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27-CV-13-13029

Filed in Fourth Judicial District Court 11/12/2013 7:23:45 PM Hennepin County Civil, MN

STATE OF MINNESOTA

DISTRICT COURT

COUNTY OF HENNEPIN FOURTH JUDICIAL DISTRICT _________________________________________________________________________________ Doug Mann, Petitioner, v. Minneapolis City Council, Respondent. _________________________________________________________________________________ The above-captioned matter came before the undersigned Judge of District Court on August 20, 2013 for a hearing on the Petition for Writ of Mandamus filed by Petitioner Doug Mann. With the Courts permission, Petitioner filed a supplemental brief on August 26, 2013, whereupon the record was closed and the matter was submitted. Petitioner was self-represented. Respondent was represented by Peter W. Ginder, Esq. Based upon all the files, records, and proceedings herein, the Court makes the following: ORDER 1. The Petition for a Writ of Mandamus is DENIED. 2. The Petition for a Writ of Mandamus is dismissed. LET JUDGMENT BE ENTERED ACCORDINGLY.

Court File No. 27-CV-13-13029 The Honorable Philip D. Bush ORDER DISMISSING PETITION FOR WRIT OF MANDAMUS

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3. The attached Memorandum is made a part hereof.

BY THE COURT:
Si gPl us1

Dated: 11/12/13

11/ 12 / 2 0 13 0 5 : 3 1: 3 9 pm

Philip D. Bush Judge of District Court

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MEMORANDUM This matter is before the Court for a hearing on the Petition for a Writ of Mandamus filed by Petitioner. For the reasons set forth below, the Petition for a Writ of Mandamus is denied and dismissed. I. Background

Petitioner has petitioned the Court for a writ of mandamus compelling Respondent Minneapolis City Council to place on the ballot in the next general election on November 5, 2013 the question of whether the City of Minneapolis shall accept obligations imposed upon it by the Vikings Stadium Act of 2012. a. City Charter In 1997, voters in the City of Minneapolis (City) amended the City Charter to include the following provision requiring a referendum if more than $10 million dollars in city resources is to be used to finance a professional sports facility: The City of Minneapolis, Minneapolis Community Development Agency, or any city department, agency, commission, or board, shall use no city resources over $10 million dollars for the financing of professional sports facilities without the approval of a simple majority of the votes cast on the question, in a ballot question put to the public at the next regularly scheduled election. City resources are defined for these purposes as: Tax increment financing, bonds, loans, land purchase or procurement, land or site preparation, including necessary infrastructure such as roads, parking development, sewer and water, or other infrastructure development, general fund expenditures, sales tax or other taxes, deferred payments, interest free or below market interest rate loans, the donation or below market value sale of any city resources or holdings or any other free or below cost city services. The ballot question shall not be put before the public in a special election, in order to prevent the costs associated with special elections. Minneapolis, Minn., City Charter, ch. 15, 13 (emphasis added). Since 1973, the City Charter has included a provision requiring a referendum if the City is to incur more than $15 million in debt or other obligations for any capital 1

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improvement. See Minneapolis, Minn., City Charter, ch. 15, 9. That provision states in pertinent part: [W]here, with respect to any and all types and forms of obligation or indebtedness authorized by this Charter and by the laws of the State of Minnesota, the aggregate amount of any such obligations or indebtedness to be issued or incurred for any improvement, including but not limited to acquisition, development, construction or betterment, of any public building, stadium, or other capital improvement project, shall in all phases from inception to completion exceed Fifteen Million Dollars ($15,000,000.00), the Board of Estimate and Taxation shall not issue or sell any bonds or other obligations nor incur any indebtedness for such purpose without the approval of a majority of the electors voting on the question of issuing such obligations or incurring such indebtedness at a general or special election. Id. b. Stadium Legislation In 2012, the Minnesota legislature enacted legislation (Stadium Legislation) providing for a new National Football League stadium (Stadium) in Minnesota. See 2012 Minn. Laws, ch. 299. The Stadium is to be built in the City at the site of the Hubert H. Humphrey Metrodome. See id., art. 1, 10, 14. Under the Stadium Legislation, the cost of building the Stadium is split between three entities. The owner of the Minnesota Vikings1 must contribute at least $477 million to building costs. See id., art. 1, 19. The State of Minnesotas share is limited to $348 million of the building costs. See id., art. 1, 15. The Citys share is limited to $150 million of the building costs. See id. In addition to its share of the building costs, the City is ultimately responsible for (1) a share of the Stadiums operating expenses

