Back to the Jul-Aug 2019 issue

Court: State Law Does Not Preempt City’s Minimum Wage Ordinance


Preemption of local authority
Graco, Inc. sought a declaratory judgment in district court that the City of Minneapolis’ Minimum Wage Ordinance, which generally mandates that employers pay minimum wages higher than those state law requires, is invalid because state law preempts it, under both a conflict and implied-preemption analysis. Graco also sought a permanent injunction prohibiting the city from enforcing the ordinance. The district court issued two orders favorable to the city. The first denied the request for a temporary injunction. The second denied the request for a permanent injunction and dismissed the claim. The Minnesota Court of Appeals affirmed the district court’s decision and held that a municipal ordinance that sets a higher minimum wage than that required by state law does not conflict with and is not impliedly preempted by the Minnesota Fair Labor Standards Act. Graco, Inc. v. City of Minneapolis, N.W.2d (Minn. Ct. App. 2019). Note: The League of Minnesota Cities filed an amicus curiae brief in the city’s support. Graco, Inc. has filed a Petition for Review with the Minnesota Supreme Court.


Nonconforming uses
AIM Development, LLC specializes in the demolition of structures and metal recycling. AIM currently owns a landfill in the City of Sartell that previously operated as a landfill for a paper mill and that was operating as a nonconforming use when AIM purchased the property in January 2013. The property’s previous owner had received a permit in 1984 from the Minnesota Pollution Control Agency (MPCA) to construct and operate an industrial solid waste land disposal facility on the property. The 1984 permit provided for a 70-acre site, and only authorized the deposit of nonhazardous industrial waste. In 1989, the city amended its zoning ordinance, making nonhazardous landfills a nonpermitted use of the land where the landfill was located. The landfill continued to operate as a legal nonconforming use, collecting waste generated exclusively in conjunction with the paper mill’s operation.

When AIM purchased the property in 2013, the MPCA transferred the property’s permit to AIM, providing that the facility could only accept certain types of waste, and that no waste from any location other than the paper mill could be deposited in the landfill. In January 2014, AIM applied to the MPCA, seeking authority to deposit waste generated from operations outside the site. The city objected to AIM’s application, and a dispute arose between AIM and the city regarding whether AIM could accept waste from outside sources. The district court granted summary judgment in the city’s favor.

The Minnesota Court of Appeals affirmed the district court’s decision and held that “AIM’s proposed expansion of the landfill constitutes an impermissible expansion of the prior nonconforming use.” The Court of Appeals reasoned that a landowner’s right to continue the prior nonconforming use is determined by the uses allowed under the terms of the permit transferred to the landowner at the time the property is purchased. AIM Development (USA), LLC v. City of Sartell, N.W.2d (Minn. Ct. App. 2019). Note: The League of Minnesota Cities Insurance Trust represented the city. AIM has filed a Petition for Review with the Minnesota Supreme Court.


In January 2013, the City of Duluth and Midway Township executed an orderly annexation agreement, as authorized under state law. The agreement designated certain land in Midway Township as the orderly annexation area and adopted conditions regarding Duluth’s annexation of land in this area. Midway Township abuts both the cities of Duluth and Proctor. In August 2014, Proctor adopted an ordinance seeking to annex property within the orderly annexation area, based on the property owners’ petition requesting annexation of their 92-acre property. Duluth objected to Proctor’s proposed annexation by ordinance, claiming that the property was not eligible for such an annexation because it is subject to the orderly annexation agreement. In October 2016, the chief administrative law judge for the Office of Administrative Hearings issued an order that approved Proctor’s annexation by ordinance. Duluth and Midway Township appealed.

