author: PORITSKY, Judge.

text:
    STATE of Minnesota, by its Attorney General, Mike HATCH, Appellant, v. EMPLOYERS INSURANCE OF WAUSAU, a Mutual Company, Respondent, Home Insurance Company, Respondent, Travelers Casualty and Surety Company, Respondent, The Travelers Indemnity Company et al., Respondents.
    No. C5-01-1904.
    Court of Appeals of Minnesota.
    May 21, 2002.

      Mike Hatch, Attorney General, Mark B. Levinger, Assistant Attorney General, St. Paul, MN; and William F. Greaney, admitted pro hac vice, Covington & Burling, Washington, DC, for appellant.
    Scott Ryskoski, Charles A. Gross, Shawn Ratter, Darron Knutson, Larson King L.L.P., St. Paul, MN, for respondent Employers Insurance of Wausau, a Mutual Company.
    Eric Magnuson, Robert B. Jaskowiak, Melissa Hortman, Rider Bennett Egan & Arundel, L.L.P., Minneapolis, MN, for respondent Home Insurance Company.
    Andrew S. Amer, Mary Beth Forshaw, Michael S. Komar, Jerauld E. Brydges, Simpson Thatcher & Bartlett, New York, NY; and Charles E. Spevacek, Stacy A. Broman, Meagher & Geer P.L.L.P., Minneapolis, MN, for respondent Travelers Casualty & Surety Company and respondents Travelers Indemnity Company et al.
    Laura A. Foggan, Karalee C. Morell, Wiley Rein & Fielding L.L.P., Washington, DC; and Dwight G. Rabuse, Nelson L. Peralta, Livgard & Rabuse, P.L.L.P., Minneapolis, MN, for amici curiae Insurance Environmental Litigation Association and The Insurance Federation of Minnesota.
    Considered and decided by HANSON, Presiding Judge, SCHUMACHER, Judge, and PORITSKY, Judge.
   OPINION

PORITSKY, Judge.

The state appeals from the district court’s grant of respondents’ motion for summary judgment. The district court ruled that the state’s claims are time-barred by the statute of limitations provision of the Minnesota Environmental Response and Liability Act (MERLA). On appeal, respondents filed notices of review, asking this court to review a prior district court order denying their motions for summary judgment on numerous constitutional grounds. Additionally, respondent Home Insurance Co. (Home) challenges an order denying its motion for partial summary judgment concerning a settlement agreement it had previously negotiated with Ford Motor Company. We affirm in part, reverse in part, and remand.

FACTS

The state commenced this action pursuant to the Minnesota Landfill Cleanup Act (LCA) and the cost-recovery provisions of the Minnesota Environmental Response and Liability Act (MERLA). The LCA permits the state to bring a direct action against respondent insurers to recover response costs incurred by the state for cleaning up two landfills located in Oak Grove and East Bethel, Minnesota. See Minn.Stat. §§ 115B.39-.445 (2000).

MERLA is Minnesota’s legislative solution to problems arising from the release of hazardous substances into the environment. The primary purposes of MERLA are:

(1) to impose strict liability on those responsible for harm caused by release of hazardous substances; (2) to allow the state to clean up contamination and collect costs later; and (3) to fund state cleanup activity.

Musicland Group, Inc. v. Ceridian Corp., 508 N.W.2d 524, 529 (Minn.App.1993), review denied (Minn. Jan. 27, 1994). MERLA was modeled after the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA). Westling v. County of Mille Lacs, 581 N.W.2d 815, 817 n. 1 (Minn. 1998).

The Minnesota Pollution Control Agency (MPCA) is the agency responsible for implementing MERLA. Minn.Stat. §§ 115B.02, subd. 3; 115B.17 (2000). MERLA requires the MPCA to identify contaminated sites in the state and the parties who are potentially responsible for the contamination (the “potentially responsible parties” — PRPs). Minn.Stat. §§ 115B.17, subds. 1, 3, 13; 115B.03, subd. 1 (2000). MERLA authorizes the MPCA to take remedial action if, after requesting the PRPs to take such action, the MPCA determines that the PRPs will not take the action in the manner or within the time requested. Minn.Stat. § 115B.17, subd. 1. When the MPCA spends public money to take a response action, MERLA authorizes the MPCA to recover its costs from the PRPs. Id., subd. 6.

MERLA was amended in 1998 to establish the accrual period for actions seeking recovery of response costs. 1998 Minn. Laws ch 341, § 2. Such actions must be brought within six years after commencement of physical on-site construction of a response action. MinmStat. § 115B.11, subd. 2(a) (2000).

The LCA was enacted in 1994 to create a more effective and less costly way for the state to cleanup landfills by authorizing the state to assume direct responsibility for remediating certain closed landfills. Minn.Stat. § 115B.40, subd. 7(b)(1). Because the state assumes the responsibility for the cleanup on behalf of a PRP, the state is permitted to recover costs, in part, through any existing insurance coverage a PRP may have acquired. Minn.Stat. §§ 115B.40-.41, 115B.441. To ensure the state’s right to recover response costs, the LCA included a provision suspending the statute of limitations for such cost-recovery actions until 2004. Minn.Stat. § 115B.40, subd. 8. The LCA was amended in 1996 to permit the state to file a direct action against the responsible party’s insurer. 1996 Minn. Laws ch. 370, §§ 1-5 (codified at Minn.Stat. §§ 115B.441-.445).

