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From the Bench: Court OKs City Limit on Rental Housing

LICENSING
Rental housing

Several property owners sued, challenging the city’s For Rent signordinance limiting to 30 percent the number of lots per block in certain low-density residential zoning districts that may be certified for rental housing licenses. The property owners claimed the ordinance violates the Minnesota Constitution and exceeds the city’s statutory authority. The district court ruled in the city’s favor. The Minnesota Court of Appeals affirmed and held that a city may use its police power to limit the number of lots on a block that are eligible to obtain certification as rental property. The Court of Appeals also held that the ordinance establishes a neutral, numerical limit that applies on a first-come, first-served basis and does not violate equal protection or due process under the Minnesota Constitution. Dean v. City of Winona, 843 N.W.2d 249 (Minn. Ct. App. 2014). Note: The League filed an amicus brief in the city’s support.

LAND USE
60-Day Rule

Kottschade sued the Minnesota Department of Transportation (MnDOT) seeking a writ of mandamus ordering MnDOT to issue him a driveway access permit to build a driveway connecting his land to the highway. Kottschade claimed his application was subject to the 60-Day Rule, and because MnDOT had failed to make a decision within the deadline, his application was automatically approved. The district court ruled in MnDOT’s favor. The Minnesota Court of Appeals reversed and held that an application for a driveway access permit is a “written application relating to zoning” under the 60-Day Rule, and that MnDOT failed to respond to the application within the deadline. Therefore, the Court of Appeals remanded the case for the district court to issue a writ of mandamus ordering MnDOT to grant Kottschade the permit. Kottschade v. State, No. A13- 1034 (Minn. Ct. App. Dec. 23, 2013) (unpublished opinion).

EMPLOYMENT LAW
Fair Labor Standards Act

A group of employees sued their employer, U.S. Steel, claiming they should have been paid for time they spent at work putting on and taking off protective gear they were required to wear, including flame-retardant jackets, pants and hoods, hardhats, work gloves, safety glasses, earplugs, and respirators. U.S. Steel argued that a provision in the collective bargaining agreement provided that this time would not be compensated. The U.S. Supreme Court unanimously ruled in U.S. Steel’s favor. The Supreme Court reasoned that putting on and taking off protective gear falls within the meaning of “changing clothes” under the Fair Labor Standards Act and, therefore, it is an appropriate subject for collective bargaining. The Supreme Court concluded that because the collective bargaining agreement states that time spent changing clothes is not compensable, the employees were not entitled to back pay. The Supreme Court adopted the common dictionary definition of “clothes,” concluding that clothes are wearing apparel used to cover the body, and rejected the employees’ claim that protective gear are not clothes. Sandifer v. United States Steel Corp., 134 S. Ct. 870 (2014).

GOVERNMENTAL IMMUNITIES
Qualified privilege

Officer Minke sued Sgt. Callaway and the City of Minneapolis, claiming in part that Callaway defamed him during an employment-related background investigation. Minke alleged that Callaway made statements that were defamatory, including attacks on his honesty, integrity, character, work ethic, and performance. Callaway and the city moved for summary judgment, claiming absolute privilege. The district court denied summary judgment, holding that absolute privilege did not apply. The Minnesota Court of Appeals and the Minnesota Supreme Court affirmed. The Supreme Court concluded that there was no compelling public policy interest supporting the application of absolute immunity. The Supreme Court noted that two types of privilege exist as defenses against defamation claims: absolute privilege and qualified privilege. Absolute privilege bars liability for even “intentionally false statements, coupled with malice,” while qualified privilege bars liability only if the “defamatory statements are publicized in good faith and without malice.” The Supreme Court noted that it has consistently declined to extend absolute privilege to lower-level executive branch officers, and concluded that nothing in the record suggests that the application of qualified privilege will prevent law enforcement agencies from investigating, hiring, and retaining highly qualified police officers. Minke v. City of Minneapolis, N.W.2d (Minn. 2014).

EMINENT DOMAIN
Attorney fees

Property owners appealed, challenging the district court’s reduction of their requested attorney fees in an eminent domain proceeding, arguing that the district court was precluded from considering the amount of damages involved and the results obtained in determining the reasonableness of their request. The property owners were entitled to attorney fees, expenses, and costs under state statute because the final award of compensation was more than 40 percent greater than the county’s last written offer before it filed the condemnation petition. The county challenged the property owners’ motion for fees, but did not submit evidence to rebut the property owners’ evidence. The Minnesota Court of Appeals held that the fact that the property owners were entitled by statute to an award of reasonable attorney fees does not preclude a district court from considering the amount of damages involved and the results obtained— including a comparison of the difference between the dam¬ages sought and the damages offered to the amount finally awarded—as a factor in determining the reasonableness of the requested fees. However, the Court of Appeals reversed the district court’s decision reducing the requested fees because there was no support in the record for the findings of fact that the district court relied on to conclude that the requested fees were unreasonable. County of Scott v. Johnston, 841 N.W.2d 357 (Minn. Ct. App. 2013).

CONSTITUTIONAL LAW
First Amendment

Scheffler went to City Hall to ask Molin, the city building inspector, about a stop-work order he had issued on the property of Scheffler’s friend. Molin yelled at Scheffler, called him a “criminal,” and accused him of living at the property unlawfully. After Scheffler urged Molin to calm down, Molin walked into the lobby and escorted Scheffler to the door, placing a hand on Scheffler’s shoulder but with no physical force. Scheffler quickly returned and requested a form on which he could file a complaint against Molin. Molin instructed a city employee to call the police. Scheffler responded that all he wanted was a complaint form, and he left after he received the contact information for Molin’s supervisor. Scheffler later called the city to file a complaint, and the city subsequently disciplined Molin. Scheffler sued Molin pursuant to 42 U.S. Code, section 1983, claiming that Molin retaliated against him when he was attempting to exercise his First Amendment rights. The district court granted summary judgment in Molin’s favor. The 8th U.S. Circuit Court of Appeals affirmed and held that while Molin’s conduct was disrespectful, it did not violate Scheffler’s First Amendment rights, and noted that Scheffler did, in fact, successfully exercise his First Amendment right to file a complaint against Molin. Scheffler v. Molin, 743 F.3d 619 (8th Cir. 2014). Note: LMCIT represented the city building inspector.

CONSTITUTIONAL LAW
Equal protection

In Kansas City, a taxi permit is required to pick up passengers. In 2005, the city adopted an ordinance limiting the number of taxi permits to 500. At the time, there were 554 permits; therefore, no new permits would be issued until the number of permits dropped below 500. Additionally, the ordinance required that new applicants could only be permitted if they apply for a package of at least 10 permits. As a result, if the number of permits dropped to 499, only existing permit holders could get the one available taxi permit, and in order for a new driver or company to enter the market, the total permits must drop to 490 or fewer. Two cabdrivers and the Kansas City Taxi Cab Drivers Association sued to overturn the ordinance, claiming it violates the Equal Protection Clause of the U.S. Constitution. The district court granted summary judgment in the city’s favor. The 8th U.S. Circuit Court of Appeals affirmed, holding that the ordinance was rationally related to a legitimate government purpose of creating incentives to invest in infrastructure and in increasing quality in the taxi¬cab industry. The 8th Circuit noted that cab drivers are not a suspect class and that driving a cab is not a fundamental right; therefore, the ordinance would survive an equal protection challenge so long as there was any conceivable state of facts that could provide a rational basis for the classification. Kansas City Taxi Cab Drivers Assoc. v. City of Kansas, 742 F.3d 807 (8th Cir. 2013).

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

Read the July-August 2014 issue of Minnesota Cities Magazine

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