence in the record and so remanded that issue as well. Finally, the court of appeals in Minntac I upheld MPCA’s decision that the groundwater discharges from the Minntac tailings basin were not subject to regulation under the federal Clean Water Act (CWA), even if pollutants from the discharges subsequently entered nearby surface waters.
WaterLegacy, the Band, and MPCA appealed the court of appeals’ decision to the Minnesota Supreme Court. All three appealed the court’s decision that the Class 1 standards do not apply to groundwater; WaterLegacy and the Band also appealed the issue of whether groundwater discharges can be subject to the CWA. After the Minnesota Supreme Court granted certiorari, but before it issued its decision, the U.S. Supreme Court issued its decision in County of Maui v. Haw. Wildlife Fund, 140 S. Ct. 1462 (2020), holding that a point-source discharge to groundwater can be subject to regulation under the CWA if the discharge is the “functional equivalent of a direct discharge from the point source into navigable waters.”
The Minnesota Supreme Court held in Minntac II that the County of Maui decision resolved the CWA-applicability issue: Contrary to MPCA’s original position, discharges to groundwater can be subject to the CWA if they meet the “functional equivalent” test. The Court thus remanded to the MPCA to evaluate whether any discharges from the Minntac basin are subject to CWA permitting requirements as “functional equivalent” point-source discharges. The Minnesota Supreme Court also reversed the court of appeals on the Class 1 issue, holding that MPCA correctly applied the Class 1 standards to groundwater at the Minntac Basin and in associated permit conditions. Because of this holding on the Class 1 issue, the Supreme Court directed the court of appeals to take up the remaining issues (that is, U. S. Steel’s appeals of MPCA’s denial of its CCH and variance requests, which the court did not decide in Minntac I).
The court of appeals’ 6/28/2021 decision (Minntac III) affirmed MPCA’s denial of U.S. Steel’s CCH and variance requests. Regarding the CCH denial, the court determined it should defer to MPCA’s determination of whether a CCH would “aid” the agency, so long as MPCA’s determination was supported by substantial evidence. See Minn. R. 7000.1900, subp. 1 (MPCA standard for granting a CCH). The court rejected U.S. Steel’s arguments that ongoing studies of sulfate reactivity and reduction created a disputed factual issue on whether MPCA set a permit sulfate limitation at the correct level. Evidence in the record demonstrated that MPCA was aware of and considered the reactivity studies, the court held; plus, the permit sulfate limit at issue was based on studies commissioned by U.S. Steel, and U.S. Steel had provided no alternate basis for calculating the limit. Regarding the variance issue, the court stated that it undertook its review with deference to MPCA’s expertise. Applying this standard, the court found that MPCA reasonably determined that U.S. Steel did not demonstrate unreasonable economic hardship, that elevated natural background levels do not justify allowing exceedances of the Class 1 sulfate standard, and that the permit’s compliance schedule allows time for U.S. Steel to comply or seek a permit amendment or variance at a later time if it determines it is unable to meet the permit timelines. In re Reissuance of an NPDES/SD Permit to United States Steel Corp., 2021 Minn. App. Unpub. LEXIS 583, 2021 WL 2645505.
Jeremy P. Greenhouse
The Environmental Law Group, Ltd.
jgreenhouse@envirolawgroup.com
Erik Ordahl
Barna, Guzy & Steffen
eordahl@bgs.com
Jake Beckstrom
Vermont Law School, 2015
jbmnusa@gmail.com
FAMILY LAW
JUDICIAL LAW
• When modifying maintenance, a court may consider requiring the recipient to spend after-acquired assets for their own self-support. Husband and wife divorced after more than 20 years of marriage, and wife received permanent spousal maintenance. Following the divorce, wife received two “legacy gifts” from her parents totaling $500,000, in addition to annual cash gifts. Husband later sought to modify maintenance based on a change in his job situation as well as wife’s receipt of gifts. Before the district court, husband argued wife should spend these gifts down for her self-support. Wife objected that the court should consider only income from the gifts, not the corpus of the gifts themselves. The district court agreed with wife and husband appealed. The Minnesota Court of Appeals affirmed, holding Minnesota law was unclear on this point and thus the lower court did not abuse its discretion.
On review, the Minnesota Supreme Court reversed. While recognizing that a maintenance recipient may not be required to spend the principal of her marital property, the Court found no similar prohibition applied to post-marital assets. Instead, the Court held that such assets are clearly “financial resources” based on the dictionary definition of that term. That, however, did not end the inquiry. The Supreme Court held that while district courts may consider the corpus of after-acquired assets as a source of self-support, they are not required to. Instead, these assets may be accounted for as a relevant factor based on the facts and circumstances of each case. (Note: The author of this case summary served as counsel in this case.) Honke v. Honke, 960 N.W.2d 261 (Minn. 2021).
• Court must determine a maintenance recipient’s need based on net or after-tax income and considering historic retirement savings. Following their 20-year marriage, the parties divorced in 2019 following a trial on the issue of spousal maintenance. The district court denied wife’s request for maintenance, finding that her gross monthly income exceeded her expenses. In determining wife’s income and expenses, the court failed to account for income taxes, health insurance, or retirement savings. Wife appealed, challenging the court’s use of her gross (rather than net) income and failure to account for the cost of health insurance and retirement savings.