The Minnesota Vikings are the National Football League team that will be playing in the Stadium. See 2012 Minn. Laws, ch. 299, art. 1, 10.
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with the Citys share set to begin at $6 million per year2 and (2) an annual contribution to the Stadiums capital improvement fund with the Citys contribution set to begin at $1.5 million per year. 3 See id., art. 1, 18, art. 3, 1. The Citys share of the building costs and operating expenses and its contributions to the capital improvement fund are to be funded by various sales taxes that must be imposed by the City, including a sales tax of up to half a percent on taxable sales within the City, a sales tax of up to three percent on certain sales of intoxicating beverages, a sales tax of up to three percent on certain short-term lodging, and a sales tax of up to three percent on certain food sales. See id., art. 3, 1-3. The revenue generated by those sales taxes is collected by the Commissioner of Revenue, who retains enough revenue to satisfy the Citys obligations for building costs, operating expenses, and capital improvements and makes various other deductions (e.g., collection costs). See id., art. 3, 1-2 ; see also Minn. Stat. 297A.61, subd. 11 (defining commissioner). The balance of the revenue is remitted to the City, which may use the excess revenue . . . to fund capital projects to further residential, cultural, commercial, and economic development in both downtown Minneapolis and the Minneapolis neighborhoods, to fund other city expenditures in support of the basketball arena, other capital projects, or for other economic development, provided the city may direct excess revenue first to convention center debt, operations, capital improvements, and marketing. Id., art. 3, 2.

Over the 30-year term of the lease required by the Stadium Legislation, see id., art. 1, 19, the Citys share of the Stadiums operating expenses will total no less than $180 million. 3 Over the 30-year term of the lease required by the Stadium Legislation, the City will have contributed no less than $45 million to the capital improvement fund.
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The Stadium Legislation contained the following provision entitled Charter Limitations, Requirements Not To Apply: Any amounts expended, indebtedness, or obligation incurred including, but not limited to, the issuance of bonds, or actions taken by the city under this act, are deemed not an expenditure or other use of city resources within the meaning of any law or charter provision. The city may exercise any of its powers under this act to spend, borrow, tax, or incur any form of indebtedness or other obligation for the improvement, including, but not limited to, acquisition, development, construction, or betterment of any public building, stadium, or other capital improvement project, without regard to any charter limitation, requirement, or provision, including any referendum requirement. Any tax exemption established under this act shall be deemed not an expenditure or other use of city resources within the meaning of any charter provision. Id., art. 3, 4. Article 3 of the Stadium Legislation contained the following provision regarding local approval: This article is effective the day after the governing body of the city of Minneapolis and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3. Notwithstanding any law to the contrary, the city of Minneapolis and its chief clerical officer have 30 calendar days following final enactment of this act, to comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3. Id., art. 3, 7. Under the designated statute, local approval is accomplished by resolution adopted by a majority vote of all members of the governing body of the unit unless another method of approval is specified by the particular special law. Minn. Stat. 645.021, subd. 2. On May 25, 2012, the City Council, by a vote of 7-6, and the Mayor approved the Stadium Legislation. (Ginder Aff. Ex. A.) On June 4, 2012, the City Clerk filed a Certificate of Approval with the Secretary of State in compliance with Minn. Stat. 645.021, subd. 3. (Ginder Aff. Ex. A.)

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II.

