G&I IX OIC LLC v. Cnty. of Hennepin
| Docket Number | A21-1493 |
| Decision Date | 24 August 2022 |
| Citation | 979 N.W.2d 52 |
| Parties | G&I IX OIC LLC, Respondent, v. COUNTY OF HENNEPIN, Appellant. |
| Court | Minnesota Supreme Court |
Thomas R. Wilhelmy, Judy S. Engel, Gauri S. Samant, Fredrikson & Byron, P.A., Minneapolis, Minnesota, for respondent.
Michael O. Freeman, Hennepin County Attorney, Rebecca L.S. Holschuh, Jeffrey M. Wojciechowski, Assistant County Attorneys, Minneapolis, Minnesota, for appellant.
Jay T. Squires, Rupp, Anderson, Squires, Waldspurger & Mace, P.A., Minneapolis, Minnesota, for amici curiae Association of Minnesota Counties and Minnesota Association of Assessing Officers.
Kathleen M. Brennan, Douglas M. Carnival, McGrann Shea Carnival Straughn & Lamb, Chartered, Minneapolis, Minnesota; and Amy D. Grady, Bloomington, Minnesota, for amici curiae Greater Minneapolis Building Owners and Managers Association, Greater St. Paul Building Owners and Managers Association, BOMA Duluth, and NAIOP Minnesota Chapter.
Robert Small, Executive Director, Minnesota County Attorneys Association, Saint Paul, Minnesota; and Kathryn M. Keena, Dakota County Attorney, Suzanne W. Schrader, Assistant County Attorney, Hastings, Minnesota; and Janet Reiter, Chisago County Attorney, Jeffrey B. Fuge, Assistant County Attorney, Center City, Minnesota; and Stephen F. O'Keefe, Goodhue County Attorney, Carol K. Lee, Assistant County Attorney, Red Wing, Minnesota; and Mark Ostrem, Olmsted County Attorney, Thomas M. Canan, Senior Assistant County Attorney, Rochester, Minnesota, for amicus curiae Minnesota County Attorneys Association.
The question posed here is whether appellant Hennepin County, in a property tax trial involving respondent G&I IX OIC LLC ("G&I"), may use an expert report containing nonpublic data about comparable rental properties to establish the market value of G&I's office tower. Specifically, we must determine whether "income property assessment data," which are classified as nonpublic by the Minnesota Government Data Practices Act ("Data Practices Act"), may be used at trial when they are contained within an "assessor's record"—e.g., an expert appraiser's report prepared for litigation. This question is an issue of statutory interpretation, and its answer turns on how statutes under two separate statutory schemes interact: (1) the Data Practices Act, Minnesota Statutes sections 13.01 –.90 (2020); and (2) the statutes in the tax code governing property tax litigation, particularly Minnesota Statutes section 278.05 (2020).
The Minnesota Tax Court interpreted these statutes and found that the Data Practices Act prohibits the County from disclosing the nonpublic data contained within its expert appraisal report. It determined instead that the County could not use the data at trial without first securing the court's approval through the balancing test for discovery of not public government data dictated by the Data Practices Act under Minnesota Statutes section 13.03, subdivision 6. The tax court ordered portions of the County's expert report containing those data to be excluded at trial. We hold that the tax-code provision of section 278.05, subdivision 3, governs and permits the County to use nonpublic data in "assessor's records" at trial, including its expert appraisal report. Because the tax court therefore erred in its order to exclude at trial portions of the expert report containing those data, we reverse.
Respondent G&I filed a property tax petition contending that Hennepin County's valuation for 2019 property taxes for 900 Second Avenue South, Minneapolis ("the Oracle Building") was too high. This pretrial dispute concerns the County's use of nonpublic data1 in its expert opinion assessing the value of comparable properties owned by third parties and the market value of the Oracle Building. The nonpublic data at issue include data on eight office buildings in downtown Minneapolis, including office rent and retail comparables for those buildings, and six restaurant rent comparables.
Discovery in the tax court case ended on March 15, 2021. Notably, during this period, G&I never formally requested disclosure of any nonpublic third-party data concerning comparable buildings, and the County never formally objected to disclosure. Expert reports were required to be exchanged by April 12, 2021, and the parties were directed to object to expert competency or admissibility of expert reports by June 1, 2021. On June 1, 2021, G&I objected to the County's expert report and filed a motion in limine to exclude from trial the expert report entirely because it was irrelevant. In the alternative, G&I moved to exclude specific pages of the report because the data are nonpublic under Minnesota Statutes section 13.51 of the Data Practices Act, which addresses the classification of assessor's data.
