Minnesota Lawyer
A coffee shop in central Minnesota is on the hook for tens of thousands of dollars after violating Gov. Tim Walz’s COVID-19 executive orders. In State of Minnesota v. The Iron Waffle Company LLC, filed May 8, the Minnesota Court of Appeals determined that the district court was not statutorily restricted from imposing substantial penalties after finding the shop in constructive civil contempt.
Iron Waffle Coffee Co. operated a coffee shop in Lake Shore, Minnesota. From August to September 2020, the Minnesota Department of Health conducted on-site inspections at Iron Waffle to ensure compliance with the executive orders. During four visits in August 2020, the MDH not only saw that employees were not wearing face coverings but also that they posted a sign telling customers that face masks were optional.
MDH sent a certified letter threatening enforcement action to Iron Waffle in August that apparently got no response. In September, after observing that no employees were wearing face coverings, the MDH mailed a Combination Administrative Penalty Order (CAPO) that assessed a $9,500 penalty for noncompliance with the executive orders. The CAPO indicated that some of the penalty would be forgiven if Iron Waffle complied.
In November, MDH said Iron Waffle still owed the penalty and that its license would be revoked 20 days after receipt of the letter unless there was corrective action and the fine was paid. After a follow-up investigation in December, during which two employees were not wearing face coverings, the MDH revoked Iron Waffle’s license.
Still, Iron Waffle remained opened, operating without a license and still not requiring employees to wear face coverings. MDH asked, and was granted, a temporary injunction to prevent Iron Waffle from operating. Still, Iron Waffle kept its doors open. The district court held Iron Waffle in constructive civil contempt and ordered Iron Waffle to pay $2,000 per day it operated without a license. Iron Waffle remained open for at least 18 days after the contempt order.
MDH moved to enforce the contempt order and judgment in its favor, presenting evidence of 49 new violations after the contempt order. The district court granted MDH’s motion. It assessed $2,000 for each of the violations, for a grand total of $98,000. Iron Waffle appealed.
Iron Waffle contested the district court’s imposition of the contempt sanctions, claiming that a district court was unable to impose civil contempt sanctions of over $250 per day. Minn. Stat. § 558.10 limits the court from imposing a fine of more than $250 for criminal contempt. It argued that this statute applied here.
But the district court’s contempt order was not punitive, the court found. Rather, the order was to compel compliance with its past orders. Finding that the contempt order was civil in nature, and determining that the statute restricted the court’s ability to impose sanctions in the criminal contempt context, the court concluded that the district court was not prevented from imposing sanctions in a civil context.
Iron Waffle also contended that the sanctions constituted an abuse of discretion. It argued that the district court should have required the MDH to show proof of Iron Waffle’s earning capacity and financial status before imposing such a hefty contempt sanction.
“I think the judge was angry with my client and Iron Waffle and perhaps overstepped his discretion,” said Richard Dahl, of Dahl Law Firm PA, who represented Iron Waffle.
The court rejected that argument, however, finding that neither Iron Waffle provided evidence that it could not pay, nor that the court had to evaluate whether the contemnor was able to pay if the issue was not raised by the contemnor.
“This is a very simple case about a restaurant, the Iron Waffle, endangering the public health by continuing to operate for months without a license despite clear orders prohibiting it from doing so,” stated Assistant Attorney General Kaitrin Vohs. “The burden that the Iron Waffle had to control the amount of the ultimate contempt fine—the Iron Waffle, if it had complied with the statute and the court’s orders — that amount would be zero.”
Dahl was disappointed by the court’s ruling.
“The danger I see is that the state can apparently revoke any license under the pretext of an emergency (be that a vehicle license, law license, medical license, etc.), taking away your ability to contest the matter or earn money to pay an attorney and then punish you with draconian contempt sanctions,” Dahl said. “If the state is willing to do that to a tiny coffee shop like the Iron Waffle to make an example, then I would say many of our rights have been stripped away via judicial fiat. I think the day of the Waffle decision was a sad day in America no matter your politics.”