Analysis

Mandamus is an extraordinary remedy that is available only to compel a duty clearly required by law. Northern States Power Co. v. Minnesota Metro. Council, 684 N.W.2d 485, 491 (Minn. 2004) (internal citation omitted). To obtain a writ of mandamus, the petitioner must show that (1) the respondent failed to perform an official duty clearly imposed by law; (2) as a result, the petitioner suffered a public wrong specifically injurious to the petitioner; and (3) there is no other adequate legal remedy. a. Did Respondent Fail to Perform an Official Duty Clearly Imposed by Law? Petitioner maintains that Respondent failed to perform an official duty clearly imposed by law by not holding a referendum on the Stadium Legislation as allegedly required by both Sections 9 and 13 of Chapter 15 of the City Charter. i. Section 13 Whether Chapter 15, Section 13 of the City Charter (Section 13) required Respondent to hold a referendum on the Stadium Legislation raises two underlying issues. First, does the Stadium Legislation entail the use of more than $10 million in city resources for the financing of a professional sports facility, such that Section 13 is applicable? Second, if Section 13 is applicable, was it preempted by the Stadium Legislation? On the first issue, Respondent argues that Section 13 does not apply because the Stadium Legislation does not entail the use of city resources. In making this argument, Respondent notes that the dictionary definition of resource sometimes denotes availability. With that definition in mind, Respondent maintains that the 5

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sales tax revenue funding the Stadium does not constitute a city resource because the revenue is never available to the City insofar as the Stadium Legislation requires that portion of the sales tax revenue funding the Stadium to be deposited into the states general fund. That argument is unavailing in several respects. Most notably, the Court cannot discern any need for turning to a dictionary definition of resource when the City Charter itself defines city resources for purposes of Section 13. Specifically, for purposes of Section 13, the City Charter defines city resources to include sales tax or other taxes. Minneapolis, Minn., City Charter, ch. 15, 13 (emphasis added). Since Section 13 defines city resources to include sales tax or other taxes, the voters who adopted Section 13 in 1997 must have intended the definition of city resources to include revenue generated by a sales tax that applies solely within the City. The voters intent is not undone simply because the statutory mechanism for collecting and directing the sales tax revenue funding the Stadium precludes the City from using that revenue for any other purpose.4 Respondents argument is likewise unavailing given a curious dichotomy. According to Respondent, the sales tax revenue used to fund the Stadium is not a city resource because, given the dictates of the Stadium Legislation, those funds are never available to the City. Under the Stadium Legislation, any excess sales tax revenue is remitted to the City, which may use the excess revenue for various purposes. See 2012

Similarly, with respect to the provision of the Stadium Legislation stating that any amounts expended by the City are not an expenditure or other use of city resources within the meaning of any law or charter provision, 2012 Minn. Laws, ch. 299, art. 3, 4, the intent of the Minneapolis voters and what is meant by city resources is not to be decided by the legislature. The legislature may have authority to preempt the City Charter, but they do not have authority to interpret it. Interpretation of the law is the domain of the judiciary.
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Minn. Laws, ch. 299, art. 3, 1-2. The excess sales tax revenue is thus available to the City and meets the definition of city resource posited by Respondent. Accordingly, Respondents position necessarily implies a curious dichotomy whereby some portions of the sales tax revenue are a city resource and other portions of it are not. That dichotomy undermines Respondents argument in the following way: (1) were it not for the Citys obligation to fund the Stadium, all of the sales tax revenue would constitute a city resource; (2) accordingly, by approving of the Stadium Legislation, the City surrendered well in excess of $10 million in city resources for purposes of funding the Stadium; and (3) by surrendering city resources for that purpose, the City used it for that purpose. Any resource, once expended, is no longer available to the person who expended it. The expenditure of it and its subsequent unavailability does not mean that it was never a resource for the person who expended it. On that point, Respondent might argue that the sales tax revenue would not exist in absence of the Stadium Legislation. However, the sales tax revenue would exist in absence of the Stadium Legislation because the sales taxes were already authorized by 1986 Minn. Laws, ch. 396, 4-5. Moreover, that law was amended in 2009 to allow the City to use some of the sales tax revenue for more expansive purposes. See 2009 Minn. Laws, ch. 88, art. 4, 12. Accordingly, in absence of the Stadium Legislation, the City would still have enjoyed the sales tax revenue as a resource. The Stadium Legislation, construed as a whole, further undermines Respondents argument that the sales tax revenue is not a city resource by virtue of the statutory mechanism for collecting the revenue and directing a portion of it toward

