The Murr family owns two adjacent lots along the Wisconsin side of the St. Croix River. They wanted to sell one of the lots to fund the development of the other lot, but state and local regulations contain a merger provision that prohibits the individual development or sale of adjacent, non-conforming lots under common ownership if they are each less than one acre. But the regulations treat adjacent lots of less than an acre as single, buildable lots if they are separately owned. The Murrs sought a variance from the regulations, which was denied. They then sued, arguing that the regulations effectively resulted in an unconstitutional taking of the lot that they were prohibited from selling, in violation of the Fifth Amendment of the U.S. Constitution.
The Wisconsin County Circuit Court and the Wisconsin Court of Appeals ruled against the Murrs, holding that a regulatory taking had not occurred. The U. S. Supreme Court affirmed, holding that the Murrs’ two lots should be analyzed as a single parcel of land for purposes of determining whether the regulations imposed so great a burden that they resulted in the taking of property. The Supreme Court also held that courts should apply a three-factor test to determine the “relevant parcel” for a regulatory-takings claim. First, courts should give substantial weight to how the land is bounded and divided under state and local law. Second, courts should look to the physical characteristics of the property. Third, courts should assess the value of the property under the challenged regulation, paying special attention to the effect of the regulated land on the value of other holdings.
Applying this three-factor test, the Supreme Court concluded that no regulatory taking had occurred because the Murr family had not been deprived of all economically beneficial use of their property; the limitation on separating smaller lots was a reasonable land use regulation; and the economic impact on the Murrs was not severe, given that they could build a larger structure on the combined lots. Murr v. Wisconsin[/], 137 S.Ct. 1933 (2017).
RENTAL HOUSING INSPECTIONS
Administrative search warrants
The City of Golden Valley’s licensing ordinance requires the periodic inspection of rental housing to ensure it complies with minimum housing and building standards in city code and state law. The city’s practice has been to require an inspection once every three years. After the landlords and two tenants of rental housing withheld consent for an inspection, the city petitioned for an administrative search warrant, which was denied based on the district court’s conclusion that criminal-type probable cause, based on an “objective, articulable suspicion of a code violation,” was required. The city appealed, claiming that under the U.S. Supreme Court’s precedent in Camara v. Municipal Court of San Francisco, there is sufficient probable cause for the issuance of an administrative search warrant for the inspection of rental housing if “reasonable legislative or administrative standards are satisfied with respect to a particular dwelling,” and that such standards can relate to “the passage of time.”
The Minnesota Court of Appeals ruled in the city’s favor. The Minnesota Supreme Court affirmed, holding that individualized suspicion of a code violation is not required and that there is no principled basis for interpreting article I, section 10 of the Minnesota Constitution to provide greater protection than the Fourth Amendment to the U.S. Constitution in the context of rental housing inspections. The Supreme Court also held that an ordinance authorizing rental housing inspections must contain reasonable standards and that on a petition for an administrative warrant, absent an emergency or other compelling need, tenants shall be given notice of the petition and the opportunity to be heard at a hearing. Finally, the Supreme Court noted that a court issuing an administrative warrant shall consider whether it should include reasonable restrictions on the inspection, including timing, scope, and authorized participants, to protect tenants’ privacy interests. City of Golden Valley v. Wiebesick, 899 N.W.2d 152 (Minn. 2017). Note: The League of Minnesota Cities filed an amicus brief in the city’s support.
Minnesota Whistleblower Act
James Friedlander sued his former employer, Edwards Lifesciences, claiming it terminated him in retaliation for reports he made to his supervisor about his employer’s alleged illegal conduct involving deceptive trade practices. Edwards Lifesciences moved to dismiss the lawsuit, claiming that Friedlander’s reports were not made in “good faith,” as required by the Minnesota Whistleblower Act, based on the Minnesota Supreme Court’s interpretation of that phrase in Obst v. Microtron, Inc. In 2000, the Supreme Court held in Obst that to act in “good faith,” within the meaning of the Whistleblower Act, an employee must act with the purpose of exposing an illegality. But in 2013, the Legislature amended the Whistleblower Act to add a statutory definition for the phrase “good faith” to mean a statement or disclosure that is not knowingly false or made in reckless disregard of its truth.
Friedlander argued that the 2013 amendment eliminated any consideration of an employee’s motivation for reporting illegal conduct. The federal district court decided to certify to the Minnesota Supreme Court the question of whether the 2013 amendment eliminated the judicially created requirement that an employee must act with the purpose of exposing an illegality. The Minnesota Supreme Court answered the certified question in the affirmative, holding that the 2013 legislative amendment eliminated the requirement that the Supreme Court had adopted in Obst. Friedlander v. Edwards Lifesciences, LLC, N.W.2d (Minn. 2017).
FAIR HOUSING ACT
Disparate impact claim
A group of for-profit, low-income landlords sued the City of Minneapolis, arguing that the city’s heightened enforcement of its facially neutral housing and rental policies, had a “disparate impact” (adverse impact) on the availability of housing for classes of individuals protected under the Fair Housing Act. Under the Act, it is unlawful to “refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.”
The city moved for judgment in its favor, arguing that the court pleadings failed to state a valid disparate impact claim. The federal district court granted the motion. The 8th U.S. Circuit Court of Appeals affirmed, holding that the landlords had failed to produce proper evidence to demonstrate a causal connection between the city’s policies and the alleged discriminatory disparate impact, reasoning that a plaintiff must, at the very least, point to an “artificial, arbitrary, and unnecessary” policy causing the problematic disparity. Ellis v. City of Minneapolis, 860 F.3d 1106 (8th Cir. 2017).
Free speech rights
The Village of Twin Oaks, a small village in St. Louis County, Missouri, passed an ordinance prohibiting all commercial activity in its neighborhood park without a permit. The permit fee is $100. The permit process requires the Village Board to consider the risk of damage to the park, any disruptive effects on typical park use, the potential congestion caused by the activity, and the nature of the activity itself. The ordinance allows for automatic approval of events lasting less than one hour, having fewer than 10 people, and with 48 hours’ notice. The ordinance was adopted in response to commercial traffic in the park and resident complaints. Commercial photographers (as many as eight at a time) were competing for shooting locations within the park. Wedding parties would congregate for photos on the park bridge. Photo subjects would occupy the park restroom facilities, using them as dressing rooms. Some photographers would even set up outdoor studios in the park for shooting multiple subjects in assembly-line fashion.
A commercial photographer, Josephine Havlak, sued the village for injunctive and declaratory relief, on behalf of herself and her business, alleging that the ordinance violates her Free Speech rights guaranteed by the First Amendment of the U.S. Constitution. The federal district court ruled in the village’s favor. The 8th U.S. Circuit Court of Appeals affirmed, reasoning that the ordinance is constitutional because it is content-neutral, has been narrowly tailored to serve the village’s significant governmental interests of reducing congestion and maintaining park safety, leaves ample alternatives for Havlak to communicate her message, and does not provide the village with unbridled discretion to approve or deny permits. Josephine Havlak Photographer, Inc. v. Village of Twin Oaks, 864 F.3d 905 (8th Cir. 2017).
Written by Susan Naughton, research attorney with the League of Minnesota Cities. Contact: email@example.com or (651) 281-1232.
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