In the present case, following extensive discovery, respondents moved for summary judgment challenging the constitutionality of the LCA. On June 13, 2001, the district court denied respondents’ motions. Respondents, via notice of review, ask this court to review the denial of their motions.

On June 18, 2001, respondents filed a second summary judgment motion, arguing that the state’s claims were barred by the statute of limitations. The district court granted respondents’ motion, finding that the MERLA statute of limitations as originally enacted in 1983 barred the state’s cost-recovery claims. The court applied the discovery-accrual rule, under which a cause of action accrues when a party discovers facts giving rise to the cause of action. Because the state had knowledge of the pollutants in East Bethel in 1982 and in Oak Grove in 1984, the court found that the state’s claims, brought in February of 2000, were time barred in 1988 and 1990 (prior to the passage of the LCA and its provision temporarily suspending the statute of limitations). The state appeals.

Respondent Home Insurance Company challenges the district court’s denial of its separate summary judgment motion concerning a settlement agreement signed by Ford Motor Company (Ford). The agreement resolved Ford’s claims for coverage under policies issued by Home for Ford’s liability at several hazardous-waste sites around the country. The district court denied Home’s motion because Ford failed to procure the state’s approval prior to entering the settlement agreement as required by Minn.Stat. § 115B.444, subd. 2.

ISSUES

1. Does the statute of limitations provision in MERLA as enacted in 1983 bar the state from recovering response costs for cleaning up contaminated landfills?

2. Do the amendments to the Minnesota Landfill Cleanup Act constitute an impairment of contracts in violation of the Minnesota and U.S. Constitutions?

3. Does the federal CERCLA preempt the Minnesota Landfill Cleanup Act?

4. Do the amendments to the Minnesota Landfill Cleanup Act violate the Commerce Clause of the Minnesota and U.S. Constitutions?

5. Does the settlement, release, and policy buy-back agreement between Home Ins. Co. and Ford preclude the state’s recovery against Home Ins. Co. under the Minnesota Landfill Cleanup Act?

ANALYSIS

“On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the lower courts erred in their application of the law.” State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990) (citation omitted). No genuine issue of material fact exists “[wjhere the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party.” DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn.1997) (alteration in original) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986)). “[T]he reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted.” Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993) (citation omitted). The state has made a showing, in the affidavit of Thomas C. Newman, that the MPCA first incurred environmental-response costs related to the construction of remedial action at the East Bethel Landfill on October 31, 1995, and at the Oak Grove Landfill on April 17, 1996. Although these facts are not beyond dispute, viewing the evidence in the light most favorable to the state for the purposes of this appeal, we accept the state’s facts as true.

I.

The state argues that the district court’s application of the discovery-accrual rule is erroneous. First, the state argues that its claims are timely under the amended MERLA statute of limitations provision that existed when the state brought this action. Second, the state argues that even under the statute prior to its amendment, the state’s claims are timely. Respondents argue: (1) the amendments to MERLA do not act to revive the state’s claims, and (2) under the original provisions of MERLA, the district court was correct in applying the discovery-accrual rule and barring the state’s claims. We agree with the state’s second argument and conclude that, under MERLA as originally enacted, that is, prior to its amendment, the state’s claims are timely.

The construction and applicability of a statute of limitation is a question of law, reviewed de novo. Benigni v. County of St. Louis, 585 N.W.2d 51, 54 (Minn. 1998). Here, the controlling statutory authority is the statute of limitations provision in the 1983 originally-enacted language of the MERLA, and as the statute was subsequently amended in 1998.

Statute of Limitations Provision of Original MERLA

MERLA created four distinct causes of action for recovery of 1) environmental-response costs; 2) natural-resource damages; 3) economic damages; and 4) damages for death, personal injury, and disease. Minn.Stat. §§ 115B.04, 115B.05, 115B.17 (2000). With respect to the original statute of limitations provisions, it reads in pertinent part:

No person may recover damages pursuant to sections 115B.01 to 115B.15 unless the action is commenced within six years from the date when the cause of action accrues. In determining when the cause of action accrues for an action to recover damages for death, personal injury or disease, the court shall consider factors including the following:
(1) When the plaintiff discovered the injury or loss;
(2) Whether a personal injury or disease had sufficiently manifested itself; and
(3) When the plaintiff discovered, or using due diligence should have discovered, a causal connection between the injury, disease, or loss and the release of a hazardous substance.

Minn.Stat. § 116B.11 (1984). (This language remained the same after the 1998 amendments.) Noticeably, the statute does not define when a “cause of action accrues” for a cost-recovery action, nor are there any Minnesota appellate cases defining the phrase. Federal courts construing MERLA ruled that the accrual date for cost-recovery actions is the same as that provided under Minnesota common law for damages to real property: six years from the date of discovery. Union Pacific R.R. Co. v. Reilly Indus., Inc., 4 F.Supp.2d 860, 865 (D.Minn.1998) (Union Pacific I), aff'd, 215 F.3d 830, 840-41 (8th Cir.2000) (Union Pacific II).