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the Stadium. The Stadium Legislation undermines that argument because it rests on the premise that the City is responsible for a share of the funding. Specifically, the Stadium Legislation provides: The state share of stadium costs shall be limited to $348,000,000 for construction of a new stadium, as permitted under section 16A.726. The city of Minneapolis share shall be limited to no more than a $150,000,000 contribution for construction, and the annual operating cost and capital contributions contained under section 473J.13. 2012 Minn. Laws, ch. 299, art 1, 15. If the City has a share of the funding, then city resources must be in play. Similarly, the Stadium Legislation refers to the sales tax as a tax imposed by the City. See, e.g., id., art. 3, 1. Revenue generated by a tax imposed by the City naturally constitutes a city resource. Lastly, constitutional limitations on local taxes undermine Respondents argument that the sales tax revenue is not a city resource. Under Section 1, Article 9 of the Minnesota Constitution, a tax cannot be imposed exclusively on any subdivision of the State, to pay an indebtedness or claim which is not peculiarly the debt of such subdivision, or to raise money for any purpose not peculiarly for the benefit of such subdivision. Sanborn v. Rice Cnty. Commrs, 9 Minn. 273, 278 (1864). This limitation further establishes that revenue generated by a city-specific sales tax is a city resource, not a resource of the state, insofar as the benefits of that revenue must inure to the city. For the reasons set forth above, the Court concludes that, within the meaning of Section 13 of the City Charter, the Stadium Legislation entails the use of more than $10 million in city resources for the financing of a professional sports facility. Section 13 is thus applicable. The Court thus turns to the issue of whether Section 13 was preempted by the Stadium Legislation.

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Under the Minnesota Constitution, municipalities possess no inherent powers and are purely creatures of the legislature. See Breza v. City of Minnetrista, 725 N.W.2d 106, 110 (Minn. 2006) (citing Minn. Const. art. XII, 3). Nevertheless, a city governed by a home rule charter, such as the City of Minneapolis, enjoys as to local matters all the powers of the state, except when those powers have been expressly or impliedly withheld. Nordmarken v. City of Richfield, 641 N.W.2d 343, 347 (Minn. Ct. App. 2002). Given the States authority to withhold powers from a home rule charter city, the legislature may preempt charter authority on matters of state concern. Id. at 348 (citing State ex rel. Town of Lowell v. City of Crookston, 252 Minn. 526, 91 N.W.2d 81, 83-84 (1958)). Here, in enacting the Stadium Legislation, the legislature preempted the referendum requirement in Section 13 of the City Charter via the following provision: The city may exercise any of its powers under this act to spend, borrow, tax, or incur any form of indebtedness or other obligation for the improvement, including, but not limited to, acquisition, development, construction, or betterment of any public building, stadium, or other capital improvement project, without regard to any charter limitation, requirement, or provision, including any referendum requirement. 2012 Minn. Laws, ch. 299, art. 3, 4 (emphasis added). On the issue of preemption, Petitioner raises two arguments in support of his position that Section 13 still requires a referendum. First, Petitioner argues that the Stadium Legislation does not evince any intent to repeal Section 13 of the City Charter. Petitioner is correct in noting that the legislature has not expressed any intent to repeal Section 13. However, repeal is not the issue. The issue is whether the legislature intended to preempt the requirements of Section 13 with respect to the Stadium Legislation. The legislature clearly expressed such intent. 9