The court of appeals reversed. While recognizing that neither statute nor case law mandate that maintenance be based on the recipient’s net income, the court held that because income taxes are unavoidable, the district court must consider them in determining a party’s need for maintenance so long as there is sufficient evidence in the record. Similarly, the district court should have accounted for the cost of health insurance and retirement savings where wife offered evidence of these expenses and they were regularly incurred throughout the marriage. Schmidt v. Schmidt, ___ N.W.2d ___, No. A20-0884, 2021 WL 2521138 (Minn. Ct. App. 6/21/2021).
Michael Boulette
Taft Stettinius & Hollister LLP
mboulette@taftlaw.com
FEDERAL PRACTICE
JUDICIAL LAW
• Standing; statutory claim; “concrete” injury. In a 5-4 decision, the Supreme Court held that persons whose credit files were impacted by FCRA violations had not suffered the “concrete” injuries necessary to confer standing where the disputed credit files were not disseminated to third parties.
A vigorous dissent by Justice Thomas noted that similar claims could conceivably be brought in state courts that are not bound by Article III’s case or controversy rules. TransUnion LLC v. Ramirez, ___ S. Ct. ___ (2021).
• Appeal dismissed due to exceedingly defective notice of appeal. Where the plaintiff filed notices of appeal that purported to appeal from the “United States District Court for the Southern District of Missouri” to the “United States Court of Appeals for the Southern District of Missouri,” from an order issued on “the 27th day of September, 2019,” the 8th Circuit found that the notices of appeal were “entirely deficient” because they appealed from an order entered on “a day when no order issued, from a district court that does not exist, to a court of appeals that does not exist.” Accordingly, the appeals were dismissed for lack of jurisdiction. Newcomb v. Wyndham Vacation Ownership, Inc., 999 F.3d 1134 (8th Cir. 2021).
• Plaintiff’s attempt to “recharacterize” claim rejected. Affirming Judge Magnuson’s award of summary judgment to the defendants, the 8th Circuit rejected the plaintiff’s attempt to recharacterize the basis for one of her claims in her briefs and at oral argument in the district court rather than moving to amend that claim. Uradnik v. Inter Faculty Org., ___ F.4th ___ (8th Cir. 2021).
• Forum non conveniens argument waived. Where the defendant argued for the first time on appeal that the action should have been dismissed based on forum non conveniens, the 8th Circuit declined to consider that argument because it was not raised in the district court. Kaliannan v. Liang, ___ F.4th ___ (8th Cir. 2021).
• Request to amend jurisdictional allegations on appeal denied. Where the plaintiffs filed an action alleging only federal question jurisdiction, their federal claims were dismissed pursuant to Fed. R. Civ. P. 12, the district court declined to the exercise supplemental jurisdiction over the plaintiffs’ state law claims, the plaintiffs then moved to amend their claims under federal law but failed to comply with the applicable local rules, the district court denied the motion to amend and again declined to exercise supplemental jurisdiction, plaintiffs appealed, and for the first time on appeal sought to amend the jurisdictional basis for their action to assert diversity jurisdiction, the 8th Circuit “declined to exercise its discretion” to permit the amendment, finding that the plaintiffs had “years” to allege diversity jurisdiction in the district court, and that permitting amendment “this late in the game would be unfair to the defendants.” Nuevos Destinos, LLC v. Peck, 999 F.3d 641 (8th Cir. 2021).
• No personal jurisdiction against manufacturer of component part. Judge Doty dismissed claims and cross-claims against the manufacturer of a component in a ceiling fan that was the source of an apartment fire, finding that the defendant did not have offices or manufacturing facilities in Minnesota, and that its website, which marketed products other than the disputed component, was insufficient to create a “substantial connection” with Minnesota. Country Mut. Ins. Co. v. Broan-Nutone, LLC, 2021 WL 2719407 (D. Minn. 7/1/2021).
• Fed. R. Civ. P. 39(b); late motion for jury trial denied. Where defendants brought an admittedly untimely motion for jury trial pursuant to Fed. R. Civ. P. 39(b) citing a “change in trial strategy,” Judge Frank acknowledged a lack of clarity regarding the relevant standards applicable to the motion, but ultimately denied the motion, finding that neither party would be prejudiced by a bench trial, and that the plaintiff would be prejudiced because a shift to the court’s jury trial calendar would “significantly postpone” the case. Peterson v. Washington Cty., 2021 WL 2686119 (D. Minn. 6/30/2021).
• Fed. R. Civ. P. 12(f); motion to strike affirmative defenses granted in part. Where the plaintiff was granted leave to file a supplemental complaint, the defendant then filed an answer asserting two new affirmative defenses, and the plaintiff moved to strike both of the new affirmative defenses pursuant to Fed. R. Civ. P. 12(f), Judge Wright applied the so-called “moderate approach” when considering the permissible scope of an answer to an amended pleading, which in turn allowed the defendant to amend its answer in response to the plaintiff’s “expanded” complaint to assert one new affirmative defense. Target Corp. v. Seaman Corp., 2021 WL 2526550 (D. Minn. 6/21/2021).
• Action dismissed as a sanction for litigation conduct. Where the plaintiff and counterclaim-defendant “withheld relevant discovery; ignored orders to provide that discovery and to pay related attorneys’ fees; declined to appear for hearings or respond to motions; and participated only sporadically in the litigation,” Judge Tostrud dismissed its claim with prejudice. Oxbow Solar Profs., Inc. v. Borrego Solar Sys., Inc., 2021 WL 2228112 (D. Minn. 6/2/2021).
