Criminal Law
JUDICIAL LAW
• Restitution: Court is not required to consider collateral sources. Appellant was convicted of murder and ordered to pay $2,362 to the Crime Victims Reparations Board (CVRB) for cremation expenses the CVRB paid as reparations to the victim’s daughter. The district court rejected appellant’s argument that the court needed to consider the approximately $14,000 the victim’s daughter received from a GoFundMe campaign.
Minn. Stat. §611A.54 dictates how the CVRB may award reparations to crime victims and requires that reparations “be reduced to the extent that economic loss is recouped from a collateral source.” Minn. Stat. §611A.54(1). Reparations and restitution are distinct forms of relief. Reparations are payments made by the CVRB, while restitution is payment by a defendant to a victim for qualified economic losses. Restitution is governed by sections 611A.04 and 611A.045, which provide that the court may consider only the amount of loss sustained by a victim as a result of the offense and the defendant’s ability to pay. Unlike reparation determinations, restitution does not involve consideration of “collateral sources.”
Thus, here, the district court did not err in failing to consider collateral sources when calculating restitution. But the district court did err by not including a payment schedule or structure in its final restitution order, as required by section 611A.045, subd. 2a. Remanded for the district court to amend its order to include a payment schedule or structure. State v. Cotton, A23-0213, 2023 WL 5689332 (Minn. Ct. App. 9/5/2023).
• 4th Amendment: Probable cause for vehicle search exists where a reliable informant personally observed unlawful conduct and police corroborated details of the report. Police received a report from a confidential reliable informant (CRI) of a man with a firearm in a vehicle who was selling marijuana. The CRI described the man, the firearm, the man’s vehicle, and the vehicle’s location. Police explained that the CRI was observing the man and his illegal activity in real time while speaking with police, that police had previously worked with this CRI multiple times, and that the CRI had always provided accurate information. Police went to the location described by the CRI and located a vehicle matching the CRI’s description. When the vehicle began to drive away, police made a traffic stop, searched the vehicle, and found a firearm, a digital scale, and marijuana inside. The driver, respondent, was charged with being a prohibited person in possession of a firearm. The district court granted respondent’s motion to suppress the evidence from the vehicle search, finding that, although the CRI was reliable, the CRI’s tip “lacked sufficient detail and range to establish the [CRI’s] basis of knowledge.” That is, the CRI’s tip “lacked details to be corroborated” by police. The state appealed and the court of appeals affirmed.
The Supreme Court reverses. A threshold issue is whether respondent’s vehicle was sufficiently connected to unlawful activity to support probable cause for the search. The court of appeals found the CRI did not specify that the gun was in the vehicle, as opposed to on respondent’s person. However, the Supreme Court notes that the tip described respondent as both selling drugs and possessing a firearm, and the CRI specifically reported personally observing respondent with a firearm inside the vehicle. For probable cause purposes, the possession of a firearm in a vehicle is sufficient to create some probability that unlawful activity is occurring.
The parties also dispute the reliability of the CRI and whether police corroborated the tip sufficiently to establish the CRI’s basis of knowledge. Based on the CRI’s track record with police, the court finds the CRI was reliable. As for the CRI’s basis of knowledge, the CRI personally observed a male in possession of a firearm. A tip based on a CRI’s personal knowledge need only be corroborated by minor details—“enough to lend credence to the [CRI’s] tip…” The Court finds the record here supports a finding that the source of the CRI’s knowledge was reliable. Reversed and remanded to the district court. State v. Mosley, A22-1073, 944 N.W.2d 883 (Minn. 9/6/2023).
• Odor of marijuana is one fact to consider in totality of the circumstances analysis for determining if a vehicle search was lawful. Respondent was pulled over by police for a vehicle equipment violation. His wife and child were also in the vehicle. During the traffic stop, police smelled an odor of marijuana emanating from the vehicle. Police told respondent the odor gave them probable cause to search the vehicle. During the search, police found methamphetamine and drug paraphernalia. Respondent sought to suppress the evidence, and the district court granted his motion and dismissed the complaint. The court of appeals affirmed.
One exception to the warrant requirement is for automobile searches. Police may search a vehicle without a warrant if there is probable cause to believe the search will result in the discovery of evidence or contraband. At the time of the offense, under Minnesota law, there were various methods of lawful possessing of marijuana (such as medical marijuana, a “small amount” of marijuana, and “industrial hemp”).
The Supreme Court rejects the state’s request to create a bright-line rule that the odor of marijuana emanating from a vehicle, on its own, will always create the requisite probable cause to search the vehicle. The Court reiterates that the totality of the circumstances test for probable cause “is meant to be applied anew in each case based on the unique circumstances present.” This analysis requires that the odor of marijuana be considered as just one circumstance among all others.
In this case, the only indication that evidence of a crime or contraband might be found in respondent’s vehicle was the odor of marijuana. Police did not articulate any other circumstance contributing to the probable cause analysis. Therefore, there was not probable cause for the search of the respondent’s vehicle and the district court properly suppressed evidence obtained during that search. State v. Torgerson, A22-0425, 2023 WL 5944620 (Minn. 9/13/2023).
• Indecent exposure: “Any place where others are present” is any place capable of being viewed by others. Appellant was standing nude in the backyard of his home when he was observed by a neighbor from her open back deck door across a public alley. Appellant’s property was partially fenced in, but there were no fences obstructing appellant’s backyard from his neighbor’s deck or from the alley. Appellant was charged with gross misdemeanor indecent exposure, due to a prior indecent exposure violation. He was convicted after a jury trial. He argued in postconviction proceedings that the state had not proved the “public place” element of the offense. The district court denied his petition and the court of appeals affirmed.
