EMERGE Community Development, Respondent,

This opinion will be unpublished and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
A18-0555

EMERGE Community Development,
Respondent,

vs.

Minnesota Department of Employment and Economic Development, et al.,
Appellants.

Filed December 3, 2018
Affirmed in part, reversed in part, and remanded
Rodenberg, Judge

Ramsey County District Court
File No. 62-CV-18-1256

Diana Young Morrissey, Paul M. Floyd, Wallen-Friedman & Floyd, P.A., Minneapolis,
Minnesota; and Nancy Hylden, Hyld en Advocacy & Law, Minneapolis , Minnesota (for
respondent)

Lori Swanson, Attorney General, S teven Forrest, Megan McKenzie, Assistant Attorneys
General, St. Paul, Minnesota (for appellants Minnesota Departme nt of Employment and
Economic Development and Shawntera Hardy)

Considered and decided by Rodenberg, Presiding Judge; Bratvold , Judge; and
Stauber, Judge.


 Retired judge of the Minnesota Court of Appeals, serving by app ointment pursuant to
Minn. Const. art. VI, § 10.

2
U N P U B L I S H E D O P I N I O N
RODENBERG, Judge
Appellant Department of Employment and Economic Development (DE ED)
challenges the district court’s grant of a writ of mandamus tha t requires DEED to issue
grant-fund reimbursements to res pondent EMERGE Community Develo pment
(EMERGE). DEED asserts that the writ (1) is unauthorized becau se EMERGE has an
adequate remedy at law; (2) unlawfully controls DEED’s discretion; and (3) is procedurally
and factually defective. By noti ce of related appeal, EMERGE c hallenges the district
court’s order denying its request for temporary injunctive relief.1 We reverse and remand
the district court’s grant of a writ of mandamus, but affirm its denial of injunctive relief to
EMERGE.
FACTS
In 2016, the Minnesota State Leg islature appropriated $35 milli on for services to
address economic and employment inequality in Minnesota. 2016 Minn. Laws ch. 189,
art. 12, § 2. It allocated $34.25 million to DEED, of which
$4,250,000 in fiscal year 2017 is for a grant to EMERGE
Community Development, in collaboration with community
partners, for services targeting Minnesota communities with
the highest concentrations of African and African-American
joblessness, based on the most recent census tract data, to
provide employment readiness tr aining, credentialed training

1 The parties and the district court referred to the relief soug ht as injunctive relief, an
injunction, and a temporary restraining order. We use the term s injunctive relief and
injunction in this opinion becaus e the district court denied su ch relief after a hearing on
notice to all parties. See Minn. R. Civ. P. 65.02(a) (“No temporary injunction shall be
granted without notice of motion or an order to show cause to t he adverse party.”); cf.
Minn. R. Civ. P. 65.01.

3
placement, job placement and re tention services, supportive
services for hard-to-employ individuals, and a general
education development fast track and adult diploma program.
For fiscal year 2018 and thereafter, the base amount is
$1,000,000 per year.

Id., subd. 2(e).
On June 20, 2016, DEED and EMERGE entered into a master grant contract. In
relevant part, the master grant contract provides:
5 Conditions of Payment
All services provided by [EMERGE] under this grant contract
must be performed to [DEED’s] satisfaction, as determined at
the sole discretion of [DEED’s] Authorized Representative and
in accordance with all applicable federal, state, and local laws,
ordinances, rules, and regulations. [EMERGE] will not receive
payment for work found by [DEED] to be unsatisfactory or
performed in violation of federal, state, or local law.

. . . .

19 Grantee Reports
[EMERGE] agrees to provide [DEED] with such progress
reports, including, but not limited to, the following:
19.1 Expenditure and program income including any
profit earned must be reported on an accrual basis.
19.2 Monthly Financial Stat us Repairs (FSRs) by the
20th of each month reporting expenditures for the
previous month.
19.3 Use of the Management Information System (as
described in 27 below).

. . . .