• Challenge to award of costs following successful summary judgment motions rejected. Where the defendants were awarded roughly $7,600 in costs in related actions following their successful motion for summary judgment, and the plaintiffs objected to the costs, arguing that the defendants had acted in bad faith by failing to seek to resolve the cases under Fed. R. Civ. P. 12 rather than Rule 56, Judge Nelson noted that the plaintiffs cited no authority in support of their argument, and finding no bad faith, affirmed the cost judgments in their entirety. Hockman v. Education Minn., 2021 WL 2621840 (D. Minn. 6/25/2021).
• Pro se litigants sanctioned in multiple cases. Magistrate Judge Leung imposed modest economic sanctions against pro se plaintiffs in two recent cases. Where the plaintiff had refused to answer certain questions during her deposition, Magistrate Judge Leung granted the defendant’s motion to re-depose the plaintiff and awarded the defendant $75 pursuant to Fed. R. Civ. P. 30(d)(2). Thomas v. Wells Fargo Bank, N.A., 2021 WL 2374863 (D. Minn. 6/10/2021).
Magistrate Judge Leung ordered a plaintiff to pay the defendant $75, which was said to represent “reasonable expenses caused by her failure to timely serve discovery responses.” Breedlove v. Consol. Vision Grp., Inc., 2021 WL 2350048 (D. Minn. 6/9/2021).
Josh Jacobson
Law Office of Josh Jacobson
joshjacobsonlaw@gmail.com
IMMIGRATION LAW
JUDICIAL LAW
• No bond hearings for those with reinstated orders of removal while seeking withholding of removal. The U.S. Supreme Court held that INA §241 [8 U.S.C. §1231], not INA §236 [8 U.S.C. §1226], is the controlling authority for the detention of noncitizens subject to reinstated orders of removal, following unauthorized reentry after removal. Such individuals are consequently not entitled to a bond hearing while pursuing withholding of removal relief before an immigration judge. Johnson, et al. v. Guzman Chavez, et al., 594 U.S. ___, No. 19-897, slip op. (2021). https://www.supremecourt.gov/opinions/20pdf/19-897_c07d.pdf
• Crime with a mens rea of “recklessness” is not a “violent felony.” The Supreme Court held that a crime with a mens rea of “recklessness” does not qualify as a “violent felony” under the Armed Career Criminal Act (ACCA) [18 U.S.C. §924]. Borden v. U.S., 593 U.S. ___, No. 19-5410, slip op. (2021). https://www.supremecourt.gov/opinions/20pdf/19-5410_8nj9.pdf
• TPS is not an admission for permanent residence (adjustment of status) purposes. The Supreme Court issued a unanimous decision finding the recipient of temporary protected status (TPS), who unlawfully entered the United States, ineligible for lawful permanent residence (adjustment of status) under INA §245 [8 U.S.C. §1255], notwithstanding the fact that he now holds TPS, a form of legal status in the United States. Sanchez et ux. v. Mayorkas, 593 U.S. ___, No. 20-315, slip op. (2021). https://www.supremecourt.gov/opinions/20pdf/20-315_q713.pdf
• Credibility rule deemed incompatible with INA §242(b)(4)(B). The U.S. Supreme Court held that the 9th Circuit Court Appeals’ rule on treatment of noncitizens’ testimony as credible—namely, that in the absence of an explicit adverse credibility determination by an immigration judge or the BIA, a reviewing court should treat a noncitizen’s testimony as credible and true—cannot be reconciled with the terms of the Immigration and Nationality Act. Instead, according to the Court, reviewing courts should accept the agency’s findings of fact as “conclusive unless any reasonable adjudicator would be compelled to conclude to the contrary,” pursuant to INA §242(b)(4)(B) [8 U.S.C. §1252(b)(4)(B)]. Garland v. Dai, 593 U.S. ___, No. 19-1155, slip op. (2021). https://www.supremecourt.gov/opinions/20pdf/19-1155_1a7d.pdf
• All three of INA §276(d)’s requirements are mandatory in collateral attacks on prior removal orders. The U.S. Supreme Court held that each of the three statutory requirements under INA §276(d) [8 U.S.C. §1326(d)] for bringing a collateral attack on a prior removal order is mandatory and the respondent may not be excused from proving the first two requirements set forth in that provision. According to the Court, INA §276(d) is clear that defendants “may not” bring collateral attacks “unless” they “demonstrat[e]” that (1) they “exhausted any administrative remedies that may have been available to seek relief against the [removal] order,” (2) the removal proceedings “improperly deprived [them] of the opportunity for judicial review,” and (3) “entry of the order was fundamentally unfair.” United States v. Palomar-Santiago, 593 U.S. ___, No. 20-437, slip op. (2021). https://www.supremecourt.gov/opinions/20pdf/20-437_bqmc.pdf
• Withholding of removal relief denied; no particular social group membership and relocation within Guatemala is viable option. Upholding the denial of withholding of removal, the 8th Circuit Court of Appeals found the petitioner failed to establish membership in a particular social group (“tattooed Guatemalan youths” or “people who promised to remove their tattoos years ago but did not”). Furthermore, the Board of Immigration Appeals (BIA) did not err when it determined he could reasonably relocate within Guatemala to avoid a vigilante group. Bautista-Bautista v. Garland, No. 20-1534, slip op. (8th Circuit, 7/6/2021). https://ecf.ca8.uscourts.gov/opndir/21/07/201534P.pdf
• Particular social group family membership is not a central reason for threats. The 8th Circuit Court of Appeals held the Honduran petitioner did not face past persecution based on her membership in a particular social group (PSG) consisting of her family. Rather, the court found she was targeted because she owned land that once belonged to her father, who was killed during a robbery in Guatemala. “The record shows that Pinto targeted Padilla-Franco because he assumed she owned the land that once belonged to her father—not because she was related to him.” Padilla-Franco v. Garland, No. 20-2415, slip op. (8th Circuit, 6/2/2021). https://ecf.ca8.uscourts.gov/opndir/21/06/202415P.pdf