Here, the district court, relying primarily on the Union Pacific decisions, adopted the discovery-accrual rule and held that the MERLA statute of limitations as it originally existed in 1983 time-barred the state’s cost-recovery claims. The district court found that the state had knowledge of the contamination at the two sites in 1982 and 1984. Because the court found that the applicable accrual standard in MERLA cost-recovery actions is the date of discovery, it determined that the state’s claims were time-barred in 1988 and 1990, respectively.

The state contends that because of the statute’s silence and the possible conflicting interpretations, the statute is ambiguous, and therefore the court erred in not applying the rules of statutory construction to determine the intent of the legislature. The state argues that the intent of the legislature was always for the state to have six years from the date of remedial construction to recover response costs and that the 1998 amendment was to clarify that intent.

The state correctly points out that, on its face, the original MERLA is silent about the accrual date for cost-recovery actions by the state and speaks only to personal injury claims. Respondents, however, point to the statute’s use of the word “person” and its corresponding definition to support their argument that the discovery-accrual rule applies:

“Person” means any individual, partnership, association, public or private corporation or other entity including the United States government, any interstate body, the state and any agency, department or political subdivision of the state.

Minn.Stat. § 115B.02, subd. 12. (1984). But respondents’ argument fails to address the fact that the legislature prescribed a discovery-accrual rule only for damage actions for death, personal injury, and disease, while remaining silent on the other causes of action that may be brought under MERLA, including cost-recovery causes of action.

Where a statute is silent on a key point and is subject to different plausible interpretations, the statute must be considered ambiguous. Burkstrand v. Burkstrand, 632 N.W.2d 206, 210 (Minn. 2001). If a statute is ambiguous, reviewing courts are to “ascertain and effectuate the intention of the legislature.” Minn. Stat. § 645.16 (2000). Legislative intent may be ascertained by considering, among other matters: (1) the occasion and necessity for the law; (2) the circumstances under which it was enacted; (3) the mischief to be remedied; (4) the object to be attained; (5) the former law, if any, including other laws upon the same or similar subjects; (6) the consequences of a particular interpretation; (7) the contemporaneous legislative history; and (8) legislative and administrative interpretations of the statute. Id. Additionally, courts are guided by certain presumptions:

(1) the legislature does not intend a result that is absurd, impossible of execution, or unreasonable;
(2) the legislature intends the entire statute to be effective and certain; [and]
⅜ ⅜ ⅜ ⅜ ⅜ ⅜
(5) the legislature intends to favor the public interest over any private interest.

Minn.Stat. § 645.17 (2000).

Here, the district court determined that in the absence of words to the contrary, the discovery-accrual rule applied to response cost-recovery claims. In reaching its decision the court relied primarily on Union Pacific 7, the federal district court decision.

As an initial matter, federal court interpretations of state law are not binding on state courts. See Jendro v. Honeywell, Inc., 392 N.W.2d 688, 691 n. 1 (Minn.App. 1986) (noting that although statutory construction of federal law by federal courts is entitled to due respect, this court is bound only by statutory interpretations of the Minnesota Supreme Court and United States Supreme Court), review denied (Minn. Nov. 19,1986).

In relying on Union Pacific I, the district court discusses a Minnesota Supreme Court case that the Union Pacific I court relied on, Minn. Mining and Mfg. Co. v.

Travelers Indem. Co. (SM), 457 N.W.2d 175 (Minn.1990). That case dealt with whether environmental-response costs incurred by 3M were covered as “damages” within the meaning of its liability insurance policies. Id. It did not address any statute of limitations issue. In holding that “damages” under the policy included environmental response costs, our supreme court explained that groundwater contamination has long been a recognized source of potential legal liability, and the advent of MERLA and other environmental statutes “merely changed the form of the liability for groundwater pollution, not the nature of that liability” so as to exclude coverage under the policies. Id. at 183. Both the district court and the Union Pacific I court quote language from the SM case out of context to support their conclusions. See Union Pacific R.R. Co., 4 F.Supp.2d at 865. They point to the supreme court’s language that “[t]he MER-LA clean up requirement did not expand the common law remedy for pollution of property,” but do not add the remainder of the sentence: “so that an order to clean up the contamination would not be within the reasonable expectation of the insured.” Id. (quoting SM, 457 N.W.2d at 184).

The district court (as well as the federal district court) also cites an unpublished opinion of this court in support of its conclusion, Hustad Dev. Corp. v. Browning-Ferris Indus., No. C5-94-2241, 1995 WL 254385 (Minn.App. May 2, 1995). We remind courts that our unpublished opinions are “[a]t best” of persuasive value and are not controlling. Dynamic Air, Inc. v. Bloch, 502 N.W.2d 796, 800 (Minn.App.1993). In any case, in Hustad, the plaintiff brought common law claims of trespass, negligence, and nuisance, as well as a MERLA claim for economic damages. Hustad, at-, 1995 WL 254385, at *1. This court applied the common law discovery-accrual rule to plaintiffs common law claims and, without explanation, applied the same common law rule to the statutory MERLA claim. Id. Notably, neither SM nor Hustad involved a claim to recover response costs, and thus did not address the accrual period for cost-recovery response actions. Accordingly, we conclude that the district court erred in relying on the Union Pacific decisions to support the conclusion that the same accrual date applies under MERLA as is provided under Minnesota common law for the tort of damage to real property.

