William Mitchell Journal of Law & Practice

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Welcome to the William Mitchell Journal of Law & Practice

The mission of the William Mitchell Journal of Law & Practice is to publish insightful articles and other scholarly writings on the forefront of legal practice in Minnesota. The Journal is committed to expressing how the impact of current legislation and recent court decisions affects the practice of law, and to presenting the practitioner’s views about how current legislation and recent court decisions may affect their practice of law.

We hope you find this journal helpful in both your practice and continuing legal education.

–The Editorial Staff

Sulfide Mining in Northern Minnesota: A Review of Possible Legal Recourse for Environmental Harm to Individuals

By: Jamison L. Tessneer

I. Background

Minnesota has an extensive history of mining. Beginning in the nineteenth century, mining in Minnesota focused on limestone and to a limited extent, gold.[1] However, Minnesota is predominantly known for its iron ore mining.[2] In the late nineteenth and early twentieth century, three iron ranges in northern Minnesota became the underpinning of a mining economy that would provide hundreds of jobs and tons of iron ore to be processed into steel.[3]

During this mining boom, the Mesabi Range, the largest in Minnesota, produced approximately sixty percent of the nation’s iron ore.[4] By the middle of the twentieth century, the supply of iron ore began to decline.[5] Researchers at the University of Minnesota developed a process in which low grade iron ore, known as taconite, could be compressed into pellets and used to make steel.[6] Today, taconite mining continues in northern Minnesota, albeit on a much smaller scale.[7]

Recently, there has been a renewed interest in mining in the region. There have been several multinational mining companies conducting mineral exploration projects in northern Minnesota and there are currently two major mining projects that have been proposed. The Northmet Project, which was proposed by Polymet Mining Corporation, has already begun the State of Minnesota’s permitting process. The proposed “Northmet Project” is different and potentially more destructive than the traditional iron ore mines familiar to northern Minnesota. This proposed mine would focus on extracting sulfide-bearing ore which would then be finished into copper, nickel, and cobalt.[8] The sulfide mine proposal includes mineral processing of approximately 228 million tons of copper-nickel-platinum group over the next twenty years.[9] The location of the Northmet Project is between Babbitt and Hoyt Lakes, Minnesota, within the boundaries of the Superior National Forest.[10]

A second project has been proposed by Twin Metals Minnesota LLC, and this project is expected to be the largest underground mine in Minnesota history.[11] The mining operation site that has been proposed is just a few miles from the Boundary Waters Canoe Area Wilderness. Twin Metals Minnesota LLC plans to begin the permitting process in 2014.[12] These two projects represent the beginning of what some expect to be a new wave of mining in northeastern Minnesota.

Support for the proposed mines exists primarily because of the potential to create desperately needed jobs and economic stimulation in the region, but there is also public concern over the impact these mines could have on northern Minnesota’s natural environment. One major concern is that sulfide waste rock contains heavy metals such as arsenic, cadmium, chromium, copper, lead, nickel, silver and zinc.[13] When sulfide waste rock is exposed to rain and snow, these metals leach into surface water and groundwater.[14] According to the U.S. Environmental Protection Agency, “[t]he resulting fluids may be highly toxic and, when mixed with groundwater, surface water and soil, may have harmful effects on humans, animals and plants.”[15] This leaching is commonly known as acid mine drainage.[16] The EPA states that acid mine drainage “disrupts the growth and reproduction of aquatic plants and animals, diminishes valued recreational fish species, degrades outdoor recreation and tourism, contaminates surface and groundwater drinking supplies, and causes acid corrosion of infrastructure like wastewater pipes.”[17]

For example, the Gilt Edge Mine, a mine in South Dakota similar to the proposed mines in Minnesota, is a designated superfund site that requires constant monitoring by the EPA.[18] According to the EPA, the mine is contaminating the Strawberry and Bear Butte Creeks with cadmium, copper, and zinc.[19] Currently, the Gilt Edge mine does not pose an immediate threat to human health.[20] If the site was not controlled, the large volumes of contaminated water could threaten well-water supplies of people living up and down stream.[21] Likewise, fourteen years after the Flambeau Mine near Ladysmith, Wisconsin ended its operations, its water continues to contain zinc and copper in excess of state toxicity standards for surface waters.[22] This contamination potentially threatens fish and aquatic life in the area.[23] There are similar mines in New Mexico, Nevada, and Montana.

In Minnesota, there are hundreds of outfitters, resorts, homeowners, restaurants, lodges, and other businesses that surround the Boundary Waters Canoe Area Wilderness, Lake Superior, and the Superior National Forest. These landowners rely heavily on the pristine wilderness of northern Minnesota for the value of their businesses and their land. The contamination of public and private land and water from similar mines in other states should lead people in Minnesota to consider whether current Minnesota law adequately protects them from potential harm to their land, their livelihood, and their families if these sulfide mining projects become a reality. Landowners in northern Minnesota could consider state law, federal law, and common law causes of action to either stop the mines before they begin, stop them once they have caused damage, collect monetary damages for damage to their property, or a combination of these relief options.

II. State Law

Minnesota is one of a few states that have established a private statutory cause of action for harm to the natural environment.[24] The Minnesota Environmental Rights Act (MERA) was passed in 1971.[25] It states that “it is in the public interest to provide an adequate civil remedy to protect air, water, land, and other natural resources located within the state from pollution, impairment, and destruction.”[26] The statute provides declaratory relief, temporary and permanent equitable relief, and may impose conditions on a party that are necessary to protect the environment.[27]

There are five main components of the statute that must be examined when considering the causes of action landowners in northern Minnesota might have against sulfide mining companies responsible for damage to the landowners’ property. It must first be determined whether the landowners would fall under the statute’s definition of a person.[28] Second, it must be determined whether the land or property in question meets the statute’s definition of natural resource.[29] Third, it must be determined if the potential harm that sulfide mines pose to the land and water is the particular type of harm that the statute is meant to protect against.[30] Next, the landowners need to consider the defenses that the mining companies would potentially have against a prima facie case under MERA.[31] Finally, landowners would need to consider whether there would be any exemptions for those against whom they could bring a cause of action.[32] There is an expansive number of cases in Minnesota that outline the scope and limitations of MERA. When read in conjunction with the plain language of the statute, these cases help illustrate the strengths and potential shortcomings that the statute may have in protecting private landowners from potential harm from sulfide mines.

A. Statutory Definitions

The statute broadly defines what it means to be a person in order to bring a cause of action.[33] The statute defines a person as “any natural person, any state, municipality or other governmental or political subdivision or other public agency or instrumentality, any public or private corporation, any partnership, firm, association, or other organization, any receiver, trustee, assignee, agent, or other legal representative of any of the foregoing, and any other entity.”[34] The statute provides an exception to family farms, family farm corporations, and bona fide farmer corporations.[35] The statute also broadly defines natural resources to include mineral, animal, botanical, air, water, land, timber, soil, quietude, recreational and historical resources, as well as scenic and aesthetic resources when owned by a government unit or agency.[36]

The statute broadly defines what is considered pollution, impairment, or destruction. Subdivision five of the statute includes any conduct that:

[V]iolates, or is likely to violate, any environmental quality standard, limitation, rule, order, license, stipulation agreement, or permit of the state or any instrumentality, agency, or political subdivision thereof which was issued prior to the date the alleged violation occurred or is likely to occur or any conduct which materially adversely affects or is likely to materially adversely affect the environment.[37]

The language focuses on conduct that violates a codified rule as the way to determine pollution, impairment, or destruction of the environment. However, the statute also leaves discretion when determining whether additional conduct is pollution, impairment, or destruction of the environment by using the ambiguous language, “or any conduct which materially adversely affects or is likely to adversely affect the environment.”[38] The language of the statute must be applied to real situations in order to understand how the courts have interpreted the law.

B. Establishing a Cause of Action

In Freeborn County v. Bryson, the court established a two-prong test to establish a prima facie cause of action under MERA.[39] The plaintiff must first establish a protectable natural resource, and second, establish pollution, impairment, or destruction of that resource.[40] In this case, farmers whose land was condemned by the county in order to construct a new highway successfully showed that the highway would adversely affect a natural marsh.[41] The court found that the highway would divide the natural marsh, the natural marsh was an ecological unit, the construction would eliminate some of the natural physical assets, the highway’s high speed would increase animal fatalities, and the highway would disturb the quietness and the solitude of the marsh.[42]

One of the difficulties in these causes of actions can be establishing harm. Minnesota Public Interest Research Group v. White Bear Rod and Gun Club[43] is one of the seminal cases in Minnesota that established the means the plaintiff has to prove harm to the environment. In this case, a nonprofit organization sought declaratory and injunctive relief under MERA because the operation of a trap-and-skeet shooting facility would adversely affect the environment.[44] The proposed site of the trap-and-skeet shooting facility included a lake that provided shelter and food to migratory waterfowl. The facility threatened deer, muskrat, fox, porcupines, raccoons, badgers, and other animals that lived in the woods and wetlands surrounding the lake.[45] The case established two means a plaintiff has to prove harm under MERA.[46]

First, the court states that the plaintiff can prove “that the conduct in question violates, or may violate, any environmental quality standard, rule, or regulation of the state or any political subdivision thereof.”[47] The plaintiff in this case did not attempt to show that the facility violated any rules or standards.[48] The plaintiff instead relied on the second means the court identified in MERA to prove harm.[49]

The court stated that the plaintiff could prove “that the conduct complained of materially, adversely affects or is likely to affect the environment.”[50] The plaintiffs claimed that the trap-and-skeet shooting facility would destroy the quietude of the area.[51] In addition, the plaintiff also claimed that the lead shot deposits in the surrounding wetlands would cause destruction to wildlife.[52] Because quietude and wildlife fall under the statute’s definition of a natural resource and the plaintiff was able to show adverse effect to the environment, the statute applied.[53]

The court further clarified how to interpret the language of “adversely affecting the environment” in State ex rel. Wacouta Township v. Brunkow Hardwood Corp.[54] In that case the court established a four-part test to determine whether conduct would adversely affect the environment.[55] First, the court must determine whether the natural resource involved is rare, endangered, or has historical significance.[56] Second, the court must determine whether the resource in question is easily replaceable.[57] Third, the court must decide if the proposed conduct will have a significant consequential effect on other natural resources.[58] Finally, the court must decide whether the direct or consequential impact will affect a critical number of the wildlife affected.[59]

These cases established the basic rules for bringing a prima facie cause of action under MERA. First, the plaintiff must demonstrate that the resource is a protectable natural resource within the broad definition of the statue. Second, the plaintiff must demonstrate pollution, impairment, or destruction of that resource. Harm can then be shown by either a violation of a codified rule, standard, or regulation, or by a more discretionary test of showing that the conduct in question adversely affects, or will adversely affect, the protectable natural resource.

C. Defenses

MERA sets out a balancing test to weigh potential economic benefits and public necessity with harm or potential harm to the environment. Section 116B.04 of the statute provides the defendants in an action the opportunity to rebut the plaintiff’s prima facie case establishing the defendant’s conduct will cause or is likely to cause harm to the environment.[60] It allows the defendant to submit evidence contrary to the plaintiff’s evidence establishing harm.[61] In Wacouta, a logging operation was enjoined because it was discovered that the site for the operation was the largest bald eagle nesting site in the state.[62] The court determined that the defendant failed to rebut any of the evidence presented by the biologists.[63]

In addition, under section 116B.04 of MERA, the statute also allows the defendant to show, as an affirmative defense, that there is no feasible or prudent alternative and that the conduct at issue is consistent with the promotion of public health, safety, and welfare of the state’s interest in protecting the environment.[64] Again, in Wacouta, the court determined that the defendant failed to show any “evidence that the enjoined conduct will promote the public health, safety, or welfare in any noneconomic fashion.”[65] In State ex rel Achabal v. County of Hennepin, the court determined that there is “an extremely high standard for defendants to meet in establishing an affirmative defense” under MERA.[66]

Finally, section 116B.04 of MERA expressly prohibits economic considerations as the sole defense under this section.[67] In State ex rel Drabik v. Martz, the Minnesota Court of Appeals upheld a temporary injunction for construction of a radio tower because it would be in view of the Boundary Waters Canoe Area Wilderness and state park land.[68] The defendant argued that the planned project would contribute capital and jobs to the local economy.[69] The court, citing section 116B.04 of MERA, explained that economic considerations alone were not superior to the state’s interest in protecting the natural environment.[70]

D. Exemptions

Conduct that has undergone the permitting process and been permitted by the Pollution Control Agency, the Department of Natural Resources, the Department of Health, or the Department of Agriculture is exempt from civil actions under MERA.[71] The statute states in relevant part, “no action shall be allowable under this section for conduct taken by a person pursuant to any environmental quality standard, limitation, rule, order, license, stipulation agreement or permit issued by the Pollution Control Agency, Department of Natural Resources, Department of Health or Department of Agriculture.”[72] Both Polymet Mining Corporation and Twin Metals Minnesota LLC are pursuing permits through the Department of Natural Resources. Polymet’s Northmet Project has already completed a Draft Environmental Impact Statement and completed a Supplemental Environmental Impact Statement. Twin Metals Minnesota LLC is working to complete a Draft Environmental Impact Statement in 2014 for its proposed project near the Boundary Waters Canoe Area Wilderness.[73] If these mining projects are given a permit to operate by the appropriate state agency, then landowners whose land has been harmed by the sulfide mines will be unable to file a cause of action against the mining companies.

E. Analysis

It could be said that MERA would sufficiently protect landowners in northern Minnesota from any potential damage that could occur to their land if the new sulfide mining operations began. The landowners would fall under the broad definition of persons defined in section 116B.02.[74] In addition, the landowners’ property would likely fall under the statute’s broad definition of natural resources.[75] The issue of harm requires a more complicated analysis.

If the harm that has occurred in other states with similar mines occurred to the land and water belonging to the landowners in northern Minnesota, the landowners would likely be able to demonstrate harm. With proper expert testimony, the landowners could show that the acid mine drainage would likely violate rules and standards for land and water pollution designated by the Minnesota Pollution Control Agency, Department of Natural Resources, or other state or local law.

The potential harm to the land could also fall within the discretionary scope of conduct that materially adversely affects the environment. Under the four-part test in Wacouta, the landowners would likely be able to show that the wilderness area in northern Minnesota is rare because the Boundary Waters Canoe Area Wilderness contains more than 1 million acres of primitive wilderness, 1,200 miles of canoe routes, and more than 2,000 designated campsites.[76] It is likely that they would also be able to show that the wilderness in Northern Minnesota is not easily replaceable by providing examples of the effects sulfide mining has had on other natural areas and their continued contamination. With the help of biologists, ecologists, and other experts, it is likely that the landowners would also be able to demonstrate that the sulfide mines would have a consequential affect on other natural resources and that it would be a critical amount.

It is likely that the landowners would be able to sufficiently demonstrate that their land is a natural resource and that there will be harm. That harm will be determined either by violating a standard or regulation, or through the Wacouta test. It seems unlikely that the mining companies would be able to rebut the evidence based on the effects sulfide mining has had in other states. It also seems unlikely that the mining companies would be able to show how the sulfide mines promote public health, safety, and welfare beyond an economic interest. There remains concern, however, that if these mines are permitted by the State of Minnesota, they will be exempt from a cause of action under MERA.

The language of the statute does contain a section that allows for civil actions to be maintained against the state or agency that sets environmental standards or promulgates permits for conduct that would be subject to the statute. Section 116B.10 states in relevant part:

[A]ny natural person residing within the state; the attorney general; any political subdivision of the state; any instrumentality or agency of the state or of a political subdivision thereof; or any partnership, corporation, association, organization, or other legal entity having shareholders, members, partners or employees residing within the state may maintain a civil action in the district court for declaratory or equitable relief against the state or any agency or instrumentality thereof where the nature of the action is a challenge to an environmental quality standard, limitation, rule, order, license, stipulation agreement, or permit promulgated or issued by the state or any agency or instrumentality thereof for which the applicable statutory appeal period has elapsed.[77]

This section of Chapter 116B allows private landowners to file suit against the State of Minnesota or the Department of Natural Resources. In order to maintain this action, the landowners would have the burden of proving that permits issued by the Department of Natural Resources were inadequate in protecting the environment from the sulfide mines.[78]

Furthermore, the statute contains language that would allow private landowners to intervene in the permitting process. In relevant part, section 116B.09 states that any natural person residing in the state “shall be permitted to intervene as a party upon the filing of a verified pleading asserting that the proceeding or action for judicial review involves conduct that has caused or is likely to cause pollution, impairment, or destruction of the air, water, land or other natural resources located within the state.”[79] The statute also requires that the agency consider the “alleged impairment, pollution, or destruction of the air, water, land, or other natural resources located within the state,” and that any conduct that negatively affects the environment is prohibited so long as there is a reasonably prudent alternative.[80] In application, the court in Reserve Mining Co. v. Herbst[81] determined that the agency erroneously concluded that a second tailings disposal site in a national forest was reasonable and prudent when the evidence demonstrated that the impact on natural resources would not be significantly different than the site initially proposed. Finally, section 116B.09 continues to maintain that economic considerations alone are not sufficient in order to justify the conduct that would adversely affect the environment.[82]

Overall, the statute is relatively strong with regard to allowing for private causes of action to protect the environment in Minnesota. On the issue of sulfide mines and other large scale projects that will almost certainly seek permitting from state agencies, the law would be more effective in giving landowners a cause of action if the language in section 116B.03, exempting permitted projects, was excluded. Absent that, if the sulfide mines are permitted, then the landowners could work together with local governments and local organizations to bring a cause of action against the state agencies. However, if that cause of action occurs after the mines are in operation and the damage to the landowners’ property has already transpired, then the state agencies and state government are not the “deep pocket” that can provide the landowners with the equitable relief that they would likely be seeking.

III. Federal Law

There are three major federal laws that allow citizens to bring private suits against polluters, which can result in penalties.[83] These federal laws do not allow the plaintiffs to receive compensation for damage to their property. In cases involving water pollution and solid waste, the penalty awards go to the federal treasury.[84] In cases involving air pollution, the court has the discretion to award some of the money to a mitigation project at the recommendation of the U.S. Environmental Protection Agency, but the rest of the money then goes to the treasury.[85] Because these federal laws do not directly benefit landowners in northern Minnesota through compensation for damages, they should briefly be examined as a possible way to enjoin mining activities and as additional penalties that the government could impose on the mining companies.

A. Clean Water Act

Under 33 U.S.C. § 1365, any citizen has the ability to pursue a cause of action against any person, including the U.S. government or relevant agency or entity, for violation of a standard or limitation of the Clean Water Act.[86] In Natural Resources Defense Council, Inc. v. Watkins,[87] the court determined that in order to have standing for redress of environmental harm, the plaintiffs need not show that absent the defendant’s conduct, the plaintiffs would enjoy an undisturbed use of their land. Under the language of the statute and the application in Watkins, it is likely that the landowners who are negatively affected by the sulfide mines would have the ability to file a citizen suit under the Clean Water Act. Despite the federal law’s inability to provide compensatory relief for the potential damage to the plaintiff’s land, the law can provide injunctive relief which would halt the operation of the sulfide mines.

B. Resource Conservation and Recovery Act

This area of federal law is focused largely on managing hazardous waste and ensuring that the waste is properly stored. Similar to the provisions outlined in the Clean Water Act, 42 U.S.C. § 6972 broadly allows any citizen to bring suit against anyone, including the United States government, “who is alleged to be in violation of any permit, standard, regulation, condition, requirement, prohibition, or order which has become effective pursuant to this chapter.”[88] In applying this statute, the court in Aiello v. Town of Brookhaven,[89] the district court for the Eastern District of New York determined that the environmental and health interests of people in the general vicinity of a landfill had sufficient standing to bring a citizen suit under the Resource Conservation and Recovery Act (RCRA). On the issue of relief, the court can require a polluter to cleanup and dispose of toxic waste properly. In City of Waukesha v. Viacom International Inc., [90] the court determined that “[u]nder RCRA, a citizen may seek a mandatory injunction that orders a responsible party to take action by attending to the cleanup and proper disposal of toxic waste.”

The landowners in northern Minnesota that are in the vicinity would meet the standard discussed in Aiello v. Town of Brookhaven[91] and therefore have the ability to bring a cause of action. Under the ruling in City of Waukesha v. Viacom International Inc., the landowners could seek similar relief in requiring mining companies to clean up the acid mine drainage leached from their mining operations and to properly dispose of waste rock from the mine.[92]

C. Clean Air Act

In Covington v. Jefferson County,[93] the Ninth Circuit Court of Appeals concluded that landowners who lived near a county landfill had Article III standing in order to bring a citizen suit under the Clean Air Act as long as the landowners could show injury-in-fact that landowners feared that contamination from the landfill would diminish their enjoyment of their property. Although the citizen suits under the Clean Air Act cannot provide compensatory damages, in Sierra Club v. Franklin County Power of Illinois, L.L.C., [94] the court issued an injunction on the construction of a new coal-fired power plant based on the citizen suit filed by the nonprofit organization.

Based on the outcomes of sulfide mining in other states, most of the focus on damage to the environment has centered on water and wildlife. However, in the case that there are violations of the Clean Air Act, the landowners would likely have standing to bring suit. Despite the inability of the federal law to provide compensatory damages for the landowners, the Clean Air Act does have the ability to enjoin the mining operations if the mining activities violate standards set forth in the law.[95]

IV. Common Law Causes of Action

Common law causes of action regarding exposure to chemicals or damage to property from an industrial site has become its own area of law known as toxic torts.[96] Toxic torts typically involve common law causes of actions including trespass, nuisance, negligence, negligence per se, strict liability, intentional infliction of emotional distress, and in some cases, assault and battery.[97] Routinely, one or more of these causes of actions will be brought in the same suit and are often coupled with statutory causes of action from the state and federal level. While many of these causes of action may be applicable to landowners in northern Minnesota, trespass and nuisance are the most pertinent.

There are a number of common obstacles associated with toxic tort causes of action. First, the plaintiff must prove that the defendant met the requisite liability standard.[98] Second, the plaintiff must establish a link between the defendant and the release of the substance.[99] Third, the plaintiff must establish that the chemical can cause the harm the plaintiff suffers.[100] Finally, the plaintiff must establish that the harm experienced is a result of exposure to the chemical.[101] Toxic tort causes of action must be viewed with these complexities in mind in order to adequately analyze the sufficiency of the law’s ability to protect or compensate landowners.

A. Trespass

The tort of trespass includes three mainstay elements. First, the landowner must have a legal interest in the property or a possessory interest. Second, the tort of trespass requires intent. Finally, synonymous with all torts, trespass requires the element of legally cognizable harm. Trespass causes of actions can have a variety of forms of relief including monetary damages, injunctive relief, and punitive damages. While the element of possessory interest is relatively straightforward, the elements of intent and harm should be more carefully examined to determine how they apply to landowners who could be negatively impacted by sulfide mines.

Modern trespass theory encompasses both intentional and unintentional or negligent physical invasion of another person’s property. [102] Intentional trespass is when the defendant knows that its conduct is likely to result in harm to the plaintiff or the plaintiff’s property or is substantially certain the harm will occur. [103] Unintentional trespass is usually rooted in negligence. Unintentional trespass is when the defendant has reason to know that its conduct is likely to result in harm to the plaintiff or the plaintiff’s property.[104] Having the knowledge that an industrial site is leaching toxic chemicals and having the knowledge that the toxic chemicals are leaching into the groundwater of the adjacent property is generally enough to show intent.[105]

Typically, harm is required in a cause of action for trespass, but it is possible to succeed in a cause of action for trespass without showing harm. Generally, if the trespass action does not include harm, the damages will only be nominal.[106] Damages can be measured in a variety of ways, but the harm cannot be speculative. [107] Most jurisdictions divide harm into temporary harm and permanent harm.[108] Temporary harm occurs when the defendant’s tortious activity is ongoing with recurring instances of harm to the landowner’s property.[109] Each instance is a separate recoverable action.[110] Permanent harm occurs when the defendant’s conduct causes irreparable harm to the plaintiff’s property.[111] Permanent harms are recoverable for damages past, present, and prospective.[112] Because of the loss of property market value, some courts have also awarded stigma damages when there is permanent damage to a property.[113] Stigma damages are awarded to compensate a plaintiff whose property begins to have a negative public perception resulting from the pollution or contamination.[114]

Courts tend to limit damages in cases of temporary harm to the cost to repair or restore the property after the damage and damages for any loss of use of the property during the temporary harm. Courts limit damages for permanent harm to the loss in market value or the diminution in the value of the property. Generally, most courts do not award stigma damages and if a court does award stigma damages, there must be physical harm from the contamination to the property.[115]

Under this trespass framework, landowners in northern Minnesota could file a trespass cause of action against sulfide mining companies if, for example, acid mine drainage from one of the mines leaked into the landowner’s groundwater causing it to be contaminated. The landowner would certainly have a possessory interest in the property. The landowner would likely be able to show unintentional trespass embedded in a theory of negligence. The landowner might also be able to show intentional trespass if it can show that the mining company had knowledge that similar mines in other states have caused the same type of contamination. Furthermore, the landowner may be able to show that the mining company’s conduct is abnormally dangerous and that can qualify as an unintentional trespass action as well. The landowner may be able to show temporary harm which could result in getting the mining activities enjoined, forcing the mining company to repair the landowner’s property, compensating the landowner for the damage, or any combination of these types of relief. The landowner may be able to show permanent trespass resulting in some or all of the previous types of relief and could also result in punitive damages.