• “Reason to believe” standard requires finding of probable cause. Applying the “reason to believe” standard under INA §212(a)(2)(C) [8 U.S.C. §1182(a)(2)(C)], the 8th Circuit Court of Appeals held the language requires a finding of probable cause. Furthermore, substantial evidence in the record supported the Board of Immigration Appeals’ conclusion there was probable cause to believe the petitioner was involved in illicit drug trafficking and thus inadmissible. Rojas v. Garland, No. 19-1944, slip op. (8th Circuit, 5/27/2021). https://ecf.ca8.uscourts.gov/opndir/21/05/191944P.pdf
ADMINISTRATIVE ACTION
• TPS extension and redesignation for Yemen. On 7/9/2021, U.S. Citizenship and Immigration Services (USCIS) published notice extending the designation of Yemen, while also redesignating it, for temporary protected status (TPS) for 18 months, 9/4/2021 - 3/3/2023. The extension applies to those who currently hold TPS and continue to meet the eligibility requirements. The redesignation allows those individuals continuously residing in the United States since 7/5/2021 to file an initial application, provided they meet the eligibility criteria outlined in the notice. 86 Fed. Register, 36295-302 (7/9/2021). https://www.govinfo.gov/content/pkg/FR-2021-07-09/pdf/2021-14670.pdf
• Social groups and domestic violence: AG Garland vacates Matter of A-B- and Matter of A-B-II. On 6/16/2021, U.S. Attorney General Merrick Garland vacated Matter of A-B- and Matter of A-B-II (having to do with social groups and domestic violence), ordering immigration judges and the Board of Immigration Appeals (BIA) to cease following the decisions when adjudicating pending or future cases. In view of imminent rulemaking, Garland directed immigration judges and the BIA to follow pre-A-B- I precedent, including Matter of A-R-C-G-, 26 I&N Dec. 388 (BIA 2014). Matter of A-B-, 28 I&N Dec. 307 (A.G. 2021). https://www.justice.gov/eoir/page/file/1404796/download
• Social groups and family memberships: A.G. Garland vacates Matter of L-E-A II. On 6/16/2021, U.S. Attorney General Merrick Garland vacated Matter of L-E-A- II (having to do with social groups and family memberships), ordering both immigration judges and the Board of Immigration Appeals (BIA) to cease following Matter of L-E-A- II when adjudicating pending or future cases. Both should follow preexisting precedent until the ongoing rulemaking process is completed and a final rule addressing the definition of “particular social group” is issued. Matter of L-E-A-, 28 I&N Dec. 304 (A.G. 2021). https://www.justice.gov/eoir/page/file/1404791/download
• Temporary increase in H-2B nonimmigrant visas for FY 2021. The Department of Homeland Security (DHS) and Department of Labor (DOL) jointly published a temporary final rule increasing the cap on H-2B nonimmigrant visas by up to 22,000 additional visas through the end of the second half of fiscal year 2021. According to DHS, these supplemental visas are available only to those U.S. businesses “likely to suffer irreparable harm, as attested by the employer on a new attestation form.” 86 Fed. Register, 28198-234 (5/25/2021). https://www.govinfo.gov/content/pkg/FR-2021-05-25/pdf/2021-11048.pdf
• TPS designation for Haiti. In May Department of Homeland Secretary Alejandro N. Mayorkas announced a new 18-month designation of Haiti for temporary protected status (TPS), in view of that nation’s “serious security concerns, social unrest, an increase in human rights abuses, crippling poverty, and lack of basic resources, which are exacerbated by the covid-19 pandemic.” Individuals able to demonstrate continuous residence in the United States as of 5/21/2021 will be considered eligible for TPS under the designation. Additional eligibility criteria will be outlined in a forthcoming Federal Register notice. U.S. Department of Homeland Security, News Release (5/22/2021). https://www.dhs.gov/news/2021/05/22/secretary-mayorkas-designates-haiti-temporary-protected-status-18-months
R. Mark Frey
Frey Law Office
rmfrey@cs.com
INTELLECTUAL PROPERTY
JUDICIAL LAW
• Patents: PTAB decisions must be reviewable by the director. The Supreme Court recently held that decisions issued by administrative patent judges (APJs) of the Patent Trial and Appeal Board (PTAB) must be reviewable by the director of the Patent and Trademark Office (PTO) to avoid a violation of the appointments clause of the Constitution. Arthrex, Inc. sued Smith & Nephew, Inc. and ArthroCare Corp. for infringement of its surgical device patent. Smith & Nephew filed an inter partes review, and the PTAB found Arthrex’s patent unpatentable. On appeal to the Federal Circuit, Arthrex argued APJs were principal officers (requiring presidential appointment) and therefore that their appointment by the Secretary of Commerce was unconstitutional. The Federal Circuit agreed that, under the statute as written, the PTAB’s APJs were principal officers. In an effort to preserve the constitutionality of the statute, the Federal Circuit judicially modified the statute to provide that “APJs [were] removable at will by the Secretary.” The Supreme Court granted certiorari to consider the constitutionality of the PTAB’s structure. The Court agreed with the Federal Circuit that, under the statute as written, the PTAB APJs lacked the required supervision to satisfy the appointments clause. The Court held that to satisfy the appointments clause, the PTO director must have authority to review final PTAB decisions. United States v. Arthrex, Inc., No. 19-1434 (6/21/2021).