Such an interpretation of the legislature’s silence fails to consider the legislative purpose and intent of MERLA. It also fails to consider that the legislature, in enacting MERLA, departed significantly from common law by imposing liability for environmental cleanup that is joint and several, retroactive, and strict. Minn.Stat. §§ 115B.03, subd. 1 (2000), 115B.04, subd. 1. Moreover, it fails to consider that MER-LA is a “remedial statute” and should therefore be broadly construed in favor of the government in order to effectuate its remedial objectives. Musicland Group, Inc. v. Ceridian Corp., 508 N.W.2d 524, 530 (Minn.App.1993), review denied (Minn. Jan. 27, 1994); see In re Greater Morrison Sanitary Landfill, 435 N.W.2d 92, 99 (Minn.App.1989) (holding that “[ljaws designed to implement [the] state’s strong policy of environmental protection should be liberally construed to effectuate that policy”), review denied (Minn. Mar. 29, 1989).

We look first to the words of the statute. Here, the legislature expressly provided what is essentially the common-law discovery-accrual rule for personal injury claims, but remained silent as to when a cause of action accrues for the remaining causes of action authorized in the statute. See Minn.Stat. § 115B.11. When the legislature applied the common-law discovery-accrual rule to personal injury actions, it had the opportunity to apply the same rule to response cost-recovery actions, but chose not to do so. This omission implies that the legislature intended some other rule than the common law accrual rule for state actions seeking recovery of response costs. See Nichols v. Metro. Bank, 468 N.W.2d 84, 86 (Minn.App.1991) (stating that legislative silence on repossession activities in its definition of “collection agency” implies an intentional exclusion from its definition), review denied (Minn. June 18, 1991). The question remains as to when the legislature intended a state cost-recovery response action to begin to accrue.

Bearing in mind the rule that the legislature does not intend a result that is absurd or impossible of execution, we begin with the fact that in 1970 — before MERLA was even enacted — the legislature was aware of approximately 250 landfills creating water-pollution problems, many of which had leached contaminants into the water table. Gov. Wendell R. Anderson, First Annual Report on the Quality of the Environment, 41 Jan. 1974. Given the sheer number of contaminated sites known to the legislature when it enacted MERLA in 1983, if the accrual period were to begin when the contamination was discovered, then by definition, no cost-recovery actions could be brought with respect to these sites. The result is a statute impossible of execution. Moreover, such a result is impractical and frustrates the very purposes of MERLA: to impose strict liability upon responsible parties and to allow the state to collect costs after cleaning up the contamination. Only if a cause of action to recover response costs accrued at the time of on-site construction of a permanent response action, would the state be able to recover its cost for cleaning up those landfills known to be contaminated prior to the enactment of MERLA. See Minn.Stat. § 115B.02, subd. 16 (defining remedial response actions as those actions consistent with a permanent remedy).

Additionally, the legislature imposed certain initial administrative tasks on the MPCA before it could take any remedial action. First, MERLA required the MPCA to establish and adopt rules by July 1, 1984, and also to establish a list of priority sites for taking remedial action. Minn.Stat. § 11533.17, subd. 13. Further, the MPCA was not permitted to expend public money on site cleanup unless it first determined that responsible parties would not take the remedial action in the manner or within the time requested, a process that takes considerable time and would further delay the state’s ability to bring an action. Id., subd. 1(a). Given the limited resources the MPCA had to conduct investigation and cleanup, a discovery-accrual rule for cost-recovery actions would have forced the MPCA to begin litigation at countless sites around the state immediately after MERLA was enacted, instead of devoting its resources to cleanup and establishing rules and identifying sites and responsible parties as required by the statute.

When choosing between possible definitions of a statutory term, the reviewing court must adopt the interpretation that appears to be the more logical in concept and the more practical in application. In re Welfare ofC.P.K, 615 N.W.2d 832, 834 (Minn.App.2000), review denied (Minn. Aug. 22, 2000). Similarly, where a law is susceptible of more than one meaning, a reviewing court is not to adopt an interpretation that defeats the purpose of the law. Governmental Research Bureau v. Borgen, 224 Minn. 313, 320, 28 N.W.2d 760, 764 (1947). In light of the purposes of MERLA, the consequences of adopting respondents’ interpretation, and the legislative exclusion of cost-recovery response actions from the statute’s definition of when a cause of action accrues, we cannot conclude that the legislature intended to apply a common law accrual period to actions by the state to recover response costs. We hold, therefore, that in order to effectuate the purposes of MERLA, the legislature intended for a cause of action to recover response costs incurred by the state to accrue at the time of on-site construction of a permanent response action.