The overarching problems associated with toxic torts apply to the tort of trespass as well. The standard of liability is a relatively easy burden to meet in a trespass case. If the defendant’s substance invades the property of the plaintiff then the defendant is liable. However, it might be difficult to determine if the substance on plaintiff’s land came from the defendant. Expert testimony would be required to show, for example, that absent the mining operations there would not be an elevated level of sulfuric acid in the plaintiff’s groundwater. It also might be difficult to establish that the harm experienced by the plaintiff is a result of the sulfide mines. Again, expert testimony would be required to show, for example, that acid mine drainage killed aquatic insects in a lake near the mining operation and that that aquatic insect was the primary food for a species of migratory birds whose population has now dramatically decreased. Case law can help demonstrate how trespass, as it relates to toxic torts, is applied in Minnesota and how it potentially could be applied in Minnesota.

In Citizens for a Safe Grant v. Lone Oak Sportsmen’s Club, Inc.,[116] a neighborhood organization brought a suit against a gun club alleging trespass among other causes of actions. The Minnesota Court of Appeals stated, “Trespass encompasses any unlawful interference with one’s person, property, or rights, and requires only two essential elements: a rightful possession in the plaintiff and unlawful entry upon such possession by the defendant.”[117] The court further stated that trespass is not limited to human interference and can occur when someone places an object on another person’s property.[118] The court concluded that the entry of bullets onto the property of another person without the property owner’s permission constitutes trespass.[119]

In an action against 3M, plaintiffs alleged that perfluorooctane sulfonate (PFOS) and perfluorooctanoic acid (PFOA), released from 3M’s facility, landed on their property after traveling through the air, surface water, and ground water, and continue to remain on their property in detectable quantities.[120] According to the U.S. EPA, PFOS and PFOA are emerging contaminants characterized as a “potential or real threat” to human health and the environment.[121] The court rejected the defendant’s motion to dismiss the claim of trespass.[122]

In contrast, in Johnson v. Paynesville Farmers Union Co-op. Oil Co.,[123] an organic farmer brought a trespass action against a neighboring farm. The plaintiff alleged that the neighboring farmer’s pesticide drifted onto the plaintiff’s property and negatively affected the plaintiff’s organic crops.[124] After a lengthy discussion, the court concluded that the particulate matter of the pesticide was not tangible[125] and further, that the pesticide did not interfere with the plaintiff’s exclusive possession of the land.[126] The court determined that allowing a trespass action based on damage to property from particulate matter would blur the line between trespass and nuisance.[127] The court maintained that landowners have a right “to exclude others through the ability to maintain an action in trespass even when no damages are provable.”[128] The court concluded by saying that requiring a landowner to show damage for invasion to the landowner’s property before that landowner could seek redress “offends the traditional principles of ownership.”[129]

The court’s decision in Johnson potentially limits a cause of action that a landowner affected by the acid mine drainage from the sulfide mines might have. The court’s opinion could be interpreted to bar a cause of action for trespass if the trespassing object is contaminated water and the contaminant is considered particulate matter. The U.S. Environmental Protection Agency defines particulate matter as “a complex mixture of extremely small particles and liquid droplets. Particle pollution is made up of a number of components, including acids (such as nitrates and sulfates), organic chemicals, metals, and soil or dust particles.”[130] Under this definition, it is possible that courts would conclude that contaminated water, such as acid mine drainage, exceeds the small particles and liquid droplets defining particulate matter. Under this interpretation, acid mine drainage could constitute trespass.

The Johnson decision was the Minnesota Supreme Court’s reversal of a decision from the lower court. The Minnesota Court of Appeals concluded that trespass could occur even though particulate matter is intangible. The court of appeals relied on two cases outside of Minnesota. In Bradley v. American Smelting & Refining Co.,[131] the Supreme Court of Washington concluded that a copper smelting company’s intentional release of arsenic and cadmium as particulate matter constituted trespass. The court stated that in order to give rise to a cause of action in trespass, the plaintiff must show an invasion affecting interest and exclusion of her property, intentional doing of the act which resulted in the invasion, it was reasonably foreseeable that the conduct could result in the invasion of the plaintiff’s possessory interest, and there were substantial damages to the plaintiff’s property.[132] In Borland v. Sanders Lead Co., Inc.,[133] the Supreme Court of Alabama applied the same test when the plaintiff sued a lead company for dangerous accumulation of lead particulates and sulfoxide deposits on the plaintiff’s property.

Under the Minnesota Supreme Court’s contemporary view, particulate matter is intangible and therefore unable to give rise to a cause of action for trespass.[134] It is possible that the leaching of acid mine drainage from sulfide mines onto another’s property would not constitute trespass under the current view. Further examination by the court of what exactly constitutes particulate matter is needed before this issue can be resolved. However, if the court were to apply the standard outlined in Bradley or Borland, then the landowners who have acid mine drainage on their property may have a higher likelihood of success in a trespass cause of action.

A landowner whose property has been contaminated with acid mine drainage may be able to show that the contamination affected his interest and exclusive control of the property. The landowner may be able to show that intentionally mining for precious metals resulted in the acid mine drainage leaching onto her property. The landowner may also be able to show that, based on the impact of sulfide mining in other states, the mining company should have reasonably foreseen that the conduct would invade the landowner’s possessory interest in the property. Finally, providing that the acid mine drainage did contaminate groundwater or kill aquatic species, the landowner would be able to demonstrate damage to her property. Under the Minnesota Court of Appeals application of the Bradley and Borland standard, a landowner whose property was affected by acid mine drainage would have the ability to bring a cause of action for trespass to the landowner’s property. Under the current Minnesota Supreme Court’s ruling in Johnson, it is difficult to definitively determine whether landowners would be able to demonstrate an invasion of their possessory interest which is one of only two essential elements the court has identified in order to give rise to a cause of action in trespass.

B. Nuisance

Nuisance is one of the most common toxic tort causes of action.[135] It arises out of harm, injury, inconvenience, or annoyance from a wide variety of conduct.[136] Nuisance is divided into two categories: public nuisance and private nuisance. Public nuisance actions can be brought by public officials or by private individuals, and private nuisance actions can be brought by private individuals.[137] In Minnesota, there are also statutory public nuisance and private nuisance causes of action. The overarching common law public nuisance and private nuisance causes of action, the statutory causes of action, and Minnesota case law must be examined and applied to the potential cause of action landowners in northern Minnesota may have against sulfide mining companies in order to understand the law’s ability to protect and compensate landowners.

1. Public Nuisance

According to the Restatement (Second) of Torts section 821B, a public nuisance is an unreasonable interference with a right common to the general public.[138] There are three main questions to consider when analyzing a public nuisance cause of action. First, consider whether the defendant interfered with a public as opposed to a private right.[139] A public right is a right that is common to all members of the general public.[140] Second, consider whether the interference was unreasonable.[141] Third, consider whether the plaintiff seeking remedy has suffered a harm that is different from the harm suffered by the general public.[142]

Subsection 821B(2) further clarifies the scope of the unreasonableness of the interference.[143] Unreasonable interference constitutes conduct that “involves a significant interference with the public health, the public safety, the public peace, the public comfort or the public convenience.”[144] The conduct could also be deemed unreasonable if it violated a statute, ordinance, or administrative regulation.[145] Finally, the conduct could also be judged unreasonable if it has a continuing effect or has produced permanent or long-lasting damage and the actor knows or has reason to know that the conduct has a significant effect on the public right.[146]

Public nuisance causes of action can be brought by public officials, private citizens, or a combination of the two.[147] The theory of the public nuisance case is that the defendant is causing some harm to the community or that public health or safety is threatened.[148] It is important to note that in a public nuisance cause of action, harm is not required and that the threat of potential harm is sufficient for the cause of action to move forward.[149] It is also important to reiterate that the private plaintiff in a public nuisance cause of action must experience a harm that is different from the harm experienced by the general public.[150] The common law application of public nuisance differs immensely from the statutory application. Under Minnesota law, public nuisance is a misdemeanor offense.[151] Minnesota Statutes section 609.74 criminalizes conduct that unreasonably injures or endangers the health, safety, or morals of a considerable number of members of the public.[152] It also criminalizes conduct that interferes with, obstructs, or endangers the passage of a public highway, right of way, or waters used by the public, and any conduct that violates a law declaring the conduct a public nuisance.[153] The major difference is that common law causes of action focus on relief such as pecuniary damages, whereas statutory public nuisance causes of action look at criminal penalties. By default, this means that statutory public nuisance causes of action must be prosecuted by the state, whereas common law causes of action can be pursued by public officials and private individuals.

Under the common law framework that is established in the Restatement (Second) of Torts, landowners in northern Minnesota could have a cause of action in public nuisance. For example, the mining companies polluted a nearby lake in the Superior National Forest or Boundary Waters Canoe Area Wilderness with acid mine drainage effectively desecrating the aquatic life and specifically killing the sport fishing populations. If a resort owner on the lake files a public nuisance cause of action, an argument could be made that the mining company interfered with a public right.

The next question is whether that interference was unreasonable. Consider the factors presented in the Restatement (Second) of Torts section 821B(2).[154] Contaminating a lake with acid mine drainage to such a degree that killed the fish and other aquatic life would be considered a significant interference with public health, public safety, the public peace, the public comfort, or the public convenience. It is also possible that contamination to this degree would violate a local, state, or federal statute, ordinance, or administrative regulation. The leaching of acid mine drainage has a continuous effect or could even be permanent damage. It could be further argued that the mining company, based on this type of mining in other states, knew or should have known the mining would have a significant impact on the public right.

Finally, the resort owner is the plaintiff seeking a monetary remedy. The resort suffered a particular harm that is different from the harm experienced by the general public. The general public may not be able to fish that contaminated lake. The resort owner is likely to lose business as a result of the contamination if people decide to go to resorts on other lakes that are not contaminated. This would likely be considered a special harm in the sense of a common law cause of action for public nuisance.

The public nuisance common law cause of action could be an effective legal measure to protect landowners in northern Minnesota. It would allow landowners to file public nuisance causes of action for harm to public resources that they may derive their business and livelihood from. The law in Minnesota is applied a little differently. The public nuisance statute would allow a local government or the state to prosecute the mining companies for damage to public land, but the misdemeanor penalties are unlikely to deter future contamination or even deter the mining operations before they begin. The landowners may be better served by pursuing action through the common law private nuisance cause of action and the state’s statutory private nuisance cause of action. In Hill v. Stokely-Van Camp, Inc., the court stated, “A nuisance may be at the same time both public and private, public in its general effect upon the public, and private as to those who suffer a special or particular damage therefrom, apart from the common injury. The public wrong must be redressed by a prosecution in the name of the state; the private injury by private action.”[155]

2. Private Nuisance

Common law private nuisance is the interference with the use and enjoyment of real property that the plaintiff has a possessory interest in. The Restatement (Second) of Torts section 821D simply states, “A private nuisance is a nontrespassory invasion of another’s interest in the private use and enjoyment of land.”[156] The goal of the private nuisance claim is to protect the landowner’s private property rather than the public interest.

The Restatement (Second) of Torts further explains who is liable in actions for private nuisance. It states that the defendant’s conduct must be the legal cause of the invasion of another person’s interest in the private use and enjoyment of that person’s land.[157] The defendant’s invasion must also be intentional or unreasonable,[158] both of which require further clarification. The defendant can also be liable if the defendant’s conduct is the legal cause of the invasion of another person’s interest in the private use and enjoyment of that person’s land and that conduct violates rules controlling negligent or reckless conduct, or the conduct is abnormally dangerous.[159]

According to the Restatement, the defendant’s conduct is intentional if the defendant acted with purpose when invading another person’s interest in the private use and enjoyment of that person’s land or the defendant knew that his conduct would cause the interference or was substantially certain the conduct would cause the interference.[160] Further, the Restatement clarifies what constitutes unreasonable intentional invasion. The intention is unreasonable if the gravity of the harm outweighs the utility of the defendant’s conduct.[161] If the harm caused by the defendant’s conduct is serious and the financial compensation for this conduct and similar conduct makes defendant’s conduct no longer feasible then it is also unreasonable.[162]

The weighing test prescribed in the Restatement (Second) of Torts section 826(a) is further clarified in section 827. It suggests that in determining the gravity of harm from the defendant’s conduct, five factors should be considered. First, the extent of harm should be considered.[163] Second, the character of harm should be considered.[164] Third, the social value that the law attached to the type of use or enjoyment that has been invaded should be considered.[165] Next, the suitability of the particular use or the enjoyment invaded to the character of the locality should be considered.[166] Finally, the burden on the person harmed in avoiding the harm should be considered.[167] These factors will help determine whether the utility of the sulfide mines, most notably their economic benefit, will outweigh the potential harm caused to the landowners.

Similar to public nuisance causes of action, private nuisance causes of action have a statutory analogue. Minnesota law states:

Anything which is injurious to health, or indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property, is a nuisance. An action may be brought by any person whose property is injuriously affected or whose personal enjoyment is lessened by the nuisance, and by the judgment the nuisance may be enjoined or abated, as well as damages recovered.[168]

This statute differs significantly from the public nuisance statute because it allows private individuals to bring an action and it specifically allows for injunctive and equitable relief. Minnesota case law illustrates how this statute has been applied.

In Citizens for a Safe Grant v. Lone Oak Sportsmen’s Club, Inc.,[169] the court presents a synopsis of case law that defines the basic scope of the private nuisance law in Minnesota. In relevant part the court states that “[n]uisance is defined as ‘anything which is . . . indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property.’”[170] In order to constitute a nuisance, the interference with the use and enjoyment must be material and substantial.[171] The standard to which the court measures discomfort is the standard to which ordinary people in the area rely.[172] In response to the defendant’s argument that its conduct was unintentional, the court explained that the statute does not contain language requiring the element of intent and instead held that the conduct resulting in a nuisance can be established from negligence, ultra hazardous activity, or the violation of a statute.[173]

The court further clarified the scope of the private nuisance statute in Wendinger v. Forst Farms, Inc.[174] In that case, the plaintiffs sued defendants because the defendants were operating a confined-animal feeding lot and the plaintiffs claimed that the invasive odors emanating from the feedlot constituted a nuisance.[175] In this case, the court made note that the conduct was wrongful if the conduct was the fault of the defendant.[176] The conduct is the defendant’s fault if it is the result of intentional conduct or conduct resulting from negligent, reckless, or ultra hazardous activity.[177] In this case, evidence of the defendant’s awareness that the conduct was interfering with the plaintiff’s use and enjoyment of the property was enough to establish that it was intentional conduct.[178] Further clarifying the statute in Johnson v. Paynesville Farmers Union Co-op. Oil Co.,[179] the court applied the statute and essentially adopted the Restatement (Second) of Torts’ test that weighs the harm to the plaintiff against the social utility of the defendant’s conduct. The common law action established in the Restatement (Second) of Torts seems to be a strong legal measure that landowners in northern Minnesota could use to protect their interests. For example, the mining company’s operation site leaches acid mine drainage into the landowner’s groundwater. This is likely to be considered an invasion of the landowner’s possessory interest in the private use or enjoyment of his or her land. It is likely that the conduct would be considered intentional because the mining company would know or have reason to know that the contamination is likely to occur based on the effect this mining has had in other states.

The leaching of acid mine drainage may not be unreasonable by the definition of the Restatement (Second) of Torts section 826 because the balancing test in section 827 may weigh in the defendant’s favor if it is only one landowner bringing the action.[180] If the landowner works with several other landowners who are also negatively affected by acid mine drainage, then the weighing test could look very different. Depending on the number of landowners affected, the harm could be extensive. The character of the harm involved could be considered grave if it is a drinking water supply. It is likely that the social value of drinking water is extremely high and the locality rule will likely consider water and drinking water to be of great concern. Finally, the burden to the landowner or landowners to avoid the harm is also likely to be considered too burdensome.

The statutory cause of action is also a strong tool that landowners could use to protect themselves from potential damage to their property from sulfide mining pollution. Acid mine drainage could be injurious to landowners’ health if it is leached into groundwater. It could also interfere with the comfortable use of the property if it leaches into an adjacent lake and kills the fish. The affected landowner would certainly fall into the category of people the statute intended to bring a cause of action. Similar to section 827 of the Restatement (Second) of Torts’ balancing test, the court’s balancing test established in Johnson would need to be considered. It is clear that under a private nuisance cause of action, whether the action is in common law or under state statute, landowners would benefit by organizing several private nuisance causes of action in order to outweigh the economic benefit of the mines. If the court applies the balancing test, the economic benefits of the mines are likely to be considered a strong social utility.

3. Federal Common Law Nuisance

There are also common law claims under federal law; however, the federal common law nuisance claim is unlikely to apply to landowners in northern Minnesota affected by sulfide mining operations. In Reserve Mining Co. v. Environmental Protection Agency, the U.S. government and the State of Minnesota jointly filed actions against Reserve Mining because the company was leaching asbestos-like fibers from taconite mining waste into Lake Superior and contaminating the drinking water for the citizens of Duluth, Minnesota.[181] One of the claims that the government filed was a federal common law nuisance claim.[182] The court stated that while federal common law nuisance claims require pollution of interstate waters, in this case Lake Superior, the government was arguing that harm was only affecting the people in Minnesota.[183] Therefore, the federal common law nuisance claim would not apply because people from Michigan and Wisconsin were not affected.[184] The federal court did, however, defer to the state public nuisance law.[185]

More than a decade after Reserve Mining Co., the Ninth Circuit Court of Appeals further limited the application of the federal common law nuisance claim. In National Audubon Society v. Department of Water, there was an action against the Los Angeles Department of Water because it had diverted four freshwater streams from Mono Lake to the City of Los Angeles.[186] The plaintiffs raised a federal common law nuisance claim that the court rejected.[187] The court, following the decision of the United States Supreme Court in Middlesex County Sewerage Authority v. National Sea Clammers Association,[188] stated that the more comprehensive scope of the Federal Water and Pollution Control Act superseded a federal common law nuisance claim and therefore the claim was denied.[189]

Based on these two cases it is unlikely that landowners in northern Minnesota would be successful with a federal common law nuisance claim. There are several lakes in the Boundary Waters Canoe Area Wilderness that share a border between the United States and Canada. It is unclear whether this would constitute interstate waters for purposes of the federal common law, or whether the lakes would be considered international waters. Regardless, the land is mostly managed by the United States federal government and Ontario’s provincial government which would leave the landowners largely absent from any legal proceedings. Furthermore, the court’s subsequent ruling in National Audubon Society v. Department of Water clearly established that in the case of federal common law claims regarding water, federal water policy supersedes and would render the federal common law nuisance claim inapplicable. The landowners in northern Minnesota would be more successful filing a claim under state law.

V. Conclusion

There are a number of laws attempting to address environmental harms at the state and federal level. Generally, these laws are written expansively in order to apply to the broadest number of possible environmental harms. The question of whether these laws are adequate for landowners in northern Minnesota or whether they are inadequate is not simple. A lot of the laws’ effectiveness is dependent on how the mining companies conduct their operations, how the landowners are affected, and how landowners who have been harmed want to pursue legal action. It is sufficed to say that some of these laws are helpful in protecting landowners’ property while others are less helpful.

The environmental statutes at the state and federal level are not adequately designed to provide compensatory damages to individuals who experience environmental harms resulting from large-scale industrial operations. The federal statutes provide no compensatory damages, while the Minnesota Environmental Rights Act only provides for damages when the project is not permitted by one of the state agencies. This means that, at the state level, compensatory damages can be sought in actions against a company responsible for an environmental harm that has not completed a state agency’s review process. If a company has completed the requisite review process for its project and receives a permit to operate, the company effectively becomes exempt from claims under MERA. The only recourse for private landowners would be to file suit against the agency that permitted the project. The relief is likely to be limited to enjoinment of the mining operations.

Injunctive relief is the best relief that the environmental statutory causes of action can provide. While injunctive relief would be an exceptional outcome to a sulfide mining project that is causing grave environmental harm, it does little to help a landowner whose land is damaged, or to the business owner who suffers a loss of business due to the contamination of the land or water.

The common law actions are likely to be the most beneficial when considering compensation for environmental harms to landowners’ property. However, the codified versions in Minnesota law and court interpretations are not necessarily the most useful. It is difficult to determine whether the Minnesota Supreme Court would consider acid mine drainage to be an invasion of a landowner’s property for an action in trespass. Arguments could be made either way on whether acid mine drainage constitutes particulate matter. It would be advantageous for the landowners pursing any cause of action to pair an action in trespass with it.

The public nuisance statute that criminalizes a public nuisance completely strips the effectiveness of the common law public nuisance cause of action. The common law cause of action in public nuisance would specifically allow landowners who are negatively impacted by acid mine drainage to bring a cause of action individually and on behalf of the public who use the land and water. In addition, public officials can bring the cause of action and can do so in conjunction with private landowners. The statutory public nuisance cause of action limits the government to prosecuting the polluter for a misdemeanor offense. In contrast, the common law private nuisance cause of action and the codified version in Minnesota law could both be effective tools for the landowners whose property has been damaged by the sulfide mining operations. The main issue is that the balancing test required by the Restatement (Second) of Torts and the court’s adoption of a similar test would require the landowners to work together in a class action style law suit in order to demonstrate that environmental harm to the landowners’ property outweighs harm to the mining company’s and the region’s economic interest.

Again, the effectiveness of these statutory and common law causes of action depends largely on what happens in the future. All of the laws allow some sort of injunctive relief which is a large part of limiting the environmental harm that these mines could potentially inflict. Injunctive relief, however, falls short of repairing a tourism industry that is reliant upon the pristine wilderness of northern Minnesota when that wilderness has been contaminated. Lawmakers in St. Paul could work with landowners in northern Minnesota to strengthen existing laws to ensure that they can protect the landowners and the environment from the potential type of damage to land and water that sulfide mines have been responsible for in other states.

 

[1] History of the Iron Range, Iron Range Resources. & Rehabilitation Bd., http://mn.gov/irrrb/DataCenter/history-iron-range.jsp (last visited Apr. 26, 2014).

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Minn. Dep’t of Natural Res., Northmet Project Draft Environmental Impact Statement 1 (2009), available at http://files.dnr.state.mn.us/input/environmentalreview/polymet/draft_eis/summary_document.pdf.

[9] Id. at 6.

[10] Id. at 1.

[11] John Myers, Underground Mine Near Ely Would Be Largest in Minnesota, Pioneer Press (Mar. 27, 2012, 10:21 AM), http://www.twincities.com/ci_20264298/underground-mine-near-ely-would-be-largest-minnesota.

[12] Id.

[13] Gilt Edge Mine, U.S. Envtl. Protection Agency, http://www2.epa.gov/region8/gilt-edge-mine (last visited Apr. 26, 2014) [hereinafter Gilt Edge Mine].

[14] Id.

[15] Abandoned Mine Drainage, U.S. Envtl. Protection Agency, http://water.epa.gov/polwaste/nps/acid_mine.cfm (last visited Mar. 27, 2014).

[16] Id.

[17] Mining Operations as Nonpoint Source Pollution, U.S. Envtl. Protection Agency, http://www.epa.gov/reg3wapd/nps/mining.html?tab=2 (last visited Mar. 27, 2014).

[18] Gilt Edge Mine, supra note 13.

[19] Id.

[20] Id.

[21] Id.

[22] Lee Bergquist, Tests Find Toxins at Flambeau Mine, Milwaukee J. Sentinel (Nov. 1, 2011), http://www.jsonline.com/news/wisconsin/tests-find-toxins-at-flambeau-mine-133051073.html.

[23] Id.

