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Minnesota's Eminent Domain Laws and Property Rights

Property Rights in the State of Minnesota

Minnesota’s property rights protections are similar to other states. The law provides a commission hearing and appeal process for determining just compensation. Minnesota law provides for recovery of attorneys’ fees, expert fees, and costs depending on the final result. Minnesota statutes also provide some rather unique claims, including so-called “minimum compensation” claims, separate claims for loss of going concern and loss of driveway access, and others that may be present in particular situations. Minnesota case law suggests that Courts ought to be “vigilant in enforcing the just compensation requirement” and that just compensation must put a property owner “in as good a position pecuniarily as if his property had not been taken.”

Meet OCA's Minnesota Attorney

Mark D. Savin

Mark Savin is a shareholder at Fredrikson & Byron and one of seven eminent domain lawyers at the Firm. For more than thirty years, he has represented owners whose property has been taken by government action. He has represented property owners in some of the Twin Cities’ largest dollar, most high-profile takings; and he has represented owners throughout the state in takings that were make-or-break matters for them. He regularly represents one of the nation’s largest retailers in eminent domain matters across the country. He served on the Board of Directors of OCA from 2013 through 2015. He has been twice recognized by Best Lawyers as its Lawyer of the Year in the field of eminent domain, first in 2013 and then again in 2019.

A Summary of Minnesota's Eminent Domain Laws

The following responses are intended to provide general information about eminent domain laws in the featured state. Such information does not constitute legal advice. Anyone interested in learning more about eminent domain law and the impact it may have on a given set of facts should consult with an OCA attorney or another attorney experienced in handling eminent domain cases.

  • Who Can Exercise Eminent Domain Laws?

    The State of Minnesota holds the power to condemn as an inherent attribute of sovereignty, as do other political subdivisions of the state to which this power has been or may be delegated. Municipalities are provided a broad grant to use eminent domain under Minnesota law. Other private entities have been delegated the power of eminent domain including electrical utilities, common carrier pipelines, railroad corporations, public service corporations, and others. All entities holding the power of eminent domain are subject to the provisions of Chapter 117 of the Minnesota Statutes.

  • What Are the Legal Requirements for Exercising the Power?

    Under Minnesota law, property can only be condemned for a lawful public use or purpose by an entity authorized to condemn. The condemning authority must follow the processes in Minnesota Statutes Chapter 117, including that the condemning authority obtain an appraisal of the property and negotiate in good faith to acquire the property by direct purchase prior to presenting a condemnation action. The condemnation petition must identify the lands affected and the lands to be taken and a hearing on the petition must be held. At the hearing on the petition, the district court for the county in which the property is located determines whether the condemnor has shown authority to condemn and satisfied relevant statutory requirements of public purpose and necessity for the particular taking at issue.

  • What Limitations or Defenses Exist?

    Generally speaking, defenses as to the public purpose and necessity of the taking may be presented. These defenses must be presented at the initial hearing on petition. However, deference is generally given to the condemning authority and the ability to successfully challenge a condemnation action may be limited.

    No appeal will be allowed from a district court order approving the condemnation unless such appeal is brought within sixty days of the original order. Special discovery limited to matters relevant to the challenged issues may be allowed at the discretion of the court, and failure to allow such discovery where essential to the proof of challenged issues may constitute error.

  • What Constitutes a Public Purpose?

    “Public use” or “public purpose” are defined under Minnesota law as either (1) the possession, occupation, ownership, and enjoyment of the land by the general public or public agencies, or (2) the creation or functioning of a public service corporation, or (3) the mitigation of a blighted area, remediation of an environmentally contaminated area, reduction of abandoned property, or removal of a public nuisance. In response to the Kelo decision and Walser Auto Sales decision, the legislature revised the definition of “public use” under Minn. Stat. § 117.025 to limit the use of eminent domain to acquire property for redevel- opment. “Economic development” by itself can no longer provide the required public use. Minnesota also has certain limitations on “mitigation of blight” or “environmental contamination” being used as public purposes.