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Second, Petitioner argues that Section 13 was not properly preempted based on Article 12, Section 2 of the Minnesota Constitution, which provides in pertinent part: The legislature may enact special laws relating to local government units, but a special law, unless otherwise provided by general law, shall become effective only after its approval by the affected unit expressed through the voters or the governing body and by such majority as the legislature may direct. Id. (emphasis added). Petitioners argument that Section 13 was not properly preempted rests on the premise that Article 12, Section 2 of the Minnesota Constitution, by use of the disjunctive or, required the legislature to allow the City to approve the Stadium Legislation through either the voters or the governing body. Petitioner has not cited any case law in support of his reading of Article 12, Section 2. Case law aside, the Court does not interpret Article 12, Section 2 as requiring that the affected government unit be allowed the choice of approving a special law through either the voters or the governing body. Rather, the Court interprets the disjunctive or in Article 12, Section 2 as merely establishing that a special law takes effect upon either form of approval. Here, the Stadium Legislation was approved by the governing body. For the reasons set forth above, the Court concludes that Section 13, though applicable, was preempted by the Stadium Legislation. ii. Section 9 The referendum requirement in Chapter 15, Section 9 (Section 9) of the City Charter, even if applicable, is likewise preempted by the Stadium Legislation and its provision stating that [t]he city may exercise any of its powers under this act to spend, borrow, tax, or incur any form of indebtedness or other obligation for the improvement .

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. . . without regard to any charter limitation, requirement, or provision, including any referendum requirement. 2012 Minn. Laws, ch. 299, art. 3, 4. iii. Preemption Since the Stadium Legislation preempted the referendum requirement in both Sections 9 and 13 of the Stadium Legislation, Respondent did not fail to perform an official duty clearly imposed by law by not holding a referendum on the Stadium Legislation. Accordingly, Petitioner has not satisfied the first requirement for obtaining a writ of mandamus. b. Did the Petitioner Suffer a Public Wrong Specifically Injurious to Him? This requirement is essentially a question of standing. Respondent argues that Petitioner lacks standing because he has not demonstrated that the lack of a referendum on the Stadium Legislation was more injurious to him than any other City resident. In Scinocca v. St. Louis Cnty. Bd. of Commrs, 281 N.W.2d 659, 660 (Minn. 1979), the court held that the plaintiff had standing to institute a mandamus proceeding against St. Louis County to enforce the Town of Canosias zoning ordinances because [p]laintiff, as a resident and taxpayer, ha[d] an interest in ensuring that town zoning ordinances are enforced.5 Given the standard set forth in Scinocca, Petitioner has standing to seek a writ of mandamus because, as a resident of the City, he has an interest in ensuring that Charter requirements giving City residents the right to vote on a particular issue are honored and enforced. In other words, Petitioner is beneficially interested in enforcing
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In Scinocca, the court held that plaintiff had standing under both Minn. Stat. 394.37, subd. 4. and Minn. St. 586.02. Only the latter statute is applicable in this case.

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any right to vote that he may enjoy. See Minn. Stat. 586.02. The second requirement for obtaining a writ of mandamus is thus satisfied. 6 c. Does Petitioner Have Any Other Adequate Legal Remedy? Plaintiff waited over a year from the passage of the Stadium Legislation and the bringing of this mandamus suit. Although many of his arguments challenge the constitutional authority of the Legislature to do what it did Plaintiff denies he is challenging the constitutionality of the Stadium Legislation. One possible alternative remedy would have been to file a lawsuit in Ramsey County challenging the constitutionally of the Stadium Legislation. Plaintiff has chosen not to pursue that option. The third requirement for obtaining a writ of mandamus is thus not satisfied. III. Conclusion

Only the second requirement for obtaining a writ of mandamus is satisfied. However, since the referendum requirement in Sections 9 and 13 of the City Charter is preempted by the Stadium Legislation, Respondent has not failed to perform a duty clearly imposed by law by not holding a referendum on the Stadium Legislation. Accordingly, Petitioner has not satisfied the first requirement for obtaining a writ of mandamus. Additionally Petitioner has an adequate remedy at law that he did not use. The Petition for a Writ of Mandamus is thus denied and dismissed. PDB

If standing requires some type of harm more injurious to Petitioner than other members of the public, Petitioner still has standing as a resident of the City because the Stadium Legislation, in effectively precluding a referendum, was particularly injuries to residents of the City insofar as they are the people whose right to vote is at issue.
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