[24] Andrew J. Piela, A Tale of Two Statutes: Twenty Year Judicial Interpretation of the Citizen Suit Provision in the Connecticut Environmental Protection Act and the Minnesota Environmental Rights Act, 21 B.C. Envtl. Aff. L. Rev. 401 (1994)

[25] Minnesota Environmental Rights Act, ch. 952, 1971 Minn. Laws 2011 (codified as amended at Minn. Stat. §§ 116B.01–.13 (2013)).

[26] § 116B.01.

[27] Id. § 116B.07.

[28] Id. § 116B.02, subdiv. 2.

[29] Id. § 116B.02, subdiv. 4.

[30] Id. § 116B.02, subdiv. 5.

[31] See Cnty. of Freeborn ex rel Tuveson v. Bryson, 210 N.W.2d 290, 297 (Minn. 1973).

[32] § 116B.03, subdiv. 1.

[33] Id. § 116B.02, subdiv. 2.

[34] Id.

[35] Id.

[36] Id. § 116B.02, subdiv. 4.

[37] Id. § 116B.02, subdiv. 5.

[38] Id.

[39] Cnty. of Freeborn ex rel Tuveson v. Bryson, 210 N.W.2d 290, 297 (Minn. 1973).

[40] Id.

[41] Id.

[42] Id.

[43] 257 N.W.2d 762 (Minn. 1977).

[44] Id. at 764.

[45] Id. at 765.

[46] Id. at 768.

[47] Id.

[48] Id.

[49] Id.

[50] Id.

[51] Id.

[52] Id.

[53] Id. at 770; see also Minn. Stat. § 116B.02, subdiv. 4 (2013).

[54] 510 N.W.2d 27 (Minn. Ct. App. 1993).

[55] Id. at 31.

[56] Id. at 30.

[57] Id.

[58] Id.

[59] Id.

[60] Minn. Stat. § 116B.04 (2013).

[61] Id.

[62] Wacouta, 510 N.W.2d at 31.

[63] Id.

[64] § 116B.04.

[65] Wacouta, 510 N.W.2d at 31.

[66] State ex rel Archabal v. Cnty. of Hennepin, 495 N.W.2d 416, 423 (Minn. 1993).

[67] § 116B.04.

[68] State ex rel Drabik v. Martz, 451 N.W.2d 893, 896–97 (Minn. 1990).

[69] Id. at 897.

[70] Id.

[71] § 116B.03, subdiv. 1.

[72] Id.

[73] Project Schedule, Twin Metals Minn., http://www.twin-metals.com/about-the-project/project-schedule/ (last visited on May 19, 2014).

[74] § 116B.02, subdiv. 2.

[75] Id. § 116B.02, subdiv. 4.

[76] The Boundary Waters Canoe Area Wilderness, U.S. Forest Service, http://www.fs.usda.gov/detail/superior/specialplaces/?cid=stelprdb5202169

[77] § 116B.10, subdiv. 1.

[78] Id. § 116B.10, subdiv. 2.

[79] Id. § 116B.09, subdiv. 1.

[80] Id. § 116B.09, subdiv. 2.

[81] 256 N.W.2d 808 (Minn. 1977).

[82] § 116B.09, subdiv. 2.

[83] 1 James T. O’Reilly, Toxic Torts Prac. Guide § 10:6 (2013).

[84] Id.

[85] Id.

[86] 33 U.S.C.A. § 1365(a) (West, Westlaw through P.L. 113-92).

[87] 954 F.2d 974, 980 (4th Cir. 1992).

[88] 42 U.S.C.A. § 6972(a)(1)(A) (West, Westlaw through P.L. 113-92).

[89] 136 F. Supp. 2d 81, 106 (E.D.N.Y. 2001).

[90] 362 F. Supp. 2d 1025, 1029 (E.D. Wis. 2005).

[91] Aiello, 136 F. Supp. 2d at 105-106.

[92] Viacom, 362 F. Supp. 2d at 1029.

[93] 358 F.3d 626, 638 (9th Cir. 2004).

[94] 546 F.3d 918, 936 (7th Cir. 2008).

[95] 42 U.S.C.A. § 7413 (West 2013)

[96] 20A1 Brent A. Olson, Minnesota Practice series: Business Law Deskbook § 25:7 (2013).

[97] Id. § 25:8

[98] Daniel A. Farber, Toxic Causation, 71 Minn. L. Rev. 1219, 1222 (1987).

[99] Id. at 1225.

[100] Id. at 1227.

[101] Id. at 1228.

[102] Olson, supra note 102, § 25:2.

[103] O’Reilly, supra note 83, § 6:8.

[104] Id.

[105] Id.

[106] Id.

[107] See Olson, supra note 102.

[108] Id.

[109] Id.

[110] Id.

[111] Id.

[112] Id.

[113] See O’Reilly, supra note 83, § 6:8.

[114] Olson, supra note 102, § 25:10.

[115] Id.

[116] 624 N.W.2d 796 (Minn. Ct. App. 2001).

[117] Id. at 805 (quoting Special Force Ministries v. WCCO Television, 584 N.W.2d 789, 792–93 (Minn. Ct. App. 1998)).

[118] Id.

[119] Id.

[120] Palmer v. 3M Co., No. C2004-6309, 2005 WL 5891911 (Minn. Dist. Ct. April 25, 2005)

[121] U.S. Envtl. Prot, Agency, Emerging Contaminants—Perfluorooctane Sulfonate (PFOS) and Perfluorooctanoic Acid (PFOA) 1 (2012), available at http://www.epa.gov/fedfac/pdf/emerging_contaminants_pfos_pfoa.pdf.

[122] Palmer, 2005 WL 5891911.

[123] 817 N.W.2d 693, 696 (Minn. 2012).

[124] Id.

[125] Id. at 702.

[126] Id. at 705.

[127] Id. at 704.

[128] Id.

[129] Id.

[130] Particulate Matter (PM), U.S. Envtl. Prot. Agency, http://www.epa.gov/pm/ (last visited April. 17, 2014).

[131] 709 P.2d 782, 789 (Wash. 1985).

[132] Id. at 790.

[133] 369 So. 2d 523, 527–29 (Ala. 1979).

[134] 817 N.W.2d 693 700 (Minn. 2012).

[135] O’Reilly, supra note 83, § 6:4.

[136] Id.

[137] Id.

[138] Restatement (Second) of Torts § 821B (1979).

[139] M. Stuart Madden & Gerald W. Boston, Law of Environmental and Toxic Torts 56 (3d ed., 2005).

[140] Id. at 57.

[141] Id.

[142] Id.

[143] Restatement, supra note 138.

[144] Id. § 821B(2)(a).

[145] Id. § 821B(2)(b).

[146] Id. § 821B(2)(c).

[147] O’Reily, supra note 83, § 6:4.

[148] Id.

[149] Id.

[150] Id.

[151] Minn. Stat. § 609.74 (2013).

[152] Id.

[153] Id.

[154] Restatement, supra note 138.

[155] 109 N.W.2d 749, 753 (Minn. 1961).

[156] Restatement, supra note 138, § 821D.

[157] Id. § 822.

[158] Id. § 822(a).

[159] Id. § 822(b).

[160] Id. § 825.

[161] Id. § 826(a).

[162] Id. § 826(b).

[163] Id. § 827(a).

[164] Id. § 827(b).

[165] Id. § 827(c).

[166] Id. § 827(d).

[167] Id. § 827(e).

[168] Minn. Stat. § 561.01 (2013).

[169] 624 N.W.2d 796, 803 (Minn. Ct. App. 2001).

[170] Id. (citing Minn. Stat. § 561.01 (2000)).

[171] Id.

[172] Id.

[173] Id. at 804.

[174] 662 N.W.2d 546 (Minn. Ct. App. 2003).

[175] Id. at 549.

[176] Id. at 551.

[177] Id.

[178] Id. at 552.

[179] 817 N.W.2d 693 (Minn. 2012).

[180] Restatement, supra note 138, §§ 826–27.

[181] Reserve Mining Co. v. Envtl. Prot. Agency, 514 F.2d 492, 501 (8th Cir. 1975).

[182] Id.

[183] Id. at 520–21.

[184] Id. at 520–22.

[185] Id. at 524.

[186] 869 F.2d 1196, 1198 (9th Cir. 1988).

[187] Id. at 1200.

[188] 453 U.S. 1 (1981).

[189] Nat’l Audubon Soc., 869 F.2d at 1200.

 

RETAINING THE SCARLET LETTER: THE TENSION BETWEEN BRANCH POWERS, LAW, AND EQUITY WITH INHERENT AUTHORITY EXPUNGEMENT—STATE V. M.D.T.

By: Robert C. Whipps

I.Introduction

II.History of Inherent Authority Expungement in MinnesotA

A.The Founding and Expansion of Inherent Authority Expungement

B.The Minnesota Court of Appeals Split on Inherent Authority

C.The Minnesota Supreme Court hears S.L.H.

III. The M.D.T. Decision

A.Facts and Procedural Posture

B.The Minnesota Supreme Court’s Decision

C.Justice Stras’ Concurrence

D.Justice Paul Anderson’s Dissent

IV. Analysis

A.Getting Off on the Wrong Foot: Equity v. Law

B.Separation of Powers: Inconsistencies

C.Expungement as a Matter of Policy

V. Conclusion

—-

I.Introduction

Imagine you are twenty-one years old, uninsured, and you need to go to the doctor because of an illness. You can barely scrape the money together for the visit, and certainly cannot afford a second appointment. The doctor writes you a prescription for some cold medicine. Prior to visiting the pharmacy you change one number, doubling the prescription. You are relatively young and don’t realize this split-second act of poverty will haunt you for at least the next fifteen years of your life.

Since this one-time mistake, you have completed college with honors, married, and started a family. However, due to your split-second act you will be denied jobs, face difficulty supporting your family, and even be prohibited from coaching your kid’s sports teams. Now, imagine there was a form of relief.

Expungement means “[t]o erase or destroy,”[1] but in Minnesota expungement takes place in the form of a “court order sealing the records and prohibiting the disclosure of their existence or their opening except under court order or statutory authority.”[2] For many years this process allowed deserving-rehabilitated people whose life would benefit from expungement to have their records sealed.

Expungement was used sparingly and only after the court gave due regard to public safety and other needs of the public to have access to criminal records.[3] In order to provide a petitioner any real benefit from an expungement, records held in the judicial and executive branch must be sealed. A partial expungement or the sealing of one branch’s records without the others provides an illusory remedy to a petitioner.

In State v. M.D.T.,[4] the petitioner, M.D.T., found herself in the scenario described above. The Minnesota Supreme Court held that district courts lack inherent authority to reach criminal records held by the executive for the purposes of granting non-statutory expungement.[5] In deferring to the separation of powers, the court held that sealing records held in the executive branch is not a unique judicial function absent a constitutional violation.[6] This decision left M.D.T. and others similarly situated with a partial expungement—an illusory remedy.

This case note begins by examining the history of inherent authority in Minnesota.[7] It goes on to present the facts and the Minnesota Supreme Court’s decision.[8] It argues that the court began its analysis incorrectly by treating inherent-authority expungement as a matter of law as opposed to its traditional role as a matter of equity.[9] It addresses the court’s use of inherent authority and the separation of powers in past decisions, and the policy concerns left unaddressed when expungement is left available as only a partial remedy. This case note concludes that the Minnesota Supreme Court allowed its equitable jurisdiction to be curtailed by the statute and the legislature.[10] Finally, it concludes that based on the court’s actions it is imperative that the legislature take action to address the policy implications that a partial expungement remedy has on Minnesota.[11]

II. History of Inherent Authority Expungement in Minnesota


A. The Founding and Expansion of Inherent Authority Expungement

Judicial power and the court’s inherent authority in Minnesota stems from the Minnesota Constitution.[12] Criminal expungement cases date back to the early 1970s in Minnesota.[13] The Supreme Court of Minnesota recognized that in the absence of statutory authority, the judiciary still possessed the ability to grant expungement as a form of equitable relief where the petitioner’s constitutional rights had been
infringed.[14]

Several years later, the Minnesota Supreme Court decided the most important historical case on expungements,[15] State v. C.A., on April 17, 1981.[16] In C.A., the Minnesota Supreme Court expanded on the use of inherent authority for criminal expungement and offered a more detailed account on exercising such authority.[17] The court recognized that “inherent authority of the courts to control the performance of judicial functions is well established.”[18] It acknowledged that “[i]nherent judicial power governs that which is essential to the existence, dignity, and function of a court because it is a court.”[19]

The court then extended the use of inherent authority beyond the scope of expungement in cases involving constitutional right infringement.[20] It stated that “[w]here denial of a constitutional right is not involved the court must decide whether expungement will yield a benefit to the petitioner commensurate with the disadvantages to the public from the elimination of the record and the burden on the court in issuing, enforcing and monitoring an expungement order.”[21] The court determined that one of its judicial functions is to “control court records and agents of the court in order to reduce or eliminate unfairness to individuals . . . .”[22] However, the court recognized the need to proceed with caution when exercising inherent authority in order to respect the separation of powers.[23]

Following the C.A. decision, the district courts in Minnesota regularly sealed judicial and executive branch records using the balancing test laid out by the Minnesota Supreme Court in C.A.[24] The court of appeals regularly affirmed these decisions and even held that the courts had the power to expunge all public records held by the Bureau of Criminal Apprehension in order to grant expungement petitioners a meaningful remedy.[25]

B.The Minnesota Court of Appeals Split on Inherent Authority

A decade later, in 1999, the Minnesota Court of Appeals began whittling away at the expungement remedy and justifying this action under the separation of powers doctrine. In State v. T.M.B., the court held the judiciary may not interfere with the executive branch’s record-keeping function unless an expungement petitioner produces evidence that executive agents abused their discretion in the performance of an executive function.[26] The court decided that in the absence of such evidence, granting expungement is impermissible under the separation-of-powers doctrine.[27] More importantly, the court held that “the fashioning of meaningful remedies is not essential to the performance of the courts’ unique judicial function.”[28]

Five years later, the Minnesota Court of Appeals expanded upon the T.M.B. decision in State v. Schultz.[29] The court acknowledged that “Minnesota case law has neither guided nor informed inherent authority expungement decisions in a totally consistent manner.”[30] The court held that criminal records are not judicial records and fall outside the scope of inherent authority.[31] The court cited the separation-of-powers doctrine in reaching its decision that the district court lacked the inherent authority to seal non-judicial criminal records.[32]

Between 2007 and 2008, the Court of Appeals decided two cases that once again blurred when it is appropriate to use the court’s inherent authority to grant expungement of records held by the executive branch. In 2007, the court of appeals decided in State v. S.L.H. that “absent a constitutional violation, [the district court] had no authority to expunge the non-judicial records . . . .”[33] Then in 2008, the court of appeals held in State v. V.A.J. that “when a district court orders an expungement of a criminal record by way of its inherent authority, that expungement order includes the judicially created public record maintained by the BCA.”[34] The Minnesota Supreme Court granted certiorari in both cases, but stayed certiorari in V.A.J. pending the outcome of S.L.H.[35]

C.The Minnesota Supreme Court Hears S.L.H.

The Minnesota Supreme Court decided State v. S.L.H.[36] in 2008 following the recent disagreement at the appellate level. The court further explained its analysis in these types of cases. To start, a court identifies what the judicial function at hand is, such as “controlling ‘court records and agents of the court in order to reduce or eliminate unfairness to individuals.’”[37] The court then decides whether appropriate circumstances justify issuing an expungement that affects records held by the executive as agents of the court.[38] If appropriate circumstances exist, the court then balances whether the advantages to the petitioner are commensurate with the disadvantages to the public and the court.[39]

The supreme court then applied this analysis to the facts of the case at hand. The court held that S.L.H.’s circumstances did not implicate a core judicial function and were not appropriate to justify issuing expungement orders upon the executive.[40] While the court did not limit the use of inherent authority exclusively to constitutional infringements, it did affirm the appellate court’s decision.[41] Thus, the supreme court did not create a bright-line rule forbidding expungement of non-judicial records—it stated that helping an individual achieve employment goals is not a core judicial function.[42] In other applications, the question of whether the judiciary could exercise inherent authority to seal non-judicial records remained.

III. The M.D.T. Decision

A.Facts and Procedural Posture

M.D.T. altered a prescription for Robitussin that contained the controlled substance codeine.[43] She then presented the altered prescription to the Shopko Pharmacy in Worthington, Minnesota.[44] When police arrested M.D.T. in 2006, she gave a statement that she altered the prescription by doubling the amount because she could not afford another doctor visit or an additional prescription if the medicine did not work.[45] M.D.T.’s record contained no other criminal offenses.[46]

The state brought three separate charges upon her including two counts of felony aggravated forgery and one count of felony-level controlled substance procurement by fraud.[47] M.D.T. entered an Alford plea on a single count of the aggravated forgery charge in violation of Minnesota Statute section 609.625, subdivision 3.[48] At sentencing, the district court stayed imposition of sentence, gave her three years of probation, and fined her $879.[49] In 2008, the court discharged M.D.T. from probation and forgave her remaining fines owed.[50]

M.D.T., representing herself pro se, filed a petition for expungement about six months after being discharged from probation.[51] She sought expungement in order to move on with her life and to pursue a career in business management and accounting.[52] M.D.T.’s demonstration of rehabilitation included that she retained a steady job and followed all court orders.[53] The district court denied M.D.T.’s petition finding she failed to provide clear and convincing evidence of rehabilitation in such a short time or that granting the petition would provide “a benefit to her that was commensurate with the public detriment of elimination of her record and the burden of issuing and administering the expungement order.”[54]

Then in 2011, M.D.T. with the assistance of counsel filed a second petition for expungement.[55] She submitted a detailed account of her rehabilitation,and her job history including dismissals and rejections solely because of her criminal record.[56] Further, she presented her personal history, education, and career plans.[57] The Nobles County Attorney objected to the M.D.T.’s petition on the ground that facilitating employment goals is not a valid reason for expungement.[58] The Nobles County Attorney additionally objected stating that expungement is not necessary to a core judicial function and the district court lacked authority to order expungement outside of the judicial branch.[59]

Finding clear and convincing evidence that the expungement “would yield a benefit to [M.D.T.] commensurate with the disadvantages to the public and public safety,” the district court granted the M.D.T.’s petition for expungement.[60] The court acknowledged that whether it had inherent authority to expunge executive records was unclear.[61] However, the court turned to several unpublished Minnesota Court of Appeals decisions and adopted an expansive view that the court had inherent authority to grant a meaningful remedy when deciding expungement cases.[62] The court then went on to order that several executive agencies seal records relating to M.D.T.’s arrest, indictment, trial, dismissal, and discharge.[63] The state appealed the district court’s decision to the Minnesota Court of Appeals.[64]

On appeal, the court addressed two issues: “Did the district court abuse its discretion by ordering expungement of respondent’s judicial branch criminal records?” and “Did the district court exceed its authority by ordering expungement of judicial branch records . . . ?”[65] The court went on to hold that the district court did not abuse its discretion by ordering expungement of criminal records in the judicial system.[66] The court then examined de novo whether the district court had inherent authority to seal executive records.[67] Through balancing the needs of the judiciary to issue an effective remedy, the needs of the executive to maintain criminal records, and the fundamental rights of M.D.T., the court held that the district court did not abuse its discretion by sealing records created by the judiciary and maintained by the executive.[68] Therefore, the court of appeals affirmed the district court’s decision.[69] Once again, the state appealed the decision of the appellate court and the Minnesota Supreme Court granted the state’s petition for further review.[70]

B.The Minnesota Supreme Court’s Decision

After granting review, the Minnesota Supreme Court first acknowledged it reviews the decision of a lower court to grant expungement “under an abuse of discretion standard.”[71] However, the court went on to shape the issue as “whether the district court exceeded the scope of its inherent authority to grant expungement.”[72] The court then framed this issue as a question of law[73] that it would review de novo.[74]

The court differentiated between the two varieties of expungement that exist in Minnesota—expungement under Minnesota Statutes Chapter 609A and expungement granted under the judiciary’s inherent authority.[75] The court stated that inherent power stems from the Minnesota Constitution[76] and inherent judicial power “governs that which is essential to the existence, dignity, and function of a court because it is a court.”[77] M.D.T. did not make a claim under statutory authority and therefore the court went on to examine the issue of inherent authority.[78]

The court recognized that the judiciary’s inherent power “governs that which is essential to the existence, dignity, and function of a court because it is a court.”[79] Additionally, the court remarked that while all of the court’s power stems from the Minnesota Constitution,[80] it also came into existence with inherent authority.[81] The court identified the test to be used was “whether the relief requested by the . . . aggrieved party is necessary to the performance of the judicial function as contemplated in our state constitution.”[82]

Before addressing this issue, the court proceeded by identifying the separation-of-powers concerns at hand. The court admitted it must give “‘due consideration’ for the other branches of the government,” and the court must avoid serving its own “needs or . . . wants . . . .”[83] Further, the court recognized that it must not exercise inherent authority where it would step on the toes of either the executive or the legislative branches of government.[84] Last, the court acknowledged that when doubts as to the court’s inherent authority arise, the court must yield to the co-ordinate branches, resolving those doubts in favor of the other branch.[85]

The court then acknowledged that it is permitted to use its inherent authority where the criminal record of a petitioner raises a serious risk of infringing his or her constitutional rights[86] and where expungement was necessary to the performance of a unique judicial function.[87] In the case at hand, M.D.T. never brought her constitutional rights into question.[88] Therefore, the court turned to the issue of whether M.D.T.’s expungement was necessary to the performance of a unique judicial function.[89]

Turning to this issue, the court acknowledged that in the past the judiciary recognized that one of its unique judicial functions concerned its ability to remedy unfairness from the accessibility of criminal records.[90] However, the court differentiated because the C.A. court was dealing with a petitioner who faced unfairness because his conviction had been set aside.[91] Since that decision, the court had distinguished between cases resolved in favor of a plaintiff and those that were not.[92]

The court then pointed out that even where the conviction had been set aside, the court never ordered the sealing of records held in the executive branch[93] or held that the court’s inherent authority extends to records in the possession of the executive.[94] The court clarified that it possesses the inherent authority to control its own internal records.[95] The court then determined that the authority to control its own records does not extend to records held by the executive branch even where such records are judicially created.[96]

Next, the court examined the legislative branch’s intent and concern of keeping criminal records held by the executive in the form of public record.[97] The court recognized that the legislature provided for expungement of criminal records that do not result in conviction, but that it has not provided for expungement in cases like M.D.T.’s, where the petitioner stands convicted of a criminal offense.[98] Secondly, the legislature created the Minnesota Government Data Practices Act[99] that creates a presumption that government data records, such as M.D.T.’s, are public.[100] Further, all data “created or collected by” law enforcement, including records of citations, arrests, and incarcerations is to “be public at all times in the originating agency.”[101] Additionally, all records held by the Bureau of Criminal Apprehension are to be kept public “for fifteen years following the discharge or the sentence imposed for the offense.”[102] Thus, the court concluded that, because fifteen years has not passed, the legislature has determined M.D.T.’s records are to remain public.[103]

The court then decided that the expungement of M.D.T.’s records was not necessary to the performance of a unique judicial function.[104] Therefore, the court held that the district court lacked the authority to expunge criminal records held by the executive, and accordingly reversed that portion of the lower decision.[105]

C.Justice David Stras’ Concurrence

Justice Stras concurred with the majority opinion in result, but disagreed as to reasoning.[106] He framed the issue as “whether district courts may, consistent with the Minnesota Constitution, expunge executive branch records.”[107] Justice Stras first dispensed with the term “inherent authority,” labeling the term as “a misnomer—one devoid of any real meaning.”[108] In Justice Stras’ opinion, the court is really just referring to judicial power under Article VI, section one of the Minnesota Constitution.[109] Additionally, Justice Stras differentiates between the United States Constitution and the Minnesota Constitution—noting the Minnesota Constitution contains a freestanding separation-of-powers clause.[110]

Justice Stras goes on to define judicial power.[111] He notes that judicial power only extends to actual controversies.[112] Justice Stras then points out that the judiciary has misused inherent authority “to promulgate the rules of evidence and procedure.”[113] He offers a variety of cases in which the guise of inherent authority was used to justify an outcome desirable to the judiciary.[114]

Further, Justice Stras points out that the judiciary invokes its inherent authority when the “interests of justice” permits.[115] To him, the “interests of justice” lacks definability and can be invoked under a “kaleidoscope of circumstances.”[116] He contends that “interests of justice” acts as an ace up the court’s sleeve that it may play when constitutional authority for court action is missing.[117] He argues that when exercising inherent authority, the court turns constitutional analysis on its head by asking whether the constitution expressly forbids the action in place of asking whether the court’s action is included within its judicial power under the Minnesota Constitution.[118]

After expressing his concerns with the court’s use of “inherent authority,” Justice Stras turns to examine whether it is within the court’s judicial power to grant expungement of criminal records held by the executive branch.[119] He contends that granting such expungement would go beyond the traditional understanding of judicial power and ignore the separation of powers doctrine enshrined in the Minnesota Constitution.[120] Thus, Justice Stras departs from the majority’s reasoning but joins in its result that the district court lacks the authority to grant M.D.T.’s request for expungement of records held by the executive.

