The Minnesota Court of Appeals has ruled that plaintiffs cannot seek monetary damages for alleged violations of the Due Process Clause of the Minnesota Constitution. This decision impacts property owners and municipal regulations across the state, clarifying the limits of constitutional claims in Minnesota.
The case, Equity Residential Holdings, LLC v. City of Minneapolis (docket number A26-0021), involved four rental license holders who claimed the City of Minneapolis violated their due process rights when it revoked their rental licenses. The court's ruling, filed on August 24, 2026, reverses a lower court's decision that had allowed for such claims to be made.
Background
The appellants in this case are Equity Residential Holdings LLC, 2020 Vision Investments LLC, Berkely Holdings Inc., and SS Quarters Inc., collectively known as ERH. These entities are involved in the ownership and management of rental properties in Minneapolis. The dispute arose after the City revoked their rental licenses, citing issues related to the involvement of a former owner, Spilos Zorbalas, who had been declared ineligible to hold rental licenses due to previous violations.
The City had issued renewal licenses for these properties in previous years, but after discovering that Zorbalas was still involved, it revoked the licenses in December 2017. ERH filed a complaint in 2023, claiming that the City violated their procedural and substantive due-process rights under both the Minnesota and U.S. Constitutions, as well as the Takings Clauses of both constitutions.
The district court initially granted the City's motion to dismiss some claims but allowed others to proceed. Both parties then appealed, leading to the certified questions regarding the possibility of seeking damages for due process violations under the Minnesota Constitution.
The Ruling
The court ruled that a plaintiff cannot bring a suit for damages based on an alleged violation of the Due Process Clause of the Minnesota Constitution. Judge Connolly, writing for the court, stated, "We conclude that a plaintiff may not bring a suit for damages based on an alleged violation of the Due Process Clause of the Minnesota Constitution." The court also noted that the second question regarding the standard for municipal liability was moot given their decision on the first question.
The court found that the district court had erred in concluding that there was a private right to monetary damages for due process claims under the Minnesota Constitution. The ruling emphasized that existing case law does not support the idea that such claims can be made for damages under state constitutional provisions.
Impact
This ruling has significant implications for property owners and municipalities in Minnesota. It clarifies that individuals cannot seek monetary compensation for alleged violations of their due process rights under the Minnesota Constitution. This decision may limit the ability of property owners to contest municipal actions related to licensing and other regulatory measures.
The court's decision aligns with previous rulings indicating that Minnesota does not recognize a private cause of action for constitutional violations. This could discourage similar claims in the future, as the court has reinforced the notion that such matters are best addressed by the state legislature or the Minnesota Supreme Court.
What's Next
The ruling can potentially be appealed to the Minnesota Supreme Court, but it is unclear if the parties will pursue that option. There are no related cases pending that directly address this issue at this time.