A18-0707

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A18-0483
A18-0707

Shogun Mankato Inc.,
Appellant (A18-0483),
Shogun Burnsville, Inc.,
Appellant (A18-0707),

vs.

Commissioner of Revenue,
Respondent.

Filed December 31, 2018
Affirmed
Reyes, Judge

Blue Earth County District Court
File No. 07-CV-17-4941
Dakota County District Court
File No. 19HA-CV-17-4563

Eric Johnson, St. Paul, Minnesota (for appellants)

Lori Swanson, Minnesota Attorney General, John M. O’Mahoney, Mi chael Goodwin,
Assistant Attorneys General, St. Paul, Minnesota (for respondent)

Considered and decided by Connolly, Presiding Judge; Larkin, J udge; and Reyes,
Judge.

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U N P U B L I S H E D O P I N I O N
REYES, Judge
Appellants challenge the denial of their petitions under Minn. Stat. § 626.04 (2018)
seeking the return, without rete ntion, of property seized durin g a civil tax audit and
subsequent execution of search warrants on appellants’ premises, asserting that their Fourth
Amendment rights were violated. We affirm.
FACTS
Appellants Shogun Mankato, Inc. and Shogun Burnsville, Inc. (th e Shoguns)
operate sushi and hibachi restau rants in Mankato and Burnsville . The Minnesota
Department of Revenue (the department) conducted a civil tax au dit of the Shoguns
beginning in September 2016 through its sales-and-use-tax division. As part of the audit,
the department sent staff to the Shoguns’ restaurants to make observation purchases, where
they posed as customers, made purchases, and retained their rec eipts. In addition, the
department asked the Shoguns to provide their point-of-sale (POS) system data, which they
agreed to. Upon inspection, the POS system did not show record s of the observation
purchases. Eight out of the eleven purchases made at the Mankato restaurant and two out
of the four purchases made at the Burnsville restaurant were missing from the POS system
data.
The missing purchases led the department to suspect that the S hoguns were using
an electronic-sales-suppression device. The sales-and-use-tax division referred the matter
to the department’s criminal-investigation division in May 2017 , which subsequently
obtained and executed search warra nts on the Shoguns’ premises. T h e c r i m i n a l -

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investigation division seized co mputers, data, records, and oth er materials from the
Shoguns. At the Shoguns’ reques t, the department later returne d some of the property,
including POS terminals, copies of the POS hard drives, a lapto p, a smartphone, and an
iPad, to allow the Shoguns to continue operation while the investigation continued.
The Shoguns brought petitions aga inst respondent Commissioner of Revenue (the
commissioner) under Minn. Stat. § 626.04(a) in Blue Earth and D akota County district
courts seeking the return of their property without retention o f copies, alleging violations
of their Fourth Amendment rights. Both district courts denied the petitions. This
consolidated appeal follows.
D E C I S I O N
I. The district courts properly denied the Shoguns’ petitions to r eturn the
property without retention under Minn. Stat. § 626.04.

The Shoguns argue that because their property was illegally sei zed, it should be
returned under Minn. Stat. § 626.04(a), and any copies that hav e been retained should be
destroyed. We are not persuaded.
We generally review a district court’s findings of fact for clear error and conclusions
of law de novo. See Rasmussen v. Tw o Harbors Fish Co. , 832 N.W.2d 790, 797 (Minn.
2013). The application of a statute to the undisputed facts is a legal conclusion that we
review de novo. City of Morris v. Sax Invs., Inc., 749 N.W.2d 1, 5 (Minn. 2008).
Any property seized with or without a warrant “shall be safely kept by direction of
the court as long as necessary for the purpose of being produced as evidence on any trial.”
Minn. Stat. § 626.04(a). The person whose property has been se ized can file a petition in