Minn. Stat. §617.23, subd. 1, prohibits indecent exposure “in any public place, or in any place where others are present.” Given the statute’s disjunctive “or,” the Supreme Court does not consider whether appellant’s partially enclosed backyard is a “public place.” Instead, the court finds the “place” element of the offense is satisfied because appellant was in a place where others were present. The Court notes that “present” is ambiguous. However, given the statute’s purpose of remedying the mischief of people lewdly exposing themselves to others, the statute’s object of preventing offense or annoyance caused by being exposed to another’s lewd conduct, and the consequences of the possible interpretations of the statute, the Court holds that the Legislature intended section 617.23, subd. 1, “to prohibit lewd behavior that is reasonably capable of being viewed by others, in light of the totality of the circumstances.”
The Court finds the state presented sufficient evidence to prove appellant exposed himself in a place reasonably capable of being viewed by others. Fordyce v. State, A21-1619, 994 N.W.2d 893 (Minn. Sept 2023).
• Falsely reporting crime. Appellant falsely reported to police that the father of her child abused the child. She was in Blue Earth County when she made the report, but the report was made to the Waseca Police Department. Appellant was prosecuted and convicted of falsely reporting a crime in Waseca County, and she argued on appeal that venue in Waseca County was improper. The court of appeals affirmed her conviction.
Minn. Stat. §627.01, subd. 1, requires that criminal cases be tried in the county where the offenses were committed, while subd. 2 explains that this means “any county where any element of the offense was committed.” Thus, the state needed to prove that at least one element of the false report of a crime offense was committed in Waseca County.
Minn. Stat. §609.505, subd. 1, makes it a crime when a person “informs a law enforcement officer that a crime has been committed… knowing that [the report] is false and intending that the officer shall act in reliance upon” it. While “inform” has differing dictionary definitions, section 609.505 itself expressly provides that, to commit the crime, the defendant must inform a specific type of person—law enforcement. Thus, the Legislature intended to include a police officer’s report of the false information as part of the offense. As such, the state can meet its burden of proving venue by showing an officer was in the county of trial when they received the false report.
Here, the state presented sufficient evidence to prove law enforcement received appellant’s false report in Waseca County, so appellant’s conviction is affirmed. State v. Johnson, A21-1360, 2023 WL 5944263 (Minn. 9/13/2023).
• Maltreatment reporting: Mandated reporter must report maltreatment within preceding three years regardless of child’s age at the time of the report. Appellant was charged with third-degree criminal sexual conduct following a report to police from appellant’s therapist that appellant told his therapist he had sexual intercourse with his children’s 17-year-old babysitter. The babysitter had turned 18 by the time the report was made. Appellant moved to suppress the therapist’s report and testimony, arguing they were based on privileged statements. The district court denied the motion, finding the therapist-patient privilege does not apply to information the therapist was required to report as a mandated reporter. Appellant was convicted after a jury trial.
The mandated reporter statute, Minn. Stat. §260E.06, subd. 1(a), partially abrogates the statutorily created therapist-client privilege, as it requires a mandated reporter “who knows or has reason to believe a child is being maltreated… or has been maltreated within the preceding three years shall immediately report the information” to the authorities. Section 260E.04 also allows disclosure of maltreatment information in legal proceedings that follow the reporting. Case law has clarified that the mandated reporter statute “abrogate[s] privilege only to the extent that it would permit evidentiary use of the information required to be contained in the maltreatment report,” which includes the identity of the child, the alleged perpetrator, and the nature and extent of the maltreatment. Appellant argues, however, that his therapist’s report was not mandatory because the babysitter was an adult at the time of the report.
The court of appeals finds section 260E.06 ambiguous, but the court notes that section 260E.4 anticipates evidentiary use of mandated child maltreatment reports in criminal proceedings and construes the mandated reporter statute with the criminal statute prohibiting appellant’s conduct and the relevant statute of limitations. The court holds that the word “child” in the mandated reporter statute “refers to an individual who is a child at the time of the maltreatment.” Therefore, the district court properly concluded appellant’s therapist’s report was mandatory and properly denied appellant’s motion to exclude the therapist’s report and testimony. State v. Martens, A22-1349, 2023 WL 6052543 (Minn. Ct. App. 9/18/2023).
• Firearms: Group of disassembled and incomplete shotgun parts can be a “firearm.” Police found in a backpack belonging to appellant a disassembled shotgun, which police were able to assemble and fire using a bolt and washer from a similar firearm. At the time, appellant was ineligible to possess a firearm. The court of appeals affirmed his conviction for possession of a firearm by an ineligible person. The Supreme Court also affirms.
Minn. Stat. §609.165, subd. 1b(a), states that a person commits a felony if they were previously convicted of a crime of violence and ship, transport, possess, or receive a firearm or ammunition. “Firearm” is not defined. The Court previously defined a firearm, in the context of Minn. Stat. §624.713, as “a weapon, that is, an instrument designed for attack or defense, that expels a projectile by the action or force of gunpowder, combustion, or some other explosive force.” Both sections 624.713 and 609.165 criminalize possession rather than use of a firearm, and both prohibit those convicted of a crime of violence from possessing firearms. Thus, the Court applies the same definition of “firearm” to this case.
The question then becomes whether taking away two parts of a shotgun (here, the bolt and washer) changes the design of the firearm. The Court finds that possessing “the integral parts unique to a firearm in an unassembled state in the same container” does not change the fact that the parts were designed to be a weapon, even though a part may be missing. The Court holds “that a disassembled and incomplete shotgun can be a firearm under section 609.165, subdivision 1b(a), so long as it is an instrument designed for attack or defense that expels a projectile by some explosive force.” Here, the state presented sufficient evidence to prove beyond a reasonable doubt that the shotgun parts in appellant’s backpack were a firearm under this definition. State v. Stone, A21-1648, 2023 WL 6280234 (Minn. 9/27/2023).
