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LPOE Inc. v. City of Duluth

Court of Appeals of Minnesota

September 16, 2013

LPOE, Inc., et al., Appellants,
City of Duluth, Respondent, Various Firearms, et al., Respondents.


St. Louis County District Court File No. 69-DU-CV-11-3507.

Randall D.B. Tigue, Mimi Hasselbalch, Golden Valley, Minnesota (for appellants)

Gunnar B. Johnson, Duluth City Attorney, M. Alison Lutterman, Deputy City Attorney, Nathan N. LaCoursiere, Assistant City Attorney, Duluth, Minnesota (for respondent City of Duluth).

Mark Rubin, St. Louis County Attorney, Thomas G. Stanley, Assistant County Attorney, Duluth, Minnesota (for respondent property).

Considered and decided by Worke, Presiding Judge; Rodenberg, Judge; and Smith, Judge.

WORKE, Judge.

Appellants challenge the summary-judgment dismissal of their claim for the return of property that they allege was wrongfully seized pursuant to a search warrant. Appellants also argue that the district court erred by dismissing their civil-rights claim based on wrongful seizure and retention of their property. The city argues that the appeal should be dismissed because criminal charges related to the seized property have been filed and the district court's dismissal of appellants' civil-rights claim is not appealable. We agree and dismiss.


In August 2011, officers were asked to assist in addressing on-going complaints[1]about a crowd that gathered outside of appellant LPOE, [2] Inc., a licensed tobacco retailer, and allegedly smoked synthetic marijuana. On five separate occasions, an investigator fitted with an electronic monitoring device visited LPOE for undercover purchases. During the first visit, the investigator overheard a patron request the "no-name brand"; after which, an employee handed the patron a sealed baggie that contained a leafy substance. The employee then recorded the sale in a notebook. After observing several different varieties of alleged synthetic marijuana displayed for sale, the investigator requested a bag of "no name." In response to the investigator's request for another purchase recommendation, the employee produced a package identified as "Maya Blue, " which the employee described as "one of the strongest ones." The investigator purchased a bag of "no name" and a bag of "Maya Blue." The purchased evidence was submitted to the Bureau of Criminal Apprehension (BCA) lab for testing for illegal substances. The substances found in "Maya Blue" were on the schedule of controlled substances for which possession or sale is a crime. The remaining substances tested indicated the presence of AM-2201, a cannabinoid receptor agonist, which was not specifically listed as a controlled substance until August 1, 2012, when AM-2201 was defined as a Schedule I Narcotic. See 2012 Minn. Laws ch. 240, § 1, at 771.

On September 21, 2011, officers obtained a search warrant for the premises of LPOE, and its owner, appellant James Robert Carlson. The warrant permitted the search for: controlled substances; business records of the ordering and selling of controlled substances; paraphernalia; records related to the transportation, ordering, purchasing, and distribution of controlled substances; business records reflecting names, addresses, and telephone numbers; business records related to obtaining, transferring, and concealing assets and monies; video and audio tapes; U.S. currency, which could be proceeds from sales of controlled substances; valuables purchased with the proceeds of the controlled-substance transactions, which may be subject to legal forfeiture; indicia of occupancy; photographs of controlled substances; and records of employee schedules. As a result of the search, officers seized firearms, U.S. currency, business records, and suspected controlled substances packaged/identified in various forms.[3]

On October 7, 2011, appellants filed a complaint against respondents The City of Duluth, Various Firearms, and $83, 510 in U.S. currency, and moved to suppress and return the seized items. Appellants framed the claim as a section 1983 action, alleging that the search warrant violated their constitutional rights. Appellants also alleged that the police seized items not specifically authorized by the warrant, and sought a declaration that the firearms and currency seized were not subject to forfeiture. On February 17, 2012, the district court denied appellants' motion to suppress and return the property after finding that the search warrant was valid and that the items seized fit within the scope of the warrant. The district court concluded that law enforcement may retain the property pending the outcome of forfeiture or criminal proceedings.

The city then moved for summary judgment, arguing that appellants' section 1983 claim should be dismissed following the district court's determination that appellants' constitutional rights were not violated with the execution of the search warrant. On December 11, 2012, the district granted the city's motion for summary judgment. The district court stated that appellants failed to present evidence to support their civil-rights-violation claim, but because the ongoing criminal investigation prevented appellants from pursuing discovery, it dismissed "without prejudice [to] allow [appellants] to refile their complaint if appropriate in the future."

After the appeal was filed, this court took judicial notice of the federal indictment of appellant Carlson from December 18, 2012. The city ...

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