Before the Minnesota Supreme Court

June 2024
Summaries prepared by the Supreme Court Commissioner’s Office

Monday, June 3, 2024

Supreme Court Courtroom, State Capitol Building, Second Floor
South Country Health Alliance, et al., Respondents, vs. Minnesota Department of Human Services, et al., Appellants, Medica Health Plans, Appellant, HMO Minnesota, Appellant, HealthPartners, Inc., Appellant, UCare Minnesota, Appellant, UnitedHealthcare of Illinois, Appellant – Case No. A22-1643:  Respondents South Country Health Alliance, PrimeWest Rural Minnesota Health Care Access Initiative, and Itasca Medical Care are entities established by rural Minnesota counties to engage in county-based purchasing of health care services for Minnesota’s Medicaid program.  In 2022, respondents filed a complaint with the district court, challenging the managed-care procurement process and procurement decisions made by appellant Minnesota Department of Human Services (DHS). Appellants Medica Health Plans, HMO Minnesota, HealthPartners, Inc., UCare Minnesota, and UnitedHealthcare of Illinois joined the action as defendants.  The district court dismissed respondents’ claims on summary judgment.
The court of appeals affirmed in part, reversed in part, and remanded.  The court of appeals concluded that DHS may not implement the prepaid medical assistance program in a county that has implemented county-based purchasing; DHS does not have discretion to refuse a county’s valid election of county-based purchasing; and South Country and PrimeWest are entitled to mediate their dispute with DHS.
The supreme court granted appellants’ petitions for review, which raised issues relating to (1) the interplay between a statutory provision that authorizes county-based purchasing, Minn. Stat. § 256B.69, subd. 3a (2022), and a statute that addresses competitive bidding for the prepaid medical assistance program, Minn. Stat. § 256B.694 (2022); (2) federal approval of the county-based purchasing model; and (3) the right of joint powers entities operating as health plans to participate in the procurement mediation process.  (Ramsey County)
Dakota Drug, Inc., Respondent, vs. Commissioner of Revenue, Relator – Case No. A23-1973:  Respondent Dakota Drug, Inc., is a wholesale drug distributor that sells drugs to customers such as pharmacies, retail drug stores, and hospitals.  As part of its business, Dakota Drug offers a rebate to its customers.  The Wholesale Drug Distributor Tax statute imposes a tax “on each wholesale drug distributor equal to 1.8 percent of its gross revenues.”  Minn. Stat § 295.52, subd. 3 (2022).  At issue is whether, for the tax years at issue, Dakota Drug properly—for tax purposes—deducted from invoiced amounts the payment of rebate amounts to arrive at gross revenues.  The Commissioner of Revenue, following an audit, concluded that the rebate amounts should not be excluded.  On Dakota Drug’s appeal to the tax court, the tax court recognized that “[t]he definition of gross revenue under the Wholesale Drug Distributor Tax is an issue of first impression” and ultimately agreed with Dakota Drug that rebate amounts it pays to customers do not constitute gross revenue for purposes of the Wholesale Drug Distributor Tax.
On appeal to the supreme court, the Commissioner of Revenue’s relator brief presents the following issue: whether the Commissioner of Revenue properly assessed Dakota Drug on the total amounts it received from its customers before any deduction.  (Minnesota Tax Court)