Three months later, G&I amended its motion in limine and filed a supplemental memorandum. G&I contended that because Hennepin County failed to produce data in discovery that are nonpublic under the Data Practices Act, disclosure of the nonpublic evidence at trial would violate the Act. G&I therefore argued that the confidential, nonpublic portions of the County's expert report should be excluded, as the previously undisclosed data are nonpublic assessor's data under the Data Practices Act.
On November 1, 2021, the tax court granted G&I's motion in limine to preclude the County from using at trial the nonpublic data in its expert appraisal report. In its order, the tax court turned to two of our prior property-tax-dispute cases considering the applicability of the Data Practices Act balancing test under Minnesota Statutes section 13.03, subdivision 6, which courts use to determine when nonpublic government data may be disclosed.2
First, in Montgomery Ward & Co. v. County of Hennepin , we held that the Data Practices Act balancing test was mandatory after the taxpayer had moved to compel discovery of nonpublic data from the County, in accordance with the plain language of section 13.03, subdivision 6.3 450 N.W.2d 299, 306 (Minn. 1990). Sixteen years later, in EOP-Nicollet Mall, LLC v. County of Hennepin , we concluded that, given the leeway afforded the tax court in deciding pretrial motions, it was not an abuse of discretion for the tax court to use the Data Practices Act balancing test in response to the taxpayer's motion in limine—rather than a motion to compel discovery—to determine whether the County should be prevented from using the data at trial. 723 N.W.2d 270, 279 (Minn. 2006).
In a footnote, we commented that we had not yet had the opportunity to definitively interpret the interaction between the Data Practices Act and the section of the tax code addressing the use of nonpublic data at a property tax trial, section 278.05 :
We also note that the legislature has addressed—albeit in a very broad, general way—the use of nonpublic data at trial. See Minn. Stat.§ 13.03, subd. 4(a) (2004) (); see also Minn. Stat. § 13.4965, subd. 4 (2004) (). Minnesota Statutes § 278.05, subd. 3 (2004), provides that "[a]ssessor's records ... may be offered at the trial subject to the applicable rules of evidence." Nonetheless, the interpretation of these statutes has not been briefed and is not properly before us in this case.
723 N.W.2d at 280 n.14 (emphasis added). Accordingly, whether assessor's records containing nonpublic data may be used at trial during property tax litigation, when no previous Data Practices Act balancing test had been undertaken by the tax court, remained an open question.
Finding that G&I's motion in limine presented this unresolved issue, the tax court conducted its own statutory interpretation of the Data Practices Act statutes and section 278.05 of the tax code. The tax court found that the Data Practices Act requires that portions of the expert assessor's report containing nonpublic data must be excluded at trial, because the court had not undertaken the Data Practices Act balancing test to allow those data to be disseminated. See Minn. Stat. § 13.03, subd. 6. The tax court also concluded that nothing in section 278.05 of the tax code or the Data Practices Act "authorizes a government entity to provide public access to not public data, at its sole discretion." The tax court further reasoned that although EOP-Nicollet Mall held that the Data Practices Act required the government entity to first object to discovery before the court could apply the balancing test of the Data Practices Act, that holding cannot reasonably be read to permit disclosure when there is no objection.
Instead, the tax court found that the "plain language of the [Data Practices Act] provides that nonpublic data is not accessible to the public." It therefore reasoned that "the only reasonable reading" of section 278.05 of the tax code forbids the County from disclosing the data "unless a court has undertaken the balancing test in section 13.03, subdivision 6," of the Data Practices Act. The tax court also expressed concern that it would participate in a violation of the Data Practices Act if it permitted the County to introduce nonpublic data at trial. Accordingly, the tax court found that the Data Practices Act prohibits the County from using nonpublic data in its expert appraisal report at trial and ordered portions of that report containing nonpublic data to be excluded.
The County asked us to reverse the tax court's order, and we granted discretionary review under Minnesota Rule of Civil Appellate Procedure 105. Minn. R. Civ. App. P. 105.01 (...
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