We note that our analysis is not unlike that of federal courts’ interpretations of CERCLA. Because MERLA was modeled after the federal CERCLA of 1980, federal interpretation of CERCLA is instructional. As with MERLA, CERCLA did not expressly provide an accrual period (or even a statute of limitations period) for cost-recovery response actions, but did provide a three-year statute of limitations from the date of discovery for action to recover damages to natural resources. See 42 U.S.C. § 9612(d) (1982). Due to CERCLA’s silence regarding the accrual period for cost-recovery response actions, federal courts applied the rules of statutory construction to determine Congress’ intent.

Courts interpreting CERCLA’s statute of limitations provision began with the proviso that the remedial intent of CERCLA required a liberal statutory construction designed to avoid frustration of the act’s purpose. United States v. Mottolo, 605 F.Supp. 898, 902 (D.N.H.1985). The purpose of CERCLA was to provide the government with tools to respond to the nationwide threat posed by hazardous-waste disposal and to impose costs and responsibility for remedial action upon the persons responsible. Id.

The Mottolo court found that Congress created a “silent exception” to CERCLA’s three-year statute of limitations by omitting any reference to claims for cost reimbursement. Id. at 903. The court held, therefore, that no statute of limitations applied to governmental actions for reimbursement of remedial-response costs. Id. at 909-910.

Similarly, other federal courts concluded that in the absence of an express statute of limitations for cost-recovery response claims, the government was not time-barred in bringing its claims. See United States v. Dickerson, 640 F.Supp. 448, 451 (D.Md.1986) (granting motion to strike statute of limitations as affirmative defense to cost-recovery claim); Kelley v. Thomas Solvent Co., 714 F.Supp. 1439, 1449-50 (W.D.Mich.1989) (striking statute of limitations defense as legally insufficient when interpreting CERCLA prior to amendment); United States v. Shell Oil Co., 605 F.Supp. 1064, 1075-76 (D.Colo. 1985) (holding that to give meaning to the time limitation provisions for pre-enactment damages to natural resources, requires a finding that liability is not so limited for pre-enactment response costs in the absence of such a time limitation).

Thus, our holding that the legislature did not intend to apply a common law accrual rule to the MERLA statute of limitations provision is consistent with federal courts’ interpretation of similar provisions in CERCLA.

Assuming, as we have, that the state first incurred environmental response costs related to the construction of remedial action at the two landfills in 1995 and 1996, we conclude that the state’s claims are not time-barred by the statute-of-limitations provisions of MERLA as originally enacted, and that therefore summary judgment was inappropriate. In light of this conclusion we need not decide whether the 1998 amendments to MERLA revived the state’s claims.

We turn next to respondents’ constitutional challenges to the statutes.

II.

Respondents argue that the Insurance Recovery Amendments to the LCA, which permit the state to bring a direct action against an insurer, violate the Supremacy Clause of the U.S. Constitution and the Contracts Clauses of the U.S. and Minnesota Constitutions for two reasons: (1) the amendments wipe out essential provisions of the insurance contracts at issue and thereby substantially impair the respondents’ contracts with their policyholders without justification; and (2) the amendments are preempted by the federal CERCLA. Respondent Home also argues that the LCA violates the Commerce Clause.

The district court denied respondents’ summary judgment motions, finding that respondents did not meet their threshold burden of proof showing a substantial impairment of a contractual obligation in violation of the Contracts Clause of the U.S. and Minnesota Constitutions. Similarly, the district court found no statutory conflict between the LCA and CÉRCLA in violation of the Supremacy Clause. Finally, the court found that respondent Home failed to show that amendments to the LCA placed an unconstitutional burden on interstate commerce in violation of the Commerce Clause of the U.S. Constitution.

On appeal from the denial of a motion for summary judgment, we examine the record to determine whether any genuine issues of material fact exist and whether the district court erred in applying the law. Offerdahl v. Univ. of Minn. Hasps. & Clinics, 426 N.W.2d 425, 427 (Minn.1988). “Evaluating a statute’s constitutionality is a question of law.” Hamilton v. Comm’r of Pub. Safety, 600 N.W.2d 720, 722 (Minn.1999) (citations omitted). Accordingly, this court is “not bound by the lower court’s conclusions.” Id. (citations omitted). We must view the evidence in the light most favorable to the nonmoving party. Offerdahl, 426 N.W.2d at 427.

“Minnesota statutes are presumed constitutional, and our power to declare a statute unconstitutional should be exercised with extreme caution and only when absolutely necessary.” In re Haggerty, 448 N.W.2d 363, 364 (Minn. 1989) (citation omitted). The party challenging a statute must demonstrate beyond a reasonable doubt that a statute violates a constitutional provision. Jacob-sen v. Anheuser Busch, 392 N.W.2d 868, 872 (Minn.1986), cert. denied, 479 U.S. 1060, 107 S.Ct. 941, 93 L.Ed.2d 991 (1987).

The LCA was enacted to create a more effective and economical program to achieve landfill cleanup than was attainable under MERLA by authorizing the MPCA to assume environmental responsibility for qualified closed landfills. Minn. Stat. § 115B.40 (2000). To help pay the state for the cost of cleaning up the landfills, the statute initially authorized the state (1) to issue bonds; (2) to assess a solid-waste-assessment tax on all residential and business customers; and (3) to permit the state to seek contribution for response costs from insurance companies that had previously sold liability policies to PRPs. See Minn.Stat. §§ 115B.42 (2000) (bonds); .22 (2000) (hazardous waste generator tax); .44 (1994) (contribution from insurance companies) (repealed by 1996 Minn. Laws ch. 370, § 7).