Samantha Foertsch
Bruno Law PLLC
samantha@brunolaw.com
Stephen Foertsch
Bruno Law PLLC
stephen@brunolaw.com
Employment & Labor Law
JUDICIAL LAW
• Time rounding-off; dismissal reversed. An employer’s practice of rounding off time worked by employees at the beginning and end of their work shifts was actionable under the Federal Fair Labor Standards Act, 29 U.S.C. §301, et. seq. Reversing summary judgment dismissal of the lawsuit, the 8th Circuit Court of Appeals held that expert evidence raised a genuine issue of whether the rounding-off had de minimus effect because it averaged out over time, as the district court erroneously concluded as a matter of law. Houston v. St. Luke’s Heath Systems, Inc., 76 F.4th 1145 (8th Cir. 8/11/2023).
• Union dues; refusal to pay. A challenge by union members to a deduction of union dues from their paycheck failed. The 8th Circuit, affirming a lower court ruling, rejected the 1st Amendment claim against the employer and the union on grounds that the employees voluntarily agreed to the deduction policy when they joined the union. Burns v. School Service Employees Union Local 284, 75 F.4th 857 (8th Cir. 7/28/2023).
• Failure to promote; agreement requires arbitration. An employee’s claim of race and age discrimination due to failure to promote her to an open position was barred by an arbitration clause in her union’s collective bargaining agreement. The 8th Circuit Court of Appeals, in a decision written by Judge David Stras of Minnesota, affirmed the lower court’s determination that arbitration was required because the dispute involved “interpretation” of the bargaining agreement. Avina v. Union Pacific Railroad Co., 72 F.4th 839 (8th Cir. 7/3/2023).
• Battery, harassment, and other claims affirmed and remanded. A contract attorney for a legal staffing company is entitled to pursue a battery claim against a co-worker, but her discrimination, harassment, and other claims against another co-worker and their employer were dismissed. The 8th Circuit affirmed the three lower court rulings by Judge Nancy Brasel in Minnesota dismissing all the claims, except remanding the sole battery claim. Yang v. Robert Half International, Inc., 2023 WL 5356624 (8th Cir. 8/22/2023).
• Retaliation, discrimination verdict; reversal because no “protected activity.” A school district employee’s verdict for discrimination and retaliation when passed over for a superintendent position was vacated and denied. The 8th Circuit ruled that the claimant did not engage in “protected activity” under Title VII of the Federal Civil Rights Act in vacating the award of damages, including punitive damages. Warren v. Kemp, 2023 WL 5356630 (8th Cir. 8/22/2023) (unpublished).
• Veterans preference; detention disparities elimination upheld. The elimination of detention deputies by Winona County during a construction project reducing the facility’s capacity was upheld. Affirming the trial court, the Minnesota Court of Appeals held that the action was made in “good faith” by the county, which defeated the veterans preference claim under Minn. Stat. §197.46. Wemette v. County of Winona, 2023 WL 5198736 (Minn. Ct. App. 8/14/2023) (unpublished).
• Unemployment compensation; disqualifying “misconduct.” An employee who committed numerous behavioral improprieties was denied unemployment compensation benefits. Upholding a disqualifying decision by the Department of Employment & Economic Development (DEED), the court of appeals held that the inappropriate comments to female customers, a verbal dispute with a co-worker, threats to another co-worker, and leaving work early, among other deficiencies, warranted a determination of “misconduct” barring benefits. Vang v. Mo’s Tropical Market, 2023 WL 5743393 (Minn. Ct. App. 9/5/2023) (unpublished).
Marshall H. Tanick
Meyer, Njus & Tanick
mtanick@meyernjus.com
Federal Practice
JUDICIAL LAW
• 28 U.S.C. §1441(b)(2); so-called “snap” removal rejected. The 8th Circuit rejected a so-called “snap” removal for the second time in recent months, finding that the removal “does not cure a lack of complete diversity among the named parties.” Cagle v. NHC Healthcare Maryland Heights, LLC, 78 F.4th 1061 (8th Cir. 2023).
• Fed. R. Civ. P. 50(b); failure to preserve issue for appeal; question of law versus sufficiency of the evidence. Where the defendant’s motions for judgment as a matter of law at the close of the plaintiff’s case and at the close of all evidence were denied, but the motion was not renewed after judgment was entered for the plaintiff, the 8th Circuit agreed with the plaintiff that the defendant was challenging the sufficiency of the evidence rather than raising a question of law, meaning that the defendant failed to preserve the issue for appeal. Turner v. Faulkner Cnty., 78 F.4th 1025 (8th Cir. 2023).
• Fed. R. Civ. P. 11(c); sanctions award affirmed. The 8th Circuit affirmed Judge Wright’s award of almost $17,000 in sanctions, finding no error in failing to impose a lesser sanction, and also rejecting the argument that monetary sanctions were not appropriate where the attorney’s fees were not “incurred” because they were covered by insurance. Kezhaya v. City of Belle Plaine, 78 F.4th 1045 (8th Cir. 2023).
• Fed. R. Civ. P. 26(a)(2)(B); treating physician’s causation opinion excluded. Affirming a district court’s exclusion of a treating physician’s expert testimony on causation due to his failure to provide the written report required by Fed. R. Civ. P. 26(a)(2)(B), the 8th Circuit held that a treating physician who is offered to provide expert testimony as to causation, but who did not make that determination in the course of treatment, is required to submit a report that meets the requirements of Fed. R. Civ. P. 26(a)(2)(B). Johnson v. Friesen, 79 F.4th 939 (8th Cir. 2023).