[DEED] shall withhold funding if reporting requirements are
not met in a complete, accurate and timely manner.

EMERGE submitted a Project Specific Plan to DEED under the mast er grant contract. It
detailed the designated uses of the funds and identified the no nprofit entities with which

4
EMERGE planned to enter into subgrant contracts. EMERGE then entered into subgrantee
contracts with other nonprofit community organizations.
In July 2017, DEED sent C.N., a compliance monitor who had mon itored other
EMERGE grants, to conduct a monitoring visit. C.N. noted that “this was the most
concerned I had ever been regarding a grantee’s lack of complia nce with contractual
obligations and inability to subs tantiate financial submissions .” C.N. immediately
contacted her superiors and, due to “the scale of the numerous programmatic and financial
concerns,” wrote a monitoring report rather than a corrective a ction report. 2 D E E D
attempted to obtain further information and documentation from EMERGE.
On September 1, 2017, DEED informe d EMERGE that DEED had identi fied
multiple “operational, financial, and programmatic issues that are in violation of the
general terms and conditions” of the master grant contract. Du e to the violations and
EMERGE’s alleged failure to provi de required information, DEED informed EMERGE
that payments to EMERGE, and all grant-funded programming, woul d be suspended
pending resolution of the identif ied issues. EMERGE claims tha t it was informed by
DEED that it would be reimbursed for acceptable costs during th e suspension; DEED
claims that it has consistently stated that it would not pay for any costs incurred during the

2 C.N. signed an affidavit stating that DEED’s corrective action reports are issued when a
“grantee continues to be out of compliance with federal, state and/or local laws and policies
and/or legislative or contractual obligations.” A corrective action report “outlines the steps
the grantee must take to remain in compliance with the contract .” It appears to us that a
monitoring report summarizes the monitor’s review of the grant, grantee, performance
measurements, and areas of concern.

5
suspension. EMERGE additionally claims that a letter sent on S eptember 11, 2017, fully
responded to all of DEED’s concerns.
The parties exchanged correspondence concerning whether EMERGE had
adequately addressed DEED’s concerns. On October 16, DEED noti fied EMERGE that
DEED was indefinitely suspending the grant and that it had hire d a third-party auditor to
conduct a thorough financial and compliance review of EMERGE and its subgrantees. The
auditor released a Phase I report on November 22, 2017, which “ did not find concrete
evidence of malfeasance during the period under review, but uncovered issues emblematic
of poor internal controls, undisciplined record keeping, poor u nderstanding of adequate
expense documentation, and poor understanding of ‘allowable’ expense under the terms of
this grant agreement.” DEED informed EMERGE on November 29, 20 17, that DEED
would conduct a “Phase II review” to examine all reported expenses under the grant.
EMERGE claimed that it sent all requested documents for the Ph ase II review to
DEED on February 12, 2018. On F ebruary 27, 2018, in response t o EMERGE’s
complaints that DEED was slow-walking the Phase II review, DEED replied that, because
it had not received all the necessary information from EMERGE or the subgrantees, it could
not move forward with the review. On February 28, 2018, EMERGE sued DEED for
declaratory judgment, breach of contract, injunctive relief, an d a writ of mandamus.
EMERGE moved the district court for injunctive relief and petit ioned for a writ of
mandamus.

6
The district court denied EMERGE’s motion for an injunction, concluding that the
Dahlberg factors weighed against such relief. In the same order, the district court granted
a writ of mandamus, ordering DEED to
promptly process and issue appropriate grant fund
reimbursements for program expenses made up to the time
DEED suspended funding, which includes (a) $233,000 owed
EMERGE for activity prior t o the initial suspension and
(b) $335,000 for September and October of 2017 for activity
up to the point where DEED demanded suspension of
activities.

DEED moved for reconsideration or, alternatively, for the court to enter judgment
on the writ. The district court denied reconsideration and ent ered judgment on the writ.
DEED appealed, and EMERGE filed a notice of related appeal conc erning the district
court’s denial of injunctive relief. The judgment was stayed pending appeal.
D E C I S I O N
I. The district court did not abuse its discretion by denying E MERGE injunctive
relief.