  • How is Just Compensation Determined

    In Minnesota, just compensation is first determined by a panel of commissioners appointed by the Court. The court at its discretion may appoint an attorney knowledgeable in eminent domain matters; all other persons must be persons engaged in the occupations of real estate sales or appraising or persons knowl- edgeable in real estate values. The commissioners’ hearing on valuation is gov- erned by Minn. Stat. § 117.085, which vests the commissioners with broad discretion as to the conduct of the hearing. In commissions chaired by an eminent domain lawyer, this proceeding may resemble a bench trial; in other instances where a lawyer is not appointed as a commissioner, the proceeding may be more informal, and evidentiary rules may be permissive. Thus, it is helpful to have a lawyer who is familiar with the commission hearing process and the likely commissioners.

    Any party that is unsatisfied with the commissioners’ award may appeal that award to the district court possessing jurisdiction of the case. While most actions are resolved at the commissioner hearings, some will proceed to trial; both the owner and the petitioner are entitled to a jury trial if such is sought.

  • How Is Fair Market Value Defined?

    While fair market value is typically the measure of “just compensation” under Minnesota law, it is “just compensation” that is the legal requirement. Under Minnesota law, because a constitutional provision for just compensation was inserted for the protection of the citizen, it ought to have a liberal interpretation. The amount of just compensation must give the property owner a full and exact equivalent for the property taken. When determining value, neither the property owner’s use of the property nor the condemnor’s planned use is dispositive; instead suitable uses, including the highest and most profitable use for which the property is adaptable and needed must be considered.

    Any competent evidence concerning any factor which would affect the price a purchaser willing but not required to buy the property would pay an owner willing but not required to sell it will be considered as part of the determination.

    The just compensation is valued as of the date of taking of the property. In some instances, where an owner must relocate as a result of the taking, an owner may be entitled to additional damages under Minnesota’s “minimum compensation” statute.

  • What About Recovering Damages to Remaining Property?

    The condemning authority does not always take entire tracts of land. In “partial takings,” the owner of the condemned property is also entitled to compensation for the diminution in value of the remainder of the property after the taking. This is commonly referred to as “severance damages.” Severance damages are measured using the “before and after” rule, by which the measure of damages is the difference between the fair market value of the entire piece of property immediately before the taking and the fair market value of the remainder of the property after the taking.

  • Is the Landowner Entitled to Recover Reasonable Attorney Fees? Expert Fees? Litigation Costs?

    Minnesota law provides for attorneys’ fees and a broad range of litigation costs, codified under Minn. Stat. §117.031. If the final award or judgment exceeds the condemning authority’s last written offer before the filing of the petition by more than 40 percent, these fees and costs are mandatory, subject only to a finding of reasonableness. If the final award or judgment exceeds the offer by less than 40 percent but more than 20 percent, fees and costs are discretionary. The Court’s analysis follows a “lodestar approach.” Costs known to have been paid to date under this statute include fees from appraisers, brokers, planners, and engineers. Some eminent domain actions are exempt from payment of fees.

REFERENCES AND LINKS

Minnesota

Fredrikson & Byron, P.A.
200 South Sixth Street
Minneapolis, MN 55402-1425
Tel:(612) 492-7442
msavin@fredlaw.com | www.fredlaw.com

Mark Savin has represented the property interests of companies such as General Mills, 3M, Prudential, Total Petroleum, Rahr Malting, Firstar Bank and Target in eminent domain litigation. He has also represented the owners of smaller businesses impacted by condemnation including restaurants, service stations, shopping centers and apartments as well as properties owned by non-profit entities including churches and hospitals.

Mark represents a number of land developers whose properties are affected by eminent domain proceedings, including developers in the Twin Cities and in the St. Cloud area. He has also acted as an adviser to major developers in connection with development projects in downtown Minneapolis.