• Fed. R. Civ. P. 6(b) and 59; Fed. R. App. P. 4; untimely notice of appeal. The 8th Circuit held that the time for the plaintiff to file his notice of appeal was not tolled by his filing of an untimely motion for a new trial despite the defendants’ failure to object to the untimeliness of the motion in the district court, finding that while Fed. R. Civ. P. 6(b) is a non-jurisdictional claim-processing rule, Fed. R. App. P. 4 barred review of the district court’s denial of the new trial motion. Gonzalez v. Shahin, 77 F.4th 1183 (8th Cir. 2023).
• IDEA; 28 U.S.C. §1441(a); “defendants;” removal. Affirming a district court’s denial of a motion to remand, the 8th Circuit held that the parents of a student were “defendants” entitled to remove a school district’s appeal of an IDEA award to federal court. Steckelberg ex rel. AMS v. Chamberlain School Dist., 77 F.4th 1167 (8th Cir. 2023).
• Fed. R. Civ. P. 26(e); denial of motion for new trial affirmed. Affirming a district court’s denial of the plaintiff’s motion for a new trial, the 8th Circuit held that even if one defendant did not supplement its expert disclosures as required Fed. R. Civ. P. 26(e), the plaintiff was unable to articulate how he was prejudiced by this failure. Wallace v. Pharma Medica Research, Inc., 78 F.4th 402 (8th Cir. 2023).
• Fed. R. Civ. P. 56(d); no abuse of discretion. The 8th Circuit found no abuse of discretion in a district court’s refusal to stay summary judgment to allow for additional discovery, finding that the plaintiff’s “unspecified assertions” regarding his alleged need for discovery “failed to meet the requirements of Rule 56(d).” Marlow v. City of Clarendon, 78 F.4th 410 (8th Cir. 2023).
• 28 U.S.C. §636; res judicata effect of magistrate judge’s denial of motion to amend. Affirming Judge Wright’s dismissal of certain claims and award of summary judgment to the defendants on other claims on the basis of res judicata, the 8th Circuit rejected the plaintiff’s argument that Magistrate Judge Brisbois’s denial of its motion to amend could not have preclusive effect, finding that the order denying the motion to amend constituted a “final judgment on the merits” for purposes of res judicata. Satanic Temple v. City of Belle Plaine, 80 F.4th 864 (8th Cir. 2023).
• Diversity jurisdiction; admission of fact not binding. Where the plaintiff limited liability company filed an action in state court, the defendant removed on the basis of diversity jurisdiction, the plaintiff agreed the parties were diverse, the defendant prevailed on its motion to dismiss, and the plaintiff appealed and then asserted for the first time that the parties were not diverse, the 8th Circuit rejected the defendant’s argument that the plaintiff’s “admission of a jurisdictional fact” was binding, and remanded the action to the district court for a determination of subject matter jurisdiction. Great River Entertainment, LLC v. Zurich Am. Ins. Co., ___ F.4th ___ (8th Cir. 2023).
• Fed. R. Civ. P. 10(a); John Doe plaintiffs; adults’ motion to proceed pseudonymously denied. Judge Blackwell denied adults’ motion to proceed as Doe plaintiffs in an action challenging the placement on “Black Lives Matter” posters in Lakeville schools, rejecting their claims that they “fear reprisal from political activists,” and finding that “in only a very few cases challenging governmental activity can anonymity be justified.” Cajune v. ISD #194, 2023 WL 5348833 (D. Minn. 8/21/2023), appeal filed (8th Cir. 9/19/2023).
• Motion for stay of discovery pending resolution of motion to dismiss granted. While acknowledging the defendant’s “heavy burden,” Magistrate Judge Wright granted the defendant’s motion to stay the Rule 26(f) conference and discovery pending resolution of its pending motion to dismiss, finding that the plaintiff would not be prejudiced by the stay, and that potential hardship to the defendant, the conservation of judicial resources, and the “likelihood” of the defendant’s success on the merits all favored a stay. Huff v. Canterbury Park Holding Corp., 2023 WL 5403472 (D. Minn. 8/22/2023).
• Alleged breach of nonsolicitation agreement; no irreparable harm. Chief Judge Schiltz denied the plaintiff’s motion for a preliminary injunction prohibiting violation of a nonsolicitation agreement, again finding that the Minnesota law that presumes irreparable harm does not apply in federal court. Piper Sandler & Co. v. Gonzalez, 2023 WL 5426000 (D. Minn. 8/23/2023).
• L.R. 7.1(f)(1)(D); request for leave to exceed word limit denied. Judge Menendez denied the plaintiff’s request to exceed the word count limitation of L.R. 7.1(f)(1)(B) on its motion for summary judgment, finding that the plaintiff had “without justification” delayed making its request until well after it filed two memoranda totaling 11,449 words, and after the defendant had filed its opposition memorandum. Little Giant Ladder Sys., LLC v. Tricam Indus., Inc., 2023 WL 5447283 (D. Minn. 8/24/2023).
• Fed. R. Civ. P. 26(a)(2); plaintiff allowed to amend inadequate expert disclosures. Denying several defendants’ motion for partial summary judgment in a negligence case, Judge Menendez agreed with the defendants that the plaintiff’s expert disclosures were inadequate on the issue of causation, but exercised her “broad discretion” and allowed the plaintiff 30 days to submit new expert disclosures. Krasne v. Mayo Clinic, 2023 WL 5487388 (D. Minn. 8/24/2023).
• Denial of motion to amend complaint affirmed. Reviewing de novo, Chief Judge Schiltz affirmed Magistrate Judge Foster’s denial of the plaintiff’s motion to amend her complaint for a fourth time, where the motion was filed 11 months after the deadline to amend set forth in the scheduling order, there was no good cause for the delay, and any error was due to the “inexcusable neglect” of her attorney. S.A.A. v. Geisler, 2023 WL 5533344 (D. Minn. 8/28/2023).