By notice of related appeal, EMERGE contends that the district court erroneously
denied its request for an injunction enjoining DEED “from their ongoing suspension of
grant funding and programming ac tivities.” EMERGE argues that “errors of law in [the
district court’s] analysis infected [its] decisions on three of t h e f i v e Dahlberg factors.”
Specifically, EMERGE contends that the district court erred as a matter of law regarding
the Dahlberg factors concerning the nature and background of the relationship between the
parties, the likelihood that EME RGE will succeed on the merits, and considerations of
public policy.

7
A temporary injunction is an ex traordinary equitable remedy, the purpose of which
is to preserve the status quo in a case until adjudication on the merits. Miller v. Foley, 317
N.W.2d 710, 712 (Minn. 1982). In Dahlberg, the Minnesota Supreme Court laid out five
factors to be considered by a di strict court when determining w hether a temporary
injunction is appropriate. Dahlberg Bros., Inc. v. Ford Motor Co., 137 N.W.2d 314, 321-
22 (Minn. 1965). The Dahlberg factors consist of:
(1) The nature and background of the relationship
between the parties preexisting the dispute giving rise to the
request for relief.

(2) The harm to be suffered by plaintiff if the temporary
restraint is denied as compared to that inflicted on defendant if
the injunction issues pending trial.

(3) The likelihood that one party or the other will prevail
on the merits when the fact situation is viewed in light of
established precedents fixing the limits of equitable relief.

(4) The aspects of the fact situation, if any, which permit
or require consideration of pub lic policy expressed in the
statutes, State and Federal.

(5) The administrative burdens involved in judicial
supervision and enforcement of the temporary decree.

Id. “The district court has broad discretion to grant or deny a t emporary injunction, and
we will reverse only for abuse of that discretion.” U.S. Bank Nat’l Ass’n v. Angeion Corp.,
615 N.W.2d 425, 434 (Minn. App. 2000), review denied (Minn. Oct. 25, 2000). We will
not disturb a district court’s findings regarding entitlement to injunctive relief unless they
are clearly erroneous. Haley v. Forcelle, 669 N.W.2d 48, 55 (Minn. App. 2003), review
denied (Minn. Nov. 25, 2003). On review, we view the facts in the light most favorable to

8
the party that prevailed at the district court level. Bud Johnson Constr. Co. v. Metro.
Transit Comm’n, 272 N.W.2d 31, 33 (Minn. 1978).
The district court applied the Dahlberg factors and concluded that the factors did
not support issuing a temporary injunction.
A. Nature and Background of the Parties
EMERGE first contends that the district court incorrectly analyzed the relationship
be t we e n t h e pa r t i e s . I n i t s or der denying injunctive relief, t he district court found that
EMERGE and DEED were “in a grantor-grantee relationship, which is governed by a
contract” and that “their relationship and expectations are cle arly set out in the contract.”
The court also found that “EMERGE had been awarded similar grants in the past, and had
worked with the same grant monitor.”
EMERGE argues that, in this situation, the “Minnesota Legislatu re is the grantor;
DEED is the Legislature’s fiscal agent; EMERGE is the grantee.” It argues that the district
court erred by focusing on the contract between DEED and EMERGE. Instead, EMERGE
argues, the district court shoul d have focused on the relations hip between the legislature
and EMERGE. EMERGE argues that, because “EMERGE’s claims . . . were based on
DEED’s overstepping the bounds of its legislatively granted authority, the [district] court
should not have deferred to DEED’s form contract over the letter [of the law] and intent of
the Minnesota Legislature.”
For the grant at issue, 2016 Minn. Laws ch. 189, art. 12, § 1, titled “Appropriations,”
states that “[t]he sums shown . . . are appropriated to the age ncies and for the purposes
specified in this article.” 2016 Minn. Laws ch. 189, art. 12, § 1. Under 2016 Minn. Laws