Participation by PRPs in the LCA cleanup program is voluntary. If a PRP chooses not to enter into a settlement with the state, the PRP may bring a contribution claim against other PRPs under MERLA or CERCLA for response costs. Conversely, by entering into a settlement with the state, a PRP is relieved of the cost and burden of environmental cleanup under MERLA and in exchange, the PRP assigns any right to liability coverage under its insurance policies to the state. Minn. Stat. §§ 115B.40, subd. 7(b)(2); 115B.43, subd. 2(a)(2)(h) (2000).

Under the Insurance Recovery Amendments to the LCA, the state is permitted to bring a direct action for response costs against insurance companies who have issued policies to PRPs. Minn.Stat. §§ 115B.441-.445 (2000). The PRP is required to cooperate with the state in preparation for negotiating a settlement with its insurance company. Id. As part of any settlement, the insurer must waive its contribution and subrogation rights for any amounts paid in the settlement. Minn. Stat. § 115B.443, subd. 9.

It is important to note that if the parties do not settle, the insurers retain the right to assert the same defenses they would have if the LCA not been enacted. The state obtains no greater rights against insurer defendants than the insurers’ policyholders would have if they were the parties seeking to enforce the coverage provisions of their policies. Minn. Stat. § 115B.444, subd. 1. And the LCA preserves the right of the insurance company to assert the same defenses against the state that it could assert in a suit by a third party against the PRP insured. Id. Thus, insurance companies are allowed both to deny coverage under their policies and to contest their policyholders’ underlying cleanup liability as well. In this respect, the LCA merely codifies the result that the state could obtain under common law principles relating to subrogation by satisfying a PRP policyholder’s liability under MERLA.

Impairment of Contracts

Respondents argue that the direct action and cooperation provisions of the Insurance Recovery Amendments to the LCA unconstitutionally impair the obligations of the insurers’ contracts with their policyholders in three ways. They argue the amendments substantially impair their contract rights by: (1) effectively removing the “no action” clauses from the policies at issue; (2) diminishing their contractual rights to policyholder cooperation and subrogation; and (3) altering their contract rights retroactively. See Minn.Stat. §§ 115B.442, subd. 4 (stating that PRPs must provide information regarding liability insurance coverage); 115B.443, subd. 9 (setting forth settlement terms for insurers regarding contribution, subrogation, and effect of settlement on joint and several liability).

The United States Constitution provides that “[n]o State shall * * * pass any * * * Law impairing the Obligation of Contracts.” U.S. Const. art. I, § 10, cl. 1. The Minnesota Constitution provides similar protections. Minn. Const. art I, § 11. Minnesota Contract Clause challenges are analyzed using the same three-part test. Jacobsen v. Anheuser-Busch, Inc., 392 N.W.2d 868, 872 (Minn.1986). When determining whether a law violates the Contracts Clause, respondents must initially meet a threshold burden: the aggrieved party must in fact show that the legislation substantially impairs a contractual obligation. Energy Reserves Group v. Kan. Power & Light Co., 459 U.S. 400, 411, 103 S.Ct. 697, 704, 74 L.Ed.2d 569 (1983). If that showing is made, it must then be demonstrated that the state does not have a significant and legitimate public purpose behind the legislation and that the legislation is unreasonable and not appropriately tailored to accomplish the asserted public purpose. Id. To meet the threshold burden, the Supreme Court requires the party alleging the violation to show that the state regulation has caused serious economic harm. Id. at 411,103 S.Ct. at 704.

Upon reviewing the record, we conclude that respondents did not meet this threshold burden sufficient to compel summary judgment for several reasons:

1. Respondents presented insufficient facts to demonstrate that since the amendments were passed, respondents have been subject to an increase in claims-related expenses due to the amendments.

2. The state presented evidence that PRPs are able to provide basic factual information required under the LCA without violating cooperation clauses in their contracts while simultaneously assisting the insurer’s defense against such claims. The district court therefore found that there was insufficient evidence presented that the amendments will cause PRPs to dishonor their contractual duty to cooperate with the insurers in such a way that would create a pecuniary loss.

3. There was no showing that any alleged altering of contribution rights has injured the respondents financially, and respondents have not presented factual evidence that connects the statutory removal of the right to contribution to any financial loss.

4. Respondents admit that it is “impossible to know” how substantial the statute’s financial burden will be on them, and although factual certainty regarding the exact level of economic harm is not essential to a finding of serious economic harm, there must be at least some specific evidence that proves the actual existence of calculable economic harm.

5. The LCA amendments may well confer an economic benefit on respondents. For example, because the state steps into the shoes of the PRP policyholder, an insurer is able to assert all its available defenses in a single action brought by the state, rather than being required to assert liability defenses in one action bought by the state and coverage defenses in a second action brought by the policyholder (or its subrogee). Thus, attorney fees and litigation costs may be reduced. Further, the total cost of remediating landfills may be reduced due to the economies of scale available because a single entity, the state, has assumed the responsibility for cleaning a large number of sites. The result may well be a decrease in the amount the insurers will have to pay out in landfill cleanup claims on the policies they issued to the PRPs.

