TAXATION
Taxpayer standing

Clapp v. Sayles-Adams, 15 N.W.3d 648 (Minn. 2025)

The facts: Deborah Clapp is a Minneapolis homeowner who believed her property taxes were being used illegally by Minneapolis Public Schools. A provision in the district’s teachers’ union contract included protections for underrepresented populations in the event of layoffs. Layoffs typically proceed on the basis of seniority, with least senior employees being laid off first. However, the 2021-2023 collective bargaining contract exempted teachers from underrepresented populations from the normally seniority-based layoff and reassignment procedures. They were also given priority in the reinstatement process. Clapp was not a party to the contract and had no connection to the school district or the union other than residing in Minneapolis and paying property taxes.

The type of case: Clapp sought declaratory judgment and injunctive relief. Normally, a party bringing a lawsuit must have suffered some sort of damages or injury. A request for declaratory judgment asks a court to define the legal obligations or rights between parties when there is uncertainty and does not require a party to show they have been injured. A request for injunctive relief asks the court to order the defendant to stop a certain action. Clapp alleged the contract provision regarding underrepresented teachers violated the equal protection clause of the Minnesota Constitution by discriminating based on race and ethnicity, and asked the court to stop Minneapolis Public Schools from spending public money on implementing that provision.

The issues: Even for declaratory judgment actions, a plaintiff must have some personal stake in the case, known as standing. An exception to this rule is taxpayer standing, where someone who does not have a direct injury can still sue to stop the unlawful use of public funds. Though Clapp lost at the district court level, the Minnesota Court of Appeals reversed, finding she had standing to pursue her claim. At the Minnesota Supreme Court, the school district contended Clapp did not meet the requirements for taxpayer standing, which requires that the central dispute is about the illegal disbursement of government funds. Rather, the district argued, Clapp’s challenge was based only on her disagreement with the contract provision, and she had not shown that there was any unlawful spending of taxpayer money.

The court’s ruling: The Minnesota Supreme Court held Clapp did not have standing. Taxpayer standing requires a direct challenge to government expenditures. Here, Clapp did not point to any unlawful spending, only showing she lived in Minneapolis, owned a home, paid property taxes, and that a portion of property taxes helps fund the school district. She did not show any government funds were being spent illegally. Instead, her real challenge was to the constitutionality of the contract provision itself.

What this means for cities: A city cannot be sued simply because someone has a political disagreement with a city ordinance or other government action. A plaintiff would need to either show that they are personally affected by the ordinance or action, or point to specific allegedly illegal spending by the city.

TORTS
Discretionary immunity

Doe 601 v. Best Acad., No. A22-1236 (Minn. Feb. 26, 2025) (precedential opinion)

The facts: Best Academy, a charter school, hired Aaron Hjermstad as a physical education teacher in 2016. The school contracted with a nonprofit charter management company to manage the hiring process. Best Academy required candidates to provide three letters of reference, and those references were to be contacted. The school did not require calls to former employers. Hjermstad provided a list of references, but no letters. On his job application, Hjermstad did not answer two questions:

1) The reason for leaving Excell, his previous school.

2) Whether Best Academy could contact Excell.

In his list of references, Hjermstad did not include any supervisors, but did include volunteer coaches from Hospitality House, a previous position, and a paraprofessional from Excell. Best Academy did not contact either job.

Hjermstad had been accused of sexual abuse of a minor student at Excell, resulting in a criminal investigation. During the investigation, Hjermstad was placed on a leave of absence by Hospitality House. Though Hjermstad was not charged, Excell did not renew his employment contract for 2015-2016.

During his job interview, Hjermstad told Best Academy that his contract at Excell was not renewed due to budget cuts. While employed at Best Academy, he sexually assaulted Doe, a minor, though Doe did not immediately report the abuse.

In March 2020, a parent unrelated to Doe reported to the school that Hjermstad had sexually assaulted her minor son. Best Academy fired Hjermstad and reported him to law enforcement.

After the Star Tribune published a story about Hjermstad’s sexual assault charges, Doe’s mother showed him the article. Doe then disclosed that Hjermstad had also assaulted him. Hjermstad was later convicted of sexually assaulting Doe and three other children.

The type of case: Doe claimed that Best Academy’s decision to hire Hjermstad was negligent because the school failed to perform due diligence during the hiring process.

The issues: Minnesota’s Municipal Tort Claims Act (MTCA) makes municipalities liable for its torts and those of officers, employees, and agents acting within the scope of their employment. Charter schools are considered municipalities for this purpose. A tort is a civil wrongdoing that causes someone to suffer a loss or harm. The MTCA contains a discretionary-function exception, meaning that municipalities have immunity for discretionary judgments made in the context of policymaking. Best Academy contended that its hiring decision was a policy-level decision, and it was therefore immune. Both the district court and the Minnesota Court of Appeals agreed and dismissed Doe’s negligent hiring claim.

The court’s ruling: The Minnesota Supreme Court held that the district court and court of appeals made a mistake in determining that Best Academy’s conduct was discretionary. In making the decision to hire Hjermstad, the school’s agent’s conduct did not involve balancing competing economic, social, political, and financial considerations for purposes of the discretionary-function exception to municipal tort liability. The school’s agent did not follow established procedures, including reference checks, in the hiring process.

What this means for cities: To invoke the discretionary-function exception, a city must show that the conduct challenged in the lawsuit involved weighing competing social, political, economic, or financial considerations. There is not a broad category of “hiring” that makes all actions in this operational area discretionary.

Written by Lisa Needham, research attorney, and Amber Eisenschenk, research manager, with the League of Minnesota Cities. Contact: [email protected] or (651) 281-1227.