D.Justice Paul Anderson’s Dissent

Justice Paul Anderson, joined by Justice Alan Page, dissented.[121] After reviewing the facts and procedure of the case, Justice Anderson reflected on his concurrence in S.L.H. where he expressed concern that the majority’s interpretation of its inherent authority would be construed too narrowly.[122] He went on to point out that the majority’s opinion in M.D.T. confirmed his concern was grounded in logic.[123]

When Justice Anderson turns to the issue at hand, he starts by examining the term expungement.[124] Justice Anderson notes that the district court simply ordered that the records be sealed—as opposed to destroyed.[125] With this distinction in mind, he frames the issue as “whether the district court abused its discretion by ordering the expungement—sealing—of M.D.T.’s criminal records.”

Justice Anderson starts his analysis by reflecting upon the court’s decision in C.A.,[126] where the court held that one of the judiciary’s unique judicial functions is to “control court records and agents of the court . . . .”[127] He noted that the court held that under appropriate circumstances it may exercise its inherent authority to grant expungement orders affecting court records and agents of the court where “expungement will yield a benefit to the petitioner commensurate with the disadvantages to the public from the elimination of the record and the burden on the court in issuing, enforcing, and monitoring an expungement order.”[128] Therefore, Justice Anderson believes the court neither misapplied the law nor abused its discretion.[129]

Then, Justice Anderson took issue with the majority opinion. In his view, the majority was off base with its interpretation of C.A., which in turn created problems with the majority’s analysis. The majority interpreted C.A. as asserting that the court may exercise inherent authority to grant expungement of an individual’s records to remedy unfairness only when the petitioner’s conviction had been set aside.[130] As noted above, Justice Anderson identified the court’s unique judicial function in C.A. as controlling court records and agents of the court.[131]

Next, Justice Anderson agrees with the majority that reducing and eliminating unfairness to individuals is not a unique judicial function in either case—whether resolved in favor of a petitioner or not.[132] He notes that the majority disregards the “balancing test” as immaterial after “engaging in a rather tortured reading of C.A.”[133] Justice Anderson next turns to the majority’s concern with the separation of powers.

First, Justice Anderson agrees with the majority in taking a cautionary approach when assessing separation of powers concerns and that doubts should be deferred to a coordinate branch.[134] However, he believes the court is compelled by duty to exercise power granted to it by the Minnesota Constitution and the people of Minnesota to “render a judgment that vindicates the existence of that power.”[135]

He then points out that the majority’s decision relies on the “situs” of records and whether the records are stored with an entity that is labeled executive or judicial.[136] Anderson argues that the majority takes an approach that is too formalistic and had been rejected in C.A.[137] Justice Anderson then points out that the majority reliance on situs leaves the threshold question of whether expungement is necessary to the performance of a judicial function unanswered.[138]

Next, Justice Anderson addresses the ability to differentiate between each branch’s functions and that some functions “cannot readily be separated and distinguished.”[139] Justice Anderson acknowledges that a criminal conviction involves all three branches working together, but believes it is certainly within the court’s province and a core function of the court to control its records.[140]

Last, Justice Anderson addressed some of the policy issues at hand. He started this by acknowledging that the result reached by the majority is not inevitable because several past district court decisions have not been appealed or disputed.[141] He points out that the majority’s opinion leaves the court essentially without remedy to grant expungement.[142] He argues that such interpretation leaves a growing number of people without the ability to turn their lives around and subjects them to collateral consequences of a conviction for a substantial period of time beyond their original sentence.[143] Additionally, he points out that these consequences have a disproportionate impact on communities of color.[144] For all of the above reasons, Justice Anderson and Justice Page dissent from the majority’s opinion.[145]

IV.Analysis

A.Getting Off on the Wrong Foot: Equity v. Law

In M.D.T., The Minnesota Supreme Court began its analysis off-course by framing the issue as a question of law subject to de novo review.[146] In the past, the Minnesota Supreme Court treated inherent authority expungement as an equitable remedy.[147] The court offered no justification for departing from this precedent and framing M.D.T.’s issue as an issue of law.[148]

Equity is “the power to do justice in a particular case by exercising discretion to mitigate the rigidity of strict rules.”[149] Under the rigidity of law, a person with a criminal record has no available remedy to address the secondary effects of his or her criminal record. Upon petition and balancing the equities, a court may mitigate this rigidity of the law to prevent further injustice to the individual from the preservation of his or her past indiscretion. The expungement of criminal records is properly considered a matter of equity.

As such, the Minnesota Supreme Court recognized that M.D.T. did not seek statutory expungement.[150] The expungement remedy provided for by the statute leaves petitioners like M.D.T. without any real available legal remedy.[151] When a legal remedy is inadequate or unavailable, equitable relief is permissible and may be granted by the courts to “accomplish justice according to the facts of a particular case.”[152] Thus, because the law left M.D.T. without legal remedy, she was forced to seek expungement as a matter of equity.[153]

Where a matter is based in equity, “courts of equity have exclusive jurisdiction, there can be no statute barring the legal remedy for there is no right of action at law.”[154] M.D.T. had no right of action at law and no legal remedy was available to her. Thus, the court’s reliance on the Government Data Practices Act as barring the legal remedy M.D.T. sought was misplaced.[155] The Government Data Practices Act could not bar M.D.T. because she was not seeking a legal remedy—she sought an equitable remedy.

Because courts of equity have exclusive jurisdiction in matters of equity, the separation of powers forbids the legislature from placing limits on a court’s equitable power. Further, Minnesota recognized the distinction between law and equity at the time the Minnesota Constitution was adopted.[156] Where a legislative act encroaches on an exclusive judiciary function, the act violates the separation of powers and is unconstitutional.[157] Thus, when the court submits to legislative will, the judicial branch’s power granted to it by the Minnesota Constitution is undercut.

The court should have recognized that expungement is a matter of equity and proceeded to decide whether the district court abused its discretion in granting the equitable remedy of expungement.[158] When a matter is decided in equity, the court reaches its decision by balancing the equities.[159] With equitable expungement, the court weighs and balances whether granting expungement will “yield a benefit to the petitioner commensurate with the disadvantages to the public from the elimination of the record and the burden on the court in issuing, enforcing, and monitoring an expungement order.”[160] When balancing these equities, the court looks at five factors:

(1) the extent that the petitioner has demonstrated
difficulties in securing employment or housing;
(2) the seriousness and nature of the offense;
(3) the potential risk that the petitioner poses and how this affects the public’s right to access the records;
(4) any additional offenses or rehabilitative efforts;
(5) other objective evidence of hardship under the circumstances.[161]

In M.D.T.’s case, the district court balanced these equities and held expungement should be granted based on the facts of her particular case.[162] When the issue was appealed, the court of appeals upheld the district court’s grant of expungement.[163] However, the Minnesota Supreme Court eschewed reviewing the district court’s equitable balance by deciding the court did not have inherent authority to grant expungement in the first place.[164]

The court permitted the policy judgments of the legislature to violate the separation of powers and control the scope of the court’s remedy. Thus, the court allowed its independent judicial function, of providing an equitable remedy in the interest of justice, to be curtailed. As Justice Paul Anderson recognized, “[a]n expungement remedy that does not extend to . . . records held by the executive branch is essentially no remedy at all.”[165]

B.Separation of Powers: Inconsistencies

Although this case note argues granting inherent authority expungement is a matter of equity and does not violate the separation of powers, the Minnesota Supreme Court relied heavily on the separation-of-powers doctrine in reaching its decision in M.D.T.[166] The court began the examination of separation of powers by recognizing the
court is limited and must proceed cautiously when exercising its inherent authority—as to not disrespect the authority of another branch.[167] Thus, the court’s use of its inherent authority and the separation of powers must be subjected to further examination.

When looking at the big picture over time, the court often applies the separation-of-powers doctrine arbitrarily when exercising its inherent authority. At times the court has adopted an expansive view of its inherent authority. For instance, in 2009, while citing inherent authority, the Minnesota Supreme Court exercised a power exclusively belonging to the legislature by creating a fee or tax to be paid by all Minnesota lawyers.[168] This collection is to be used to help fund the state’s public defender system.[169] In the past, the Minnesota Supreme Court had recognized that “tax policy is a peculiarly legislative function.”[170] In using its inherent authority to increase the fee, the court demonstrated that it has broad inherent authority, even when exercising authority arguably belonging to the legislative branch.

More recently in Dickhoff v. Green,[171] the Supreme Court decided to incorporate the loss-of-chance doctrine in medical malpractice claims in Minnesota.[172] In the past, the Supreme Court addressed the issue of loss-of-chance twice and elected not to develop the doctrine.[173] Thus, loss-of-chance had never been recognized under common law. Prior to Dickhoff, the court heard a case, Hickman v. Group Health Plan, Inc.,[174] requesting the establishment of wrongful birth and wrongful life doctrines in medical malpractice claims.[175] The Supreme Court recognized that “[b]ecause of these problems and the fact that no such action exists at common law, we consider the establishment of wrongful birth or wrongful life suits to be best within the exclusive jurisdiction of the legislature.”[176] Under separation of powers, the court’s decision in Dickhoff should have been left to the exclusive jurisdiction of the legislative branch.

At other times the Minnesota Supreme Court has used its inherent authority in a protective manner as when it cited its inherent authority when striking down a statute placing limitations on attorney sanctions.[177] The court held that allowing the statute to stand impinged on the court’s inherent authority to oversee attorneys and attorney fees because the statute would deprive the court “of a final, independent review of attorney fees.”[178] The court would not allow the legislature to encroach into a judicial function and violate the separation of powers.[179] However, as the dissent points out, several other jurisdictions have held set statutory maximum fees do not impede upon the court’s ability to regulate the practice of law.[180] As evidenced in these other jurisdictions, the separation of powers does not, as a matter of absolute necessity, prohibit the legislative branch from creating such caps on fees.

In another example, State by Archabal v. County of Hennepin,[181] the Minnesota Supreme Court used its inherent authority and the separation of powers to avoid application of a statutory law mandating all meetings involving public bodies remain open to the public.[182] This situation is analogous to M.D.T. because both cases involve a legislative determination of the public’s right to information. The Archabal court stated if it “orders a litigating public body into a closed settlement conference as a practical necessity in deciding the case and carefully and narrowly limits the scope of the conference to the issues involved in the litigation, application of the Open Meeting Law would violate the separation of powers . . . .”[183] The Archabal court did not defer to the legislature’s policy judgment that such meetings ought to be open in order to protect the public’s access to information. The court refrained from deferring to the legislature in order to protect its own ability to grant a remedy and resolve cases.

This is by no means an exhaustive list of times where the judiciary refrains from deferring to a co-branch of government in the name of separation of powers. It does illustrate that there is a variance in the court’s deference to the legislature and the court’s use of inherent authority. At times the court’s inherent authority is broad and exercised “in a ‘kaleidoscope of circumstances’ that defies categorization.”[184] However, the court’s variance is understandable given the nature of governance with three branches of government.

Each branch cannot be neatly compartmentalized.[185] The constitution only prohibits each branch from exercising power exclusively assigned to another branch.[186] In many instances, governance requires inter-branch cooperation in the performance of government functions, and these functions are often “so interwoven and connected that they cannot readily be separated and distinguished.”[187] This is the case with the creation of criminal records as it necessarily involves the work of all three branches—legislature defines crime; executive investigates and charges crimes; and the judiciary convicts crimes.[188]

Where there is overlap, if the exercise of a power is not exclusively entrusted to either the executive or judicial branches, the branch to which the power belongs must be determined by law—by the legislature.[189] Thus, in order to grant expungement, as the court has recognized in the past, the court must be exercising power exclusively assigned to it. The majority in M.D.T. identifies the power it is exercising as remedying unfairness to individuals—a power not exclusively within the judicial branch’s sole discretion.[190]

The court should have identified the power it was exercising as controlling court records and agents of the court as this power is exclusively a unique judicial function.[191] The judicial power of the court to control court records is further evidenced by the supreme court’s decision in In re Welfare of J.J.P., where the court held that sealing a judicially created order adjudicating a juvenile as a delinquent and in possession of the executive branch was permissible in the absence of explicit legislative authority.[192] Surprisingly, this decision was released the same day as M.D.T.[193]

Additionally, in the majority’s opinion, the court simply differentiated between records based on the location of where the records were held—classifying all records as either executive or judicial.[194] However, during oral argument, the justices addressed and discussed three categories of records—records created and maintained by the judiciary; records created by the judiciary and its agents, but maintained by the executive; and records created and maintained by the executive entities that are not agents of the court.[195]

It is not clear why the judiciary elected to brush over the third category of records, but from past decisions, it is clear that Minnesota district courts have the power to expunge records that are judicially created and maintained.[196] The Minnesota Supreme Court has also recognized the ability of the courts to order expungement of records maintained by agents of the courts.[197] Additionally, one can infer from C.A. the court does not have a right to order expungement of records that are created and held by executive branch members who are not subject to judicial control as agents of the court.[198]

In place of the recognizing the three historical categories, the court lumped the second and third categories together as executive records. This action allowed the court to circumvent its prior application of inherent authority to control its own records, including those held outside of the judiciary by agents of the court. In the past, district courts had authority to seal judicial records and records held outside of the judiciary by agents of the court, and when the district court exercised its authority it was reviewed under an abuse of discretion standard. The court should have discussed all three categories as it had in past decisions.

C.Expungement as a Matter of Policy

The policy justifications permitting the judiciary to grant equitable expungements are quite compelling. Criminal records subject former offenders to collateral consequences. In recent years, the public’s access to criminal records has increased as records have become readily available. Members of society from certain populations such as veterans, minorities, people living in poverty, and those suffering from mental illness or addiction are more likely to have criminal records. Last, the criminal justice system includes a focus on rehabilitation.

Citizens with criminal records face a substantial amount of collateral consequences—consequences that result from a criminal conviction, but are not imposed directly by the court.[199] In Minnesota, collateral consequences number in the hundreds.[200] These can limit an offender’s ability work in certain careers.[201] Collateral consequences can act as barriers preventing offenders from obtaining occupational or professional licensing.[202] These also may limit a returning citizen’s chances to obtain housing.[203] The person’s ability to obtain government benefits may also be inhibited by collateral consequences.[204] There are several additional forms of collateral consequences a returning citizen may experience well after he or she has completed a court-ordered sentence.[205]

Minnesota has seen a sharp rise in the number of criminal convictions over the last three decades.[206] As the number of convictions have risen, so has the public’s ability to easily obtain access to criminal records.[207] In Minnesota, criminal records are readily available to the public through the Bureau of Criminal Apprehension[208] and the judicial branch.[209] These public access changes have taken place over the last ten years.[210] The public’s ease in access to criminal records further subjects an ex-offender to collateral consequences and can even lead to the exploitation of a person’s criminal record.[211]

Collateral consequences have a disproportionate impact on certain communities.[212] Communities of color are incarcerated in greater numbers, subjecting these communities to an increased number of criminal records and collateral consequences.[213] Crime rates are higher among the poor and downtrodden.[214] Criminal records contribute to problems Minnesota veterans face in obtaining employment and housing as well.[215] People with mental health conditions also are excessively involved in the criminal justice system.[216] People suffering from addiction to either drugs or alcohol disproportionately come under the cloud of a criminal record.[217] These communities continue to face what can be insurmountable consequences stemming from criminal records even after they have paid their debt to society.[218]

It is at times forgotten that the Criminal Code in Minnesota focuses not on punishment, but on deterrence and rehabilitation.[219] In fact, “rehabilitation of the convicted person has been widely accepted as a primary goal of post-sentence procedures . . . .”[220] Rehabilitation is “[t]he restoration of one convicted of a crime to a respected and useful position in society . . . .”[221] Rehabilitation is accomplished by improving “a criminal’s character and outlook so that he or she can function in society without committing other crimes.”[222]

Additionally, the legislature has declared:

[I]t is the policy of the state of Minnesota to encourage
and contribute to the rehabilitation of criminal offenders and to assist them in the resumption of the responsibilities of citizenship. The opportunity to secure employment or to pursue, practice, or engage in a meaningful and profitable trade, occupation, vocation, profession or business is essential to rehabilitation and the resumption of the responsibilities of citizenship.[223]

Collateral consequences inhibit rehabilitation by preventing ex-offenders from reintegrating into society.[224] Minnesota has not followed the trend of other states in limiting third-party public access to criminal records.[225] Additionally, criminal records affect underrepresented groups, further disadvantaging these communities.[226] When circumstances are appropriate, full expungement is imperative for helping Minnesotans to rehabilitate their lives after they have paid their debt to society as imposed by the courts.[227]

V.Conclusion

In M.D.T., the Minnesota Supreme Court determined that a district court does not have inherent authority to grant expungement of criminal records held by the executive.[228] It did so in the name of the separation of powers doctrine because sealing records held in the executive is not a unique judicial function.[229]

The court began astray by treating the court’s authority to grant expungement as a matter of law. As in the past, the court should have recognized that expungement is an equitable matter for which it can grant a complete remedy where it has properly weighed the equities at hand.[230] By relying on a statute or law, the court allowed its equitable power to be limited by the legislature in violation of the separation of powers.[231]

Over the years, the Minnesota Supreme Court has at times broadly applied its inherent authority and used its inherent authority to protect the integrity of its unique judicial power.[232] Criminal records are the creation of the cooperative effort of the three branches.[233] The judiciary is not prohibited from sealing records because the creation and storage of criminal records do not fall under any power belonging exclusively to any branch of government in Minnesota.[234] In the past, the court divided criminal records into three categories and the court determined it had the authority to seal records held outside of the judiciary if the records were held by an agent of the court.[235]

There are strong policy justifications in favor of allowing a past offender’s records to be sealed regardless of the location of such records.[236] Records are readily available to the public leaving room for certain communities to face hundreds of collateral consequences.[237] This inhibits rehabilitated members of these communities from reentering society as restored citizens.[238]

In its decision, the Minnesota Supreme Court deferred to the legislature to make policy judgments and create any new law allowing the court to decide to expunge records held outside of the judiciary.[239] With the ball in the legislature’s court, the community must await legislative action permitting the judiciary to seal all records. In the past, the legislature has made attempts to ease restrictions on expungement without success.[240] Following the M.D.T. decision, an Expungement Working Group within the Minnesota House of Representatives has once again been meeting in the interim.[241] Due to the holding in M.D.T., it is now of greater importance for the legislature to timely address these policy concerns in future legislative sessions.


[0]
J.D. Candidate, William Mitchell College of Law, January 2015; B.A. Political Science, Augsburg College, 2010. I would like to send a special thank you to my friends, family, mentors, and teachers for helping guide me down my path. This note is dedicated to my Stephanie Lue for her enduring love, patience, and encouragement.

[1]
Black’s Law Dictionary 662 (9th ed. 2009).

[2]
Minn. Stat. § 609A.01 (2012).

[3]
See, e.g.,
State v. L.W.J., 717 N.W.2d 451, 455 (Minn. Ct. App. 2006)(“[E]xpungement of a criminal record is an extraordinary remedy to be granted only upon clear and convincing evidence that it would yield a benefit to the petitioner commensurate with the disadvantages to the public and public safety.”).

[4]

State v. M.D.T., 831 N.W.2d 276 (Minn. 2013).

[5]
Id. at 284.

[6]
Id.

[7]
See infra Part II.

[8]
See infra Part III.

[9]
See infra Part IV.

[10]
See infra Part V.

[11]
See infra Part V.

[12]
Minn. Const. art. VI, § 1.

[13]
See Morrissey v. State, 174 N.W.2d 131 (Minn. 1970).

[14]
State v. Ambaye, 616 N.W.2d 256, 258 (Minn. 2000); In re R.L.F., 256 N.W.2d 803, 808 (Minn. 1977); see Ritesh Patel, Hall v. Alabama: Do Federal Courts Have Jurisdiction to Expunge Criminal Records?, 34 Am. J. Trial Advoc. 401, 405–06 (2010) (discussing expungement where there has been a constitutional violation).

[15]
Lindsay W. Davis, An Amicus Perspective on Recent Minnesota Criminal Expungement, 2 Wm. Mitchell J.L. & Prac. 4 (2009).

[16]
State v. C.A., 304 N.W.2d 353 (Minn. 1981); see also State Court Administrator’s Office, Minnesota Judges Criminal Benchbook 17-13 (2006).

[17]
Davis, supra note 15.

[18]
C.A., 304 N.W.2d at 358 (citing State v. Osterloh, 275 N.W.2d 578, 580 (Minn.1978); Clerk of Court’s Comp. for Lyon Cnty. v. Lyon Cnty. Comm’rs (In re Lyon), 241 N.W.2d 781, 784, 786 (Minn. 1976); In re Disbarment of Greathouse, 248 N.W. 735, 737 (Minn. 1933)).

[19]
C.A., 304 N.W.2d at 358 (citing In re Lyon, 241 N.W.2d at 784); see also
Joseph M. Sayler, Mischief Makers Beware: Minnesota Courts’ Broad Power to Sanction Misconduct in the Wake of Frazier v. BNSF, 35 Hamline L. Rev. 67, 71 (2012) (discussing inherent authority in Minnesota).

[20]
C.A., 304 N.W.2d at 358.

[21]
Id.

[22]
Id. (including where the unfairness does not have a constitutional dimension).

[23]
Id. at 358–59 (citing State v. Osterloh, 275 N.W.2d 578, 580 (Minn. 1978); In re Lyon, 241 N.W.2d at 786; In re Greathouse, 248 N.W. 735, 737 (Minn. 1933)).

[24]
Davis, supra note 15, at section II(B).

[25]
See, e.g., State v. P.A.D., 436 N.W.2d 808, 810–11 (Minn. Ct. App. 1989).

[26]
State v. T.M.B, 590 N.W.2d 809, 812 (Minn. Ct. App. 1999).

[27]
Id. at 813.

[28]
Id. (stating instead it is a “judicial want”).

[29]
676 N.W.2d 337 (Minn. Ct. App. 2004).

[30]
Id. at 343.

[31]
Id. (citing T.M.B., 590 N.W.2d at 813.

[32]
Id. at 343–44; see also
Thomas R. Frenkel, Sealed Appellant v. Sealed Appellee, 130 F.3d 695 (5th Cir. 1997), 24 S. Ill. U.L.J. 627, 629 (2000) (discussing the “Seventh Circuit’s contrary . . . holding that the judiciary has no jurisdictional authority to order the expungement of executive branch records”).

[33]
State v. S.L.H., No. A06-1750, 2007 WL 2769652, at *1 (Minn. Ct. App. Sept. 25, 2007), aff’d, 755 N.W.2d 271 (Minn. 2008).

[34]
State v. V.A.J., 744 N.W.2d 674, 678 (Minn. Ct. App. 2008).

[35]
Davis, supra note 15, at section II(A).

[36]
755 N.W.2d 271 (Minn. 2008).

[37]
Id. at 276 (citing State v. C.A., 304 N.W.2d 353, 358 (Minn. 1981)).

[38]
Id.

[39]
Id.

[40]
Id. at 277–78 (helping individuals achieve employment goals is not a core judicial function).

[41]
Id. at 280.

[42]
Lindsay W. Davis, Minnesota’s Inherent Authority Criminal Expungement Law: Two Years After State v. S.L.H., 5 Wm. Mitchell J.L. & Prac. 2 (2012).

[43]
State v. M.D.T., 815 N.W.2d 628, 630 (Minn. Ct. App. 2012); see also Minn. Stat. § 152.02, subdiv. 3(b)(1)(ii) (B) (2012) (codeine is a Schedule II drug).

[44]
M.D.T., 815 N.W.2d at 630.

[45]
State v. M.D.T., 831 N.W.2d 275, 278 (Minn. 2013); see also Anna Light, Another Chance for Second Chances?, Minn. Just. Monthly 1 (Sept. 2012), http://www.crimeandjustice.org/pdffiles/mjmsep2012/Article%20-%20M%20D%20T%20Final.pdf.

[46]
M.D.T., 815 N.W.2d at 630.

[47]
M.D.T., 831 N.W.2d at 278; see also Minn. Stat. §§ 152.025 subdiv. 2(a)(2)(i), 609.625 subdiv. 1(1), 3.

