Minnesota Chamber of Commerce, et al., Appellants,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-0131

Minnesota Chamber of Commerce, et al.,
Appellants,

vs.

City of Minneapolis,
Respondent.

Filed September 18, 2017
Affirmed
Halbrooks, Judge

Hennepin County District Court
File No. 27-CV-16-15051

Christopher K. Larus, Anne M. Lockner, Katherine S. Barrett Wiik, Anthony
F. Schlehuber, George B. Ashenmacher, Robins Kaplan LLP, Minneapolis, Minnesota (for
appellants)

Susan L. Segal, Minneapolis City Attorney, Sara J. Lathrop, Sarah C.S. McLaren, Assistant
City Attorneys, Minneapolis, Minnesota (for respondent)

Considered and decided by Peterson, Presiding Judge; Halbrooks, Judge; and Smith,
Tracy M., Judge.

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U N P U B L I S H E D O P I N I O N
HALBROOKS, Judge
This is an appeal and related appeal from the district court’s ruling on the motion
for a temporary inju nction against enforcement of an employee -leave ordinance adopted
by respondent City of Minneapolis brought by appellants Minnesota Chamber of
Commerce, together with other employers and business associations (collectively, the
chamber). The chamber argues that the district court abused its discretion by declining to
enjoin enforcement o f the ordinance in its entirety . By notice of related appeal, t he city
argues that the district court abused its discretion by granting the temporary injunction with
respect to any “employer resident outside the geographic boundaries” of Minneapolis. We
affirm.
FACTS
On May 31, 2016, the city adopted the Minneapolis Sick and Safe Time Ordinance
(the ordinance). See Minneapolis, Minn., Code of Ordinances (MCO) §§ 40.10 -.310
(2017). The ordinance requires employers to provide employees with one hour of leave
for every 30 hours worked, with annual caps on accrual and carryover . MCO § 40.210.
Employers with six or more full -time, part-time, or temporary employees must provide
paid leave. MCO §§ 40.200(c), .220(g). Leave time may be used for the employee’s or a
family member’s needs related to physical or mental health, domestic abuse, sexual assault,
stalking, and school and workplace closings. MCO § 40.220(b).

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The ordinance defines employees as those “who perform work within the
geographic boundaries of the city for at least eighty (80) hours in a year ” for a particular
employer. MCO § 40.40. An employer is a private person or entity that employs one or
more employees. Id. Employers must maintain three years of records for each employee
showing hours worked, leave accrued, and leave used. MCO § 40.270 (a), (b) . If an
employer’s records are inadequate, and a violation is alleged, a violation shall be presumed.
MCO § 40.270(e). The ordinance took effect on July 1, 2017, but provides for limited
enforcement in the first 12 months for most first violations. MCO § 40.90(a), (b).
On October 13, 2016, the chamber commenced an action in district c ourt
challenging the ordinance. The chamber’s complaint seeks a declaration that the ordinance
is invalid because the city lacks authority to enact it, the ordinance conflicts with or is
impliedly preempted by state law, and the ordinance “extends the City’s power beyond its
boundaries.” The complaint also seeks temporary and permanent injunctive relief. The
chamber requested emergency assignment of a judge and moved for a temporary injunction
and consolidation with a hearing on the merits.
The district court held a hearing on December 8, 2016, ordered supplemental
briefing on the reach of the ordinance beyond the city’s borders, and on January 19, 2017,
filed an order granting in part and denying in part the chamber’s motion for temporary
injunctive relief. The district court enjoined enforcement of the ordinance “against any
employer resident outside the geographic boundaries of the City of Minneapolis until after
the hearing on the merits of the case, or further order of the Court.” It denied the balance

