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From the Bench: Can the City Ban Unlicensed Vehicles?

By Susan Naughton

CONSTITUTIONAL LAW
Nuisance ordinance

Johnson was charged with and found guilty of violating a nuisance ordinance prohibiting unlicensed motor vehicles in the city. Johnson appealed, claiming the ordinance was unconstitutional. Johnson argued that because the ordinance includes vehicles that are “not currently licensed” within its definition of proscribed nuisances, the ordinance effectively requires payment for vehicle registration, and thus, imposes a motor vehicle tax that the city has no authority to impose.Generic license plate in rounded chrome frame Johnson also argued that such a tax cannot be imposed on vehicles that are not being operated on a public highway. The Minnesota Court of Appeals ruled in the city’s favor, holding that Johnson had not met his burden of demonstrating that the ordinance was unconstitutional. The Court of Appeals reasoned that just because the state does not require registration or taxation of certain vehicles that are withdrawn from use on public highways, it does not follow that a city has no constitutionally reasonable interest in regulating the presence of such vehicles within its boundaries. State v. Johnson, No. A12-1040 (Minn. Ct. App. 2013) (unpublished).

EMINENT DOMAIN
Municipal electric utility

The city annexed land and acquired the right to provide electric service to it by condemning a rural electric utility’s property. The condemnation was authorized by Minnesota Statutes, section 216B.47, which provides that damages must include: “the original cost of the property less depreciation, loss of revenue to the utility, expenses resulting from integration of facilities, and other appropriate factors.” The city attempted to use a fair market value analysis when addressing the statute’s factors, but the district court and the Minnesota Court of Appeals held that section 216B.47 prohibits consideration of fair market value evidence, even though courts have historically used such evidence to determine the constitutionally required just compensation for property acquired by eminent domain. The Minnesota Supreme Court affirmed and held that the city’s valuation was inconsistent with the statute’s plain language by failing to give meaningful consideration to the four statutory factors. But the Supreme Court declined to adopt the lower courts’ reasoning, which found that fair market value analysis was not compatible with the four factors of the statute. Instead, the Supreme Court reasoned that fair market value principles might be used in a situation where the statutory factors produce a level of compensation below the fair market value of the property taken because the state and federal constitutions would prohibit a court from awarding the owner less than the full market value of his or her loss. The Supreme Court also noted that it would not consider whether and under what circumstances fair market value evidence might be appropriate under the statutory factor of “other appropriate factors,” noting that the city had stipulated that this factor should be considered zero. Moorhead v. Red River Valley Cooperative Power Ass’n, 830 N.W.2d 32 (Minn. 2013).

CONSTITUTIONAL LAW
Sign ordinance

DiMa Corporation owns a portable sign that it rents to customers for advertising. The city adopted an ordinance that, the city contends, prohibits DiMa’s customers from using the sign. DiMa sued, challenging the city’s interpretation of its ordinance and asserting a First Amendment right to rent the sign. DiMa also moved for a temporary injunction to prevent the city from enforcing the ordinance while the lawsuit was pending. The district court denied the motion. The Minnesota Court of Appeals reversed, concluding that the district court erred when it determined that DiMa would be unlikely to succeed on the merits of its claims and would not suffer irreparable harm if the ordinance was not enjoined. The Court of Appeals concluded that the balancing test for determining whether an injunction should be issued favored DiMa for the following reasons: It was likely that DiMa would succeed on the merits because it is entitled to continue displaying its sign under the ordinance’s nonconforming use provision. Irreparable harm is presumed if there is a First Amendment violation. The city would likely be immune from liability for damages based on DiMa’s lost profits from not being able to rent its sign. DiMa Corp. v. City of Albert Lea, No. A12-1284 (Minn. Ct. App. 2013) (unpublished).

