St. Paul Companies, Inc. v. Hatch

437 N.W.2d 666, 1989 Minn. App. LEXIS 340, 1989 WL 26846
CourtCourt of Appeals of Minnesota
DecidedMarch 28, 1989
DocketNo. C5-88-2392
StatusPublished
Cited by1 cases

This text of 437 N.W.2d 666 (St. Paul Companies, Inc. v. Hatch) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
St. Paul Companies, Inc. v. Hatch, 437 N.W.2d 666, 1989 Minn. App. LEXIS 340, 1989 WL 26846 (Mich. Ct. App. 1989).

Opinion

[667]*667OPINION

PARKER, Judge.

Appellant St. Paul Companies, Inc., challenges the trial court’s October 25, 1988, judgment dismissing the action on the ground that the statute providing for de novo review is unconstitutional. We affirm the trial court and accept jurisdiction to review the matter pursuant to the MAPA.

FACTS

Respondent Alleghany Corp. applied to the Commissioner of the Department of Commerce, as required by Minn.Stat. § 60D.02, for approval to purchase 10 percent or more of the voting stock of St. Paul Companies (SPC). After conducting significant discovery, the parties participated in an administrative hearing. Based on the administrative law judge’s recommendations, the Deputy Commissioner approved the application on the condition that additional approval be sought if Alleghany intended to acquire more than 20 percent of the stock.

SPC petitioned for review in Ramsey County District Court Alleghany petitioned this court for a writ of certiorari, seeking direct review of the Commissioner’s order. After this court granted the writ, SPC filed a notice of review and motion to dismiss or remand. We dismissed and discharged the writ on the ground that an appeal was premature because Allegha-ny’s constitutional challenge of Minn.Stat. § 60D.12 had not been resolved. Allegha-ny moved to dismiss SPC’s petition for review in Ramsey County District Court. The trial court dismissed, finding the statutory provision on de novo review unconstitutional and inseverable.

ISSUES

1. Is Minn.Stat. § 60D.12, subd. 1 (1986), unconstitutional on the ground that it violates the separation of powers doctrine set forth in Article III of the Minnesota Constitution?

2. Does this court have jurisdiction to review the Commissioner’s order?

DISCUSSION

I

The interpretation of a statute is a question of law, and we need not defer to the trial court’s analysis. Driscoll v. Driscoll, 414 N.W.2d 441, 445 (Minn.Ct.App.1987). Statutes are presumed to be constitutional. Wegan v. Village of Lexington, 309 N.W.2d 273, 279 (Minn.1981) (citing Guillams v. Commissioner of Revenue, 299 N.W.2d 138, 142 (Minn.1980)). The power of the courts to hold the law unconstitutional is exercised only when absolutely necessary, and then with extreme caution. Id. A statute will not be declared unconstitutional unless the party challenging it demonstrates beyond a reasonable doubt that the statute violates some constitutional provision. Id. (citing Head v. Special School Dist. No. 1, 288 Minn. 496, 182 N.W.2d 887 (1970), cert. denied, Minneapolis Federation of Teachers v. Spannaus, 404 U.S. 886, 92 S.Ct. 196, 30 L.Ed.2d 168 (1971)).

Minnesota Constitution art. Ill, § 1, states:

The powers of the government shall be divided into three distinct departments: legislative, executive and judicial. No person or persons belonging to or constituting one of the departments shall exercise any of the powers properly belonging to either of the others except in the instances expressly provided in this constitution.

Minn.Stat. § 60D.12, subd. 1 (1986), states:

Any person aggrieved by any act, determination or order or any other action of the commissioner pursuant to sections 60D.01 to 60D.13 may appeal therefrom to the district court for Ramsey County. The court shall conduct its review without a jury and by trial de novo, except that if all parties, including the commissioner, so stipulate, the review shall be confined to the record. Portions of the record may be introduced by stipulation into evidence in a trial de novo as to those parties so stipulating or by either [668]*668party without stipulation where a witness is not available for trial.

The statute at issue provides for “trial de novo,” which means that a case is to be tried as if it had not been tried before. In re Matter of Branch A-38, JT Ditch No. 204, 406 N.W.2d 524, 525 (Minn.1987). A trial de novo constitutes an original proceeding, not an appeal in the traditional sense. The reviewing court is therefore permitted to substitute its judgment for that of the Commissioner. See Stronge Lightner Co. v. Commissioner of Taxation, 228 Minn. 182, 195, 36 N.W.2d 800, 807 (1949).

SPC argues that the de novo review provision does not violate the separation of powers clause because de novo review is historically accepted as a standard of review. SPC cites numerous drainage ditch, licensing, health administration and pollution control cases involving public policy and regulatory issues where the review was classified as “de novo.” Alleghany cites extensive authority which disallows de novo review.

The cases cited by both parties, while supporting their respective positions, do not specifically address the meaning or application of de novo review in this case. A close reading of section 60D.12, subd. 1, indicates that the legislature intended to allow a trial de novo only as specifically defined therein. The statute allows a review confined to the record only upon stipulation of the parties. Absent mutual consent, the district court must begin anew.

The central issue is whether de novo review of the Commissioner’s order involves a non-judicial function, rendering the delegation of such review to the judiciary unconstitutional.

A judicial function has been described generally as hearing a case pending between adverse parties, applying the law to the facts, and rendering judgment determining the rights of the parties. In re Getsug, 290 Minn. 110, 115, 186 N.W.2d 686, 689-90 (1971). In State v. Brill, 100 Minn. 499, 111 N.W. 639 (1907), the court engaged in a lengthy historical review of the separation of judicial powers from those delegated to other branches of government, noting:

[A]s all departments derive their authority from the same Constitution, there is an implied exclusion of each department from exercising the functions of the others * * *. The Constitution of the United States does not in terms prohibit one department of the government from exercising the powers which are therein conferred upon either of the other departments, but federal courts have uniformly held that only judicial functions may be imposed upon the judiciary.

Id. at 506-07, 111 N.W. at 642.

The Minnesota Supreme Court in State ex rel. McGinnis v. Police Civil Service Commission of Golden Valley, 253 Minn. 62, 91 N.W.2d 154

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Related

St. Paul Companies, Inc. v. Hatch
449 N.W.2d 130 (Supreme Court of Minnesota, 1989)

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437 N.W.2d 666, 1989 Minn. App. LEXIS 340, 1989 WL 26846, Counsel Stack Legal Research, https://law.counselstack.com/opinion/st-paul-companies-inc-v-hatch-minnctapp-1989.