Minnesota Supreme Court declines to review 2040 Plan ruling in latest victory for Minneapolis

The Minnesota Supreme Court on Tuesday decided not to review the environmental lawsuit that has shadowed development in Minneapolis since the city’s enactment of its 2040 Comprehensive Plan.

The court’s decision comes after six years of litigation over the controversial municipal development guide, which earned accolades from urbanists across the nation for ending single-family zoning as well as objections from citizen groups who wanted the city to study the impacts of increasing density on the urban environment.

Tuesday’s development is a victory for the city and supporters of the plan. However, it does not end the lawsuit.

“Today’s decision allows our City to continue our work to desegregate Minneapolis neighborhoods and build a diversity of housing options in every community,” Minneapolis Mayor Jacob Frey said in a statement. “It’s been a long time coming, and I am thankful Minneapolis can continue advancing our nation-leading housing work.”

Now that the Supreme Court has declined review, the two parties will head back to district court, where the city will attempt to dismiss the lawsuit. The citizen groups are expected to ask Judge Joseph Klein to issue a new remedy after they prevailed in a summary judgement last year.

“The goal was not to punish the city,” said Jack Perry, the lawyer representing Smart Growth Minneapolis and the Minnesota Citizens for the Protection of Migratory Birds. The groups, along with the Audubon Chapter Minneapolis, sued the city in 2018. “The goal is environmental protection, is make them do environmental review of this plan. That was it.”

In 2021, the Minnesota Supreme Court ruled in favor of the citizen groups, ruling that residents could sue local governments’ comprehensive plans under the Minnesota Environmental Rights Act, even though those plans were theoretical in nature and lacked the details of individual development projects.

A series of court orders then suspended, restarted and halted again 2040-related projects in Minneapolis, sowing confusion among planners and throwing new housing construction into limbo. In May, an appeals court reinstated the 2040 Plan and revived stalled projects, reasoning that throwing the plan out entirely would impose “unnecessary hardship.”

As litigation raged on, the city of Minneapolis and the Minnesota Chapter of the American Planning Association lobbied the Legislature to change state law and define the adoption of municipal comprehensive plans as conduct that would not cause pollution under MERA, thus exempting them from environmental reviews. Environmental groups chafed at the 2023 version of the bill, finding it “needlessly broad,” but supported another version this year that specified comprehensive plans could not be challenged on the basis of residential density, which environmentalists argue is needed in the urban core to prevent sprawl — the destruction of natural lands further from the metropolis.

The law that ultimately passed in the 2024 legislative session did not include the narrow provision protecting comprehensive plans from lawsuits based on density, which the environmental groups would have preferred, but rather it attempts to protect the current plans for Minneapolis and St. Paul from MERA legal challenges in their entirety.

Those exemptions were still limited enough to satisfy environmental organizations, said Peter Wagenius, legislative director of the Sierra Club’s North Star Chapter, which led development of the law.

“People know what’s in the current comp plan(s) of the city of Minneapolis and … the city of St. Paul. They’re well analyzed and digested, and environmental organizations were comfortable with saying we’re willing to exempt them from MERA in their entirety,” Wagenius said. “That is a reasonable thing to do that protects MERA moving forward but also deals with the the immediate threat of litigation against Minneapolis and St. Paul.”

Perry disagrees that the new law could be retroactively applied, saying lawmakers did not make the time component clear enough.

Smart Growth Minneapolis petitioned the state Supreme Court to review the appeals court’s May ruling reinstating the 2040 Plan, arguing in part that the new law designed to intervene in its lawsuit should not have been incorporated into the tax bill because a 1857 provision in the state Constitution said legislators may not roll together bills on unrelated topics in the interest of transparency.