Josh Jacobson
Law Office of Josh Jacobson
joshjacobsonlaw@gmail.com
Intellectual Property
JUDICIAL LAW
• Copyright: Copyright to architectural design does not prevent sale of building in bankruptcy. A panel of the United States Court of Appeals for the 8th Circuit recently held in a per curiam decision that the Architectural Works Copyright Protection Act of 1990 (AWCPA) extended copyright protection to “architectural works.” McQuillen Place Company, LLC, retained Cornice & Rose International, LLC (C&R), an architectural firm, to design a building to be built in Charles City, Iowa. C&R obtained copyright protection under the AWCPA for its technical drawings and for the building itself. First Security Bank & Trust Company was the primary construction lender to McQuillen and obtained a first mortgage on the building. With the building approximately 90% complete, McQuillen halted construction and filed for bankruptcy. The bank sought to sell the building to the highest bidder free and clear of all liens.
C&R entered an appearance and objected that such a sale violated C&R’s intellectual property rights. The bankruptcy court approved the sale and included language that the purchaser may use and occupy the building so long as not using the plans or drawings owned by C&R. C&R filed a motion to reconsider arguing that the copyright prevented the building from being sold where the architect had not been paid in full. The motion was denied. C&R later filed a lawsuit against the bank, its president, and parties involved in the completion of the building. C&R alleged that all defendants infringed C&R’s architectural works copyright by finishing the building because that is an infringing derivative work. The district court dismissed the copyright infringement claim, finding the claim was barred by issue and claim preclusion from the bankruptcy court’s order and because the owner’s right to finish the building was protected from a claim of copyright infringement by 17 U.S.C. §120(b). On appeal, the 8th Circuit panel held that C&R litigated the scope of its intellectual property rights in the bankruptcy proceeding. The bankruptcy court rejected the same claims and arguments regarding the AWCPA that C&R alleged in its lawsuit. Finding the claims barred, the panel did not further consider the argument under 17 U.S.C. §120(b). Cornice & Rose Int’l, LLC v. Four Keys, LLC, No. 22-1976, 2023 U.S. App. LEXIS 20990 (8th Cir. 8/11/2023).
• Trademark: Likelihood of confusion analysis is fact-specific even when mark is famous. Judge Tunheim recently denied Defendant Taco Chon Mexican Grill’s motion for summary judgment of trademark infringement. Taco John’s is a franchise of quick service Mexican restaurants that sells Mexican food in a causal setting. There are approximately 370 Taco John’s establishments across 23 states, including 80 different locations in Minnesota since 1972. Taco Chon Mexican Grill is a set of restaurant-bars in Burnsville and St. Cloud, Minnesota that first opened in 2019. Plaintiffs Taco Johns International, Inc. and Spicy Seasonings, LLC sued Taco Chon Mexican Grill, Taco Chon Mexican Grill II, LLC, and the owner of Taco Chon, Juan Ramos, for trademark infringement, trademark dilution, unfair competition, and related state law claims. Defendants moved for summary judgment on each of plaintiffs’ claims, arguing Taco Chon was not similar to Taco John’s mark and that Taco John’s had failed to show a likelihood of confusion. The court found each of these are highly fact-specific analyses. The court denied Taco Chon’s motion for summary judgment on all claims because genuine disputes of material fact existed as to the likelihood of confusion and whether there is evidence of tarnishment or dilution. However, the court found that Taco John’s mark is both strong and famous and indicated that the court would instruct the jury accordingly. Taco John’s Int’l, Inc. v. Taco Chon Mexican Grill LLC, No. 22-1050 (JRT/LIB), 2023 U.S. Dist. LEXIS 156934 (D. Minn. 9/6/2023).
Joe Dubis
Merchant & Gouldjdubis@merchantgould.com
Probate & Trust Law
JUDICIAL LAW
• Restricting the right to vote of a person subject to guardianship affirmed. In appointing a guardian for appellant, the district court revoked appellant’s right to vote. On appeal, the appellant challenged the revocation and argued that revoking his right to vote, pursuant to Minn. Stat. §524.5-120(15) and Minn. Stat. §524.5-313(c)(8), violated equal protection and due process because neither statute provides specific guidelines for denying the right to vote. The Minnesota Court of Appeals highlighted the factual circumstances in the record that supported the district court’s decision, such as factual statements in the visitor’s report and the fact that appellant presented no contrary evidence. But the court declined to define the mental impairment required to restrict the right to vote and declined to articulate guidelines or criteria to be measured to determine the same as “[a]n appellate court ‘may not add to a statute what the legislature deliberately or inadvertently omitted.’” The court of appeals then affirmed the district court’s decision to revoke appellant’s right to vote. In re Guardianship of Nguyen, No. A23-0344, 2023 WL 6054285 (Minn. Ct. App. 9/18/2023).
• District court precluded from enforcing a settlement agreement that touches on issues that are pending appeal. During the pendency of an appeal relating to numerous matters in an intrafamily dispute between two siblings, the parties agreed to participate in mediation in an effort to “reach a global resolution.” After a 13-hour mediation, the mediator made a video recording of the terms discussed and directed the parties to work out a written settlement agreement. No written agreement was ever reached, and appellant later filed a motion to enforce the agreement. The district court determined that it did not have authority to enforce the agreement, because it would “necessarily affect [a] prior order which is appealed from,” in violation of Minn. R. Civ. App. P. 108.01. The court of appeals agreed, finding that many of the facts relating to the settlement agreement were not different from the pending appeal. Because of this, the court affirmed the district court’s order denying enforcement of the settlement agreement. In re Estate of Legred, Nos. A23-0038, A23-0039, A23-0041, A23-0277, 2023 WL 6054279 (Minn. Ct. App. 9/18/2023).