In light of the dearth of facts presented to the district court to establish a threshold showing of substantial impairment of their contractual obligations, we affirm the district court’s denial of summary judgment with respect to respondents’ Contract Clause challenges.

Federal Preemption

Respondents also argue that MERLA is preempted by CERCLA and therefore is unconstitutional. The Supremacy Clause of the U.S. Constitution invalidates state laws that interfere with or are contrary to the laws of Congress. Wise. Pub. Intervenor v. Mortier, 501 U.S. 597, 604, 111 S.Ct. 2476, 2481, 115 L.Ed.2d 532 (1991). Federal preemption of state statutes is found in one of three ways: (1) where the federal statute expressly states that it is preempting state law (“express preemption”); (2) where the federal regulatory scheme is so pervasive the Congress must have intended to “occupy the field” and disallow any state regulation on the same subject (“field preemption”); and (3) where Congress has chosen not to occupy a field, but federal and state law conflict (“conflict preemption”). Barnett Bank of Marion County v. Nelson, 517 U.S. 25, 31, 116 S.Ct. 1103, 1107-08, 134 L.Ed.2d 237 (1996).

Respondents do not argue that express preemption applies here. With respect to field preemption, 42 U.S.C. § 9614(a) states:

[n]othing in this chapter shall be construed or interpreted as preempting any State from imposing any additional liability or requirements with respect to release of hazardous substances within the State.

42 U.S.C. § 9614(a) (1994). Therefore, there is no intent by Congress to “occupy the field” and disallow any state regulation on the subject. ARCO Envtl. Remediation, L.L.C. v. Dep’t of Health & Envtl. Quality of Mont., 213 F.3d 1108 1114 (9th Cir.Mont.2000).

As to conflict preemption, the issue is whether the provision of the LCA that permits the state to file a direct action against insurers conflicts with the provision of CERCLA that establishes when a direct action against someone other than a responsible party may be brought under CERCLA. See 42 U.S.C. § 9608(c) (1994); Minn.Stat. § 115B.444, subd. 1. Conflict preemption is found when it is impossible to comply with both federal and state law, or if the state law is an obstacle to the accomplishment of Congress’ objectives. Nelson, 517 U.S. at 31, 116 S.Ct. at HOT-OS.

CERCLA does allow a direct right of action against “guarantors” in limited circumstances related to insolvency of the PRP when evidence of financial responsibility by the guarantor is provided. 42 U.S.C. § 9608(c)(1), (2). Even so, an insurer is not necessarily a guarantor under CERCLA. A guarantor is defined as “any person, other than the owner or operator, who provides evidence of financial responsibility for an owner or operator under this chapter.” 42 U.S.C. § 9601(13) (1994).

Here, the district court found that there was no conflict between the acts because the LCA is part of a totally separate legislative scheme that does not even implicate CERCLA. We agree. There is nothing in CERCLA that denies a state the right to create direct actions under its own law. Indeed, as noted, CERCLA specifically states that

[njothing * * * shall be construed or interpreted as preempting any State from imposing any additional liability or requirements with respect to the release of hazardous substances within such State.

42 U.S.C. § 9614(a). Because the direct-action provisions of the LCA merely provide a remedy for a breach of a duty created under state law, and because CERCLA prohibits only direct actions to recover damages for claims brought under CERCLA, we conclude that the Supremacy Clause is not implicated and the direct-action provisions of the LCA are not preempted by CERCLA.

Respondents also argue that a number of contribution-related provisions of the LCA are preempted by CERCLA. CERCLA grants PRPs that are sued by the federal government for cleanup costs the right to seek contribution from other responsible parties for their fair share of the response costs. Bedford Affiliates v. Sills, 156 F.3d 416, 427 (2d Cir.1998). From this, respondents argue that the LCA provisions requiring PRPs to waive their contribution rights upon participation in the LCA program is preempted by CERCLA, as is the LCA provision that requires insurers to waive contribution claims upon settlement of direct-action claims brought by the state. See Minn. Stat. §§ 115B.43, subd. 2 (stating that PRPs must waive contribution rights); 115B.443, subd. 9 (stating that insurers must waive their contribution claims).

However, respondents’ argument fails to consider that (1) CERCLA does not directly grant contribution rights to insurers; therefore, it does not primarily affect insurers; and (2) the waiver of contribution rights is optional for both insurers and PRPs under the LCA, (PRP or insurer can choose not to settle). Therefore, any contribution rights under CERCLA or the LCA remain available. Moreover, both CERCLA and the LCA provide that PRPs that enter into settlements with a state are entitled to contribution protection from future claims. 42 U.S.C. § 9613(f)(2) (1994); Minn.Stat. § 115B.443, subds. 8, 9. We therefore conclude that the LCA contribution waiver provisions do not conflict with CERCLA and its provisions are constitutional.