9
ch. 189, art. 12, § 2, titled “Department of Employment and Economic Development,” the
funds were appropriated to DEED. Id., § 2. DEED was directed to disburse $4.25 million
to EMERGE and its community partn ers for job training, placemen t, and education
services targeting African and African American communities wit h high rates of
joblessness. Id., subd. 2(e).
Once a grant has been designated by the legislature, a grantor and granting agency
are statutorily required to enter into a grant agreement, which is “a written instrument or
electronic document defining a legal relationship between a granting agency and a grantee
when the principal purpose of the relationship is to transfer c ash or something of value to
the recipient to support a public purpose authorized by law.” Minn. Stat. § 16B.97, subd.
1 (2016). The “state is not bound by the grant” in the absence of a valid grant agreement,
which requires compliance with statutory requirements. Minn. Stat. § 16B.98, subd. 5(a)-
(e) (2016).
Despite EMERGE’s argument that the district court incorrectly f ound that
EMERGE and DEED’s relationship was governed by contract, EMERGE sued DEED for
breach of contract. The distric t court did not abuse its discr etion in determining that the
essence of the relationship betw een the parties is a contractua l one, and its consideration
that the nature of the parties’ relationship does not favor gra nting a temporary injunction
is not clearly erroneous.
B. Likelihood of Success on the Merits
EMERGE argues that the district court incorrectly determined that EMERGE made
a doubtful showing of success on the merits. EMERGE argues that it is likely to succeed

10
because of “the clear provisions of the Legislative grant” and the absence of any indication
that EMERGE committed fraud with grant funds.
One of the factors a district court must consider in deciding whether to afford
injunctive relief is “[t]he like lihood that one party or the ot her will prevail on the merits
when the fact situation is viewed in the light of established p recedents fixing the limits of
equitable relief.” Metro. Sports Facilities Co mm’n v. Minn. Twins P’ship , 638 N.W.2d
214, 221 (Minn. App. 2002), review denied (Minn. Feb. 4, 2002). Here, the district court
noted that “it is not clear whether DEED has acted in good fait h in how it has handled
reviewing and monitoring EMERGE’s finances.” This disputed iss ue is central to
EMERGE’s breach-of-contract claim and remains for trial. The d istrict court also
concluded that “it is clear from the grant contract language th at DEED was required to
suspend funds upon its determina tion that EMERGE was not perfor ming its contractual
duties, and that DEED’s authorized representative had sole disc retion to make that
determination.” Because of that contractual language, the dist rict court stated that it
“cannot say that EMERGE is likely to succeed on the merits.”
EMERGE argues that the district court should have relied on legislative intent and
the absence of any criminal misfeasance to determine whether EMERGE could eventually
succeed on the merits. EMERGE seems to be arguing that it shou ld receive the funds
appropriated by the legislature regardless of the language of t he grant contract that it was
required by statute to sign and fulfill. See Minn. Stat. §§ 16B.97-.98 (2016) (requiring a
grant agreement before a grantee receives funds and providing s tatutory requirements

11
concerning the creation and vali dity of grant agreements). Thi s is inconsistent with
EMERGE’s complaint alleging a valid contract between EMERGE and DEED.
The district court concluded that EMERGE had not demonstrated a likelihood that
it will ultimately succeed on the me rits, because the grant con tract gave DEED broad
discretion in administering the contract and issues concerning DEED’s breach-of-contract
claims remain for trial. We see no clear error in that conclusion.
C. Public Policy Considerations
Finally, EMERGE argues that the d istrict court im properly evalu ated the public
policy interests when it denied injunctive relief. The district court observed that the public
interest was weighted evenly between EMERGE’s interest in receiving grant money “that
was specifically designated to it by the Minnesota Legislature in order to effectuate its
purpose under that grant” and DEED’s interest in ensuring that “taxpayer funds are being
used responsibly.” EMERGE cites no caselaw in support of its a rgument that the district
court improperly evaluated the public policy interests. An ass ignment of error based on
“mere assertion” and not supported by authority is forfeited un less prejudicial error is
obvious on mere inspection. Schoepke v. Alexander Smith & Sons Carpet Co., 187 N.W.2d
133, 135 (Minn. 1971). In the absence of a properly briefed argument and clear error, we
cannot say that the district court clearly erred in its determi nation that public policy
considerations did not favor the grant of temporary injunctive relief.3

3 We also observe that the district court’s consideration of DEED’s responsibility to ensure
proper use of taxpayer funds is a perfectly reasonable one.