[48]
M.D.T., 815 N.W.2d at 631; see also Black’s Law Dictionary 83 (9th ed. 2009) (defining an Alford plea as “[a] guilty plea that a defendant enters as part of a plea bargain, without actually admitting guilt.”).

[49]
M.D.T., 815 N.W.2d at 631.

[50]
M.D.T., 831 N.W.2d at 278; see also Light, supra note 45, at 2.

[51]
M.D.T., 815 N.W.2d at 631.

[52]
M.D.T., 831 N.W.2d at 278.

[53]
M.D.T., 815 N.W.2d at 631.

[54]
Id.; see also Light, supra note 45, at 2.

[55]
M.D.T., 815 N.W.2d at 631.

[56]
Id.

[57]
M.D.T., 831 N.W.2d at 279.

[58]
M.D.T., 815 N.W.2d at 631. However, the Rock Nobles Community Corrections was not opposed to expungement in M.D.T.’s case. M.D.T., 831 N.W.2d at 279.

[59]
M.D.T., 815 N.W.2d at 631.

[60]
Id.

[61]
M.D.T., 831 N.W.2d at 279.

[62]
M.D.T., 815 N.W.2d at 631.

[63]
Id. at 632. Executive agencies included: Nobles County Sheriff, Bureau of Criminal Apprehension, Minnesota Attorney General’s Office, Minnesota Department of Corrections, Nobles County Attorney, Worthington City Police Department, Probation and Court Services Department, and the Worthington City Attorney. Id. The court reasoned that M.D.T.’s one-time mistake did not justify inhibiting her employment opportunities for fifteen years. M.D.T., 831 N.W.2d at 279.

[64]
M.D.T., 815 N.W.2d at 630.

[65]
Id. at 632.

[66]
M.D.T., 831 N.W.2d at 279.

[67]
M.D.T., 815 N.W.2d at 634 (citing State v. N.G.K., 770 N.W.2d 177, 181 (Minn. Ct. App. 2009)).

[68]
Id. at 639. The court here did not provide an explanation of why it used an abuse of discretion standard for an item it identified as an issue to be reviewed de novo.

[69]
Id.

[70]
See State v. M.D.T., No. A11-1285, 2012 Minn. LEXIS 376, at *1 (Minn. June 27, 2012).

[71]
M.D.T., 831 N.W.2d at 279 (citing State v. Ambaye, 616 N.W.2d 256, 261 (Minn. 2000)).

[72]
Id.

[73]
Id. (citing State v. Chauvin, 723 N.W.2d 20, 23 (Minn. 2006)).

[74]
Id. (citing Modrow v. JP Foodservice, Inc., 656 N.W.2d 389, 393 (Minn. 2003)).

[75]
Id.; see also Minn. Stat. § 609A (2012); State v. S.L.H., 755 N.W.2d 271, 274 (Minn. 2008); Kelly J. Keegan, Expungement in Minnesota CLE, Hot Issues in Criminal Law and Key Cases 8-3 (2012).

[76]
Minn. Const. art. VI, § 1.

[77]
M.D.T., 831 N.W.2d at 280 (quoting Clerk of Court’s Comp. for Lyon Cnty. v. Lyon Cnty. Comm’rs (In re Lyon), 241 N.W.2d 781, 784 (Minn. 1976)).

[78]
Id.

[79]
Id.

[80]
M.D.T., 831 N.W.2d at 280; see also Minn. Const. art. VI, § 1 (vesting “[t]he judicial power of the state” in the “supreme court, a court of appeals, if established by the legislature, a district court and such other courts . . . as the legislature may establish”).

[81]
M.D.T., 831 N.W.2d at 280 (quoting State by Archabal v. Cnty. of Hennepin, 505 N.W.2d 294, 298 n.6 (Minn. 1993)).

[82]
Id. (quoting In re Lyon, 241 N.W.2d at 786 (Minn. 1976)).

[83]
Id. (citations omitted).

[84]
Id. (quoting Granada Indep. Sch. Dist. No. 455 v. Mattheis, 170 N.W.2d 88, 91 (Minn. 1969)).

[85]
Id. (quoting Gollnik v. Mengel, 128 N.W. 292, 292 (Minn. 1910)).

[86]
Id. (quoting In re R.L.F., 256 N.W.2d 803, 808 (Minn. 1977)).

[87]
Id. at 281 (citations omitted).

[88]
Id. at 280.

[89]
See id. at 281.

[90]
Id.

[91]
Id. (citing State v. S.L.H., 755 N.W.2d 271, 277 (Minn. 2008)).

[92]
Id.

[93]
Id.

[94]
Id. (citations omitted).

[95]
Id. (citing State v. C.A., 304 N.W.2d 353, 361. (Minn. 1981)).

[96]
Id. at 282. In reaching this conclusion the court once again cited the need to proceed cautiously under the separation of powers, and that it must respect the equal authority of another branch of government. Id. (citations omitted).

[97]
Id.

[98]
Id.; see also Minn. Stat. § 609A.02, subdiv. 1–3 (2012).

[99]
Minn. Stat. § 13.

[100]
M.D.T., 831 N.W.2d at 282 (citing Minn. Stat. § 13.01, subdiv. 3).

[101]
Id. (quoting Minn. Stat. § 13.82, subdiv. 2).

[102]
Id. (quoting Minn. Stat. § 13.87, subdiv. 1(b)).

[103]
Id. at 282–83.

[104]
Id. at 284.

[105]
Id.

[106]
Id. at 288 (Stras, J., concurring).

[107]
Id. at 284.

[108]
Id.

[109]
Id.

[110]
Id.; see also Minn. Const. art. III, § 1.

[111]
M.D.T., 831 N.W.2d at 285 (Stras, J., concurring). Judicial power as the “power that adjudicates upon the rights or persons or property and to that end declares, construes, and applies the laws.” Id. (citations omitted). It “extends to any matter which from its nature is subject to a suit at common law, or in equity, and the core power is to decide cases.” Id. (citation omitted).

[112]
Id.

[113]
Id.

[114]
Id. (examples include: striking down statutory limits on attorney fees; ordering public entities to hold settlement conferences; placing a fee (tax) on lawyers to fund the Public Defender’s Office; hearing appeals in the interests of justice where there is otherwise no jurisdiction). However, Justice Stras does not feel all of these examples are abuses of judicial power. Id. at 287.

[115]
Id. at 286.

[116]
Id.

[117]
Id.

[118]
Id.

[119]
Id. at 287.

[120]
Id. at 288.

[121]
Id. at 303 (P. Anderson, J., dissenting).

[122]
Id. at 294 (citing State v. S.L.H., 755 N.W.2d 271, 282 (Minn. 2008)).

[123]
Id. (expressing concern the judiciary will no longer be able to grant a meaningful remedy).

[124]
Id. at 295. Expungement means “[t]o
erase or destroy.” Id. However, in Minnesota, expungement “may consist of the return of the records to the person seeking relief, or the sealing of the records, subject to reopening only upon court order, rather than destruction.” Id. (citing State v. C.A., 304 N.W.2d 353, 357 (Minn. 1981)).

[125]
Id.

[126]
C.A., 304 N.W.2d 353.

[127]
M.D.T., 831 N.W.2d at 295 (P. Anderson, J., dissenting) (citing C.A., 304 N.W.2d at 358).

[128]
Id.

[129]
Id. at 296.

[130]
Id.

[131]
Id. (citing C.A., 304 N.W.2d at 358).

[132]
Id.

[133]
Id. at 297. The majority avoids the balancing test by determining that it should only be engaged in where a case had been set aside. See id.

[134]
Id. at 297 (P. Anderson, J., dissenting).

[135]
Id.

[136]
Id. at 298.

[137]
Id. (citing C.A., 304 N.W.2d at 360–61).

[138]
Id.

[139]
Id. (quoting State ex rel. Patterson v. Bates, 104 N.W. 709, 711 (Minn. 1905)).

[140]
Id. at 298–99.

[141]
Id. at 299.

[142]
See id. at 302. The expungement remedy is illusory and meaningless as the public will still be able to access a petitioner’s records through the Bureau of Criminal Apprehension. Id.

[143]
Id.

[144]
Id.; see also
Shawn D. Stuckey, Decreasing the Accessibility to Criminal History Records to Diminish the Devastating Impacts of Collateral Effects on African Americans in Minnesota, 27 Chicano-Latino L. Rev. 203, 204 (2008) (“Minnesota is one of the nation’s leaders in the disparity of incarceration rates.”).

[145]
M.D.T., 831 N.W.2d at 303.

[146]
Id. at 279. The court relied on State v. Chauvin, 723 N.W.2d 20, 23 (Minn. 2006), a case deciding whether the court had inherent authority to impanel a jury, to justify reviewing the issue in M.D.T. de novo. M.D.T., 831 N.W.2d at 279.

[147]
State v. Ambaye, 616 N.W.2d 256, 261 (Minn. 2000). Matters of equity are reviewed under an abuse of discretion standard—unless there is a clear abuse-of-discretion a lower court’s decision will be upheld. Id.

[148]
In addition to State v. Ambaye, 616 N.W.2d 256, 261 (Minn. 2000),even if the issue was a question of law, the Minnesota Supreme Court had already decided it had the inherent authority to seal records held outside of the judicial branch. See State v. C.A., 304 N.W.2d 353, 358 (Minn. 1981) (establishing that when appropriate circumstances exist, inherent authority allows for expungement of records of the court and its agents—thus allowing the sealing of records held outside the judiciary).

[149]
Kevin C. Kennedy, Equitable Remedies and Principled Discretion: The Michigan Experience, 74 U. Det. Mercy L. Rev. 609, 609 (1997).

[150]
See M.D.T., 831 N.W.2d at 279.

[151]
See Minn. Stat. § 609A (2012).

[152]
Minnesota Odd Fellows Home v. Pogue, 73 N.W.2d 615, 619–20 (Minn. 1955); see also Equity, Legal Info. Inst. (Aug. 19, 2010), http://www.law.cornell.edu/wex/equity.

[153]
See M.D.T., 831 N.W.2d at 279.

[154]
Ozmun v. Reynolds, 11 Minn. 459, 462 (1866); see also Bensel v. Hall, 225 N.W. 104, 105 (Minn. 1929) (“[R]egardless of statute[,] equity will enforce a legal obligation in the absence of an adequate legal remedy for its enforcement.”).

[155]
M.D.T., 831 N.W.2d at 284 (allowing expungement of executive records undermines the legislative policy judgments set forth in the Minnesota Government Data Practices Act); see also Minn. Stat. §§ 13.01, 13.87.

[156]
See
Olson v. Synergistic Tech. Bus. Sys., Inc, 628 N.W.2d 142, 154 (Minn. 2001) (“This statute was in force at the time of the adoption of the Minnesota Constitution and the specific language of the statute was merely intended ‘to preserve in substance the common law distinction between actions at law and suits in equity.’”).

[157]
See
Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 141–42 (Minn. 1999).

[158]
See State v. Ambaye, 616 N.W.2d 256, 261 (Minn. 2000).

[159]
SCI Minn. Funeral Servs., Inc. v. Washburn-McReavy Funeral Corp., 795 N.W.2d 855, 860–61 (Minn. 2011). If the court rules as a matter of law, the standard of review is de novo. Id.

[160]
State v. K.M.M., 721 N.W.2d 330, 335 (Minn. Ct. App. 2006).

[161]
Id. (citing State v. H.A., 716 N.W.2d 360, 364 (Minn. Ct. App. 2006)).

[162]
See State v. M.D.T., 815 N.W.2d 628, 631 (Minn. Ct. App. 2012).

[163]
Id. at 634 (finding the district court did not abuse its discretion); see also
Nadeau v. Cnty. of Ramsey, 277 N.W.2d 520, 524 (Minn. 1979).

[164]
State v. M.D.T., 831 N.W.2d 276, 284 (Minn. 2013). “[A] district court abuses its discretion if it acts against logic and the facts on record, or if it enters fact findings that are unsupported by the record, or if it misapplies the law.” In re Adoption of T.A.M., 791 N.W.2d 573, 578 (Minn. Ct. App. 2010) (internal quotation marks and citations omitted).

[165]
M.D.T., 831 N.W.2d at 302 (P. Anderson, J., dissenting).

[166]
Id. at 282.

[167]
Id.

[168]
See Order Temporarily Increasing Lawyer Registration Fees, No. C1–81–1206, Order at 1–3 (Minn. filed Nov. 4, 2009); see also M.D.T., 831 N.W.2d at 285–86 (Stras, J., concurring). The nature of a tax cannot be avoided by entitling it a fee.

[169]
See Order Temporarily Increasing Lawyer Registration Fees, supra note 168; see also M.D.T., 831 N.W.2d at 285–86 (Stras, J., concurring). One cannot avoid the nature of a tax by entitling it a fee.

[170]
Hutchinson Tech., Inc. v. Comm’r of Revenue, 698 N.W.2d 1, 14 (Minn. 2005).

[171]
836 N.W.2d 321 (Minn. 2013).

[172]
Id. at 336.

[173]
See Fabio v. Bellomo, 504 N.W.2d 758 (Minn. 1993); Leubner v. Sterner, 493 N.W.2d 119 (Minn. 1992).

[174]
396 N.W.2d 10 (Minn. 1986).

[175]
Id.

[176]
Hickman v. Grp. Health Plan, Inc., 396 N.W.2d 10, 13 (Minn. 1986) (emphasis added) (“Barring constitutional violations, that should end the matter.”).

[177]
Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 141 (Minn. 1999).

[178]
Id. at 142.

[179]
Id. at 141–42.

[180]
Id. at 146 (R. Anderson, J., dissenting).

[181]
505 N.W.2d 294, 298 (Minn. 1993).

[182]
See Minn. Stat. § 13.D (2012) (stating that settlement conferences within the court are not listed as an exception to the Public Open Meeting statute).

[183]
Archabal, 505 N.W.2d at 298.

[184]
State v. M.D.T., 831 N.W.2d 276, 286 (Minn. 2013) (Stras, J., concurring) (quoting State v. Beecroft, 813 N.W.2d 814, 867–68 (Minn. 2012) (Stras, J., dissenting)).

[185]
State ex rel. Patterson v. Bates, 04 N.W. 709, 711 (1905) (noting “it is not always easy to discover the line which marks the distinction between executive, judicial, and legislative functions . . . .”).

[186]
Minn. Const. art. III, § 1; see also M.D.T., 831 N.W.2d at 285 (Stras, J., concurring); Quam v. State, 391 N.W.2d 803, 809 (Minn. 1986).

[187]
Bates, 104 N.W. at 711.

[188]
Jon Geffen & Stefanie Letze, Chained to the Past: An Overview of Criminal Expungement Law in Minnesota–State v. Schultz, 31 Wm. Mitchell L. Rev. 1331, 1367 (2005).

[189]
Bates, 104 N.W. at 712 (
“There may be cases in which a particular power cannot be said to be either executive, legislative, or judicial; and if such a power is not by the Constitution unequivocally entrusted to either the executive or judicial departments of the government, the mode of its exercise and the agency must necessarily be determined by law—that is, by the Legislature.”).

[190]
State v. M.D.T., 831 N.W.2d 276, 286 (Minn. 2013) (P. Anderson, J., dissenting).

[191]
Id. (P. Anderson, J., dissenting). The court may control records and agents in order to remedy unfairness to individuals. Id.

[192]
In re Welfare of J.J.P., 831 N.W.2d 260, 262 (Minn. 2013). Unlike Minnesota statute section 609A.02, section 609B.198 subdivision 6 does not include the language “all records.” Thus, under the plain language of Minnesota statute section 609B.198, permission of the judicial branch to seal executive records is not explicitly present. However, this did not prevent the court from permitting at least one variety of judicially created records held by the executive from being sealed. J.J.P., 831 N.W.2d at 262.

[193]
Both cases were decided May 22, 2013. See id., M.D.T., 831 N.W.2d 276.

[194]
See generally id. (differentiating between records created and maintained by the judiciary and records in possession of the executive).

[195]
See generally Oral Argument, State v. M.D.T., 831 N.W.2d 276 (No. A111285), available at http://www.tpt.org/courts/MNJudicialBranchvideo_NEW.php?number=A111285.

[196]
See State v. V.A.J., 744 N.W.2d 674, 676 (Minn. Ct. App. 2008); State v. S.L.H., A06-1750, 2007 WL 2769652 (Minn. Ct. App. Sept. 25, 2007), aff’d, 755 N.W.2d 271 (Minn. 2008); State v. T.M.B, 590 N.W.2d 809, 811 (Minn. Ct. App. 1999).

[197]
See State v. C.A., 304 N.W.2d 353, 360–63 (Minn. 1981) (listing some agents of the court and including others to whom orders may possibly extend). Such expungements were granted under the judiciary’s inherent authority to control its own records. See M.D.T., 831 N.W.2d at 295 (P. Anderson, J., dissenting).

[198]
See C.A., 304 N.W.2d at 361 (noting that it is beyond the scope of judicial control to order officials of a state security hospital not to disclose information).

[199]
M.D.T., 831 N.W.2d at 302 (P. Anderson, J., dissenting).

[200]
Brief and Addendum of Council on Crime and Justice et al. as Amici Curiae Supporting Petitioner at 9, State v. M.D.T., 831 N.W.2d 302 (Minn. 2013) (No. A11-1285); see also National Inventory of Collateral Consequences of Conviction, Am. Bar Assoc., http://www.abacollateralconsequences.org/search/?jurisdiction=2 (last visited Apr. 17, 2014).

[201]
See, e.g., Minn. Stat. § 44.11, subdiv. 5 (2012) (employment in the municipal civil service); id. § 420.07(6) (service as a firefighter); id. § 617.242, subdiv. 6 (ownership or management of adult entertainment facilities). See generally Am. Bar Assoc., supra note 201.

[202]
See, e.g., Minn. Stat. § 144.99 subdiv. 9 (health department licenses); id. § 325J.03(a)(2) (pawnbroker license). See generally Am. Bar Assoc., supra note 201.

[203]
See, e.g., Minn. Stat. § 245C.14, .15 (residing in a household at which services are provided by any Department of Human Services licensee). See
generally
Am. Bar Assoc., supra note 201.

[204]
See, e.g., Minn. Stat. § 256D.024, subdiv. 1(a) (general assistance); id. § 256J.26, subdiv. 1 (Minnesota Family Investment Program); See generally Am. Bar Assoc., supra note 201.

[205]
Criminal records may affect: participation in government contracts; political and civil engagement; family and domestic rights; hunting, fishing, and firearm permits; registration, notification, and residency restrictions; motor vehicle registration and licensing; and other additional items. See generally Am. Bar Assoc., supra note 201.

[206]
In 1981, there were 5500 felony convictions in Minnesota. In 2010, that number had almost tripled to 14,311. Minnesota Sentencing Guidelines Commission, MSGC Report to the Legislature 5 (2012), available at
http://mn.gov/sentencing-guidelines/images/2012%2520Legislative%2520Report.pdf; see also Pew Ctr. on the States, One in Thirty-one: The Long Reach of American Corrections 42 (March 2009), available at http://www.pewstates.org/uploadedFiles/PCS_Assets/2009/PSPP_lin3l_report_FINAL_WEB_3-26-09.pdf.

[207]
Davis, supra note 15; see also Shawn D. Stuckey, Collateral Effects of Arrests in Minnesota, 5 U. St. Thomas L.J. 335, 337 (2008).

[208]
Minnesota Public Criminal History, Minn. Bureau of Crim. Apprehension, https://cch.state.mn.us/pcchOffenderSearch.aspx (last visited Oct. 27, 2013).

[209]
Access Case Records, Minn. Jud. Branch, http://www.mncourts.gov/publicaccess (last visited Oct. 27, 2013).

[210]
Davis, supra note 15.

[211]
Susanna Kim, Businesses Charge Hundreds to Remove Mug Shots Online, ABC News (Apr. 23, 2012), http://abcnews.go.com/Business/businesses-make-profit-copying-mug-shots-online-critics/story?id=16157378 (posting mug shots online and forcing offenders to pay for removal).

[212]
State v. M.D.T., 831 N.W.2d 276, 302 (Minn. 2013) (P. Anderson, J., dissenting).

[213]
Id.
; see Erin Westbrook, Comment, Collateral Sanctions As Punitive Sentences and the Minnesota Judiciary’s Expungement Authority, 9 U. St. Thomas L.J. 959, 966 (2012) (noting collateral consequence disproportionately punish minorities); see also Brief and Addendum of Council on Crime and Justice et al. as Amicus Curiae Supporting Petitioner, supra note 200, at 18.; Lucy Wieland, Editorial, Minnesota’s Racial Disparities: A Judge’s View, Star Trib. (Minneapolis), Apr. 17, 2011, http://www.startribune.com/opinion/commentaries/119948639.html (“Since 1981, the prison population in Minnesota has tripled, and 47 percent of inmates are now men and women of color.”).

[214]
Westbrook, supra note 214, at 966 (noting collateral consequence disproportionately punish minorities).

[215]
Brief and Addendum of Council on Crime and Justice et al. as Amid Amicus Curiae Supporting Petitioner, supra note 201, at 21.

[216]
Id.; see also Nat’l Alliance on Mental Illness Minn., Advocating for People with Mental Illness in the Minnesota Criminal Justice System 2 (Nov. 2009), available at
http://www.namihelps.org/advocatingbooklet2.pdf (stating that 60% of Minnesotans in jail suffer from mental illness).

[217]
Minn. Dep’t of Human Servs., Drug and Alcohol Abuse in Minnesota: A Biennial Report to the 2009 Minnesota Legislature 18 (2009), available at http://www.dhs.state.mn.us/main/groups/disabilities/documents/pub/dhs16_144046.pdf (“The majority of cases coming to our courts involve alcohol/drug dependent persons. Alcohol/drug abuse and addiction is a factor in 80 to 90 percent of Minnesota’s criminal cases . . . .”).

[218]
Zainab Wurie, Tainted: The Need for Equity Based Federal Expungement, 6 S. Region Black L. Students Ass’n L.J. 31, 36 (2012) (noting that “[C]onsequences of a criminal conviction linger long after the sentence imposed by the court has been served . . . .”).

[219]
Minn. Stat. § 609.01 (2012); see also
Westbrook, supra note 214, at 962.

[220]
Minn. Stat
. § 609 Advisory Committee’s Comment (1963).

[221]
Ballentine’s Law Dictionary 1081 (3d ed. 1969).

[222]
Black’s, supra note 1, at 1398–99.

[223]
Minn. Stat. § 364.01 (2012).

[224]
Nora V. Demleitner, Preventing Internal Exile: The Need for Restrictions on Collateral Sentencing Consequences, 11 Stan. L. & Pol’y Rev. 153, 154 (1999); see also Westbrook, supra note 214, at 969.

[225]
Brief and Addendum of Council on Crime and Justice et al. as Amid Curiae Supporting Petitioner, supra note 201, at 6.

[226]
Id.

[227]
Id.

[228]
State v. M.D.T., 831 N.W.2d 276, 284 (Minn. 2013).

[229]
Id.

[230]
See supra Part IV.

[231]
See supra Part IV.

[232]
See supra Part IV.

[233]
See supra Part IV.

[234]
See supra Part IV.

[235]
See supra Part IV.

[236]
See supra Part IV.

[237]
See supra Part IV.

[238]
See supra Part IV.

[239]
See State v. M.D.T., 831 N.W.2d 276, 283 (Minn. 2013). It is plainly appropriate to recognize and accommodate legislative policy judgments in the context of expungement of criminal records held outside the judiciary.

[240]
Davis, supra note 15.

[241]
Audio Files: Expungement Working Group Audio & Video Archives 2013–2014, held by Minnesota House of Representatives Expungement Working Group, http://www.house.leg.state.mn.us/comm/workinggroups/expungaudio.asp.

ELECTRONICALLY STORED INFORMATION: WHAT HATH GOD WROUGHT?

By Roger S. Haydock [Y]

6 Wm. Mitchell J.L. & Prac. 2.

This article will appear in Fundamentals of Pretrial Litigation, 9th Ed. by Roger Haydock, David Herr, and Jeffrey Stempel (West 2013).

The Launch[1]

Who knew way back in 1844 that Morse Code and telegrams would someday be replaced by computers and digital messages? Who anticipated even ten years ago that electronically stored information (ESI) would come to dominate much of civil discovery? And who, pray tell, understands all of its ramifications and possibilities?

This article attempts to be an introductory primer into the world of ESI discovery.  Electronically stored information comprises the myriad types of documents created by computers, smart phones, tablets, recorders, and similar devices. ESI is the moniker that federal and state rules and case law designate for the information created, communicated, or stored in digital form that requires the use of computer hardware and software. Basically, ESI is defined as the content directly or indirectly generated as a series of binary bits on an electronic medium. But you knew that already, even if Samuel Morse could not possibly foresee that happening.