The district court vacated the order, concluding that once property is subject to an orderly annexation agreement, it cannot subsequently be annexed by ordinance. The Minnesota Court of Appeals reversed the district court’s decision and held that a nonparty to an orderly annexation agreement may annex real property within a designated orderly annexation area through an annexation-by-ordinance proceeding. The Minnesota Supreme Court affirmed the Court of Appeals’ decision and held that an orderly annexation agreement does not preclude an otherwise lawful annexation by ordinance by nonparties to the agreement. In re the Matter of the Annexation of Certain Real Property to the City of Proctor from Midway Twp., N.W.2d (Minn. 2019).


Procedural due process
Megan Olson was arrested for driving while impaired (DWI) on Aug. 16, 2015. Because of past convictions, she was charged with first-degree DWI, which is a “designated offense” under Minnesota Statutes, section 169A.63, a statute authorizing the civil forfeiture of vehicles used in certain criminal offenses. Forfeiture laws generally give the state the right to seize property associated with crimes and assume its ownership. Police seized the vehicle Megan was driving. Megan was the vehicle’s primary driver, but her mother, Helen Olson, is its registered owner. The state notified both Megan and Helen of its intent to forfeit the vehicle.

On Oct. 7, 2015, the Olsons filed a timely demand for a judicial determination of the proposed forfeiture. The forfeiture trial date was rescheduled six times, pending the outcome of Megan’s related criminal matter. The forfeiture statute provides that a judicial determination must be held “at the earliest practicable date, and in any event no later than 180 days following the filing of the demand by the claimant.” But it also provides that, if “a related criminal proceeding is pending, the hearing shall not be held until the conclusion of the criminal proceedings.”

On Oct. 12, 2016, Megan pleaded guilty to first-degree DWI. On Oct. 14, 2016, the Olsons made a motion for summary judgment in the forfeiture action, claiming a violation of their constitutional right to procedural due process under the U.S. and Minnesota Constitutions. A forfeiture hearing took place on Feb. 23, 2017. The district court granted summary judgment in favor of the Olsons, concluding that the statute did not provide for meaningful review after a prehearing vehicle seizure, and, therefore, was unconstitutional on its face (unconstitutional in every application). The Minnesota Court of Appeals affirmed, ruling that the statute was not unconstitutional on its face, but was unconstitutional as applied in this situation because Megan and Helen were denied prompt, post-deprivation judicial review of the forfeiture for over 18 months.

The Minnesota Supreme Court affirmed the Court of Appeals’ decision in part and reversed it in part. The Supreme Court held that the statute is not unconstitutional on its face because it could provide adequate due process in some cases. The Supreme Court also concluded that the statute, as applied here, provided adequate due process to Megan Olson, as the nonowner driver of the vehicle, but did not provide adequate due process to Helen Olson, as the vehicle’s alleged innocent owner. Finally, the Supreme Court concluded that the vehicle should be returned to Helen Olson. Olson v. One 1999 Lexus, 924 N.W.2d 594 (Minn. 2019).


Minnesota Human Rights Act claim
Keith Daniel worked as a firefighter for the City of Minneapolis for 14 years and had several work-related injuries, including injuries to his right ankle and to his shoulders. Daniel sued the city under the Minnesota Human Rights Act (MHRA), even though he had received workers’ compensation benefits for his injuries. In the suit, he alleged that while he was working for the Fire Department, the city had discriminated against him by failing to accommodate his disability and by retaliating against him for seeking an accommodation. Daniel’s requested accommodation was to wear doctor-prescribed flat footwear that was different from the department-required station shoes with heels.

The city moved for summary judgment, arguing that Daniel’s claims were barred by the exclusivity provision in the Workers’ Compensation Act. The district court denied the city’s request for summary judgment. The Minnesota Court of Appeals reversed the district court’s decision. The Minnesota Supreme Court reversed the Court of Appeals’ decision and held that an employee can pursue claims under both the Workers’ Compensation Act and the MHRA, reasoning that each act provides a distinct cause of action for a different type of injury. Daniel v. City of Minneapolis, 923 N.W.2d 637 (Minn. 2019).

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