HUMAN RESOURCES
Privileged communication

McBee v. Team Industries, A23-1876 (Minn. Oct. 29, 2025)

The facts: Thaleaha McBee was terminated from Team Industries after reporting back problems to staff and receiving a 10-pound lifting restriction. Team did not attempt to accommodate her condition. After termination, McBee applied for unemployment benefits with the Minnesota Department of Employment and Economic Development (DEED). DEED sent Team a questionnaire to determine if McBee qualified for benefits. As part of the questionnaire, Team stated that it did not try to make accommodations for McBee because she claimed that she could suffer paralysis by simply looking up, and the company did not want to risk liability for aggravating her injury.

The type of case: McBee filed a complaint against Team alleging that it violated the Minnesota Human Rights Act (MHRA) for failure to reasonably accommodate her disability. At trial, the district court granted Team’s motion to exclude the DEED questionnaire from evidence under Minnesota Statutes, section 268.19, subdivision 2(c), which makes information created solely for unemployment benefit determinations “absolutely privileged” and inadmissible in any civil proceeding held outside that administrative case. The district court and court of appeals both ruled in Team’s favor. McBee appealed to the Minnesota Supreme Court.

The issues: The court considered whether Minnesota Statutes, section 268.19 bars the use of documents like the DEED questionnaire in a disability discrimination case filed under the MHRA.

The court’s ruling: The court ruled that the phrase “absolutely privileged” in the statue protects employers from liability for information provided to DEED, such as a defamation claim, but does not make the information inadmissible in court. The protection applies to civil liability, not to evidentiary use in unrelated cases.

What this means for cities: Cities should recognize that information provided to DEED regarding unemployment benefits could be admissible and used against the city in other types of litigation.

CIVIL RIGHTS
Mass-arrest, qualified immunity

Kampas v. City of St. Louis, No. 24-2431 (8th Cir. Oct. 31, 2025)

The facts: After an adverse verdict in a police shooting case, a crowd of protesters blocked Interstate 64 in St. Louis, Missouri, by marching in the roadway. The plaintiffs attended the protest as “legal observers” to document police conduct and gather evidence for future litigation. The plaintiffs were not on the freeway, and remained lawfully at the base of an off-ramp while protesters occupied the freeway.

When protesters exited the roadway, they surrounded the plaintiffs, who then followed the protestors off the freeway. Police waited for the protesters to exit the freeway, surrounded them, and began arrests. The plaintiffs told officers they had not been on the interstate and asked to leave, but their requests were denied, and they were arrested. None of the arrested protestors were ultimately charged with a crime.

The type of case: The plaintiffs sued the city under 42 U.S.C. Section 1983 for violating their First and Fourth Amendment rights. They claimed police unlawfully seized them and retaliated against them for exercising their free speech rights. The district court granted the city’s motion for summary judgment (court-ordered judgment without a trial) finding the officers were entitled to qualified immunity. Law enforcement officers are entitled to qualified immunity when their actions do not violate a clearly established statutory or constitutional right.

The issues: The Eighth Circuit Court of Appeals reviewed whether the police officers had actual or arguable probable cause to arrest the plaintiffs and whether the arrests were retaliatory in violation of the First Amendment.

The court’s ruling: The court determined that officers do not violate an individual’s rights if they have arguable probable cause to make the arrest. The court ruled that it was objectively reasonable for officers to conclude that the marching protestors acted as a unit and that the plaintiffs, who had not clearly separated themselves from the group, were part of the unit that had unlawfully blocked the freeway. Because officers had arguable probable cause to arrest the plaintiffs as part of the trespassing group, the plaintiffs’ failed to establish a retaliatory arrest claim.

What this means for cities: When making mass arrests, officers are not required to make individual determinations of probable cause if it is reasonable to assess the group as a whole.

COUNCIL AUTHORITY
Utility rates

Moline Machinery, LLC v. City of Duluth, A25-0205 (Minn. Ct. App. Sept. 8, 2025)

The facts: The City of Duluth operates a stormwater utility and charges user fees on residential and nonresidential property owners to fund its operation and maintenance consistent with state law and city ordinance. The fees are based on the amount of impervious area (any surface that prevents stormwater from soaking into the ground) on each property. The city calculates charges using an equivalent residential unit (ERU) value, which represents the average impervious surface area of various residential properties, such as single-family, multifamily, townhome, condominium, and mobile-home residences. For nonresidential properties, the city divides the parcel’s square footage of impervious surface area by the ERU value to determine fees.

The type of case: Nonresidential property owners filed a class action lawsuit against the city for unjust enrichment and the taking of private property without just compensation. They alleged that the city had overcharged them for stormwater utility fees and undercharged certain multifamily properties that received fee discounts. The district court granted the city’s motion for summary judgement (court-ordered judgment without a trial).

The issues: The Minnesota Court of Appeals reviewed whether there were material facts in dispute regarding whether the city’s rate structure was just and equitable.

The court’s ruling: The court recognized that cities have broad legislative authority to set utility rates. However, it found that Duluth provided discounts to the ERU value to multifamily properties based on building height (number of stories) without specific authorization in the city’s code. Because these discounts resulted in a higher rate for commercial properties, the court concluded that there was a genuine issue of material fact as to whether the rates were just and reasonable, creating a potential for unjust enrichment. The court also ruled that because the fees were collected to cover the city’s costs, they did not amount to a taking under the Minnesota Constitution.

What this means for cities: Courts generally defer to cities when setting utility rates, but any adjustments must be authorized by city code to avoid challenges of unfair or inequitable rate structures.

Written by Kyle Hartnett, assistant research manager with the League of Minnesota Cities. Contact: [email protected] or (651) 215-4084.