What is less well known, perhaps, is the enormous impact ESI is having on discovery and litigation. Due to the abundance of electronically stored information and its illusive nature, electronic discovery introduces different variables into the traditional discovery process. The geometric increase of ESI in the business world and in ordinary life experiences is spawning new legal precedent and developing technological innovations. The discovery of ESI often requires specialized knowledge and tools to preserve it from destruction and to convert it into a readable, reviewable format.

Information created and stored on computer systems, laptops, smart phones, and similar devices is readily discoverable as long as it is relevant. E-mails, social network communications, video and audio recordings, blog postings, and website searches are an especially fertile ground for discovery. Litigators need to be well prepared to seek electronic data in all cases, from the simplest of actions to complex multi-district litigation.

There are limits to the discoverability of ESI beyond relevance. It also has to be readily accessible and affordable. Courts usually draw a distinction between producing electronically stored information that is available and designing new computer programs to extract data: they will require the former and deny the latter unless there is no other way to obtain the information and the costs are affordable or borne by the requesting party. Parties can negotiate to share costs, and a party can seek judicial protection from excessive expenses.

The overall goals of e-discovery are the same as physical discovery. As with paper and printed documents, you will need to understand how to best preserve, disclose, request, and respond to ESI document production procedures. While a degree in computer science would help, you can learn to understand the existence and availability of ESI and how to direct and monitor ESI discovery. You can also learn to appreciate when it is necessary to consult with and retain an expert in intellectual technology or computer forensics. To be a proficient and professional litigator, you or your law firm will need to have available a litigation support person (or team) or access to a consultant for assistance.

The ESI Policies

Before embarking on the law relevant and peculiar to ESI discovery, understanding how ESI discovery is the same as paper, printed, and physical discovery (summarized for our purposes as paper) places this section in perspective. Often, the discovery rules that apply to both paper documents and ESI apply with equal force and effect to both types of mediums. Originally, the rule provisions were adopted only for paper documents as they were created at a time before the advent, or even conception, of ESI.

Overall, the policies underlying the discovery rules, case law, and relevant statutes are the same regardless of whether paper or ESI documents are involved. The discovery procedures to be used should be the ones that are (1) the most convenient, (2) the least burdensome, and (3) the least expensive. These three general guidelines help in interpreting and applying the law to ESI discovery.

Civil procedure rules have recently been amended to reflect differences. A number of federal and state rules now contain specific references to electronically stored information. These specialized ESI rules augment the traditional rules applicable to paper discovery. These rules will continue to be modified as ESI discovery issues evolve and as ESI technology changes.

Another overall policy relates to privacy and its scope and preservation. Modern technology and electronic devices make it relatively easy to convert traditional private and confidential information into public and easily accessible information. Further, the notion that “private” conversations, actions, and events will remain secret and unknown to other hearers and viewers is undone by the availability of ubiquitous video devices and social networks. These shifts significantly affect privacy expectations. What a person or business may have reasonably expected to be private information is now often made public. Privacy expectations have changed and so has the law regarding it.[2] Parties are no longer ensured of having their private information protected from discovery because it has likely entered the public domain.[3] And parties can no longer rely on the law to enforce their expectations of privacy because the expectations are no longer reasonable.[4]

In discovery, a protective agreement and order can still be used to retain confidential information, and the law can protect and preserve this information. But, it may well be that sources not governed by the discovery rules can and will disclose the private information to the public. Clients, lawyers, parties, and litigators should anticipate that seemingly private information and conduct will be made public or will be discoverable.[5] The more informed rubric is as follows: if you compose, say, or do it, expect it to be revealed and deal with the consequences.

The Sources of ESI Law

There are several legal sources controlling the discovery of ESI. Before beginning a review of the technological aspects of ESI and a summary of the law, an overview of these sources provides an introductory perspective.[6]

Rules of Civil Procedure: Federal Rules 26 (scope), 34 (document production), 37 (sanctions), and 16 (pretrial orders), as well as similar state court rules, have been amended to provide procedures that apply exclusively to ESI discovery. These rules add to or modify the existing procedures that govern all types of discoverable information.

Court Rules: Additional procedural rules appear in local court rules and in standing orders issued by judges.[7] These provisions apply to cases venued in these jurisdictions and before these judges.

Case Law: Numerous federal and state court decisions govern the application of the discovery rules. Every federal circuit and all state appellate courts have issued some or many opinions determining what and how ESI is discoverable. These cases fall into at least six ESI categories: (1) preservation, (2) cooperation, (3) accessibility, (4) proportionality, (5) cost shifting, and (6) spoliation sanctions. The footnotes in this article contain the seminal cases.

Professional Responsibility Rules: The ABA Model Rules of Professional Conduct and updated state rules list acceptable and unprofessional conduct regarding ESI discovery and evidence. Model Rule 3.4(a) states that a lawyer shall not “unlawfully obstruct” access to evidence or “unlawfully alter, destroy or conceal a document or other material having potential evidentiary value” or “counsel or assist another person” to do so.[8] While this rule applies to all types of discoverable evidence, it has become especially applicable to ESI cases.

Statutes: Federal and state statutes also govern the obligations of lawyers and parties regarding ESI. An example of such legislative regulation is the federal Sarbanes-Oxley Act, which prohibits the destruction, alteration, or fabrication of any evidence that is involved in a federal investigation.[9] Regulatory rules promulgated by the Securities and Exchange Commission further require that any documents sent, created, or received in connection with an audit or a review of financial information must be retained for a period of seven years.[10] And, again, while these provisions apply to all categories of documents, they were created with ESI in mind.

Sedona Principles: The need for guidance on handling the added responsibilities of federal and state rule amendments regarding ESI and instructions on how to handle resultant litigation activities gave rise to a group of interested individuals known as The Sedona Conference.[11] Sedona is a nonprofit legal policy research and education organization that has a working group comprised of judges, attorneys, and electronic discovery experts dedicated to resolving ESI issues. Sedona has published a number of documents concerning ESI, including the Sedona Principles.[12] Courts have found the Sedona Principles instructive with respect to electronic discovery issues.

Special Masters: To oversee and assist lawyers and their clients with ESI discovery issues, judges appoint masters with technological know-how and litigation experience.[13] Litigators may request the judge to do so or the court, on its own, may designate a special master. These experts can help the litigators reach agreements on ESI protocols, monitor ESI discovery, and provide recommendations regarding ESI procedures. They can save the parties, lawyers, and court substantial savings in costs and time.

The Lexicon of ESI

The following terms are used frequently in e-discovery and will be encountered in resolving ESI issues:

Source Media: The electronic device on which the ESI is stored. Source media includes computers, cell phones, portable hard drives, flash drives, websites, social mediums, tablets, and cloud storage. Individuals use these devices and sources to create billions of informational electronic documents, just as you are reading this section. Some of what is being created is likely relevant to potential and actual litigation.

ESI Production Protocol: An ESI production protocol is an agreed upon format for the delivery of responsive files between parties. It is necessary to ensure compatibility of these deliverables with each party’s review methodology. A workable ESI protocol is crafted by lawyers and technological experts involved in the legal dispute. It is the way the parties agree to produce requested ESI and can be modified during the litigation to resolve ESI disclosure problems.

Native Format: Native format refers to the source or original state of an electronically stored file. Throughout the discovery process, files may be converted into a variety of formats compatible with each party’s review platform, with TIFF or PDF being the most common. In general, retaining documents in their native format and files is highly recommended because this is the format ordinarily used to produce documents to opposing parties.[14]

Tagged Image File Format (TIFF Image; .TIF): The TIFF file is an image format that is widely supported by image viewing applications. It is a commonly used production format for ESI because it is compatible with most major review software. TIFF image files are more difficult to alter than a native file. However, they cannot always capture the full content of a native file (e.g., the markup layers on some electronic files).

Portable Document Format (PDF): PDF is a file type allowing documents to be viewed through Adobe Acrobat Reader on any computer without the need for additional software or hardware. It is often used as a native file format and is difficult to alter. And, it is a commonly requested ESI production format. The PDF format is generally able to preserve more of an electronic document’s native characteristics than a TIFF image, but is usually larger in file size.

Metadata: For each action initiated on a computer, smart phone, tablet, or other device, a significant amount of information is captured and stored, including the user initiating the action, when it was performed, geographic location, and duration of use, among others. This information is called metadata, because it is “data about data.”[15] There are several types of metadata, including (1) system metadata (author, date, time information), (2) embedded metadata (hidden or internally linked data), (3) substantive metadata (also known as application metadata), and (4) ephemeral metadata (data overridden by new data, such as web searches). The amount and type of metadata stored varies with the type of device used, but it can be humongous. Computer forensic tools can often recover lost metadata.

Forensic Imaging: To prevent the destruction of electronic data during the collection of files from a source device, a forensic expert can create an exact duplicate of all files, including deleted files and metadata. This copy is called the forensic image and is the source of documents for further analysis, review, and production.

Optical Character Recognition (OCR): There are several electronic file types that store potentially relevant information but cannot be readily searched. OCR is a technology that effectively “reads” documents that do not contain easily searchable text and writes the text to a searchable format. For example, a non-searchable PDF attached to an email may contain communication critical to a case, but, without OCR, that information would not appear discoverable in an ordinary full-text search result.

Load File: This is the single file or directory of files containing all of the data necessary to ingest the collection into a desired review platform, including native files, TIFF images, metadata, OCR, and other extracted text. A load file format is specified by the agreed upon ESI production protocol to ensure compatibility with each party’s review platform. It contains the ESI that is disclosed and produced.

An ESI Scenario

A scenario will help bring these definitions to life:

An employee creates a document containing a list of all her clients on a company computer in a PDF format, which she names as Steal-Me.pdf. This electronic information appears on the hard drive of her computer and on the company server that serves as a backup source. She has just generated ESI and corresponding metadata, which captured the time the file was created, where it is stored, and when it was last accessed, among other data. She then transfers the PDF file to a flash drive, prints the PDF to paper, deletes the PDF, and quits her job. The flash drive is now the source media. The next day, all of her clients stop sending work to her former employer, who becomes suspicious and hires a forensic team to investigate ESI documents she has authored. The forensic team creates a forensic image of her hard drive and analyzes recently created or deleted files. They locate Steal-Me.pdf, among other responsive files, and notify the employer, who contacts legal counsel to initiate suit against the former employee.

Because the files have not been converted into another format, they are considered native files. The law firm then relies on its IT staff with expertise in computer forensics to prepare the discovery for review. The IT experts convert the native PDF file to a TIFF image and then perform OCR on the image to ensure all litigators are able to search and review the potential evidence in a format compatible with their review software, according to the agreed upon ESI production protocol drafted by the lawyers and technical advisers from both parties. The TIFF and OCR are then exported to an electronic load file, which is provided from the employer party to her lawyer. This process provides both litigating parties with ESI and allows them to search and produce relevant disclosable and discoverable information.

The Life Cycle of ESI

ESI discovery has a life cycle. There are ten key phases to a typical time chart that aid in understanding the entire process and identify variables unique to the e-discovery process:

1.  Legal Hold

This preservation request or demand is triggered by actual litigation, the reasonable expectation of litigation, government inquiries, or other types of disputes. The hold correspondence entails a prompt notification to custodians of potentially relevant documents, including ESI, and advises them not to tamper with or delete such data. The custodians need to understand that nothing can be deleted and everything needs to be preserved. These files and the accompanying data can be placed by each custodian in a separate electronic file to be provided to the lawyer issuing the legal hold and, if discoverable, to opposing parties. The legal hold usually overrides an existing document retention/destruction policy.

2.  Identification

Litigators, on their own or pursuant to Federal Rule of Civil Procedure 26(f) and similar state rules, will discuss and identify the types, locations, and sources of potential discovery. Parties typically agree to terms limiting the scope of the ESI collection to a reasonable breadth proportional to the damages sought in the suit. This is known as the doctrine of proportionality. As with paper documents, the scope of discoverable ESI also needs to comply with the governing legal relevancy standards.

3.  Preservation and Recovery

Data preservation is obviously critical to its collection. At this point, responsive custodians and devices have been identified, but the data has not yet been sequestered from its native location. Like non-electronic information, preserving the original attributes of a piece of evidence is essential. Unlike paper information, ESI is highly volatile and requires specific technological processes to maintain its integrity. Spoliation may occur in the form of the deliberate or accidental deletion of potentially incriminating emails or files by a custodian or an automated computer system. Reasonable measures need to be taken to prevent these erasures and to maintain existing discoverable information.

A primary issue regarding data recovery is whether the deleted data can be recovered. The initial answer is that it depends. It depends on the type of data, how it was deleted or overridden, the resources and money available to attempt to recover it, and the ability of the computer forensic recovery tools. So, some data can easily be recovered, much can be recovered through reasonable efforts, and some will not be recoverable.

4.  Collection

After potential evidence has been identified, it must be collected from its source media or device for review. The goal of forensic collection is to extract potentially relevant ESI from the identified source media and, without affecting its content or metadata, create a duplicative forensic image. Proper forensic collection can involve cracking passwords, decrypting files, and recovering deleted or tampered files. Just like in the movies.

Due to the sensitivity of forensic data and the finality of a mistake, it is critical that collection is performed quite carefully and precisely. The product of the collection is usually a hard drive containing an exact duplication of the potentially relevant information on the source media. This mirror image of the data preserves the information in a protected medium and prevents the inadvertent destruction while the materials are being collected. The forensic image can subsequently be filtered to further identify relevant information for analysis.

5.  Analysis

After a collection has been performed, the producing party usually performs an analysis of the files before providing them to opposing counsel. Irrelevant or privileged information and other non-discoverable data will need to be identified and withheld. The litigators can mutually agree on criteria to cull non-responsive documents from the responsive information. This process can involve keyword search hits (e.g., e-mails between a custodian and their counsel), irrelevant date ranges, and non-responsive system files. Effectively filtering a collection by such criteria requires collaboration by both sides of the case and an expert in data analytics to operate the filtration technology.

6.  Processing

While the potentially relevant ESI has now been collected from the source media, each file is still vulnerable to spoliation. Simply accessing a file in its current state would modify its metadata to reflect the current user, date, and location, overwriting the original evidence. The first step in the processing phase is to extract each file’s metadata and searchable text and store it in a static database linked to the corresponding source file. The second step of processing is to convert each file into a reviewable format as set forth by the production protocol agreed upon by the litigators. Common formatting protocols include:

Numbering: Assigning each document a unique identifying number by electronic stamp (known as bates stamp) or filename.

OCR: For documents that do not contain text (e.g., PDFs), OCR is necessary to make them searchable.

TIFF Conversion: If requested in the production protocol, native files are converted to TIFF images.

This work effectively “freezes” all electronic content and converts it into a format useful for review. After data is processed, it is exported to a load file and is then delivered to all responsive parties. The majority of the processing phase will be performed by a litigation support person or team or a retained vendor.

7.  Review

After a load file is created for internal review or is received from the other side, it needs to be imported into a document review platform. At minimum, a review platform is software that allows litigators to view electronic documents and store pertinent information. Typically, the interface consists of a document viewer pane, a list of the documents’ original metadata, and a coding pane consisting of fields and designations used to record relevant information about each document. A pane is a region of the software’s interface with a dedicated purpose. Most major review platforms may be accessed through highly secure websites, allowing multiple litigators to review a document set from any location with Internet access.

Review workflows vary for each case but usually involve an administrator assigning batches of documents to reviewers, who analyze documents and records information relevant to the case. A reviewing litigator may also be looking for privileged documents to exclude from the review or to redact privileged content from relevant documents. The review phase is typically a linear process and may take a few weeks to many months—yes, you read that correctly—depending on the volume of discovery.

8.  TAR or Manual Review

Technologically assisted reviews (TAR) may be an efficient and effective way to identify relevant discoverable information in very large document sets. Properly designed search terms and a responsive computerized system may be the best or only way to review the reams of available ESI information. Using such a system, attorneys initially review a sample of the document universe, assigning designations for relevance and other key attributes. Based on these decisions, the computer performs an algorithmic analysis of the entire document universe and assigns each document a designation (e.g., hot, background, junk). After the computer codes the documents, a sample is generated to verify its accuracy. The system can then be “trained” to produce a desirable accuracy level and error threshold. At that point, the lawyers can then prioritize the document review or accept the produced results as final.

Manual review—individuals looking on their own for relevant information—is a common option, but the enormity of the task often requires some technological assistance. There may not be a need for a sophisticated TAR system, but some computerized based process which augments manual reviews may be needed. Another option is sampling, with a TAR-like system reviewing selective ESI. If that review produces relevant information, then expanded sampling or more extensive reviews would be warranted.

9.  Production

After the review phase is complete, documents deemed responsive to the dispute are assigned unique identifying production numbers, transferred or exported from the review platform to a separate new file, and delivered to opposing counsel and the court according to the predefined ESI production protocol. Based on the type of data being produced and each party’s review methodology, the protocol may include production of native files, TIFF images, PDFs, and load files.

A well-designed ESI production protocol can make this process relatively easy and affordable. Often, a production protocol may require unnecessary steps that can be burdensome and costly to both sides. For example, a protocol requiring only bates- stamped TIFF images may seem to simplify the process at the time of the agreement, but it could add a significant amount of unnecessary time and cost to the production. On the other hand, if redactions were made in the review platform, TIFF images or PDFs must be produced to prevent privilege exposure. The best way to minimize costs and risk to both sides is to identify variables preemptively and tailor the protocol to your case.

10.  Presentation

There are several commercial software platforms designed for the presentation of electronic evidence. After the evidentiary set has been identified, a litigation support specialist can provide the technical support necessary to prepare the evidence for the court or deposition. Litigators need to work closely with their technical support staff to ensure that the presentation follows their arguments and meets their standards for presentability.

And now you know, almost for sure, that you will need a technology adviser to help you through all this to get it right, unless you are one yourself.

The Discoverability of ESI

The scope of ESI discovery is the same as other information under the federal or applicable state rules. Federal and state courts have interpreted and applied these rules and developed various approaches to ESI discovery.[16]

Procedural ESI Rules

Federal Rule 26(a)(1) specifically makes electronically stored information subject to the same initial disclosure requirements for paper documents.[17] Federal Rule 26(b)(2)(B) explicitly extends discovery to electronically stored information.[18] This rule specifies: “A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost,” unless there exists good cause for such production.[19]

This latter rule introduces two specific factors when considering ESI discovery: its reasonable “accessibility” and any “undue burden or cost” incurred in its production.[20] Types of ESI that may not be discoverable include data from obsolete computer devices (have you heard of Wang?), deleted information (not spoliation), and other data that is not electronically searchable (where’s Hal?). Good cause may be established in an effort to recover this data because the benefit of the disclosed information outweighs the burden and expense of producing it or because the relevant data is not available from any other source.[21]  Federal Rule 34(a)(1)(A) provides that ESI must be produced as “stored in any medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form.”[22] And, Rule 34(b)(2)(E) states that “a party must produce [ESI] in a [format] in which it is ordinarily maintained or in a reasonably usable [format]”[23] and only in one format.[24]

Further, Rule 34(b)(1)(C) allows the requesting party to specify the form in which ESI is to be produced.[25] Rule 34(b)(2)(D) permits the responding party to object to the proposed format.[26] If no format is specified or if there is an objection, the responding party must identify the intended format to be used for disclosure.[27]

Additional rules govern privilege and work product data that may have been inadvertently or mistakenly produced. ESI may well contain privileged or confidential information that is obvious or is encrypted and that is mingled with or attached to discoverable information and documents. Federal Rule 26(b)(5)(B) details the procedure for asserting claims of privilege and other work product and the requirements on the receiving party to return, sequester, or destroy the non-discoverable or protected information.[28] Issues relating to the waiver of privilege and work product claims may be resolved by the parties or by a court.

These rules require the responding party to furnish ESI in a manner understandable to the requesting party and to bear the cost and expense of compiling the data and translating them into a readable printout or some other machine-readable format.[29] The rules also allow the responding party to refuse to provide ESI if it is not readily accessible either because it is too burdensome to produce or because it costs too much to produce. The parties may confer and mutually agree on a limited scope of ESI discovery or split the costs of production. If unable to agree, the court may decide the issues based on a Rule 37 motion for production enforcement[30] or a Rule 26(c) protective order.[31]

Federal Rule 26(f) encourages parties to discuss and resolve these ESI matters at the early stages of the case during discovery planning discussions as well as during ongoing litigation.[32] Rule 16(b)(3)(B) references electronically stored information as part of the overall disclosure and discovery process.[33] Similar state court rules provide parties with the same or similar duties, rights, and procedures.

Judicially Imposed ESI Factors

Courts have crafted factors especially applicable to electronically stored information which augment the above civil procedure rules. Judges take into consideration these factors in determining whether ESI needs to be disclosed or discovered. The following list synthesizes and summarizes these numerous factors. Courts vary in relying on or ranking these inclusive factors.[34] The applicable precedent and the facts and circumstances of each case determines which of these factors apply and control the outcome:

  • The breadth of the request and the extent to which the request is specifically tailored to discover helpful information.
  • The availability of the information from other available sources.
  • The cost of production in total expenses and as compared to the amount in controversy.
  • The resources of each party as compared to the total cost of discovery.[35]
  • The relative ability of each party to control costs and incentives to do so.
  • The materiality of the data and the benefits to the party seeking the information.
  • The importance of the issues.
  • The complexity of the case.
  • The need to protect privileged information, work product, trade secrets, or other confidential information.
  • The ease of accessing the data.[36]
  • The extent to which the production would disrupt normal operations of the responding party.
  • Whether the ESI is in a readily accessible format or needs to be translated into another format.
  • Whether the information or software needed to produce the data is proprietary or invades confidential business information.
  • Whether the translation, if necessary, is too burdensome or costly.
  • Whether the requesting party has offered to pay some or all of the production costs.[37]
  • Whether the data is stored in a way that is not reasonably warranted by legitimate personal, business, or non-litigation reasons.
  • Whether the data was stored in a manner designed to defeat discovery.
  • Whether the responding party was properly aware of potential or actual litigation in storing or discarding data.[38]
  • Whether the responding party has violated any protocols or rules regarding preservation or spoliation.[39]

Preserving ESI

Parties to potential or pending lawsuits, official government proceedings, and reasonably foreseeable litigation have an obligation to preserve documents, paper, and electronically stored information.[40] This obligation usually extends to arbitration and administrative procedures as well. Representative lawyers will issue litigation holds to their clients advising them in no uncertain terms to retain and not destroy or delete information. This obligation extends to all parties and their employees and agents and to lawyers as well, in house or retained. Generally, the litigation hold applies to backup mediums that are accessible, but not to systems that are inaccessible, which includes backups maintained solely for the purpose of disaster recovery. These preservation obligations override document retention/destruction policies that become suspended.

Because of the nature of ESI, these obligations are especially vital to preserving relevant and potentially discoverable information. Courts are imposing severe sanctions for failures to comply with these responsibilities. Because of these developments, the wisest practice is to err on the side of preserving and not deleting or destroying documents, even if there is a reasonable document destruction policy in place.[41] Even if not required by law to be preserved, fact finders and decision makers are likely to conclude that the deleted or destroyed data must have contained information harmful to the discarding party. These adverse inferences may be imposed by law or by common sense.

A party may be able to have a third person or business, not a party to the case, retain and not discard ESI.[42] Federal Rule 45 and similar state rules allow a party to subpoena documents, including electronically stored information, from a non-party.[43] A lawyer for a party can send a preservation request to a non-party asking that certain documents be preserved before the subpoena is issued and served. The non-party may or may not have a duty to do so or the adverse consequences for not complying may be insignificant. But, often the non-parties will comply to be fair and to avoid becoming embroiled in litigation efforts to retrieve that data from them.

The ESI Doctrines

There are four primary doctrines that govern or assist in controlling the scope and cost of ESI discovery: cooperation, accessibility, affordability, and proportionality.[44]

Cooperation: Discovery rules, judicial opinions, and best practices have developed protocols for lawyers and their clients to seek mutual cooperation and reach reasonable agreements regarding the production of ESI. Meet and confer rules, pretrial orders, discovery plans developed by lawyers, and special master appointments are effective ways to reach cooperative solutions to the myriad of problems inherent in ESI discovery. Participants include experts in technology and computer forensics to develop ways and means of producing accessible and affordable ESI.[45]

Accessibility: As explained previously, the key to usable ESI discovery is its accessibility. A responding party has an obligation to provide ESI in a readily accessible format. This may be the native format of the ESI or another format that is cost effective. Because of the various formats that compose ESI, the specific disclosure format is based on what the requesting party has reasonably suggested, any objections by the responding party, what format the data is in, what format may be able to translate the data, and the costs associated with these processes.

