Many years ago, a seasoned stock-broker cautioned his brother, a lawyer (who happened to be my father), “If you’re going to predict, predict often…,” which has long been one of my all-time favorite aphorisms.
Last April, we predicted that Minnesota Sands would lose in its challenge to the constitutionality of the City of Winona’s regulation of the mining of silica sand (used in fracking). We predicted a dissent. This week, Minnesota Sands lost in its challenge, with a dissent.
Background: Minnesota Sands invested in real estate (or, more specifically, mineral rights in real estate) in Winona County to mine for silica sand for sale for use in fracking. Thereafter, the County passed an ordinance prohibiting industrial mining operations, with a carve-out for “‘construction minerals,’ provided that the landowner secures a conditional-use permit.” This appears to have resulted in a significant financial loss to Minnesota Sands.
The issue, then, becomes whether the County ordinance violated the Commerce Clause. U.S. Const. art. I, § 8 or was an unconstitutional taking of its property interests in five mineral leases that it holds within the County. See U.S. Const. amends. V, XIV; Minn. Const. art. I, § 13. In our view, Minnesota Sands’ arguments were somewhat strained, convoluted, and unpersuasive. On the other hand, it was a close call for the Minnesota Supreme Court, a 4-3 decision, so, evidently, others view it otherwise.
We’ll see whether Minnesota Sands tries to take this to the U.S. Supreme Court, which might be more ideologically predisposed in its favor. Given the amount of Minnesota Sands’ supposed financial loss, we think the odds are good that it will seek U.S. Supreme Court review but we’ll see…