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STATE OF MINNESOTA IN COURT OF APPEALS A07-0925

State of Minnesota by Friends of the Riverfront, et al., Appellants, vs. City of Minneapolis, et al., Respondents, Minneapolis Park and Recreation Board, Respondent, DeLaSalle High School, Respondent.

Filed June 24, 2008 Affirmed Lansing, Judge Hennepin County District Court File No. 27-CV-06-19758 Jack Y. Perry, Matthew J. Franken, Briggs and Morgan, P.A., 2200 IDS Center, Minneapolis, MN 55402 (for appellants) Susan L. Segal, Minneapolis City Attorney, James A. Moore, Stephen H. Norton, Assistant City Attorneys, 300 Metropolitan Center, 333 South Seventh Street, Minneapolis, MN 55402-2453 (for respondent City of Minneapolis, et al.) Brian F. Rice, Ann E. Walther, Rice, Michels & Walther, LLP, #206, 10 Second Street Northeast, Minneapolis, MN 55413 (for respondent Minneapolis Park and Recreation Board) Carolyn V. Wolski, Leonard, Street and Deinard, Suite 2300, 150 South Fifth Street, Minneapolis, MN 55402 (for respondent DeLaSalle High School)

Considered and decided by Lansing, Presiding Judge; Toussaint, Chief Judge; and Hudson, Judge. SYLLABUS Under the collateral-estoppel doctrine, an administrative decision is entitled to preclusive effect only if the administrative hearing allowed the parties a full and fair opportunity to be heard. In the administrative context, a full and fair opportunity to be heard requires that the hearing provide adequate procedural safeguards and that the tribunal not be impermissibly biased. The procedural safeguards must include the

opportunity to present evidence and legal arguments and must also take into account other procedural elements that may be necessary based on the magnitude and complexity of the matter. OPINION LANSING, Judge As part of a challenge to a proposed athletic facility on Nicollet Island, the plaintiffs brought a lawsuit asserting a Minnesota Environmental Rights Act claim, a contract claim, and a declaratory-judgment claim. The district court dismissed the suit. On appeal, the plaintiffs challenge the decision to dismiss each of these claims. We conclude that the MERA claim was precluded by a previous administrative determination, that the contract claim was not ripe, and that the remaining declaratoryjudgment claim fails as a matter of law. Accordingly, we affirm.

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FACTS This appeal stems from litigation over DeLaSalle High School and the Minneapolis Park and Recreation Board's plan to build an athletic facility next to the high school's campus on Nicollet Island. The city's historic-preservation committee initially denied a certificate of appropriateness for the project, but the city council reversed the decision on appeal. In the city-council proceedings, the Friends of the Riverfront, one of the plaintiffs in this case, intervened and argued that the proposed athletic facility would be in violation of the Minnesota Environmental Rights Act (MERA). On certiorari appeal, this court affirmed the city council's decision to grant the certificate of appropriateness. Friends of the Riverfront v. DeLaSalle High School, No. A06-2222 (Minn. App. Nov. 20, 2007), review denied (Minn. Jan. 29, 2008). After the city council made its decision--but before this court heard the appeal-- the Friends of the Riverfront, the Grove Street Flats Association, and Sidney and Lola Berg brought a suit in district court challenging the proposed athletic facility. They claimed that construction of the facility would violate MERA and the terms of the Bergs' lease of land on Nicollet Island. In addition, they claimed that they were entitled to a declaratory judgment that the city-council president had a conflict of interest and should be disqualified from making further rulings on the proposed athletic facility. The district court dismissed the suit, primarily on the basis that the issues had already been decided in the city-council proceeding. The plaintiffs then appealed.

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ISSUES I. Under the collateral-estoppel doctrine, does the city council's MERA determination preclude an independent MERA lawsuit? Are the contract claims ripe for adjudication? Did the plaintiffs' action for a declaratory judgment against the city-council president set forth a legally sufficient claim for relief? ANALYSIS In their motion to dismiss, defendants presented arguments on a number of issues best raised in a summary-judgment motion. When a motion to dismiss presents matters outside the pleading, the district court can, as it did in this case, treat the motion as a motion for summary judgment. Minn. R. Civ. P. 12.02. On appeal from summary judgment, we determine whether there are any genuine issues of material fact and whether a party is entitled to judgment as a matter of law. Minn. R. Civ. P. 56.03; Yang v. Voyagaire Houseboats, Inc., 701 N.W.2d 783, 788 (Minn. 2005). In assessing the evidence, we take the view most favorable to the party against whom judgment was granted. Motorsports Racing Plus, Inc. v. Arctic Cat Sales, Inc., 666 N.W.2d 320, 323 n.1 (Minn. 2003). I The decisive issue in this case is whether collateral estoppel precludes an independent Minnesota Environmental Rights Act (MERA) claim. Collateral estoppel is a common-law doctrine that precludes the relitigation of previously determined issues. State v. Lemmer, 736 N.W.2d 650, 658 (Minn. 2007). The application of the doctrine involves a mixed question of fact and law, which we review de novo. Id. at 659. We do 4

II. III.

not apply the doctrine rigidly, and our focus is on whether the application would work an injustice. Hauschildt v. Beckingham, 686 N.W.2d 829, 837 (Minn. 2004). Collateral estoppel can be applied based on administrative hearings when--as in this case--the administrative body acted in a quasi-judicial capacity. Graham v. Special Sch. Dist. No. 1, 472 N.W.2d 114, 115-16 (Minn. 1991). Collateral estoppel precludes relitigation if (1) the issues are identical, (2) the issue was necessary to the administrative agency's decision, (3) the decision was a final determination subject to judicial review, (4) the estopped party was a party or in privity with a party to the prior determination, and (5) the estopped party was given "a full and fair opportunity to be heard on the adjudicated issue." Id. at 116. The plaintiffs argue that two of these requirements are not satisfied. First, they argue that they did not receive a full and fair opportunity to be heard in the city-council hearing. Second, Sidney and Lola Berg and the Grove Street Flats Association argue that they were not in privity with a party to the city council's determination. We reject these arguments. Full and Fair Opportunity In determining whether a party was given a full and fair opportunity to be heard, Minnesota courts focus on two factors. First, we ask whether the administrative hearing provided sufficient procedural safeguards. State v. Joseph, 636 N.W.2d 322, 328 (Minn. 2001). Second, we ask whether the tribunal or administrative agency was impermissibly biased. See Graham, 472 N.W.2d at 119 (concluding that collateral estoppel did not apply when school district was determining legality of its own conduct). 5

To determine whether the administrative hearing provided sufficient procedural safeguards to permit application of the collateral-estoppel doctrine, we must first identify the procedural safeguards that are necessary. Previous Minnesota cases are consistent with the Restatement (Second) of Judgments, which requires the right "to present evidence and legal argument" and "other procedural elements as may be necessary[,] . . . having regard for the magnitude and complexity of the matter in question, the urgency with which the matter must be resolved, and the opportunity of the parties to obtain evidence and formulate legal contentions." Restatement (Second) of Judgments

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