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of injunctive relief requested and denied the request to consolidate the temporary injunction
hearing with a hearing on the merits, determining that additional discovery was necessary
before trial.
The chamber appealed and the city filed a related appeal. The parties stipulated to,
and the district court ordered, a stay of further proceedings in the district court. Thereafter,
we denied the chamber’s motion to expedite the processing of the appeal, and the supreme
court denied the chamber’s petition for accelerated review.
D E C I S I O N
The district court has broad discretion in ruling on a motion for a temporary
injunction, and appellate courts will reverse only for clear abuse of that discretion. Carl
Bolander & Sons Co. v. City of Minneapolis, 502 N.W.2d 203, 209 (Minn. 1993). A district
court’s ruling on a motion for a temporary injunction “ neither establishes the law of the
case nor constitutes an adjudication of the issues on the merits.” Indep. Sch. Dist. No. 35
v. Engelstad, 274 Minn. 366, 370, 144 N.W.2d 245, 248 (1966); see also Haley v. Forcelle,
669 N.W.2d 48, 55 (Minn. App. 2003) (same), review denied (Minn. Nov. 25, 2003).
A showing of irreparable harm is a threshold requirement for a grant of injunctive
relief prior to a complete trial on the merits. Cherne Indus., In c. v. Grounds & Assocs. ,
278 N.W.2d 81, 92 (Minn. 1979) ; see also U.S. Bank Nat’l Ass’n v. Angeion Corp. , 615
N.W.2d 425, 434 (Minn. App. 2000) (“The party seeking the injunction must demonstrate
that there is an inadequate legal remedy and that the injunction is necessary to prevent great
and irreparable injury.”), review denied (Minn. Oct. 25, 2000). When irreparable harm is

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found, a district court should consider five factors to determine whether a temporary
injunction is warranted under Minn. R. Civ. P. 65.02: (1) the nature and relationship of the
parties, (2) the balance of relative harm to the parties, (3) the likelihood of success on the
merits, (4) public -policy considerations , and (5) any administrative burden involving
judicial supervision and enforcement. Dahlberg Bros. v. Ford Motor Co., 272 Minn. 264,
274-75, 137 N.W.2d 314, 321-22 (1965).
Here, the district court found that the chamber demonstrated irreparable harm based
on the time and resources required to comply with the ordinance and the city’s position
that damages would not be recoverable, due to various immunity defenses, in the event that
the ordinance is ultimately invalidated. The district court further found that the nature-
and-relationship-of-the-parties and admi nistrative-burden factors are neutral, the balance
of harms favors the chamber, and public-policy considerations favor the city. With respect
to the likelihood of success on the merits, the district court found that this factor favors the
city with respect to preemption and the chamber with respect to extraterritoriality.
I. The district court did not abuse its discretion by declining to temporarily
enjoin the ordinance in its entirety.

The chamber challenges the district court’s Dahlberg findings on the likelihood of
success on the merits (with respect to preemption) and on the public-policy considerations.
We first consider whether the district court erred in its assessment of the likelihood of
success on the merits. The district court concluded that the chamber is unlikely to succeed
on its claims that the ordinance conflicts with, or in the alternative is impliedly preempted
by, state law. Cf. Bicking v. City of Minneapolis, 891 N.W.2d 304, 313 n.8 (Minn. 2017)

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(identifying various preemption theorie s, including conflict, express, and implied (field)
preemption).
“A conflict exists between state law and a municipal regulation when the law and
the regulation ‘contain express or implied terms that are irreconcilable with each other,’
when ‘the ordinance permits what the statute forbids,’ or when ‘the ordinance forbids what
the statute expressly permits.’” Id. at 313 (quoting Mangold Midwest Co. v. Village of
Richfield, 274 Minn. 347, 352, 143 N.W.2d 813, 816 (1966)). The chamber contends that
the ordinance conflicts with Minn. Stat. § 181.9413 (2016), which requires employers with
21 or more employees to allow the use of personal sick-leave benefits for safety leave and
to care for defined relatives. Minn. Stat. §§ 181.940, subd. 3, .9413 (2016). “Safety leave”
is defined as leave used for needs relating to domestic abuse, sexual assault, or stalking.
Minn. Stat. § 181.9413(b).
The chamber contends that section 181.9413 impliedly permits employers to
decline to provide leave benefits to employees and that the ordinance is irreconcilable with
this implied provision. The chamber asserts that the district court improperly disregarded
caselaw analyzing conflicts involving implied statutory provisions. But whether the
relevant statutory terms are express or implied, a conflict only exists if the ordinance and
statutory provision are irreconcilable. Two laws are not irreconcilable if “the ordinance
does not permit, authorize, or encourage violation of the statute.” Mangold, 274 Minn. at
355, 143 N.W.2d at 819. Similarly, under state-federal conflict analysis, two laws are not
in conflict if a party can comply with both provisions. See Sanchez v. Dahlke Trailer Sales,