Significant Eminent Domain and Property Rights Representations and Reported Decisions

  • Representation of a professional sports team in a taking of land from the Met Center site by the City of Bloomington in connection with the development of the Mall of America.
  • Representation of a national bank against the Minnesota Deportment of Transportation. In this condemnation for highway expansion, Mr. Savin successfully proposed and persuaded the MNDOT to adopt a revised road design resulting in improved access to the property and paved the way for a negotiated settlement.
  • Representation of an owner of a 50-acre undeveloped property burdened by an easement taking that interfered with commercial development. The condemnor asserted that there was little or no damage as a result of the easement. After hearing by commissioners which focused on complex legal and geotechnical issues, the owner was awarded nearly $3 million.
  • Representation of a manufacturing company in a jury trial involving loss of access. The jury awarded substantial severance damages, reversing an earlier commission’s findings.
  • Representation of a private landowner with a large parcel of vacant land considered to be of limited value by the condemnor because of land use regulations on commercial development. After hearing by commissioners which focused on land use and zoning issues, the landowner was awarded compensation several times the condemnor’s offer.
  • Representation of a special use processing plant whose interests were impacted by the taking of a related parcel. A negotiated settlement was reached which involved a swap of private and public properties and relocation payments to the landowner.
  • Representation of a property owner under the Tucker Act in the Court of Federal Claims on a successful regulatory takings claim against the Army Corps of Engineers.

Speaking Engagements

  • American Law Institute: Eminent Domain and Land Valuation Litigation, “Dropping the Bomb: Challenging Highest and Best Use,” February 2015, San Francisco, CA.
  • American Law Institute: Eminent Domain and Land Valuation Litigation, “The Changing Law of Visibility,” January 2013, Miami Beach, FL.
  • American Law Institute-American Bar Association: Condemnation 101, “Condemnation, Common Sense, and My Sister-in-Law, the Court Reporter,” January 2012, San Diego, CA.
  • William & Mary Law School, Brigham-Kanner Property Rights Conference, October 17, 2013, Williamsburg, VA.

Published Articles and Papers

  • Lost Visibility and the Right to Exclude: How Merrill’s Sine Qua Non of Property Compels Just Compensation in Takings Cases
    Brigham-Kanner Property Rights Conference Journal, Volume 3, September 2014
  • Kelo Revisited
    Appraisal Institute (Minnesota), St. Paul, MN, May 31, 2006
  • Real Property Valuation and Appraisals – The Real Estate Attorney’s Survival Guide
    Minnesota State Bar Association, Minneapolis, MN, June 6, 2005
  • Use of Condemnation and Relocation in the Development of Affordable Housing
    Lorman Education Services, Bloomington, MN, October 10, 2001
  • Government Influence on Value: Use of the Scope of the Project Rule
    Minnesota Institute of Legal Education, Minneapolis, MN, October 10, 2001
  • “Valuation of Contaminated Properties,” Minnesota Environmental Assessment Roundtable
    Minneapolis, MN, September 9, 1999

Professional Affiliations

  • Co-Chair, Ramsey County District Court Working Group on Eminent Domain, 2012-2013
  • Co-chair, Minnesota State Bar Association Eminent Domain CLE, 2005-2006
  • Jury Instruction Guide Sub-committee for Eminent Domain, 2005
  • Lecturer
    • University of Minnesota Law School, Professor Alex Klass, 2007-2013
    • University of St. Thomas Graduate Program in Real Estate Appraisal, Professor Thomas Musil, 2007
    • William Mitchell Law School, Professor Evan Rice, 2005-2006

Education

  • Kenyon College, A.B. with honors, 1967
  • Stanford University, M.A., 1970
  • Stanford University, Ph.D., 1976
  • University of Minnesota, J.D., cum laude, Law Review (Associate Editor),1986

Bar Admissions and Membership

  • Minnesota
  • U.S. Supreme Court
  • U.S. Court of Appeals for the Eighth Circuit
  • U.S. Court of Appeals for the Federal Circuit
  • U.S. District Court for the District of Minnesota
  • U.S. Court of Federal Claims
  • Minnesota Bar Association

Honors and Awards

  • AV® Preeminent™ Peer Review Rated by Martindale-Hubbell®
  • Recognized by Super Lawyers, Minnesota Law & Politics
  • The Best Lawyers in America®, Eminent Domain and Condemnation Law
  • Minneapolis Lawyer of the Year, Eminent Domain and Condemnation Law, as recognized by The Best Lawyers in America®, 2014

Mark Savin has represented the property interests of companies such as General Mills, 3M, Prudential, Total Petroleum, Rahr Malting, Firstar Bank and Target in eminent domain litigation. He has also represented the owners of smaller businesses impacted by condemnation including restaurants, service stations, shopping centers and apartments as well as properties owned by non-profit entities including churches and hospitals.