Affordability: Also, as discussed previously, the expense involved with ESI discovery is often a factor in its discoverability. Ordinary document production can be quite a costly endeavor, and ESI discovery can easily add extensive or mind-boggling costs to this process. The federal and state rules that provide parties with protections against unduly expensive procedures can be used to control these costs. If the parties and their lawyers cannot mutually agree on ways to reduce expenses, a court can intervene to determine what is fair, affordable, and appropriate given the issues at stake.

Proportionality: This concept has always been a factor in document production, including paper documents. The scope of discoverable information ought to be based on the significance of the information sought and the costs involved in producing it relative to merits of the claims and defenses. If the process and expense outweigh the benefits of the sought-after information, the doctrine of proportionality provides that such information, which may be relevant, is not discoverable. Factors courts rely on in determining proportionality include:

  • The total cost of production compared to the amount in controversy or the significance of the legal issues.
  • The total cost of production compared to the resources available to each party.
  • The financial ability of a party to afford the expenses compared to the value of the information to the other party.[46]

The outcome of these balancing tests rests on the specific needs and interests of each case.[47]

ESI Cost Shifting

One way to alleviate affordability and proportionality issues is to share expenses depending upon the financial wherewithal of the parties or shift production costs to the requesting party. Federal and state rules explicitly empower the parties, their lawyers, and the court to determine what is the fairest way of distributing costs.[48] Factors that have been developed to provide a fair and balanced approach include:

  • How much can a party afford to pay for discovery?
  • Is it fair to impose extensive ESI discovery costs on the responding party or the requesting party?
  • Which party, if any, is more responsible for the problems involved with ESI production?
  • What is the fairest way to share, split, or impose discovery expenses?

ESI Spoliation

Parties and their lawyers have always been under a duty to preserve and not destroy relevant documents. It is possible, but more difficult, to get rid of paper evidence; usually it requires shredding, burning, and other forms of physical destruction. These processes are more difficult to do privately or without the assistance of others. Electronically stored information can much more easily be deleted in private and through seemingly non-discoverable ways. The temptation to do so may be too tempting, resulting in the spoliation of otherwise discoverable information.

Courts have been made aware of these realities and have responded with sanctions imposed against such improper conduct.[49] The sanctions are authorized by the inherent power of the court and pursuant to Federal Rule 37 and similar state rules.[50] Usually, spoliation sanctions will be considered if there was a clear duty to preserve, if there exists a culpable failure to do so, and if there is a reasonable probability that the loss of evidence will materially prejudice the adverse party. Courts typically design a sanction to deter parties from engaging in spoliation, place the risk of losing on the party who wrongfully created the risk, and restore the prejudiced party to the position the party would have been in but for the wrongful destruction.

These sanctions, in some jurisdictions, have been severe and imposed not only on parties but also on their lawyers. There are a variety of sanctions at the court’s disposal, and the various federal circuit courts and state appellate courts continue to develop their own applicable precedents.[51]

The applicable rules and case law may exonerate a party if ESI has been deleted or discarded. Federal Rule 37(e) states that a court may not impose sanctions if the electronically stored information was destroyed or lost because of the “routine, good faith operation of an electronic information system.”[52] It is proper to periodically modify, overwrite, or delete ESI in the normal course of events. Businesses and individuals may do so in the ordinary course of their work or life. The rules do not intend to punish them for routine, good faith practices.[53] A litigation hold or preservation request can override these practices and place a potential party on notice that litigation is foreseeable. It may come down to two questions: what do they know and when did they know it?

Who knew, indeed.


[Y] Professor of Law, William Mitchell College of Law and Charter member, Street Legal Road Lawyers. Ben Sexton and Harrison Misewicz assisted in the writing and editing of this article and helped make it make sense. West has graciously agreed to allow the pre-publication of this article before it appears in Fundamentals of Pretrial Litigation. Kudos to West.

[1]
“What hath God wrought” was the first public American Morse Code message sent in 1844, from Baltimore to Washington D.C.

[2] In re Cunnius, 770 F. Supp. 2d 1138, 1142–49 (D. Wash. 2011) (explaining the changes in privacy and ways to craft information demands without violating an individual’s Fourth Amendment rights).

[3] See Wood v. Town of Warsaw, No. 7:10–CV–00219–D, 2011 WL 6748797, at *3 (E.D.N.C. Dec. 22, 2011) (granting motion to modify subpoena despite privacy concerns over private or confidential information on nonparty’s computer because such concerns may be overcome by a protective order where counsel has an opportunity to review documents for privileged information prior to production).

[4] See id.

[5] Mezu v. Morgan State Univ., 269 F.R.D. 565, 577 (D. Md. 2010) (deeming confidential employee data under state law not protected by privilege and discoverable, effectively waiving any exception of privacy under an employer/employee understanding).

[6] See Mancia v. Mayflower Textile Servs. Co., 253 F.R.D. 354 (D. Md. 2008), for a discussion of attorney and client duties concerning ESI discovery.

[7] Thomas Y. Allman, The Sedona Conference Inst., E-Discovery in Federal and State Courts After the 2006 Amendments 3 (2012), available at http://www.ediscoverylaw.com/uploads/file/2012FedStateEDiscoveryRules%28May3%29.pdf.

[8] Model Rules of Prof’l Conduct R. 3.4(a).

[9] Sarbanes-Oxley Act of 2002, Pub. L. No. 107–204, 116 Stat. 745 (codified as amended in scattered sections of 15 U.S.C. and 18 U.S.C.).

[10] 17 C.F.R. § 210.2–06 (2012).

[11]The Sedona Conference®, http://www.thesedonaconference.org (last visited Apr. 7, 2013).

[12] See The Sedona Conference, The Sedona Principles: Best Practices Recommendations & Principles for Addressing Electronic Document Production (Jonathan M. Redgrave et al. eds., 2d ed. 2007).

[13] PIC Grp., Inc. v. LandCoast Insulation, Inc., Civil Action No. 1:09–CV–662–KS–MTP, 2011 WL 2669144, at *1 (S.D. Miss. July 7, 2011) (applying Fed. R Civ. P. 53, the court appointed a special master to review allegations of the defendant failing to comply with ESI obligations, to ensure compliance with existing discovery holds, and to recommend a course of action for the remaining discovery issues).

[14] Fed. R. Civ. P. 34(b) advisory committee note, 2006 Amendment (“[T]he option to produce in a reasonably usable form does not mean that a responding party is free to convert electronically stored information from the form in which it is ordinarily maintained to a different form that makes it more difficult or burdensome for the requesting party to use the information efficiently in the litigation.”); see also Aguilar v. Immigration & Customs Enforcement Div. of U.S. Dep’t of Homeland Sec., 255 F.R.D. 350, 355 (S.D.N.Y. 2008).

[15] Aguilar, 255 F.R.D. at 354.

[16] Point Blank Solutions, Inc. v. Toyobo Am., Inc., No. 09–61166–CIV, 2011 WL 1456029, at *4 n.3 (S.D. Fla. Apr. 5, 2011) (“Judge Scheindlin is in the Second Circuit, which has some rules which are different than those in our Eleventh Circuit.”).

[17] Fed. R. Civ. P. 26(a)(1).

[18] Fed. R. Civ. P. 26(b)(2)(B).

[19] Id.; see also Star Direct Telecom, Inc. v. Global Crossing Bandwidth, Inc., No. 05–CV–6734T, 2012 WL 1067664, at *8 (W.D.N.Y. Mar. 22, 2012) (issuing sanctions for failing to preserve other sources of requested ESI after discovery backup tapes would not be a viable source).

[20]See, e.g., Clean Harbors Envtl. Servs. v. ESIS, Inc., No. 09 C 3789, 2011 U.S. Dist. LEXIS 53212, at *19–21 (N.D. Ill. May 17, 2011) (requiring the requesting party to share the cost of production if they insisted on conversion of files from obsolete off-site backups).

[21] Camesi v. Univ. of Pittsburgh Med. Ctr., Civil Action No. 09–85J, 2010 WL 2104639, at * 7 (W.D. Pa. May 24, 2010) (providing that the burden is on the requesting party to show that the need for the ESI outweighs the burden or cost of producing it).

[22] Fed. R. Civ. P. 34(a)(1)(A).

[23] Fed. R. Civ. P.  34(b)(2)(E)(ii)

[24] Fed. R. Civ. P. 34(b)(2)(E)(iii); see also Covad Commc’ns Co. v. Revonet, Inc., 267 F.R.D. 14, 20 (D.D.C. 2010) (stating that the parties had “bigger fish to fry” than reproducing documents that are already in a usable format into a format that includes metadata).

[25] Fed. R. Civ. P. 34(b)(1)(C); see also Romero v. Allstate Ins. Co., 271 F.R.D. 96, 106 (E.D. Pa. 2010).

[26] Fed. R. Civ. P. 34(b)(2)(D).

[27] Id.

[28] Fed. R. Civ. P. 26(b)(5)(B).

[29] Adams v. Dan River Mills, Inc., 54 F.R.D. 220, 222 (W.D. Va. 1972).

[30] Fed. R. Civ. P. 37; see also Susquehanna Commercial Fin., Inc. v. Vascular Res., Inc., No. 1:09–CV–2012, 2010 WL 4973317, at *1, *12–15 (M.D. Pa. Dec. 1, 2010).

[31] Fed. R. Civ. P. 26(c).

[32] Fed. R. Civ. P. 26(f); see also In re Facebook PPC Adver. Litig., No. C09-03043 JF (HRL), 2011 U.S. Dist. LEXIS 39830, at *3–11 (N.D. Cal. Apr. 6, 2011) (ordering court production of privileged source code and continued cooperation between litigants with handling protected information).

[33] Fed. R. Civ. P. 16(b)(3)(B).

[34] Point Blank Solutions v. Toyobo Am., Inc., No. 09-61166-CIV, 2011 WL 1456029, at *4 n.3 (S.D. Fla. Apr. 5, 2011).

[35] Boeynaems v. LA Fitness Int’l, LLC, Civil Action Nos. 10-2326 and 11-2644, 2012 U.S. Dist. LEXIS 115272 (E.D. Pa. Aug. 16, 2012) (class action plaintiffs were expected to pay costs for discovery given the asymmetrical balance of discoverable information).

[36] Adair v. EQT Prod. Co., No. 1:10cv00037, 2012 WL 1965880, at *5 (W.D. Va. May 31, 2012) (denying a protective order after the movant had asserted that ESI was inaccessible but failed to demonstrate that filtering by a custodian would be a burdensome expense).

[37] In re Ricoh Co., Patent Litig., 661 F.3d 1361, 1366 (Fed. Cir. 2011).

[38] Goodman v. Praxair Servs., Inc., 632 F. Supp. 2d 494 (D. Md. 2009).

[39] Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497 (D. Md. 2010).

[40] See Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311, 1324 (Fed. Cir. 2011) (providing that litigation is foreseeable if “overcoming [potential] contingencies was reasonably foreseeable”).

[41] Victor Stanley, Inc., 269 F.R.D. at 524.

[42] See Columbia Pictures, Inc. v. Bunnell, 245 F.R.D. 443, 447 (C.D. Cal. 2007) (quoting Fed. R. Civ. P. 34 advisory committee note, 2006 Amendment) (affirming discoverability of ESI in RAM because “Rule 34 requires no greater degree of permanency from a medium than that which makes obtaining the data possible”). Courts have required third parties to produce information from quickly erasing RAM, which a party to the case had a legal right to access.

[43]Fed. R. Civ. P. 45.

[44] Merriman v. Minn. Life Ins. Co., No. 12-C-621, 2012 U.S. Dist LEXIS 124854, at *9–11 (E.D. Wis. Aug. 31, 2012) (explaining that the Seventh Circuit has started a pilot program for ESI discovery issues wholly based on the Sedona Principles with mandatory adherence from all parties appearing before the court).

[45] Fed. R. Civ. P. 34 advisory committee note, 2006 Amendment; see also S2 Automation LLC v. Micron Tech., Inc., No. CIV 11–0884 JB/WDS, 2012 WL 3656454, at *18–19 (D.N.M. Aug. 9, 2012) (stating that prior to any court involvement in ESI disputes, parties should seek and resolve disputes before the expense and work occurs, and additional time may be required to allow a responding party to assess appropriate forms of production).

[46] In re Aspartame Antitrust Litig., 817 F. Supp. 2d 608 (E.D. Pa. 2011) (detailing different standards for accessibility across several jurisdictions and determining whether the request is proportionate to the amount in dispute).

[47] Chenault v. Dorel Indus., Inc., No. A–08–CA–354–SS, 2010 WL 3064007 (W.D. Tex. Aug. 2, 2010).

[48] See Plantronics, Inc. v. Aliph, Inc., No. C 09–01714 WHA (LB), 2012 WL 5269667, at *12 (N.D. Cal. Oct. 23, 2012) (providing how and when it is appropriate for a court to tax ESI discovery costs).

[49] Qualcomm Inc. v. Broadcom Corp., No. 05cv1958–B (BLM), 2010 WL 1336937, at *1–2 (S.D. Cal. Apr. 2, 2010) (dismissing sanctions against outside attorneys after showing that improper conduct was the client’s fault).

[50] Fed. R. Civ. P. 37.

[51] See, e.g., Victor Stanely, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497 (D. Md. 2010).

[52] Fed. R. Civ. P. 37(e).

[53] Ferron v. EchoStar Satellite, LLC, 410 F. App’x 903, 911–12 (6th Cir. 2010).

Indemnification and Insurance: Who Is To Blame?—Engineering & Construction Innovations, Inc. v. L.H. Bolduc Co., 803 N.W.2d 916 (Minn. Ct. App. 2011).

6 Wm. Mitchell J.L. & Prac. 1

By Eric M. Carpenter[Y]

I.  Introduction

Indemnification is defined as the “action of compensating for loss or damage sustained.”[1]  Therefore, indemnity is the “right of an injured party to claim reimbursement for its loss, damage, or liability from a person who has such a duty.”[2]  “The right of indemnity can be contractual or it can arise under common law or statute.”[3]

At common law, a neutral approach to enforcing indemnification agreements was favored.[4]  A contract requiring one party to indemnify the other for the other’s own negligence would be upheld provided the “contract language, fairly construed, evidenced such an intent.”[5]  The court would then require indemnification, even if the indemnitee was 100% at fault.[6]

Minnesota followed the neutral approach until the 1970s.  In 1979, the Minnesota Supreme Court adopted the “strict construction” approach.[7]  In Farmington Plumbing & Heating, the supreme court held that “[i]ndemnity agreements are to be strictly construed when the indemnitee . . . seeks to be indemnified for its own negligence.”[8]  The court qualified that holding by stating that “[t]here must be an express provision in the contract to indemnify the indemnitee for liability occasioned by its own negligence; such an obligation will not be found by implication.”[9]

In Minnesota, strict construction controlled indemnity agreements for only five years.  In 1984, the Minnesota Legislature adopted an anti-indemnity statute specific to building and construction contracts.[10]  Minnesota Statutes section 337.02 states that an “indemnification agreement contained in . . . a building and construction contract is unenforceable . . . [if the] damage is attributable to the negligent or otherwise wrongful act or omission [of the indemnitee].”[11]  The purpose of the statute is to ensure that each party remains responsible for its own negligent acts or omissions.[12]  However, the legislature also provided a narrow exception to this anti-indemnity statute.  Minnesota Statutes section 337.05 makes it acceptable for a subcontractor to purchase insurance for the benefit of others without regard to fault.[13]  Section 337.05 allows the subcontractor to indemnify and insure the general contractor against any damage resulting from work performed under the subcontract even if the general contractor is at fault.  Therefore, the insurance contract exempts the otherwise invalid indemnity agreement.

This article first outlines the facts of Engineering & Construction Innovations, Inc. v. L.H. Bolduc Co., which addressed the indemnity issues considered above.[14]  Second, the article states the issues presented in Engineering & Construction Innovations.[15]  Third, the article details the parties’ claims, the Ramsey County District Court’s decision, and the Minnesota Court of Appeals’s decision.[16]  Fourth, the article provides an analysis of the Minnesota Court of Appeals’s decision.[17]  Finally, the article concludes that, on review, the Minnesota Supreme Court should affirm the court of appeals’s decision.[18]

II.  The ECI v. Bolduc Facts

The Metropolitan Council Environmental Services (“MCES”) hired Frontier Pipeline, LLC (“Frontier”) as the prime contractor of an underground sewer system in White Bear Lake, White Bear Township, and Hugo, Minnesota.[19]  Frontier installed several runs of twenty-eight-inch sewer pipe.[20] Frontier subcontracted with Engineering and Construction Innovations, Inc. (“ECI”) to install a lift station and several Forcemain Access Structures (“FAS”) along the pipeline route.[21]  ECI was required to install each FAS at a depth of approximately thirty feet in order to connect the sewer pipes Frontier installed at a depth of approximately twenty-five feet.[22]  ECI decided that “sheeted pits” would be the safest way to excavate the deep pits without danger of the walls collapsing.[23]  ECI hired L.H. Bolduc Co. (“Bolduc”) to furnish, drive, and remove the sheeting cofferdams, which acted as walls for the sheeted pits during excavation and construction.[24]

ECI required Bolduc to purchase and maintain various types of insurance policies during the project.[25]  ECI also required Bolduc to name ECI as an additional insured on the commercial general liability (“CGL”) policy.[26]  The Travelers Indemnity Company of Connecticut (“Travelers”) was the insurer on the CGL policy.[27]  Travelers issued an endorsement to the policy covering ECI as an additional insured.[28]

In August 2007, Bolduc drove the sheet piling according to the pipeline locations provided to it by Frontier’s surveyor.[29]  Unfortunately, Bolduc drove a piece of sheet piling for Forcemain Access Structure Number 1 (“FAS-1”) into the pipeline, which Frontier had previously installed.[30]  In December 2007, ECI discovered the damage after Bolduc completed its work at FAS-1.[31]  ECI provided Bolduc and Travelers with written notice of the damage.[32]  At the insistence of MCES and Frontier, ECI immediately repaired the damage to the pipeline to avoid a $5,000 per day assessment of liquidated damages.[33]  Bolduc and Travelers inspected the damage before ECI repaired the pipeline.[34]  The cost of repairs was $235,339.89.[35]

ECI sought reimbursement from Bolduc, but Bolduc refused to pay.[36]  ECI submitted a claim to Travelers, but Travelers refused to reimburse ECI for the repair costs.[37]  ECI submitted a claim to its own insurer, Western National, which also denied the claim.[38]  Subsequently, ECI notified Bolduc that ECI would not pay the $32,513.29 contract amount for the sheet piling and that Bolduc owed ECI an additional $202,826.60.[39]

In August 2008, ECI brought suit against Bolduc and Travelers.[40]

III.  The ECI v. Bolduc Issues

The dispute between ECI and Bolduc presented two issues.  First, was Bolduc required to indemnify and insure ECI for any damages resulting from work under Bolduc’s subcontract?  ECI argued that Bolduc was responsible for damages it caused regardless of fault.[41]  In contrast, Bolduc argued that it was obligated to indemnify and insure ECI only for damages resulting from Bolduc’s own negligence.[42]

Second, did Travelers’s additional insured endorsement limit coverage to damage caused by Bolduc’s negligence?  ECI argued that the policy contained no express limitation for only Bolduc’s negligence.[43]  Travelers argued that the policy limited coverage to damages caused by Bolduc’s negligence.[44]

IV.  The ECI v. Bolduc Legal Framework
A.  Claims

ECI alleged breach of contract and negligence against Bolduc.[45]  ECI also alleged breach of contract and brought a declaratory judgment action against Travelers.[46]  Bolduc filed a counterclaim alleging breach of contract.[47]  Travelers filed a counterclaim for declaratory judgment.[48]

B.  District Court

In November 2009, the Ramsey County District Court bifurcated ECI’s negligence claim against Bolduc from the remaining claims.[49]  The parties fully preserved the breach of contract claims and the declaratory judgment actions for determination at a later date.[50]  In March 2010, the parties stipulated that they would present only three issues to the jury.[51]  First, whether Bolduc’s negligence caused the damage to the pipeline at FAS-1.[52]  Second, whether ECI’s negligence caused the damage to the pipeline at FAS-1.[53]  Third, how much Bolduc owed ECI in damages, if anything.[54]  The jury returned a special verdict form finding that Bolduc was not negligent and ECI was not entitled to any money from Bolduc.[55]  The special verdict form only required the jury to determine ECI’s negligence if Bolduc was found negligent.[56]  Therefore, the jury did not answer the question regarding ECI’s negligence.[57]

After the jury returned its verdict, ECI and Bolduc brought cross-motions for summary judgment on their breach of contract claims.[58]  Additionally, ECI and Travelers brought cross-motions for summary judgment on their breach of contract claims and their declaratory judgment actions.[59]  The district court concluded that Bolduc had not breached its contract with ECI.[60]  The district court reasoned that the contract only required Bolduc to indemnify and insure ECI from damages caused by Bolduc’s negligence.[61]  Subsequently, the district court concluded that section 337.05 was not at issue “because [the contract between Bolduc and ECI] does not require Bolduc to obtain insurance coverage extending to ECI’s own negligence.”[62]  Therefore, Bolduc did not breach the contract because the jury determined that Bolduc was not negligent.[63]  The district court used the same reasoning to determine that Travelers was not required to indemnify and insure ECI for the damage to the pipeline.[64]  The district court granted Bolduc’s and Travelers’s motions for summary judgment, denied ECI’s motion for summary judgment, and awarded Bolduc $45,965.53 plus prejudgment interest on its breach of contract claim.[65]

C.  Court of Appeals
1.  Majority

ECI appealed the district court’s decision to the Minnesota Court of Appeals.  The court of appeals reversed and remanded the case in a 2-1 decision.

The court of appeals began its analysis with the indemnity language in the contract.  The contract provided as follows:

[Bolduc] agrees to protect, indemnify, defend, and hold harmless ECI . . . to the fullest extent permitted by law and to the extent of the insurance requirements below, from and against (a) all claims, causes of action, liabilities, obligations, demands, costs, and expenses arising out of injury to any persons or damages to property caused or alleged to have been caused by any act or omission of [Bolduc], its agents, employees or invitees, and (b) all damage, judgments, expenses, and attorney’s fees caused by any act or omission of [Bolduc] or anyone who performs work or services in the prosecution of the Subcontract.[66]

The court of appeals noted that the Minnesota Legislature provided that a construction contract containing an indemnification agreement is “unenforceable except to the extent that ‘the underlying injury or damage is attributable to the negligent or otherwise wrongful act or omission, including breach of a specific contractual duty, of the promisor or the promisor’s independent contractors, agents, employees, or delegates.’”[67]  The court of appeals qualified that statutory language by stating that “section 337.02 does ‘not affect the validity of agreements whereby a promisor agrees to provide specific insurance coverage for the benefit of others.’”[68]  Therefore, the court of appeals concluded that the indemnification and insurance agreements were enforceable.[69]

Having concluded that the indemnification and insurance agreements were enforceable, the court of appeals next addressed Bolduc’s argument that it was required to indemnify and insure ECI for actions arising only out of Bolduc’s own negligence.[70]  Under the contract language, Bolduc was required to indemnify ECI “from and against ‘all claims, causes of action, liabilities, obligations, demands, costs, and expenses arising out of . . . damages to property caused or alleged to have been caused by any act or omission of [Bolduc], its agents, employees or invitees’ and carry insurance to cover such an obligation.”[71]  Bolduc’s argument would have required the court of appeals to read the word “negligence” into the insurance and indemnification language of the contract.  The court of appeals declined to do that.  Because the contract required Bolduc to indemnify and insure ECI without regard to fault, the court of appeals reversed the district court’s award of summary judgment in favor of Bolduc and remanded the matter to the district court.[72]

Next, the court of appeals addressed the district court’s award of summary judgment in favor of Travelers.  “Bolduc’s ECI policy provided that Travelers would pay ‘those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.’”[73]  The policy included an additional insured endorsement that named ECI as an insured.[74]  Travelers argued that the endorsement limited coverage to situations where Bolduc was negligent.[75]  However, the court of appeals declined to incorporate the word “negligent” into the policy.[76]  Therefore, the court of appeals reversed the district court’s award of summary judgment in favor of Travelers and remanded the matter to the district court.[77]

Finally, the court of appeals addressed ECI’s argument that reversal of the district court’s award of summary judgment in favor of Bolduc required reversal of the $45,965.53 breach of contract award.[78]  However, the court of appeals declined to address that issue because ECI did not raise it in its principal brief.[79]

2.  Dissent

The dissent focused much of its attention on section 337.02, which “does not permit a party to a construction contract to be indemnified for its own negligence.”[80]  The dissent reasoned that if “Bolduc was found not negligent by the jury,” then “ECI [was] the only other party that could [have been] negligent under the facts of the case.”[81]  In addition, the dissent did not believe that section 337.05 applied.  The dissent stated that “[a]greements seeking to indemnify the indemnitee for losses occasioned by its own negligence . . . are not favored by the law and are not construed in favor of indemnification unless such intention is expressed in clear and unequivocal terms, or unless no other meaning can be ascribed to it.”[82]  The dissent did not find “such specific, clear, and unequivocal term[s]” in the contract that would have indemnified ECI for its own negligent acts.[83]  The dissent stated that the entire purpose of section 337.02 would be defeated if “ECI could immunize itself from the risk of ever having to accept responsibility for its own negligent acts.”[84]  Therefore, the dissent would have affirmed the district court’s grant of summary judgment in favor of Bolduc and Travelers.[85]

V.  Analysis of the ECI v. Bolduc Decision
A.  Important Language

Indemnification and insurance cases require the courts to interpret contractual language, interpret statutory language, and apply case law.  Before introducing some of the relevant case law, it is important to have a firm grasp of the contractual and statutory language that is important to this case.