EMPLOYMENT LAW
Seasonal employees

The union petitioned the Bureau of Mediation Services (BMS) to clarify the unit status of several seasonal employees. BMS issued a unit clarification order without conducting a hearing, and found that 13 seasonal employees were “public employees” under the Public Employment Labor Relations Act, and, therefore, should be included in the union’s unit. The city appealed, arguing that BMS’s failure to hold a hearing or conduct a meaningful investigation resulted in an inadequate record and a decision unsupported by substantial evidence. The city also argued that BMS’s decision was arbitrary because it did not consider an employee’s minimum time in a particular job classification and that BMS erred by naming specific individuals rather than the work they did in certain job classifications. The Minnesota Court of Appeals affirmed, reasoning that a hearing is not required for a unit clarification, and that the BMS’s naming of specific individuals was consistent with the statutory language. The Court of Appeals also noted that it would not consider the city’s argument regarding BMS’s failure to conduct a meaningful investigation because the city had not raised this argument when it requested BMS to reconsider its decision. Minn. Teamsters Public and Law Enforcement Employees, Local No. 320 v. City of Coon Rapids, No. A12-1349 (Minn. Ct. App. 2013) (unpublished).

EMPLOYMENT LAW
Marital status discrimination

Aase worked for Wapiti Meadows Community Technologies & Services, Inc. (CTS) as a mental health practitioner. CTS terminated Aase’s employment due to a conflict of interest or potential conflict of interest because of her husband serving on the board of CTS’s primary competitor. Aase sued, claiming CTS had terminated her based on her marital status in violation of the Minnesota Human Rights Act (MHRA). CTS moved for summary judgment, arguing that Aase’s failure to comply with its conflict-of-interest policy rendered her unqualified for her job and that the conflict of interest was the legitimate, nondiscriminatory reason for her discharge. The district court granted summary judgment in CTS’s favor after analyzing the claims under the McDonnell Douglas framework and concluding that, although Aase had established a prima facie case of discrimination, CTS had articulated a nondiscriminatory reason for her termination, and Aase failed to demonstrate that the articulated reason was pretextual. The Minnesota Court of Appeals reversed and remanded, holding that discharging an employee because her spouse accepted a position with a competitor violates the MHRA’s ban on marital discrimination because the termination is based on a spouse’s actions. But the Court of Appeals also reasoned that discharging an employee for refusing to cooperate with an employer’s attempts to mitigate a potential conflict of interest is based on an employee’s actions, and therefore, is nondiscriminatory under the MHRA. The Court of Appeals remanded the case because it concluded that Aase had demonstrated that there were genuine fact issues regarding whether the nondiscriminatory reason CTS gave for her termination was pretextual. Aase v. Wapiti Meadows Community Technologies & Services, Inc., 832 N.W.2d 852 (Minn. Ct. App. 2013).

EMPLOYMENT LAW
Hostile work environment

A woman gestures Three female employees worked at a store and motel owned by a corporation whose sole shareholder is Brian Zapolski. The employees sued, claiming Zapolski’s sexual harassment subjected them to a hostile work environment. The employees testified that Zapolski exposed them to sexual comments and other sexual behavior, including the comparison of one of the women to a nude photo in Playboy and the suggestion that she watch a “pornographic DVD” he had brought to work. The district court dismissed the employees’ claims, finding that they had not been subject to harassment that is actionable under the Minnesota Human Rights Act (MHRA). The Minnesota Court of Appeals reversed the district court’s decision. The Minnesota Supreme Court reversed the Court of Appeals’ decision and remanded the case for the district court to consider the claim under the correct legal standard. The Supreme Court held that: (1) the fact that sexually explicit behavior was directed at men as well as at women is not relevant to a determination of whether plaintiffs have proved a claim for hostile work environment sexual harassment under the MHRA; (2) a plaintiff may prove a claim for hostile work environment sexual harassment under the MHRA without proving loss of pay or other employment benefits; and (3) an individual and sole owner of an employer whose conduct subjects the employer to vicarious liability for hostile work environment sexual harassment claims cannot be individually liable as an aider and abettor under the MHRA. Rasmussen v. Two Harbors Fish Co., 832 N.W.2d 790 (Minn. 2013).

Written by Susan Naughton, research attorney with the League of Minnesota Cities. Contact: snaughto@lmc.org or (651) 281-1232.

Read the November-December 2013 issue of Minnesota Cities magazine

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