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Inc., 897 N.W.2d 267, 276 (Minn. 2017) (“[A] state law conflicts with a federal law when
it is impossible for a private party to comply with both state and federal requirements .”)
(quotation omitted)).
The chamber does not argue that an employer would necessarily run afoul of section
181.9413 by complying with th e ordinance . Even if the statute impliedly permits an
employer to decline to offer leave benefits, an employer would not violate the statute by
providing the leave benefits required by the ordinance . Nor does the chamber argue that
an employer must violate the ordinance to comply with the statute . It may be that the
ordinance and the statute simply address separate and distinct aspects of employer -
provided leave benefits. See Canadian Connection v. New Prairie Township, 581 N.W.2d
391, 396 (Minn. App. 1998) (finding no conflict when a pollution-control agency’s odor-
management plan and township ordinance addressed different aspects of feedlot odor) ,
review denied (Minn. Sept. 30, 1998).
In the alternative, the chamber sought temporary injunctive rel ief premised on its
theory of field, or implied, preemption. “Although some cases have confused the two and
even used them interchangeably, it is [the supreme court’s] opinion that [field] preemption
and conflict are separate concepts and should be govern ed by separate doctrines.”
Mangold, 274 Minn. at 356, 143 N.W.2d at 819. Field preemption “is premised on the
right of the state to so extensively and intensively occupy a particular field or subject with
state laws that there is no reason for municipal regulation.” In re Appeal of Rocheleau, 686
N.W.2d 882, 890 (Minn. App. 2004) , review denied (Minn. Dec. 22, 2004) . When field

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preemption applies, “a local law purporting to govern, regulate, or control an aspect of the
preempted field will be void, even if the local law is not in conflict with the state law.” Id.
Minnesota courts consider four factors in determining whether field preemption
applies. Mangold, 274 Minn. at 358, 143 N.W.2d at 820. Applying the first factor, the
district court defined the subject matter being regulated as “private-employer provided sick
and safe leave.” See id. (identifying first factor as subject matter to be regulated ). The
chamber argues that the district court erred in declining to charac terize the subject matter
as “employer-provided leave,” but the district court noted that it would have reached the
same result on the second and third Mangold factors if it had adopted the chamber’s
characterization.
The second and third Mangold factors consider whether the state’s full or partial
regulation of the subject matter indicates that the subject matter is solely of state concern .
See id. The chamber argues that the legislature has extensively regulated the fi eld of
employer-provided leave, citing section 181.9413 and provisions in chapter 181 relating to
pregnancy and parenting leave; blood, organ, and bone-marrow donation; and military -
related leave. The district court concluded that the chamber had not shown that the subject
matter, whether defined as employer-provided leave or private-employer-provided sick and
safe leave, is regulated by state law to an extent or in a manner that indicates it is a matter
solely of state concern. Given the sparsity and narrowness of statutory provisions on the
subject matter, the district court reasonably concluded that the legislature has not indicated
an intent to occupy the field.

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Applying the fourth Mangold factor, the district court concluded that the ordinance
would not “have unreasonably adverse effects upon the general populace of the state.” See
id. (identifying fourth factor as whether “subject matter itself is of such nature that local
regulation would have unreasonably adverse effects upon the general populace of the
state”). As the district court noted, the supreme court has not found the presence of “a
checkerboard of conflicting regulations” to be dispositive. See G.E.M. of St. Louis, Inc. v.
City of Bloomington, 274 Minn. 471, 473, 144 N.W.2d 552, 554 (1966).
We recogni ze that variances between municipal regulations
affecting commercial activity, particularly in a metropolitan
area, create serious problems. The absence of preemption by
the state legislat ure may lead in the end to the “ uninhibited
commercial warfare, . . . disparate degrees of peace, repose and
comfort in different communities and, in the metropolitan
areas, . . . a checkerboard of conflicting regulations”
envisioned by the trial judge. Nevertheless, for the reasons
outlined in the Mangold case, we feel that the ordinance, if
properly adopted, was within the corporate power of the
city . . . .