• Patents: Assignor estoppel exists in certain circumstances. The Supreme Court recently affirmed the existence of the judicially created assignor estoppel doctrine but identified limitations to its application. In the late 1990s, Csaba Truckai invented a device to treat abnormal uterine bleeding. Truckai received a patent for the invention claiming a device with a moisture-permeable head. The patent and rights to continuation applications were ultimately assigned to Hologic, Inc. through a series of assignments. In 2008, Truckai founded Minerva Surgical and developed a new, moisture-impermeable device to treat abnormal uterine bleeding. Hologic filed a continuation application to add claims to cover all applicator heads, regardless of whether they are moisture permeable or not. Hologic sued Minerva for patent infringement.
In defense, Minerva asserted that the continuation patent was invalid for lack of written description. The district court found that assignor estoppel barred Minerva from challenging the validity of the patent. Assignor estoppel acts to prevent those who assign their patent rights from later contesting the validity of said patents because, based on the principles of fair dealing, it would be unfair to allow the assignor to receive benefit for assigning the patents but then to later challenge the patent’s validity. The Supreme Court granted certiorari to consider the applicability of the assignor estoppel doctrine. The Court affirmed the viability of the assignor estoppel doctrine but held that there are limits to its application. The Court explained that “when the assignor has made neither explicit nor implicit representations in conflict with an invalidity defense, then there is no unfairness in its assertion” and assignor estoppel does not apply. The Court identified three examples where application of assignor estoppel would be unfair: (1) where the assignment occurs before an inventor can represent that specific patent claims are valid, (2) where there is a change in the law after assignment, or (3) where the patent claims are materially broadened as compared to the claims that were assigned. Minerva Surgical, Inc. v. Hologic, Inc., No. 20-440 (6/29/2021).
Joe Dubis
Merchant & Gould
jdubis@merchantgould.com
REAL PROPERTY
JUDICIAL LAW
• Intentional ouster. A tenant seeking to recover damages under Minn. Stat. §504B.231 for ouster from residential premises must prove that the landlord acted both unlawfully and in bad faith, the latter of which means that “the landlord acted in a dubious or dishonest fashion—in a way that suggests the landlord was acting with ulterior motive or purpose beyond just a desire to oust the tenant.” In Reimringer, the plaintiff entered a written lease agreement with defendant pursuant to which plaintiff was to pay $7,500 before moving into the home. The plaintiff and his family moved into the home while it was unlocked without making that payment. The defendant learned that the plaintiff moved in without making the payment and requested the payment. The plaintiff did not make the payment and the defendant requested multiple times that he leave. Ultimately the plaintiff did leave and moved into a hotel room. The defendant paid for three nights at the hotel and placed the plaintiff’s personal property in a rented storage container until the plaintiff was able to pick it up.
The plaintiff filed a lockout petition under Minn. Stat. §504B.375 and sought treble damages for ouster under Minn. Stat. §504B.231. The district court held an evidentiary hearing and then dismissed the lockout petition, concluding that the plaintiff was not a residential tenant, and denied the claim for treble damages, finding that the defendant did not act in bad faith. The Minnesota Court of Appeals affirmed the denial of the treble damages claim. The Supreme Court noted that the Legislature used the term “unlawfully and in bad faith” to describe the circumstances in which a tenant is entitled to recover treble damages and intended that both words apply, and that the words have different meanings. Thus, self-help removal of a tenant is insufficient in and of itself to prove that the removal was also in bad faith. The definition of bad faith requires a showing of dubious or dishonest action beyond just the ouster; the tenant must show that the landlord harmed or intended to harm the plaintiff “in a way that goes beyond merely depriving the tenant of access to his or her residence.” The district court should examine the totality of circumstances when deciding whether bad faith existed. The court may consider the landlord’s conduct after the ouster. The court should not consider, in deciding the existence of bad faith, a landlord’s mistaken belief about the legal right of the tenant to reside in the home; ignorance of the law is not a defense to conduct undertaken with bad faith. Reimringer v. Anderson, No. A19-2045, ___N.W.2d ___, 2021 WL 2447268 (Minn. 6/16/2021).