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district court seeking its return. Id. The district court shall not order the return of the
property if “(1) the property is being held in good faith as potential evidence in any matter,
charged or uncharged; (2) the property may be subject to forfei ture proceedings; (3) the
property is contraband or may contain contraband; or (4) the pr operty is subject to other
lawful retention.” Id.
Retention of seized property fo r the purpose of introducing it at a future trial is
proper under Minn. Stat. § 626.04. State v. Ture, 632 N.W.2d 621, 630 (Minn. App. 2001)
(holding state’s retention of property for 22 years proper when criminal investigation
ongoing); C.f. State v. Sutterfield, 347 N.W.2d 295, 296 (Minn. App. 1984) (holding seized
property must be returned when charges against appellant were dropped and state no longer
had use for property). Further, a sales-suppression device is subject to forfeiture, and its
use is a felony. Minn. Stat. § 289A.63, subd. 12 (a)-(b) (2018).
The Blue Earth County district court declined to order the ret urn of the property,
finding that the criminal investigation was ongoing in this cas e and concluding that the
property was “being held in good faith as potential evidence in an ongoing criminal
investigation by the Minnesota D epartment of Revenue.” Similar ly, after conducting an
ex parte hearing, the Dakota Co unty district court found that t he commissioner held the
property in good faith as potential evidence in any matter, the property may be subject to a
forfeiture proceeding, and it may contain contraband.
We have reviewed the records and conclude that they support the district courts’
findings. The criminal investigation is ongoing, and the commi ssioner suspects that the
Shoguns may have used sales-suppression software, which is cont raband. The statute

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provides that the district court shall not order the return of the property if it meets any of
the criteria in the statute. Mi nn. St a t . § 62 6. 0 4( a ) . Be c a us e the record shows that the
property is being held as potential evidence in any matter, tha t it may be subject to a
forfeiture proceeding, or that it may contain contraband, the d istrict courts appropriately
denied the Shoguns’ petitions to return the property without retention of any copies by the
commissioner.
II. The Shoguns are not entitled to relief under the Fourth Amendment.
The Shoguns argue that their Fourth Amendment rights have been violated by the
commissioner’s tax audit and subsequent execution of the search warrants the
commissioner obtained. The Shoguns contend that their consent to provide information in
the audit was vitiated because the commissioner failed to discl ose the “fundamentally
criminal nature of the overall operation.” We disagree.
The Blue Earth County district court expressly declined to addr ess the Shoguns’
Fourth Amendment claims, finding that these claims could be bro ught if and when a
criminal case is filed. The Dakota County district court did n ot mention the Shoguns’
Fourth Amendment claims in its order. An appellate court gener ally will not consider
matters not considered by the district court. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn.
1988). “[A]n undecided question is not usually amenable to appellate review.” Hoyt Inv.
Co. v. Bloomington Commerce & Trade Ctr. Assocs., 418 N.W.2d 173, 175 (Minn. 1988).
Therefore, we decline to address the Shoguns’ Fourth Amendment claims.
Moreover, Minn. Stat. § 626.04 does not provide a cause of acti on for Fourth
Amendment claims. The statute concerns lawful retention of property seized and does not

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expressly permit constitutional challenges to the seizure of th e property at issue. Minn.
Stat. § 626.04(a). The statute further provides that the petit ion asking for the return of
property shall be determined by a “simple and informal procedur e.” Minn. Stat.
§ 626.04(a). “A statute does not give rise to a civil cause of action unless the language of
the statute is explicit or it can be determined by clear implication.” Becker v. Mayo Found.,
737 N.W.2d 200, 207 (Minn. 2007); see also Bruegger v. Faribault Cty. Sheriff’s Dep’t ,
497 N.W.2d 260, 262 (Minn. 1993) (concluding that principles of judicial restraint
preclude judicial creation of additional causes of action outside those evident in a statute’s
express or implied terms). Further, the rules of statutory construction forbid adding words
or meaning to a statute that were left out. Phelps v. Commonwealth Land Title Ins. Co. ,
537 N.W.2d 271, 274 (Minn. 1995). In contrast, Minn. Stat. § 6 26.21 (2018), provides a
cause of action for a person aggrieved by an unlawful search an d seizure. The district
courts properly disregarded th e Shoguns’ constitutional claims under Minn. Stat.
§ 626.04(a).1
Affirmed.

1 The Shoguns raise an additional issue in which they argue that the district courts have
jurisdiction to return the property seized, independent of any criminal proceedings. This
argument is premised on the property being seized unlawfully un der the Fourth
Amendment. Because we conclude t hat the Shoguns’ Fourth Amendm ent claims are not
viable under Minn. Stat. 626.04(a), we need not address this issue.