Id. The chamber also contends that the district court failed to consider the impact of the
ordinance on employers across the state. We are satisfied that the district court gave due
consideration to affected individuals and entities in applying the fourth Mangold factor.
In view of an employer’s ability to comply simultaneously with the ordinance and
section 181.9413, the narrow and scattered statutory provisions regulating employer -
provided leave, and the p olicy implications inherent in the chamber’s arguments on the
statewide effects of municipal regulation, the district court ’s preliminary analysis of the
chamber’s likelihood of success on conflict and field preemption was reasonable.

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The chamber also challenge s the district court’s public-policy findings under
Dahlberg, questioning the city’s claim that the ordinance will positively impact public
health. The chamber’s argument overlooks another public-policy consideration identified
by the district court: deference to the city in matters of municipal governance. The district
court weighed the “strong public policy towards permitting the City to govern in ways that
it believes best promotes the public health of its residents” against the chamber’s interest
in not being “unlawfully burdened.” We find no fault with the district court giving greater
weight to respecting the city’s legislative role than to the regulatory b urdens affecting
private employers. See White Bear Docking & Storage, Inc. v. City of White Bear Lake ,
324 N.W.2d 174, 175 (Minn. 1982) (“The court’s authority to interfere in the management
of municipal affairs is, and should be, limited and sparingly invoked.”).
The district court found that the chamber established irreparable harm and that the
balance of harms favors the chamber, but the l ikelihood of success and public -policy
considerations favor the city. It found the remaining Dahlberg factors to be neutral. We
are satisfied that the district court properly exercised its discretion by determining that,
overall, the balance with respect to preemption tips in favor of the city, and therefore
declining to temporarily enjoin the ordinance in its entirety.
II. The district court did not abuse its discretion by temporarily enjoining
enforcement of the ordinance against nonresident employers.

In its related appeal, the city first argues that the district court erred in reaching the
question of the geographic reach of the ordinance because the issue is not justiciable. The
city contends that the extraterritoriality challenge is not ripe for adjudication because it is

11
not a proper facial challenge to the ordinance. We are not convinced that a facial-challenge
construct applies to this dispute. The chamber challenges the city’s territorial authority; it
does not claim that the ordinance interferes with the exercise of constitutional rights. See,
e.g., Minn. Voters All. v. City of Minneapolis, 766 N.W.2d 683, 685, 688-89 (Minn. 2009)
(addressing facial challenge to instant-runoff-voting election methodology on grounds that
ordinance violated rights to vote, to associate for political pur poses, and to equal
protection). In any event, it is not clear that factual development is necessary to determine
whether the ordinance, as enacted, improperly extends the city’s regulatory authority. See
McCaughtry v. City of Red Wing , 808 N.W.2d 331, 339 -40 (Minn. 2011) (declining to
delay resolution because facial challenge presents “a purely legal question that does not
require the development of a factual record”).
The city also argues that the challenge is not justiciable because it has not yet
enforced the ordinance against employers physically located outside of the city. The city
asserts that because it may not fully enforce the ordinance, and could adopt rules limiting
the reach of enforcement activities, the challenge is premature. The supreme court rejected
a similar argument in McCaughtry, concluding that a challenge to an ordinance was
justiciable although a district court , in issuing an administrative warrant authorized by
ordinance, could impose limits not required by the ordinance itself. 808 N.W.2d at 34 1
(“The possibility that a judge might in the future limit the City’s administrative warrant
application to ensure that the warrant comports with the Minnesota Constitution does not
make the challenge here premature.”).

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The district court here concluded that the issue of the ordinance’s territorial reach is
justiciable because a declaratory -judgment action is proper to test the validity of an
ordinance, and an actual controversy exists between the parties because the impact on
employers is not merely hypo thetical and the city’s stated plans for enforcement do not
alter the plain language of the ordinance. We agree.
In Bicking, the supreme court reiterated that
a justiciable controversy exists when a claim presents “definite
and concrete assertions of r ight that emanate from a legal
source,” “ a genuine conflict in tangible interests between
parties with adverse interests, ” and a controversy capable of
“resolution by judgment rather than presenting hypothetical
facts that would form an advisory opinion.”