The indemnity language in the contract between ECI and Bolduc provided as follows:

[Bolduc] agrees to protect, indemnify, defend, and hold harmless ECI . . . to the fullest extent permitted by law and to the extent of the insurance requirements below, from and against (a) all claims, causes of action, liabilities, obligations, demands, costs, and expenses arising out of injury to any persons or damages to property caused or alleged to have been caused by any act or omission of [Bolduc], its agents, employees or invitees, and (b) all damage, judgments, expenses, and attorney’s fees caused by any act or omission of [Bolduc] or anyone who performs work or services in the prosecution of the Subcontract.  [Bolduc] shall defend any and all suits brought against ECI . . . on account of any such liability or claims of liability.  [Bolduc] agrees to procure and carry until the completion of the Subcontract, workers compensation and such other insurance that specifically covers the indemnity obligations under this paragraph, from an insurance carrier which ECI finds financially sound and acceptable, and to name ECI as an additional insured on said policies.[86]

In addition, Bolduc’s insurance policy provided that Travelers would pay “those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.”[87]  The insurance policy included an additional insured endorsement that named ECI as an insured.[88]  That endorsement limited coverage to situations where “the injury or damage is caused by acts or omissions of [Bolduc] or [its] subcontractor in the performance of [its] work to which the written contract requiring insurance applies.”[89]

The relevant statutory language is found in Minnesota Statutes sections 337.02 and 337.05.  Chapter 337 applies specifically to building and construction contracts.[90]  Section 337.02 provides the following:

An indemnification agreement contained in, or executed in connection with, a building and construction contract is unenforceable except to the extent that: (1) the underlying injury or damage is attributable to the negligent or otherwise wrongful act or omission, including breach of a specific contractual duty, of the promisor or the promisor’s independent contractors, agents, employees, or delegatees; or (2) an owner, a responsible party, or a governmental entity agrees to indemnify a contractor directly or through another contractor with respect to strict liability under environmental laws.[91]

Section 337.02 ensures that all parties remain responsible for their own negligent acts or omissions.  Section 337.05, subdivision 1, states that “[s]ections 337.01 to 337.05 do not affect the validity of agreements whereby a promisor agrees to provide specific insurance coverage for the benefit of others.”[92]  For practical purposes, section 337.05, subdivision 1, operates as an exception from the general prohibition under section 337.02.

B.  Bolduc Argued That Section 337.05 Does Not Apply

Bolduc argued on appeal that “[t]he district court properly construed Minnesota law with regard to interpretation of contracts when it found that the ECI contract did not require Bolduc to indemnify ECI when Bolduc was found to be not negligent and ECI’s damages were zero.”[93]  Bolduc recognized ECI’s argument that section “337.05 permits the enforcement of agreements by which one party agrees to insure another for its own negligence” as nothing more than a “confusing alternative argument.”[94]  Bolduc defended the district court’s conclusion “that section 337.05 was not at issue in the present case ‘because [the contract between Bolduc and ECI] does not require Bolduc to obtain insurance coverage extending to ECI’s own negligence.’”[95]  Bolduc stated that allowing one party to insure another for its own negligence was “clearly forbidden by Minnesota law.”[96]  Bolduc’s argument relied on the “strict construction” approach, which the Minnesota Supreme Court used in Farmington Plumbing & Heating five years prior to the Minnesota Legislature’s adoption of Minnesota Statutes sections 337.02 and 337.05.[97]  However, the adoption of section 337.05 in 1984 created a narrow exception in construction contracts.  Section 337.05, subdivision 1, makes it acceptable for a subcontractor to purchase insurance to cover negligent acts of the general contractor.[98]  Consequently, the insurance contract exempts the otherwise invalid indemnity agreement.

In 1992, the Minnesota Supreme Court agreed with this interpretation of section 337.05 in Holmes v. Watson-Forsberg Co.[99]  The supreme court stated that “the legislature both anticipated and approved a long-standing practice in the construction industry by which the parties to a subcontract could agree that one party would purchase insurance that would protect ‘others’ involved in the performance of the construction project.”[100]

It is important to note that Bolduc did not cite Holmes in its appellate brief.[101]  Also noteworthy is the fact that the court of appeals opined that Bolduc’s argument against incorporating section 337.05 relied on its own opinion in Holmes.[102]  In Holmes, the court of appeals concluded that “[b]ecause the indemnification agreement is not enforceable, there is nothing to insure.”[103]  However, the supreme court reversed the court of appeals’s decision in Holmes.[104]  The supreme court concluded that “the parties are free to place the risk of loss upon an insurer by requiring one of the parties to insure against that risk.”[105]

Applied together, sections 337.02 and 337.05 allow a party to indemnify for another’s negligence and to insure that risk.  This “narrow exception to the general prohibition of indemnification from the indemnitee’s own negligence” has become “common practice in the construction industry.”[106]  General contractors commonly require subcontractors to insure the general contractors’ indemnification obligations.[107]

C.  Bolduc Also Argued Apportionment of Fault

Bolduc argued that “because the jury found that Bolduc was not negligent, there can be no obligation to insure or indemnify ECI for the damage caused to the pipeline.”[108]  The dissent agreed with that argument: “Bolduc was found not negligent by the jury, and ECI was awarded no damages.  Consequently, ECI is the only other party that could be negligent under the facts of the case.  Therefore, Bolduc is being asked to indemnify ECI for its own negligence.”[109]  However, that argument ignores the existence of section 337.05, which is crucial to the analysis.  The majority found that “[w]hile an apportionment of fault would be relevant to the analysis under section 337.02 of the permissible extent of an indemnification obligation without a coextensive agreement to insure, because the indemnification and insurance obligations coincide, section 337.05 exempts the contract from the application of section 337.02.[110]  Therefore, while the jury’s finding that Bolduc was not negligent would be fatal for ECI in a section 337.02 apportionment-of-fault analysis, it is irrelevant because of the section 337.05 exception.  Section 337.05 permitted the contract to require Bolduc to insure and indemnify ECI without regard to fault.

D.  The Contract Language Matters

The Minnesota Supreme Court has recognized that the “specific statutory language employed will determine whether there is an enforceable agreement to indemnify and insure against another’s negligence.”[111]  In Holmes, the supreme court found that the following language required the subcontractor to indemnify and insure the general contractor: “[F]or which the Contractor may be or may be claimed to be, liable.”[112]  The language in Holmes stated that the subcontractor was required to indemnify and insure the general contractor without regard to fault.[113]  Similarly, in McCarthy, the agreement provided for indemnification “regardless of whether or not such claims, losses, damages and expenses are caused in whole or in part by [the indemnified party].”[114]  Once again, the indemnitor was required to indemnify and insure the indemnitee without regard to fault.  The supreme court has also recognized language that provided the opposite result.  In Hurlburt, the contractual language stated that indemnification and insurance “shall apply only to the extent that the underlying injury or damage is attributable to the negligence or otherwise wrongful act or omission . . . of Subcontractor or [its sub-subcontractors].”[115]  The language in Hurlburt stated that the subcontractor was required to indemnify and insure the general contractor only if the subcontractor was at fault.  Unlike Holmes and McCarthy, the Hurlburt language did not require an indemnitor to indemnify a negligent—or at fault—indemnitee.

In Engineering & Construction Innovations, the dissent stated that the ECI contract language was “very different” from the language in Holmes.[116]  “In Holmes, the subcontractor promised to indemnify the contractor ‘for all damages or injury to all persons, whether employees or otherwise, and to all property, arising out of it, resulting from or in any manner connected with, the execution of the work provided for in this [contract].’”[117]  The dissent opined that the “obligation to indemnify was tied to the broader nature of the work being performed under the subcontract and not to damages caused by the acts or omissions or alleged acts or omissions of a subcontractor.”[118]  Unfortunately, the dissent did not explain how the Holmes language was different from the ECI contract language, which stated: “[Bolduc] agrees to protect, indemnify, defend, and hold harmless ECI . . . against . . . (b) all damage . . . caused by any act or omission of [Bolduc] or anyone who performs work or services in the prosecution of the Subcontract.”[119]  The ECI contract language and the Holmes language are both tied to the broader nature of the work being performed under the subcontract.  Bolduc’s argument that it was not negligent is irrelevant.  Bolduc caused the damage when it drove the sheet piling into the pipeline.[120]  Bolduc performed that work under its subcontract.[121]  Therefore, fault is irrelevant because Bolduc performed the work under its subcontract.  Under this reasoning, the majority found that the ECI contract “employ[ed] language that [was] similar to that approved by the supreme court in Holmes.”[122]

E.  Travelers Insurance Policy

Travelers argued that the insurance policy excluded “coverage for damages caused by the fault of another unless the parties have entered into an ‘insured contract’ where the insured has agreed to indemnify the other party for damages caused by the other party’s own ‘tort liability.’”[123]  Travelers cited Farmington Plumbing & Heating as authority that Minnesota courts apply a strict construction standard when a contract calls for one party to indemnify and insure another for its own negligence.[124]  However, the Minnesota Legislature replaced the strict construction approach used in Farmington Plumbing & Heating five years after that decision.  In 1984, the Minnesota Legislature adopted Minnesota Statutes sections 337.02 and 337.05, which control indemnification and insurance agreements in building and construction contracts.[125]

In its analysis of the insurance policy, the court of appeals found a 1995 decision by the Appellate Court of Illinois “particularly instructive.”[126]  “In J.A. Jones, the Illinois Appellate Court held that when an additional insured endorsement does not expressly limit coverage to a subcontractor’s negligence, coverage for the general contractor under an additional insured endorsement similarly was not limited to such negligence.”[127]

In Engineering & Construction Innovations, the insurance policy listed ECI as an additional insured.  “The endorsement limit[ed the] coverage to situations where the injury or damage is caused by acts or omissions of you or your subcontractor in the performance of your work to which the written contract requiring insurance applies.”[128]  The endorsement did not limit coverage to damages caused by Bolduc’s negligent acts.  Therefore, because the additional insured endorsement did not expressly limit coverage to Bolduc’s negligence, ECI’s coverage under the additional insured endorsement similarly was not limited to Bolduc’s negligence.  As such, Travelers was required to insure ECI as an additional insured against any damages caused by Bolduc without regard to fault.

VI.  The Minnesota Supreme Court Granted Review

On November 22, 2011, the Minnesota Supreme Court granted review.  The supreme court should affirm the court of appeals’s decision.  The Minnesota Legislature adopted clear and unambiguous statutes regarding indemnification and insurance agreements in building and construction contracts.  Section 337.02 forbids a party from requiring another party to indemnify it against its own negligent acts.  However, the contract between ECI and Bolduc was exempt from that general prohibition because the parties agreed that Bolduc would purchase insurance and name ECI as an additional insured.  “[T]he legislature both anticipated and approved [this] long-standing practice in the construction industry” when it adopted section 337.05.[129]

The indemnification and insurance agreements provided protection for ECI from damage caused by any act or omission of Bolduc under its subcontract.[130]  The facts clearly state that Bolduc damaged the pipeline when it drove its sheet piling into the pipeline.[131]  It is irrelevant whether Bolduc was negligent or not.  The fact remains that the pipeline was damaged as a result of work performed under Bolduc’s subcontract.  In addition, Bolduc agreed to indemnify and insure ECI against any damage caused as a result of work performed under its subcontract.[132]  Therefore, the Minnesota Supreme Court should affirm the court of appeals’s decision to reverse and remand the matter to the district court for further proceedings not inconsistent with its opinion.

VII.  Conclusion

The majority and the dissent arrived at very different conclusions when asked to interpret the indemnification and insurance language used in the subcontract between ECI and Bolduc.  The majority and dissent agreed that section 337.02 prohibits a party from requiring another party to indemnify it from its own negligent actions.  However, the two opinions diverged in their application of section 337.05.  The majority stated that the legislature intended for section 337.05 to operate as an exception from the general prohibitions of section 337.02.  Therefore, Bolduc was required to indemnify and insure ECI against damage caused under its subcontract without regard to fault.  In contrast, the dissent stated that section 337.05 did not apply because the contractual language was not identical to the language approved by the supreme court in Holmes.


[Y] J.D. Candidate, William Mitchell College of Law, May 2013; B.A., Psychology and Spanish, Saint John’s University, 1996.  Prior to law school, I worked for fourteen years in urban development and construction management.  I dedicate this article to my wife, Tami, for her unyielding encouragement and support.

[1] BLACK’S LAW DICTIONARY 837 (9th ed. 2009).

[2] Id.

[3] Paula Duggan Vraa & Steven M. Sitek, Public Policy Considerations for Exculpatory and Indemnification Clauses: Yang v. Voyagaire Houseboats, Inc., 32 WM. MITCHELL L. REV. 1315, 1321 (2006).

[4] 3 PHILIP L. BRUNER & PATRICK J. O’CONNOR, JR., BRUNER AND O’CONNOR ON CONSTRUCTION LAW § 10:16 (2002).

[5] Id.

[6] Id.

[7] Farmington Plumbing & Heating Co. v. Fischer Sand & Aggregate, Inc., 281 N.W.2d 838 (Minn. 1979).

[8] Id. at 842 (emphasis added).

[9] Id. (citing Webster v. Klug & Smith, 260 N.W.2d 686, 690 (Wis. 1978)).

[10] MINN. STAT. § 337.02 (2010).

[11] Id.

[12] Holmes v. Watson-Forsberg Co., 488 N.W.2d 473, 475 (Minn. 1992).

[13] MINN. STAT. § 337.05, subdiv. 1 (2010).

[14] Eng’g & Constr. Innovations, Inc. v. L.H. Bolduc Co., 803 N.W.2d 916 (Minn. Ct. App. 2011); see infra Part II.

[15] See infra Part III.

[16] See infra Part IV.

[17] See infra Part V.

[18] See infra Parts VI & VII.

[19] Eng’g & Constr. Innovations, Inc.,  803 N.W.2d at 919.

[20] Appellant’s Brief, Addendum and Appendix at 5, Eng’g & Constr. Innovations, 803 N.W.2d 916 (No. A11-159), 2011 WL 4454819 (stating that each run was typically several hundred feet in length).

[21] Eng’g & Constr. Innovations, 803 N.W.2d at 919.

[22] Appellant’s Brief, Addendum and Appendix, supra note 20, at 5.

[23] Id.

[24] Eng’g & Constr. Innovations, 803 N.W.2d at 919.  Cofferdamsare temporary barriers commonly made of wood, steel, or concrete sheet piling primarily used for bridge/pier construction in shallow water.  Fla. Dep’t of Envtl. Prot., Cofferdam/Sheet Piling: Best Management Practiceshttp://www.dep.state.fl.us/coastal/programs/coral/documents/2007/MICCI/16Jul/Structural_BMPs.pdf (last visited Sept. 28, 2012).

[25] Eng’g & Constr. Innovations, 803 N.W.2d at 919.

[26] Id.

[27] Id.

[28] Id.

[29] Appellant’s Brief, Addendum and Appendix, supra note 20, at 11.

[30] Brief and Appendix of Respondent L.H. Bolduc Co., Inc. at 4, Eng’g & Constr. Innovations, 803 N.W.2d 916 (No. A11-159), 2011 WL 4454824.

[31] Appellant’s Brief, Addendum and Appendix, supra note 20, at 9.

[32] Eng’g & Constr. Innovations, 803 N.W.2d at 919.

[33] Id.

[34] Appellant’s Brief, Addendum and Appendix, supra note 20, at 9.

[35] Eng’g & Constr. Innovations, 803 N.W.2d at 919.

[36] Brief and Appendix of Respondent L.H. Bolduc Co., Inc., supra note 30, at 4.

[37] Respondent Travelers Indemnity Company of Connecticut’s Brief and Addendum at 10, Eng’g & Constr. Innovations, 803 N.W.2d 916 (No. A11-159), 2011 WL 4454827.

[38] Id. at 4.

[39] Eng’g & Constr. Innovations, 803 N.W.2d at 919 (noting that $32,513.29 plus $202,826.60 equals the $235,339.89 ECI paid to Frontier).

[40] Appellant’s Brief, Addendum and Appendix, supra note 20, at 9.

[41] Id. at 30.

[42] Eng’g & Constr. Innovations, 803 N.W.2d at 923.

[43] Appellant’s Brief, Addendum and Appendix, supra note 20, at 42.

[44] Eng’g & Constr. Innovations, 803 N.W.2d at 924.

[45] Id. at 919.

[46] Id.

[47] Id.

[48] Id.

[49] Id.

[50] Id.; Appellant’s Brief, Addendum and Appendix, supra note 20, at 4.

[51] Eng’g & Constr. Innovations, 803 N.W.2d at 919.

[52] Id.

[53] Id.

[54] Id.

[55] Id.

[56] Appellant’s Brief, Addendum and Appendix, supra note 20, at 11–12.

[57] Id. at 12.

[58] Eng’g & Constr. Innovations, 803 N.W.2d at 920.

[59] Id.

[60] Id.

[61] Id.

[62] Id. at 921.

[63] Id. at 920.

[64] Id.

[65] Id.

[66] Id.

[67] Id. at 921 (quoting Minn. Stat. § 337.02 (2010)).

[68] Eng’g & Constr. Innovations, 803 N.W.2d at 921 (quoting Minn. Stat. § 337.05, subdiv. 1 (2010)).

[69] Eng’g & Constr. Innovations, 803 N.W.2d at 923.

[70] Id.

[71] Id.

[72] Id.

[73] Id.

[74] Id. at 924.

[75] Id.

[76] Id.

[77] Id.

[78] Id.

[79] Id. at 924–25.

[80] Id. at 925 (Connolly, J., dissenting).

[81] Id.

[82] Id. (quoting Yang v. Voyagaire Houseboats, Inc., 701 N.W.2d 783, 791 (Minn. 2005)).

[83] Eng’g & Constr. Innovations, 803 N.W.2dat 925–26 (Connolly, J., dissenting).

[84] Id. at 926–27.

[85] Id. at 927.

[86] Id. at 920–21 (majority opinion).

[87] Id. at 923.

[88] Id. at 924.

[89] Id.

[90] See MINN. STAT. § 337.01 (2010).

[91] MINN. STAT. § 337.02 (2010) (emphasis added).

[92] MINN. STAT. § 337.05, subdiv. 1 (2010).

[93] Brief and Appendix of Respondent L.H. Bolduc Co., Inc., supra note 30, at 31.

[94] Id. at 35 n.13 (citing Appellant’s Brief, Addendum and Appendix, supra note 20, at 34–35).

[95] Eng’g & Constr. Innovations, Inc. v. L.H. Bolduc Co., 803 N.W.2d 916, 921 (Minn. Ct. App. 2011) (alternation in original).

[96] Brief and Appendix of Respondent L.H. Bolduc, Co., Inc., supra note 30, at 35 n.13 (citing Farmington Plumbing & Heating Co. v. Fischer Sand & Aggregate, Inc., 281 N.W.2d 838, 842 (Minn. 1979).

[97] Brief and Appendix of Respondent L.H. Bolduc, Co., Inc., supra note 30, at 34 (citing Farmington Plumbing & Heating Co., 281 N.W.2d at 842 (stating that “[i]ndemnity agreements are to be strictly construed when the indemnitee . . . seeks to be indemnified for its own negligence”)); see also MINN. STAT. §§ 337.02, .05 (2010).

[98] See Minn. Stat. § 337.05, subdiv. 1 (2010).

[99] Holmes v. Watson-Forsberg Co., 488 N.W.2d 473, 475 (Minn. 1992).

[100] Id.

[101] See Brief and Appendix of Respondent L.H. Bolduc, Co., Inc., supra note 30.

[102] Eng’g & Constr. Innovations, Inc. v. L.H. Bolduc Co., 803 N.W.2d 916, 921 (Minn. Ct. App. 2011).

[103] Holmes v. Watson-Forsberg Co., 471 N.W.2d 109, 112 (Minn. Ct. App. 1991), rev’d, 488 N.W.2d 473 (Minn. 1992).

[104] Holmes, 488 N.W.2d at 476.

[105] Id. at 475.

[106] Eng’g & Constr. Innovations, 803 N.W.2d at 922 (citing Katzner v. Kelleher Constr., 545 N.W.2d 378, 381 (Minn. 1996)).

[107] Hurlburt v. N. States Power Co., 549 N.W.2d 919, 923 (Minn. 1996).

[108] Eng’g & Constr. Innovations, 803 N.W.2d at 923.

[109] Id. at 925 (Connolly, J., dissenting).  However, ECI is not the only other party that could be negligent because Frontier’s surveyor marked the locations for the sheet piling.  See supra text accompanying note 29.

[110] Eng’g & Constr. Innovations, 803 N.W.2d at 923 (majority opinion).

[111] Id. at 922 (citing Holmes v. Watson-Forsberg Co., 488 N.W.2d 473, 474 (Minn. 1992)).

[112] Holmes, 488 N.W.2d at 474.

[113] Id. at 475.

[114] McCarthy v. Target Stores, No. C4-98-1297, 1999 WL 58568, at *7 (Minn. Ct. App. Feb. 3, 1999).

[115] Hurlburt v. N. States Power Co., 549 N.W.2d 919, 922 (Minn. 1996).

[116] Eng’g & Constr. Innovations, 803 N.W.2d at 926 (Connolly, J., dissenting).

[117] Id. (alteration in original) (quoting Holmes, 488 N.W.2d at 474).

[118] Eng’g & Constr. Innovations, 803 N.W.2d at 926 (Connolly, J., dissenting) (emphasis added).

[119] Id. at 920 (majority opinion) (alternation in original) (emphasis added); see supra text accompanying notes 86–89 for more complete ECI contract language.

[120] See supra text accompanying note 30.

[121] See supra text accompanying note 24.

[122] Eng’g & Constr. Innovations, 803 N.W.2d at 922.

[123] Respondent the Travelers Indemnity Company of Connecticut’s Brief and Addendum, supra note 37, at 35.

[124] Id. at 36 (citing Farmington Plumbing & Heating Co. v. Fischer Sand & Aggregate, Inc., 281 N.W.2d 838, 842 (Minn. 1979)).

[125] MINN. STAT. §§ 337.02, .05 (2010).

[126] Eng’g & Constr. Innovations, 803 N.W.2d at 923.

[127] Id. (citing J.A. Jones Constr. Co. v. Hartford Fire Ins. Co., 645 N.E.2d 980, 982 (Ill. App. Ct. 1995)).

[128] Eng’g & Constr. Innovations, 803 N.W.2d at 924 (emphasis added).

[129] Id. at 921 (first alteration in original).
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[130] See supra text accompanying note 86.

[131] See supra  text accompanying note 30.

[132] See supra text accompanying note 86.

Minnesota’s Inherent Authority Criminal Expungement Law: Two Years After State v. S.L.H.

5 Wm. Mitchell J.L. & Prac. 2

By Lindsay W. Davis[Y]

The Minnesota Supreme Court last considered the issue of the inherent authority expungement, in particular, a district court’s ability to seal records held outside the judicial branch, over two years ago in State v. S.L.H.[1] Since then, individuals continue to seek relief from the effects of their criminal records, and the number of expungement petitions has remained steady.[2] The Minnesota Court of Appeals has analyzed inherent authority criminal expungements in several cases since S.L.H., producing two published decisions.[3] This article will explain how the appellate courts have applied and refined S.L.H., and which circumstances may still warrant relief to seal executive-branch records under the court’s inherent authority. Continue reading

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