12
The district court acted within its discretion when it denied EMERGE’s request for
temporary injunctive relief.
II. The district court abused its discretion by granting a writ of mandamus.
In its appeal of the district court’s grant of a writ of mandamus, DEED raises several
grounds on which it argues that the district court’s grant of m andamus was improper.
DEED contends that it was improper for the district court to is sue a writ of mandamus
“upon a motion with disputed facts and in the absence of a jury trial.” Because we conclude
that this issue is dispositive, we do not address DEED’s other arguments.4
A writ of mandamus is an extraordinary remedy based on equitabl e principles,
awarded at the district court’s discretion. Chanhassen Chiropractic Ctr., P.A. v. City of
Chanhassen, 663 N.W.2d 559, 562 (Minn. App. 2003), review denied ( M i n n . A u g . 5 ,
2003). A district court may issue a writ of mandamus “to any inferior tribunal, corporation,
board, or person to compel the performance of an act which the law specially enjoins as a
duty resulting from an office.” Minn. Stat. § 586.01 (2016). To obtain a writ of mandamus
“[a] petitioner must demonstrate: (1) the failure of an official duty clearly imposed by law;
(2) a public wrong specifically injurious to petitioner; and (3 ) no other adequate specific
legal remedy.” Coyle v. City of Delano, 526 N.W.2d 205, 207 (Minn. App. 1995). If the
mandamus proceeding involves disputed issues of fact, “[e]ither party shall be entitled to

4 DEED also argues that the writ of mandamus was improperly granted because EMERGE
has an adequate remedy at law through its breach-of-contract cl aim and because the writ
of mandamus improperly interferes with DEED’s discretion under the master grant contract
to determine whether to make payments. Because we conclude the district court
improperly issued the writ of mandamus despite unresolved issues of disputed fact, we do
not address DEED’s remaining arguments.

13
have any issue of fact tried by a jury, as in a civil action.” Minn. Stat. § 586.12 (2016). A
district court may proceed without a trial when material facts are substantially undisputed.
Coyle, 526 N.W.2d at 208. When a district court’s decision on a writ of mandamus is based
solely on legal determinations, appellate courts review that decision de novo. Breza v. City
of Minnetrista, 725 N.W.2d 106, 110 (Minn. 2006).
Here, the facts are very much in dispute. DEED denies “that EMERGE had
$568,000 in grant expense reimbursements performed to DEED’s satisfaction.” EMERGE
claims it is entitled to continue d funding under the legislative grant and contends that the
“record contains no suggestion, m uch less actual evidence that EMERGE . . . [was not
performing its] duties under the legislative grant.” The district court accurately identified
these factual disputes, including that “it is not clear whether DEED has acted in good faith
in how it has handled reviewing and monitoring EMERGE’s finance s.” Whether or not
DEED acted in good faith is a disputed factual question, and one that implicates the pending
breach-of-contract claim. Whether DEED’s suspension of the gra nt was proper is very
much in dispute.
By issuing a writ of mandamus in this circumstance, the distric t court deprived
DEED of its jury-trial right und er Minn. Stat. § 586.12. It re mains to be seen how these
factual disputes will be resolve d, but those disputes cannot pr operly be resolved by the
summary issuance of a peremptory writ of mandamus. Therefore, we reverse the district
court’s grant of a writ of mandamus and remand for further proceedings.
Affirmed in part, reversed in part, and remanded.