891 N.W.2d at 308 ( quoting Onvoy, Inc. v. Allete, Inc., 736 N.W.2d 611, 617 -18 (Minn.
2007)). In considering whether a proposed city -charter amendment would be preempted
by state law, the supreme court stated that a justiciable controversy requires
“only a right on the part of the complainant to be relieved of an
uncertainty and insecurity arising out of an actual controversy
with respect to his rights, status, and other legal relations with
an adversary,” even though “the status quo between the parties
has not yet been destroyed or impaired.”

Id. at 309 (quoting Minneapolis Fed’n of Men Teachers, Local 238 v. Bd. of Educ. , 238
Minn. 154, 157, 56 N.W.2d 203, 205 (1952)). And this court has held that, “if a declaratory
judgment claimant possesses a bon[a] fide legal interest which has been, or with respect to
the ripening seeds of a controversy is about to be, affected in a prejudicial manner,
jurisdiction exists.” Rice Lake Contracting Corp. v. Rust Env’t & Infrastructure, Inc., 549

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N.W.2d 96, 99 (Minn. App. 1996) (quotation omitted) , review denied (Minn. Aug. 20,
1996).
Here, the ordinance was adopted in May 2016 and took effect in July 2017 . I n
addition to requiring employers to provide leave benefits, the ordinance requires employers
to maintain three years of records with respect to any employee who works 80 hours within
the city in a given year. MCO §§ 40.40, . 270. Inadequate recordkeeping result s in a
presumption of a violation. MCO § 40.270(e). The chamber submitted multiple affidavits
showing that existing recordkeeping systems are not adequate to track and maintain the
required information. In particular, it appears that recording the whereabouts of employees
relative to municipal boundaries is not a standard part of existing time-tracking systems.
Under these circumstances , the district court did not err in determining that, even before
the ordinance took effect, the rights of employers were in jeopardy from the ripening seeds
of an actual controversy. Thus, the dis trict court did not err in determining that the issue
of the extraterritorial effect of the ordinance is justiciable and that a ruling on the chamber’s
motion for temporary injunctive relief was warranted.
The city next argues that the district court abu sed its discretion in granting
temporary injunctive relief with respect to nonresident employers. The city contends that
the district court erred in its determination of the likelihood of success on the merits, and
that this error necessitates reversal of the temporary injunction.
A district court errs by granting temporary injunctive relief “[i]f a plaintiff can show
no likelihood of prevailing on the merits.” Metro. Sports Facilities Comm’n v. Minn. Twins

14
P’ship, 638 N.W.2 d 214, 226 (Minn. App. 2002) , review denied (Minn. Feb. 4, 2002) .
“But if a plaintiff makes even a doubtful showing as to the likelihood of prevailing on the
merits, a district court may consider issuing a temporary injunction to preserve the status
quo until trial on the merits.” Id.; see also Sanborn Mfg. v. Currie, 500 N.W.2d 161, 164-
65 (Minn. App. 1993) (“Trial courts have the discretion to balance the factors of irreparable
harm and likelihood of success on the merits. Where plaintiffs make a strong showing of
irreparable harm, but a doubtful showing that they are likely to win the case, trial courts
may properly decide to grant an injunction to preserve the status quo until trial.” (citing
Dahlberg, 272 Minn. at 275 n.13, 137 N.W.2d at 321 n.13)). In Dahlberg, the supreme
court affirmed a temporary inju nction, despite noting “serious obstacles” and a
“foreseeable barrier” to the movant’s ultimate success on the merits. 272 Minn. at 277-78,
283, 137 N.W.2d at 323, 326.
“The general rule, applicable to municipalities as well as to states, is that the power
and jurisdiction of the city are confined to its own limits and to its own internal concerns.”
City of Duluth v. Orr , 115 Minn. 267, 270, 132 N.W. 265, 265 (1911). A city has no
authority to “legislate as to matters out side the municipality in the guise of municipal
concern.” Almquist v. City of Biwabik , 224 Minn. 503, 507, 28 N.W.2d 744, 746 (1947)
(quotation omitted) (holding that city had no authority to determine that city and adjacent
town constituted a single election and assessment district).
In State v. Nelson , the city passed an ordinance requiring inspection of “every
animal producing milk for sale within the city,” wherever located. 66 Minn. 166, 168, 68