Tuesday, June 4, 2024

Supreme Court Courtroom, State Capitol Building, Second Floor
Minnesota Internship Center, Appellant, vs. Minnesota Department of Education, Respondent – Case No. A23-0064: Appellant Minnesota Internship Center (MNIC) operates a charter school in Minneapolis and receives state education aid, including certain types of aid that are based on attendance.  In September 2018, respondent Minnesota Department of Education (MDE), which distributes state aid to Minnesota schools, received a complaint alleging that MNIC had manipulated its records to inflate attendance figures.  MDE selected MNIC for an audit for fiscal year 2018, spanning the 2017–18 school year.  Eventually—following a lengthy audit and an administrative appeal—the Commissioner of Education issued a determination that MNIC had overreported the number of students enrolled at MNIC in fiscal year 2018 and therefore had been overpaid over $1.3 million in state aid. 
On appeal, MNIC argued, among other things, that MDE’s investigation should have taken place under Minn. Stat. § 127A.42, subd. 2 (2022), which provides that the Commissioner may reduce state aid to a school that “authorizes or permits” certain “violations of law,” rather than under Minn. Stat. § 127A.41, subd. 3 (2022), which authorizes audits.  Because MDE should have acted under section 127A.42, MNIC argued, MDE should also have followed the procedures set forth in that statute, including giving notice to the school in a particular form, allowing the school an opportunity to correct the violations, and holding a hearing under certain procedures—which MNIC argued that MDE did not do.  The court of appeals rejected this argument, reasoning that MDE was authorized to act under section 127A.41, and otherwise affirmed the Commissioner’s decision.
The supreme court granted review on the following issue: whether the Minnesota Department of Education was required to conduct its investigation of Minnesota Internship Center’s alleged criminal wrongdoing and resulting clawback of more than $1.3 million pursuant to and with the corresponding minimum due process protections of Minn. Stat. § 127A.42.  (Minnesota Department of Education)
State of Minnesota, Respondent, vs. Brandon Stuart Moore, Appellant – Case No. A22-1570:  Appellant Brandon Moore was convicted of an aggravated first-degree controlled substance crime for possessing methamphetamine, which was found alongside a handgun in the locked glovebox of a car he was driving.  The aggravating factors were the amount of controlled substance he possessed (over 100 grams) and the presence of the firearm within his “immediate reach.”  Minn. Stat. § 152.021, subd. 2b(1) (2022).  The court of appeals concluded that for a firearm to be within a person’s “immediate reach,” the State must prove that the firearm was “close at hand” and the person had physical access to it “without delay.”  Under the facts of the case, the court of appeals concluded that the evidence at trial established the handgun was within appellant’s “immediate reach.” 
The supreme court granted review on the following issue: whether appellant’s aggravated first-degree controlled substance crime conviction must be reversed because the State failed to prove beyond a reasonable doubt that the firearm in the locked glovebox was within his “immediate reach” as required by the statute.  (Chippewa County)

Wednesday, June 5, 2024

Supreme Court Courtroom, State Capitol Building, Second Floor
State of Minnesota, Respondent, vs. Logan Hunter Vagle, Appellant – Case No. A23‑0863:  Respondent State of Minnesota charged appellant Logan Vagle, in part, with possession of a firearm without a serial number, Minn. Stat. § 609.667(3) (2022), after police found a gun without a serial number in Vagle’s car.  Minnesota Statutes section 609.667 (2022) makes it a crime to “(1) obliterate[], remove[], change[], or alter[] the serial number or other identification of a firearm; (2) receive[] or possess[] a firearm, the serial number or other identification of which has been obliterated, removed, changed, or altered; or (3) receive[] or possess[] a firearm that is not identified by a serial number.”  Section 609.667 further states: “As used in this section, ‘serial number or other identification’ means the serial number and other information required under United States Code, title 26, section 5842, for the identification of firearms.” 

Vagle moved to dismiss the charge of possessing a firearm without a serial number for lack of probable cause.  He argued that because his firearm is a privately made firearm, it was not required to have a serial number under federal law, and as a result, section 609.667(3) did not require his gun to have a serial number.  The district court granted Vagle’s motion to dismiss, concluding that section 609.667(3) required his gun to have a serial number but that section 609.667(3) is unconstitutionally vague as applied. 

The State filed a pretrial appeal.  The court of appeals reversed the district court.

The supreme court granted review on the following issues: (1) whether the Legislature’s reference to the federal code in section 609.667 applies to section 609.667(3); (2) whether it is a felony for Minnesotans to possess privately made firearms that do not include serial numbers where federal law exempts privately made firearms from serial number requirements; and (3) whether the district court correctly concluded that section 609.667 is unconstitutionally vague.  (Anoka County)

In the Matter of the Welfare of: C.T.B. – Case No. A23-0459:  Respondent State of Minnesota filed a delinquency petition charging appellant C.T.B. with unlawful possession of a firearm by a person under the age of 18.  C.T.B. moved to suppress evidence of the firearm, arguing that the police found the firearm during an unconstitutional seizure and search.  After a contested omnibus hearing, the district court denied C.T.B.’s motion to suppress.  Following a court trial based on stipulated evidence, the district court found C.T.B. guilty and stayed adjudication of delinquency.  The court of appeals affirmed.
The supreme court granted review on the following issue: whether the lower courts erred by determining officers lawfully stopped and frisked C.T.B. based on (1) his proximity to a man who they suspected had recently brandished a firearm and (2) non-particularized knowledge that criminals may pass off a weapon to avoid detection.  (Hennepin County)

Monday, June 10, 2024

Courtroom 300, Minnesota Judicial Center
State of Minnesota, Appellant, vs. Julian Daniel Valdez, Respondent – Case No. A22-1424:  Appellant State of Minnesota charged respondent Julian Valdez with second-degree intentional murder and second-degree felony murder for an August 5, 2021 fatal shooting.  A jury trial was held.  After both parties had rested, the district court found that Valdez was entitled to a jury instruction on defense of others.  The district court instructed the jury, over Valdez’s objection, that one of the requirements of defense of others was that “[t]he Defendant has a duty to retreat or avoid the danger if reasonably possible.”  The jury found Valdez guilty of second-degree felony murder but not guilty of second-degree intentional murder.  The court of appeals reversed and remanded for a new trial.