• Cartway petition. A party challenging a township’s oral denial of an oral request for the establishment of a cartway does not satisfy the requirements to obtain mandamus relief. In Scheffler, the petitioner owned two adjacent parcels. Open water or a marsh creates a separation between the northern portion of the second parcel and the southern portion of that parcel. The second parcel lacks connection to a public road. The petitioner attended a town board meeting and asked that the town board establish a cartway. The board offered to discuss the issue with its attorney. At another meeting, the petitioner asked about the cartway, the board discussed the issue, and ultimately the petitioner asked if the board was denying the request and a board member responded in the affirmative. The petitioner then sought a writ of mandamus. The district court denied the request, deciding that the petitioner failed to show that the town board had a clear and present duty to perform and that he had no other legal remedy. The court of appeals affirmed, holding that the oral request for a cartway was insufficient to impose a duty on the board because it did not constitute a “petition” for a cartway as required by Minn. Stat. §164.08, subd. 2(a). Scheffler v. Lake Edward Township, No. A20-1472, 2021 WL 2530635 (Minn. App. 6/21/2021).
• Docks and zoning ordinances. The Minnesota Supreme Court identified a test for determining when an ordinance is a zoning regulation such that a city must follow the procedural requirements of Minn. Stat. §462.357 when adopting it. A city must follow the statutory requirements for adopting zoning regulations when an ordinance (1) governs subjects identified in Minn. Stat. §462.357, subd. 1, including but not limited to the location, height, and width of buildings and structures, and (2) serves a zoning purpose such as controlling land use and development. Although Minn. Stat. §412.221 permits cities to regulate the location, construction, and use of docks, that statute cannot be used to bypass the protections of Minn. Stat. §462.357 to adopt ordinances subject to its terms. Because the City of Waconia adopted a dock ordinance under 412.221 and failed to comply with the procedural requirements of Minn. Stat. §462.357, the dock ordinance is void and an injunction granted to the city to restrain further construction of a dock in violation of its terms is also void. City of Waconia v. Dock, No. A19-1099, ___N.W.2d ___, 2021 WL 2447267 (Minn. 6/16/2021).
Julie N. Nagorski
DeWitt LLP
jnn@dewittllp.com
TAX LAW
JUDICIAL LAW
• Anti-Injunction Act does not bar suit seeking to set aside information-reporting requirement. The Anti-Injunction Act, 26 U.S.C. §7421(a), bars any “suit for the purpose of restraining the assessment or collection of any tax.” In effect, the Act requires taxpayers seeking to challenge a tax to first pay the tax, then sue for a refund. The petitioner in this dispute is a material advisor to taxpayers engaged in micro-captive transactions. As the Court notes in its opinion in CIC Servs., LLC v. Internal Revenue Serv., a “micro-captive transaction is typically an insurance agreement between a parent company and a ‘captive’ insurer under its control.” Micro-captive transactions are “reportable transactions” (in other words, transactions the Service deems potentially abusive). The Service, acting under its authority delegated from Congress, issues Notice 2016–66. The notice requires taxpayers and material advisors associated with such an agreement to (among other things) “describe the transaction in sufficient detail for the IRS to be able to understand [its] tax structure.”
CIC sought to challenge the notice as a violation of the requirements for notice-and-comment rulemaking under the Administrative Procedure Act. CIC did not fail to comply with the reporting requirements, and it did not owe a tax (or a penalty) for noncompliance. Instead, CIC wanted to bring a challenge to the notice before any enforcement action. The question presented in CIC Services v. IRS, therefore, was whether the Act prohibits a suit seeking to set aside this information-reporting requirement. For three reasons, the Court held that the Act does not preclude the suit. Fist, CIC Services sought in this lawsuit not to restrain the assessment of a tax, but to avoid the regulatory burdens imposed by the notice, which imposes substantial compliance costs that are unconnected to CIC Services’ potential tax liability. Second, the causal chain connecting the notice›s reporting requirement to any tax is attenuated. And finally, the notice is enforced by criminal as well as tax penalties.
The Court’s opinion was 9-0. Justice Sotomayor filed a concurring opinion in which she emphasized that “the answer might be different if CIC Services were a taxpayer instead of a tax advisor.” Justice Kavanaugh also filed a concurring opinion so that he could “underscore what remains (and does not remain) of Alexander v. ‘Americans United’ Inc., 416 U.S. 752 (1974), and Bob Jones Univ. v. Simon, 416 U.S. 725 (1974).” CIC Servs., LLC v. Internal Revenue Serv., 141 S. Ct. 1582 (2021).
• Income tax not limited to individuals who perform “the functions of a public office.” In two cases, the court summarily rejected identical frivolous arguments. “This is a time-worn tax-protestor argument that no court has ever accepted. Section 3401(c) provides that the term ‘employee’ ‘includes’ Federal officers and employees; it does not say that the term ‘employee’ ‘consists exclusively’ of Federal officers and employees.” Muhammad v. Comm’r, T.C.M. (RIA) 2021-077 (T.C. 2021). See also Delgado v. Comm’r, T.C.M. (RIA) 2021-084 (T.C. 2021) (rejecting the same argument).
• Tax court has jurisdiction to dismiss unopposed motion to voluntarily dismiss fee/costs petition. Taxpayers Robert and Elaine Stein filed a petition for fees/costs. The commissioner filed an answer, after which the taxpayers moved to voluntarily dismiss their petition. The commissioner did not oppose the voluntary dismissal. The uncontested motion warranted a discussion, however, because in the “bulk” of tax court cases—deficiency cases—“a decision of the Tax Court dismissing the proceeding shall be considered as its decision that the deficiency is the amount determined by the Secretary.” IRC §7459(d). This section prevents a taxpayer from avoiding entry of a decision in a deficiency case by moving to withdraw the petition. In a non-deficiency case, though, such as was before the court here, that underlying concern is absent. The court explained, in accord with prior cases in similar, non-deficiency contexts, that since its jurisdiction over fee and costs petitions was distinct from its deficiency jurisdiction, IRC §7459(d)’s decision-entry mandate for deficiency petitions was not implicated. The court instead turned to the Federal Rules of Civil Procedure to guide its analysis and concluded that the court has broad discretion to grant voluntary dismissals under F.R.Civ.P. 41(a)(2), bounded only by considerations of prejudice to opposing party. Since the commissioner did not oppose the motion, and since prejudice to the opposing party was not a concern here, the court granted the motion. Stein v. Comm’r, No. 22695-18, 2021 WL 2483031 (T.C. 6/17/2021).