15
N.W. 1066, 1067 (1896). The inspection was a prerequisite to the issuance of a license to
sell milk within the city. Id. On appeal from his conviction of selling milk in the city
without a license, the defendant argued that the ordinance exceeded the authority granted
by the st atute because it operated extraterritorially. Id. at 169, 68 N.W. at 1068. The
supreme court rejected the argument, concluding that “[t]he manifest purpose of the statute
under which this ordinance was passed” was to prevent unwholesome milk from being sold
in the city, which could not be accomplished without inspections beyond the city’s borders.
Id. It concluded that the “ordinance has no extraterritorial operation, and there has been
no attempt to give it any such effect. The only subject on which i t operates is the sale of
milk within the city.” Id. at 170, 68 N.W. at 1068. The city argues that the ordinance
echoes the dairy-inspection ordinance at issue in Nelson. We agree that the parallel is
strong. We note that, unlike here, the ordinance in Nelson used a licensing program to
effect its regulation of commerce conduct ed in the city, although the distinction may not
be significant. See id. at 168, 68 N.W. at 1067.
In Orr, the Duluth city council passed an ordinance prohibiting the storage o f
specified explosives within one mile of the city limits without a permit, which the
defendant was found guilty of violating. 115 Minn. at 268-69, 132 N.W. at 265. The
supreme court concluded that Duluth had the authority to regulate or prohibit the sto rage
of explosives within the city limits, but not beyond its borders. Id. at 269, 132 N.W. at
265. The chamber urges that the ordinance echoes the explosives-storage ordinance in Orr.

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But here, employers are only subject to the ordinance if their employees work within the
city limits at least 80 hours per year.
In City of Plymouth v. Simonson, we upheld a city ordinance prohibiting the delivery
of harassing materials within the city. 404 N.W.2d 907, 908-09 (Minn. App. 1987), review
denied (Minn. June 26, 1987) . The crux of the issue was whether the ordina nce had
extraterritorial effect when applied to harassing letters placed into the U.S. Mail outside of
the city. Id. at 908. We concluded that the act of harassment was complete upon receipt,
not upon mailing, and upheld the ordinance. Id. at 909. Because in Simonson, all relevant
activity occurred within the city borders, this case is less instructive.
The district court found that the chamber established irreparable harm and that the
balance of harms favored the chamber. Specifically, the district court determined that the
chamber would be harmed in the absence of temporary relief by “expend [ing] substantial
time and resources in advance of the Ordinance’s effective date in order to comply with its
mandates,” while the city was unlikely to be subjected to substantial harm from a temporary
injunction because “the Ordinance itself does not permit rigorous enforcement until one
year following its effective date.” The district court likewise found that the likelihood of
success on the merits (with respect to extraterritoriality) favored the chamber.
The city challenges only the district court’s conclusion regarding the likelihood of
success on the merits. The chamber’s likelihood of success on the extraterritoriality issue
must be determined by analogy to and analysis of the caselaw; there is no unambiguous
statute or lack of crucial evidence that definitely answers the question. Cf. Sanborn Mfg.

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Co. v. Currie , 500 N.W.2d 161, 165 (Minn. App. 1993) (reversing temporary injunction
when moving party lacked evidence necessary to succeed on the merits). Under the
caselaw summarized above, we cannot conclude that the chamber has not made “a doubtful
showing as to the likelihood of prevailing on the merits.” See Metro. Sports Facilities
Comm’n, 638 N.W.2d at 226. E ven if we were to conclude that “serious obstacles” and
“foreseeable barrier[s]” stood between the chamber and permanent injunctive relief, see
Dahlberg, 272 Minn. at 283 , 137 N.W.2d at 32 3, in view of the district court’s
unchallenged findings on irreparable harm and the balance of harms , which favor the
chamber, reversal would not be warranted . We therefore conclude that t he district court
properly exercised its discretion by temporarily enjoining enforcement of the ordinance
against nonresident employers.1
Affirmed.

1 The city also argues that the district court erred by temporarily enjoining enforcement
against any “employer resident outside the” city because it is unclear what employers are
affected. “Every order granting an injunction . . . shall be specific in te rms; shall describe
in reasonable detail . . . the act or acts sought to be restrained. ” Minn. R. Civ. P. 65.04.
We conclude that the order is sufficiently specific in view of the temporary nature of the
injunction and the limited enforcement permitted by the ordinance in its first year.