Jessica L. Kometz
Bassford Remele
jkometz@bassford.com
State Appellate Practice
MN SUPREME COURT
(Editor’s note: Bench & Bar is happy to announce the debut of our State Appellate Practice case notes. The purpose of this section is to provide timely updates on developments at the Minnesota Supreme Court and Minnesota Court of Appeals by tracking notable decisions, cases accepted or rejected for review by the Minnesota Supreme Court, and significant special term orders from the Minnesota Court of Appeals.)
• Notable decisions: Actual malice standard applied to defamation claims arising out of #MeToo social media posts. The Minnesota Supreme Court determined that the actual malice standard applied to defamation claims based on a Facebook post that accused Johnson and two other individuals of sexual assault in the context of the #MeToo movement. The majority opinion, authored by Justice Chutich, clarified that defamation claims must be examined on a “case-by-case basis, apply[ing] the totality of circumstances test and balanc[ing] the content, form, and context of the speech, as well as any other pertinent factors, to determine whether speech involves a purely private matter or is a statement about a matter of public concern intended to influence public discussions about desired political or social change.” Chief Justice Gildea dissented, concluding that the “mere fact Freborg made these allegations amid a social movement and included #MeToo in her post does not convert her otherwise private speech into speech on a matter of public concern entitled to heightened First Amendment protection.” Justice Anderson and Justice Hudson joined the dissent of Chief Justice Gildea. Johnson v. Freborg, A21-1531 (Minn. 9/20/2023).
• Notable petitions granted/denied: Review granted in case involving sufficiency of expert testimony on the issue of causation for medical negligence claims. In a medical negligence action, the district court granted summary judgment on the issue of causation, finding that Rygwall failed to present sufficiently detailed expert opinions on the issue of causation. Rygwall appealed and the court of appeals affirmed. Rygwall successfully petitioned the Supreme Court for review. Issue granted: Whether courts may supplant the jury and hold as a matter of law that the evidence is insufficient to prove causation in a negligence action where medical expert testimony (1) details the precise course of action that the defendant should have followed, (2) explains why these interventions would have made a difference, and (3) opines that the failure to follow the standard of care caused the plaintiff to suffer harm. In re Rygwall v. ACR Homes, Inc. d/b/a ACR Homes, A22-1376, petition for review granted on 9/19/2023.
• Notable petitions granted/denied: Court to hear petition to exclude Trump from primary, general elections. In this elections administration proceeding, individual voters seek an order directing the Secretary of State to exclude Donald J. Trump from the ballot for the 3/5/2023 presidential nomination primary and from the ballot for the 11/5/2024 general election as candidate for the office of president of the United States. Numerous parties have intervened in the proceeding or been allowed to participate as amici. The Supreme Court has agreed to “address threshold and potentially dispositive legal issues of justiciability and the legal construction of Section 3 of the Fourteenth Amendment to the U.S. Constitution” prior to permitting any discovery. Oral argument is set for 11/2/2023. Growe et al. v. Simon, A23-1354, statutory petition for review granted on 9/20/2023.
MN COURT OF APPEALS
• Notable decision: Department of Education’s statutory audit and reduction of state aid authority defined. In a certiorari challenge to a Department of Education audit that resulted in the reduction in state aid, the court of appeals determined that the Commissioner of Education has the authority, under Minn. Stat. §127A.41, when read in conjunction with Minn. Stat. §124E.16, to audit charter schools to verify pupil counts and state aid entitlements. Minn. Stat. §127A.14, subd. 3 also authorizes the commissioner to increase or decrease the amount of state aid based on the audit results. Minnesota Internship Center v. Minnesota Department of Education, A23-0064 (Minn. App. 9/25/2023).
• Notable decision: Personal jurisdiction proper over nonresident investment firm based on actions of employee. In a consumer fraud action, Pretium Partners LLC appealed from the denial of its motion to dismiss the state of Minnesota’s complaint for lack of personal jurisdiction. A divided Minnesota Court of Appeals affirmed, determining that the state presented “specific evidence” which, taken as true, established a prima facie showing of specific personal jurisdiction, including evidence that (1) Pretium held itself out as the owner of the rental properties; (2) an employee traveled to Minnesota to “assess legal risks;” (3) that same employee communicated with Minnesota residents and government officials “many times via text, email, and phone;” and (4) that employee coordinated 22 rental property inspections while in Minnesota. Judge Connolly dissented, finding that there were insufficient contacts with Minnesota in light of the remedial nature of the Pretium employee’s actions on the single visit to the forum. State v. HavenBrook Homes LLC et al., Pretium Partners LLC, et al., A23-0244 (Minn. App. 9/5/2023).
• Notable special term orders: Final Order for Purposes of Appeal – Termination of Parental Rights. In an appeal from a district court order terminating parental rights, the respondents argued that the appeal was untimely because the order terminating appellant’s parental rights was a non-appealable order. The court of appeals disagreed, noting that “[a]n order terminating parental rights is final and appealable.” The court further observed that “[a] final order” for purposes of appeals from orders of a juvenile court “ends the proceeding as far as the court is concerned or finally determines some positive legal right of a party relating to the action.” An order terminating a party’s parental rights fell well within this definition. In re Welfare of Children of K.F., No. A23-1285 (Order) (Minn. App. 9/25/2023).