• Court grants substitution of expert witness despite petitioner’s failure to request leave from the court. The court filed a scheduling order in this matter on 6/1/2020. The order required the parties to notify each other in writing of the identity of its expert appraiser within 10 days of retention, but no later than 45 days before the close of discovery. On 3/12/2021, Menard sent notice to the county that Andy Donahue had been retained just one day prior. Because the county continually expressed doubt regarding Mr. Donahue’s retention, the court directed confirmation. On May 7, Menard provided the county with an Amended Notice of Testifying Expert stating that Mr. Donahue was no longer retained and was replaced by Wade Landreville. Three days later, the county filed and served a motion in limine and for sanctions upon Menard, contending that Menard violated the scheduling order by not moving to amend it.
“Motions in limine are intended to prevent the ‘injection into trial matters which are irrelevant, inadmissible and prejudicial.” Hebrink v. Farm Bureau Life Ins. Co., 664 N.W.2d 414, 418 (Minn. App. 2003). A motion in limine that is similar to a motion for summary judgment and “effectively seeks to deprive its opponent of an essential element of its case as a matter of law” is subject to the procedural rules governing dispositive motions. Id. at 418, 419.
Scheduling orders “control the subsequent course of the action and shall be modified only to prevent manifest injustice.” Minn. R. Civ. P. 16.05. Failure to obey a scheduling order may result in sanctions or prohibiting the introduction of evidence. Further, “a scheduling order shall not be modified except by leave of court upon a showing of good cause.” Minn. R. Civ. P. 16.02. However, a district court has discretion over whether to enforce its own scheduling order. See Maudsley v. Pederson, 676 N.W.2d 8, 12 (Minn. App. 2004).
At a hearing on its motion in limine, the county moved to exclude from evidence the appraisal or testimony from Mr. Landreville. Menard asserts that it properly notified the county of the substitution of Mr. Landreville upon determining that Mr. Donahue’s workload would not permit an appraisal before the deadline. Further, Menard noted that Mr. Landreville’s retention and notice was completed before the appraisal deadline.
The court agreed with Menard that the notice and retention was done before the deadline but agrees with the county that Menard should have sought leave to amend the scheduling order to permit late disclosure of an expert witness. See Minn. R. Civ. P. 16.02.
The court stated that had Menard requested leave from the court, it would have been granted. Further, if the court were to grant the county’s motion in limine, the prejudice to Menard would outweigh any possible prejudice to the county resulting from delayed notice of substitution. Because the court has the authority to enforce or modify its own scheduling order, and because the record did not support prejudice to the county, the court denied the county’s motion in limine. Menard, Inc. v. Dakota Co., 2021 WL 2446297 (MN T.C. 6/11/2021).
• A question of subject matter jurisdiction is analytically distinct from a cause-of-action dispute. Petitioner Harlan Anderson filed a property tax action concerning 15 parcels, contesting the assessed property values for January 2019. The 15 parcels make up an integrated, fully functioning family farm. The county filed a motion to partially dismiss, arguing that “Mr. Anderson did not have the required ‘estate, right, title, or interest in or lien upon’ nine of the fifteen parcels.” The court denied the county’s motion and filed an order giving Mr. Anderson 30 days to show cause why the matter should not be dismissed “for lack of the statutorily required estate, right, title, interest, or lien upon [nine of the 15 parcels].” Mr. Anderson subsequently brought a motion to amend the pleadings to include three additional petitioners.
Minn. Stat. §278.01, subd. 1(a) states that “only a person with ‘any estate, right, title, or interest in or lien upon any parcel of land’ has statutory standing to bring a petition.” Mr. Anderson and his additional three petitioners (Mary Anderson, Richard Anderson, and Mark Anderson) “assert that they individually, jointly, or collectively... have an estate, right, title, interest or lien on all of the parcels referenced in this case.” The county, however, produced property records of the parcels at issue to show that Mr. Anderson does not retain the required estate, right, title, interest, or lien, and maintains that because Mr. Anderson’s motion was brought after the statutory deadline for filing the property tax petition, the court lost jurisdiction to grant Mr. Anderson’s motion to amend his petition.
The court disagreed with the county and offered two examples. First, in Jim Bern Company v. Ramsey Co., No. 62-CV-17-2723, 2018 WL 911206 (Minn. T.C. 1/9/2018), the court “denied a motion to amend a property tax petition when the movant asked the court to add claims for 34 additional parcels of land after the statutory deadline had passed.” Second, in Smith v. Washington Co., No. 82-CV-20-1952, 2020 WL 5887224 (Minn. T.C. 9/30/2020), “the court refused to grant leave to amend the taxes-payable year on a petition when that request was made after the expiration of the statutory deadline.” The cases of Bern and Smith involved the tax court’s subject matter jurisdiction and the court held that claims “asserted for the first time after the expiration of the petition deadline” are permanently time-barred. See Minn. Stat. §278.01, subd.1c. However, in the present case, Mr. Anderson identified the parcels at issue in his original and timely petition.