Mark represents a number of land developers whose properties are affected by eminent domain proceedings, including developers in the Twin Cities and in the St. Cloud area. He has also acted as an adviser to major developers in connection with development projects in downtown Minneapolis.

Significant Eminent Domain and Property Rights Representations and Reported Decisions

  • Representation of a professional sports team in a taking of land from the Met Center site by the City of Bloomington in connection with the development of the Mall of America.
  • Representation of a national bank against the Minnesota Deportment of Transportation. In this condemnation for highway expansion, Mr. Savin successfully proposed and persuaded the MNDOT to adopt a revised road design resulting in improved access to the property and paved the way for a negotiated settlement.
  • Representation of an owner of a 50-acre undeveloped property burdened by an easement taking that interfered with commercial development. The condemnor asserted that there was little or no damage as a result of the easement. After hearing by commissioners which focused on complex legal and geotechnical issues, the owner was awarded nearly $3 million.
  • Representation of a manufacturing company in a jury trial involving loss of access. The jury awarded substantial severance damages, reversing an earlier commission’s findings.
  • Representation of a private landowner with a large parcel of vacant land considered to be of limited value by the condemnor because of land use regulations on commercial development. After hearing by commissioners which focused on land use and zoning issues, the landowner was awarded compensation several times the condemnor’s offer.
  • Representation of a special use processing plant whose interests were impacted by the taking of a related parcel. A negotiated settlement was reached which involved a swap of private and public properties and relocation payments to the landowner.
  • Representation of a property owner under the Tucker Act in the Court of Federal Claims on a successful regulatory takings claim against the Army Corps of Engineers.

Speaking Engagements

  • American Law Institute: Eminent Domain and Land Valuation Litigation, “Dropping the Bomb: Challenging Highest and Best Use,” February 2015, San Francisco, CA.
  • American Law Institute: Eminent Domain and Land Valuation Litigation, “The Changing Law of Visibility,” January 2013, Miami Beach, FL.
  • American Law Institute-American Bar Association: Condemnation 101, “Condemnation, Common Sense, and My Sister-in-Law, the Court Reporter,” January 2012, San Diego, CA.
  • William & Mary Law School, Brigham-Kanner Property Rights Conference, October 17, 2013, Williamsburg, VA.

Published Articles and Papers

  • Lost Visibility and the Right to Exclude: How Merrill’s Sine Qua Non of Property Compels Just Compensation in Takings Cases
    Brigham-Kanner Property Rights Conference Journal, Volume 3, September 2014
  • Kelo Revisited
    Appraisal Institute (Minnesota), St. Paul, MN, May 31, 2006
  • Real Property Valuation and Appraisals – The Real Estate Attorney’s Survival Guide
    Minnesota State Bar Association, Minneapolis, MN, June 6, 2005
  • Use of Condemnation and Relocation in the Development of Affordable Housing
    Lorman Education Services, Bloomington, MN, October 10, 2001
  • Government Influence on Value: Use of the Scope of the Project Rule
    Minnesota Institute of Legal Education, Minneapolis, MN, October 10, 2001
  • “Valuation of Contaminated Properties,” Minnesota Environmental Assessment Roundtable
    Minneapolis, MN, September 9, 1999

Professional Affiliations

  • Co-Chair, Ramsey County District Court Working Group on Eminent Domain, 2012-2013
  • Co-chair, Minnesota State Bar Association Eminent Domain CLE, 2005-2006
  • Jury Instruction Guide Sub-committee for Eminent Domain, 2005
  • Lecturer
    • University of Minnesota Law School, Professor Alex Klass, 2007-2013
    • University of St. Thomas Graduate Program in Real Estate Appraisal, Professor Thomas Musil, 2007
    • William Mitchell Law School, Professor Evan Rice, 2005-2006
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