The supreme court granted review on the following issues: (1) whether the district court abused its discretion when it used the standard jury instruction for defense of others and instructed the jury that there was a duty to retreat or avoid the danger if reasonably possible; and (2) whether any error in the instruction was harmless beyond a reasonable doubt because the State disproved two elements of defense of others: the deadly force used by Valdez was clearly unreasonable, and Valdez became the aggressor by producing and brandishing a firearm, forfeiting his right of defense of others.  (Renville County)

In re Petition for Disciplinary Action against R. James Jensen, Jr., a Minnesota Attorney, Registration No. 0164409 – Case No. A24-0113:  An attorney discipline matter that presents the question of what discipline, if any, is appropriate based on the facts of the case.

Tuesday, June 11, 2024

Courtroom 300, Minnesota Judicial Center
State of Minnesota, Respondent, vs. Robert Lee Baker, III, Appellant – Case No. A22-1283:  While sitting in a car driven by his girlfriend, appellant Robert Baker was robbed at gunpoint by two masked assailants.  When the robbers were fleeing with Baker’s property, Baker exited the car and shot and killed one of the robbers.  Respondent State of Minnesota charged Baker with second-degree intentional murder and unlawful possession of a firearm.  Baker pleaded guilty to unlawful possession of a firearm.  A jury trial was held.  After the parties had rested, the district court denied Baker’s request for instructions on self-defense and defense of others, finding that Baker had not met his burden of production on either defense.  The jury found Baker guilty of second-degree murder.  The court of appeals affirmed.
The supreme court granted review on the following issue: whether the district court denied Baker his constitutional right to present a defense and committed reversible error by refusing to instruct the jury on defense of self and others.  (Dakota County)

State of Minnesota, Respondent, vs. Korwin Lucio Balsley, Appellant – Case No. A23-0133:  In 2022, appellant Korwin Balsley was convicted of two counts of second-degree criminal sexual conduct for offenses he committed in 2015.  The district court imposed an aggravated sentence after finding that appellant met the criteria for an engrained offender based, in part, on his 2017 conviction for second-degree assault.  The court of appeals concluded the district court properly considered appellant’s 2017 second-degree assault conviction a “previously committed” offense, even though the offense occurred after he committed the 2015 criminal sexual conduct offense for which he was being sentenced. 
The supreme court granted review on the following issue: whether Balsley’s 2017 conviction for assault in the second degree qualifies as a “previously committed” predatory crime for purposes of enhancing Balsley’s sentence under the engrained-offender statute, Minn. Stat. § 609.3455, subd. 3a(a)(2) (2022), when the conviction was out of sequence from the current conviction—a delayed report case where the charged offense allegedly occurred in 2015.  (Redwood County) 

Wednesday, June 12, 2024

Nonoral:  Chad Olson, Respondent, vs. Total Specialty Contracting, LLC, and Federated Mutual Insurance Co., Relators – Case No. A23-1851:  Respondent Chad Olson was employed as a journeyman heat and frost insulator for relator Total Specialty Contracting, LLC.  Early in the morning on November 8, 2021, Olson slipped and fell and injured himself while approaching the gate entrance of the construction project on the University of Minnesota campus for which he was subcontracted.  The compensation judge found that Olson’s injury arose out of and in the scope and course of employment and ordered the employer and its insurer, relator Federated Mutual Insurance Co., to pay benefits.  The Workers’ Compensation Court of Appeals affirmed.  It addressed Dykhoff v. Xcel Energy, 840 N.W.2d 821 (Minn. 2013) as affirming that a slip and fall injury must be both “arising out of” and “in the course of” employment to be compensable, canvassed other decisions, and affirmed the compensation judge’s conclusion that Olson’s injury arose out of and in the course of employment.

On appeal to the supreme court, relators’ brief presents the following issues:  (1) whether the compensation judge’s findings and order, as affirmed by the Workers’ Compensation Court of Appeals, violates the Minnesota Supreme Court’s Dykhoff precedent by finding an unexplained fall on a flat surface to be work-related; (2) whether the compensation judge’s findings and order, as affirmed by the Workers’ Compensation Court of Appeals, is supported by the substantial weight of the evidence; and (3) whether an employee has carried his burden of proof that an injury arose out of employment when he cannot allege to a reasonable degree of probability that any work-related hazard or work-related special risk caused his fall.  (Workers’ Compensation Court of Appeals)