• Notable special term orders: Final Order for Purposes of Appeal – Denial of Motion to Amend. In an appeal from a district court order denying a motion to amend a marital dissolution property division, the appellant argued that the order denying the motion was an immediately appealable final order on the grounds that it constituted a final division of property resolving property allocation issues between the parties and conclusively determined appellant’s positive legal rights related to marital property. However, the court of appeals noted that because the order ostensibly being appealed was the denial of a motion to amend a prior order, it determined that appellant actually sought “review of the district court’s rulings on the property-division issues” in that prior order. The court further noted that “[a]n order for the recovery of money” is not appealable. As no final judgment had yet been entered on that prior order, the court dismissed the appeal seeking review of the district court’s property division as premature. Blessing v. Blessing, No. A23-1331 (Order) (Minn. App. 9/25/2023).
• Notable special term orders: Final Order for Purposes of Appeal – Spousal Maintenance. In an appeal from a district court order regarding spousal maintenance, the appellant argued that the order was final and appealable because it terminated appellant’s right to receive spousal maintenance. But the court of appeals observed that the appealed order did not fully resolve the issue of spousal maintenance because it provided for additional submissions to determine the amount of spousal maintenance arrearages that were owed to appellant. As the order did not “fully resolve the issue of spousal-maintenance arrearages, it is not a final, appealable order,” and the court dismissal the appeal as premature. Locketz v. Locketz, No. A23-1313 (Order) (Minn. App. 9/25/2023).
Pat O’Neill
Larson King, LLP
phoneill@larsonking.com
Sam Schultz
Larson King, LLP
sschultz@larsonking.com
Tax Law
JUDICIAL LAW
• Property tax: To appeal a commissioner’s notice of determination, the party seeking review must both serve and file the appeal within 60 days after the notice date of an order. A taxpayer filed an appeal to contest a 3/3/2023 order assessing taxes and interest for property located in Blue Earth County. The commissioner moved to dismiss the appeal for lack of subject matter jurisdiction because the appeal was filed past the maximum statutory window.
Minnesota Statute §271.06 allows a taxpayer to appeal an order regarding “any tax, fee, or assessment… including the imposition of interest…” Minn. Stat. §271.06, subd. 1. “[W]ithin 60 days after the notice date of an order of the commissioner of revenue, the appellant... shall serve a notice of appeal upon the commissioner and file the original, with proof of such service, with the Tax Court administrator....” Minn. Stat. §271.06, subd. 2. The taxpayer filed and was granted a 30-day extension. Though the parties agree on the facts regarding the date of the order, the taxpayer’s filing of an extension, and the date of the appeal, the taxpayer argued that he did not include weekends or holidays in the calculation of the statutory 90-day window. The court applied Rule 6.01(a), finding that the appeal was filed outside the 90-day maximum statutory window, and granted the commissioner’s motion to dismiss for lack of subject matter jurisdiction. Abdalle v. Commr. of Revenue, No. COR-9598, 2023 WL 6134625 (Minn. TC 9/19/2023).
• Petitions for redetermination and “person[s] outside [of] United States.” The court granted respondent’s motion to dismiss for lack of jurisdiction under section 6213(a). Section 6213(a), “Time for filing petition and restriction on assessment,” lays out a 90-day filing period in which a taxpayer may petition the tax court for redetermination of deficiencies. 26 U.S.C.A. §6213. The statute allows an extended 150-day period “if the notice is addressed to a person outside the United States.”
The taxpayers in this case filed their petition for redetermination 148 days after a notice of deficiency was mailed to their California residence. They did not dispute their petition was filed outside the normal 90-day period, but instead “allege[d] their absence from the United States during part of the day… the notice was mailed, entitled them to the extended 150-day period.” (Emphasis added.) Because its jurisdiction is predicated “on a valid notice of deficiency and a timely filed petition,” the court was faced with deciding whether the 150-day period applied under these facts. 26 U.S.C.A §6213, 7442 (West).
The court has previously held that the 150-day period applies “not only to persons outside the United States ‘on some settled business and residential basis,’ but also to persons temporarily absent from the country.” (quoting Levy v. Comm’r of Internal Revenue, 76 T.C. 228 (1981)). However, the 150-day period also requires the temporary absence to have “result[ed] in delayed receipt of the deficiency notice.” See Levy at 231.
While the taxpayers provided evidence they were abroad at the beginning of the day, they returned to their California residence the evening the notice of deficiency was mailed. The taxpayers were present the day the notice was mailed. Their absence from the country on the morning of the mailing did not delay their receipt of the notice, and therefore the court found it lacked jurisdiction to hear the case as their petition for redetermination was not a “timely filed petition.” Evenhouse v. Comm’r of Internal Revenue, T.C.M. (RIA) 2023-113 (T.C. 2023).
• Tax lien priorities, refunds, and “innocent spouse” relief from joint liability. In a complex innocent spouse case, the court held that petitioner was entitled to a refund for overpayments of IRS lien payments.
In 2012, the petitioner and her husband purchased a home, which they held in joint tenancy with right of survivorship. Before the husband’s untimely death in 2014, two mortgages were taken out—the WF mortgage in 2012, and the FB mortgage in 2013. Notices of deficiency and demands for tax years 2012 and 2013 were issued. In 2015, a notice of federal tax lien (NFTL) was filed against the home. Finally, in early 2015, petitioner requested innocent spouse relief (ISR). A final determination granting ISR in part for tax year 2012 and in full for tax year 2013 was awarded in 2017. Overall, the petitioner remained liable only for $3,340 (plus interest) of the previously determined $123,200 deficiency.
Facing economic difficulties following her husband’s untimely death, the petitioner failed to make payments on the mortgages, resulting in the home’s entering foreclosure. Prior to a foreclosure sale, the house was sold in 2015, and the proceeds were used to satisfy four obligations: (1) the closing costs, (2) the WF mortgage, (3) the FB mortgage, and (4) the tax liens.