The court stated that instead of implicating its subject matter jurisdiction, the county argued whether Mr. Anderson had standing to bring claims on the land parcels for which he is not the title holder. Chapter 278 of Minnesota Statutes “does not limit statutory standing to title holders.” A property tax petition may be brought by anyone with an “interest in the subject property.” See Minn. Stat. §278.01, subd. 1(a). The family members of the subject property retained the integrity of the land to operate as an “integrated, fully-functioning farm.” Because the 15 parcels, taken together, constitute a single farm, Mr. Anderson has a clear interest in the parcels as a unit, regardless of whether he holds title to each parcel. As a result, and because the county has not shown that it would be prejudiced by the amendment, the court granted Mr. Anderson’s motion for leave to amend on the merits. Anderson v. Wright Co., 2021 WL 2557313, (MN T.C. 6/18/21).
• Court denies motion for reconsideration after respondent gained access to petitioners’ proprietary information. The court previously consolidated these matters for judicial efficiency in solving discovery disputes. The present cases involve the market value of two downtown Minneapolis properties and one North Loop property for taxes payable in 2019. During discovery, petitioners indicated that they possessed responsive materials, but requested a protective order limiting the use of sensitive information to the “this-case only.” The county objected to the request, arguing that such protection was unwarranted and legally improper pursuant to Minn. Stat. §§273.061, .12 and 278.05. Additionally, the county filed a motion to compel discovery. The court subsequently granted in part and denied in part the county’s motions to compel and granted the petitioners’ motions for protective orders. The court resolved the scope-of-protection issue by limiting the use of information to each individual case. The assessors were allowed access “to proprietary information in their capacity as expert appraisers for the City of Minneapolis or the County,” but were not granted access to that “same information in their capacity as assessors.”
After receiving discovery information from petitioners, the county requested and was granted leave to file a motion for reconsideration of the protective orders. Supported by affidavits, the county argued that Hennepin County and Minneapolis assessors use information obtained through discovery for non-litigation purposes. Petitioners filed a memo opposing the motion.
Motions for reconsideration are intended for limited circumstances and are not to be used to reargue what was argued before, nor to express disagreement with the court’s prior decisions. Here, the court declined to exercise its discretion to reconsider because the county sought leave to request reconsideration only after having downloaded the petitioners’ proprietary information. As such, the court agreed that absent compelling circumstances or previously unavailable facts, “it would be inequitable to allow the County” to pursue diminished protection. LPF North Loop Investors LLP v. Hennepin Co., 2021 WL 2098945 (MN T.C. 5/19/21).
ADMINISTRATIVE ACTION
• All cybercurrency is not created equal. In Chief Counsel Advice 2021-24008, the Service determined that a pre-Tax Cuts and Jobs Act (TCJA) exchange of Bitcoin for Ether, or Bitcoin or Ether for Litecoin, did not qualify as a like-kind exchange. Section 1031 permits taxpayers to exchange, tax-free, property used in trade or business or for investment purposes for property that is “like-kind.” (Section 1031 was amended by the Tax Cuts and Jobs Act and this tax-free exchange treatment is now permitted only for real property.) The memo reasoned that although Bitcoin, Ether, and Litecoin are all forms of cryptocurrency, Bitcoin and Ether held a special position in the cryptocurrency market because they acted as an on- and off-ramp for investments in other cryptocurrencies. Thus, Bitcoin and Ether differed in both nature and character from Litecoin. Therefore, neither Bitcoin nor Ether qualified as like-kind property to Litecoin. Turning to exchanges of Bitcoin for Ether, the memo discussed fundamental differences between the two cryptocurrencies, including difference in their overall design, intended use, and actual use. While Ether and Bitcoin both may be used to make payments, Ether’s additional functionality differentiates Ether from Bitcoin in both nature and character. Therefore, Bitcoin and Ether did not qualify as like-kind property for purposes of pre-TCJA Code Sec. 1031.
• Child tax credit changes could cut childhood poverty in half. As part of the last covid relief package, Congress temporarily expanded the child tax credit and changed how the credit is paid out. Previously, the child tax credit was available once a year, after taxpayers filed their returns. With the change, families have access to half of the credit each month. Other critical changes include eliminating the parental income requirement and increasing the per-child amount for the credit. The credit is subject to a phase-out for higher income taxpayers. According to researchers at Columbia University’s Center on Poverty and Social Policy, these changes will reduce child poverty from nearly 14% to 7.5%. Unless Congress acts to make them permanent, key changes to the Child Tax Credit will expire at the end of 2021. Taxpayers who filed returns in 2019 and 2020 do not have to do anything to receive the monthly payments. Taxpayer who did not file returns in 2019 or 2020 may sign up through the IRS Website (https://www.irs.gov/credits-deductions/child-tax-credit-non-filer-sign-up-tool). Similarly, families who prefer to opt out of this monthly payment can do so through the Service’s web portal.
Morgan Holcomb
Mitchell Hamline School of Law
morgan.holcomb@mitchellhamline.edu
Sheena Denny
Mitchell Hamline School of Law
sheena.denny@mitchellhamline.edu