In 2015, the tax liens on the petitioner’s home were paid from the 2015 home sale proceeds. In 2017, it was determined the petitioner was eligible for ISR and within that determination was a denial of the petitioner’s refund for overpayment. The petitioner argued that she was entitled to a refund. To be entitled to a refund, however, petitioner had to establish that the funds used to make the initial payment could be traceable to her separate portion of the property. See Ordlock v. Comm’r of Internal Revenue, 126 T.C. No. 4 (U.S. Tax Ct., 2006).
At issue here: whether the petitioner’s payment of the 2015 tax liens was traceable to their separate property interest in the home sale proceeds, thus qualifying the petitioner for a refund of the 2015 tax liens following the determination for ISR.
Petitioners are entitled to refunds only if there was an overpayment, and only if that overpayment was made with funds that belonged to the taxpayer. Thus, the court had to determine if the portion of the proceeds used to satisfy the tax lien were funds that belonged to the petitioner or her late husband.
Ohio property law applied. The court addressed satisfying the liabilities that encumbered the home and their respective priorities. The first priority determined by the court was the closing costs of the sale. Ohio courts have previously held that priority is given to the costs of sale when property is subject to foreclosure. Although this sale was not a foreclosure sale, the court not only found it analogous for determining payment priority because the house was being foreclosed, but also found that such a determination would not affect its ultimate decision in this case. The closing costs, minimal in relation to the totals of this proceeding, were thus divided equally amongst the petitioner and her late husband’s respective one-half interest in the proceeds.
In determining the next priority, the court determined whether the mortgages held priority over the tax liens. Pursuant to Section 6323(h)(1), which specifies conditions for purposes of determining priority, the court found the mortgages held priority over the tax liens. 26 U.S.C.A §6323(h)(1). Since the WF mortgage was first in time, it was given after closing cost, followed by the FB mortgage as the third priority. The tax liens were thus the lowest priority.
Further investigating the WF mortgage, the court determined the petitioner’s husband was the primary obligor of the mortgage, and petitioner only had a surety relationship between her husband and the mortgagor. Since the late husband was the primary obligor, payment of the WF mortgage was taken entirely from petitioner’s late husband’s one-half interest in the proceeds.
Proceeding to the FB mortgage, the court determined the petitioner was either equally encumbered by the mortgage with her late husband or only residually encumbered with her late husband. No strict determination was necessary, however, as the husband’s remaining one-half interest was insufficient to fulfill even one half of the FB mortgage. The late husband’s one-half interest was thus exhausted, and the remaining FB mortgage was paid by the petitioner.
Since the tax liens were the last remaining encumbrance on the proceeds, the liens could only have been paid from the petitioner’s one-half interest in the proceeds. Given that the petitioner requested ISR prior to payment of the tax liens, and the court determined that the tax liens were paid solely from the petitioner’s one-half interest in the home sale, the court determined that the payment of the tax liens was an overpayment by the petitioner. As the ISR request reduced the petitioner’s liability to $3,340 (plus interest), the court concluded the petitioner was entitled to a refund of the tax liens less the petitioner’s ISR liability. O’Nan v. Comm’r of Internal Revenue, T.C.M. (RIA) 2023-117 (T.C. 2023).
Morgan Holcomb, Adam Trebesch, Brandy Johnson, and Leah Olm
Mitchell Hamline School of Law
Torts & Insurance
JUDICIAL LAW
• Defamation; matters of public concern. Plaintiff, a private figure, filed suit against defendant for defamation after a post on defendant’s Facebook page accused plaintiff and two other dance instructors from the Twin Cities dance community of varying degrees of sexual assault. Plaintiff was one of defendant’s dance teachers, and the two previously had a casual sexual relationship that lasted for about a year. The district court granted defendant’s motion for summary judgment, finding that defendant’s speech was true and, alternatively, that her speech involved a matter of public concern and was not made with actual malice. The court of appeals reversed. It held that the truth or falsity of defendant’s statement presented a genuine issue of material fact. The court of appeals further held, in a divided opinion, that because the dominant theme of defendant’s post involved a matter of private concern, plaintiff was not required to prove actual malice to recover presumed damages. The court of appeals remanded the case to the district court for further proceedings.
The Minnesota Supreme Court reversed in part and remanded. The only issue on appeal was whether or not the post related to a matter of public concern, as defendant did not appeal the court of appeals’ ruling that a genuine issue of material fact existed as to the statement’s falsity. On this issue, the Court held that to make this determination in a particular case, courts should consider the “totality of the circumstances,” including “the content, form, and context of the speech.” The Court noted that “as a general proposition,” speech relating to sexual assault is a matter of public concern. The Court went on to hold that “[b]ecause the overall thrust and dominant theme of [defendant’s] post—based on its content, form, and context—involved a matter of public concern, namely, sexual assault in the context of the #MeToo movement,” it was entitled to constitutional protection through the actual malice standard. The Court reasoned: “even though [defendant] named, tagged, and admonished three specific instructors in her post, these personal messages do not outweigh the dominant theme of her speech—to discuss sexual assault in the dance community, a matter of public import.” Because the Court determined it could not address the issue of actual malice without a determination of the truth or falsity of the statement, the Court remanded the case to the district court for further proceedings to determine the veracity of defendant’s post and, if the post is found to be false, whether the making of the post meets the constitutional actual-malice standard.
Chief Justice Gildea filed a dissenting opinion that was joined by Justices Anderson and Hudson. The dissent embraced a narrower view of what constituted matters of public concern, emphasizing matters related to self-government, government officials, and government performance. Johnson v. Freborg, No. A21-1531 (Minn. 9/20/2023). https://mn.gov/law-library-stat/archive/supct/2023/OPA211531-092023.pdf
Jeff Mulder
Bassford Remele
jmulder@bassford.com