Commerce Clause

Respondent Home argues that the Insurance Recovery Amendments to the LCA are unconstitutional because they burden interstate commerce in two ways: (1) they impose economic protectionism benefiting Minnesota at the expense of other states and to the detriment of out-of-state insurers and policyholders; and (2) they allow Minnesota to interfere with interstate commerce without any balancing of the minimal local benefit against the heavy restraint of commerce nationally.

The Commerce Clause grants Congress the power to regulate commerce among the several states. U.S. Const., art. I, § 8, cl. 3. The power to regulate commerce also encompasses an implicit or “dormant” limitation on the authority of states to enact legislation affecting interstate commerce. Cotto Waxo Co. v. Williams, 46 F.3d 790, 793 (8th Cir.1995). State regulation may therefore not overburden interstate commerce. Id. However, not every exercise of state power with some impact on interstate commerce is invalid. A state statute must be upheld if it

regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental * * * unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.

Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 847, 25 L.Ed.2d 174 (1970) (citing Huron Portland Cement Co. v. Detroit, 362 U.S. 440, 443, 80 S.Ct. 813, 816, 4 L.Ed.2d 852 (1960)).

The U.S. Supreme Court adopted a two-tiered approach for analysis of state statutes under the Commerce Clause in Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth., 476 U.S. 573, 578-79, 106 S.Ct. 2080, 2084, 90 L.Ed.2d 552 (1986). The first part of the analysis asks whether the statute in question directly affects interstate commerce. Id. Statutes that directly regulate or discriminate against interstate commerce, or that have the effect of favoring in-state economic interests over out-of-state interests, are unconstitutional. Id. If the effect upon interstate commerce is indirect, then it becomes a question of whether the economic burden on interstate commerce is clearly excessive in relation to the putative local benefits. Id. While there is no clear line separating the two categories (direct versus indirect burden on interstate commerce), “the critical consideration is the overall effect of the statute on both local and interstate activity.” Id.

Home argues that the provision in the LCA amendments that requires the attorney general to approve otherwise private negotiations between insurers and their policyholders directly affects interstate commerce. Home contends that the amendments impermissibly burden interstate commerce by effectively preventing settlements negotiated in consideration of a broad policy release, if the release might possibly affect the policyholder’s potential liability to the state at a Minnesota landfill. As an example, Home points to the district court’s ruling that partially invalidated Home’s agreement with Ford Motor Co. (Ford), because Ford did not seek approval from the attorney general’s office as required by the statute. Home argues that the LCA impermissibly enables Minnesota to take a disproportionate share of insurance proceeds collected nationally by authorizing a veto power over out-of-state settlements in the absence of any compelling or legitimate state interest.

The district court, in denying respondents’ summary judgment motion, found that the LCA does not directly burden interstate commerce because the amendments do not directly target out-of-state insurers for regulation. The court also found no indirect burden under the Commerce Clause because respondents did not show that the statute has caused or will cause them any significant economic harm. We agree.

The statutory language at issue reads:

A policyholder may not enter a settlement that releases an insurer from any claims for which the state has an action under subdivision 1, unless the attorney general has given prior written approval to the settlement and the policyholder agrees to assign to the state any amounts recovered under the settlement from the insurer that are attributable to the resolution of the claims.

MinmStat. § 115B.444, subd. 2(b).

We initially note that the statute does not purport to regulate every settlement agreement that insurance companies may have with Minnesota companies; rather, it seeks to regulate only those settlements involving qualified landfill sites in which the state has a legitimate interest (not all landfills), because the state essentially assumed the liability of the PRP policyholder. The involvement of the state is therefore limited. Without a requirement for state approval of such settlements, insurers and their policyholders could deprive the state of any recovery to which it has an interest by entering into a settlement agreement that releases the insurer from further liability. Further, because the act pertains uniformly to settlements between PRPs and insurers, regardless of where the insurance company is domiciled, it does not discriminate against out-of-state insurers in favor of in-state insurers. Accordingly, we conclude that the act does not directly burden the Commerce Clause so as to be unconstitutional.

We turn next to whether the statute in directly burdens interstate commerce. As we have already noted in part,

[a statute] will be upheld unless the burden imposed on [interstate] commerce is clearly excessive in relation to the putative local benefits. If a legitimate local purpose is found, then the question becomes one of degree.

Pike, 397 U.S. at 142, 90 S.Ct. at 847 (citation omitted.) In this connection, the court is to balance the burden on interstate commerce against the putative local benefits. The benefit to the state, as noted above, is a procedure that protects the state from a settlement between an insurer and a policyholder that releases the insurer from further liability. Weighted against this benefit to the state, as the district court found, the respondents have failed to show that the LCA amendments imposed anything more than a minimal burden on interstate commerce. The district court found that there was no evidence setting forth the additional costs of doing business in Minnesota incurred by out-of state insurers as a result of the LCA amendments. We concur with the district court’s conclusion that it is not enough to argue that most of the insurers are from out-of-state. Thus, we conclude respondents have not made a showing that the burden on interstate commerce is clearly excessive when weighed against the benefit to Minnesota. We affirm the district court’s denial of respondents’ summary judgment with respect to whether provisions of the LCA violate the Commerce Clause. Settlement, Release, and Policy Buy-Back Agreement with Ford

The district court denied Home’s motion for partial summary judgment seeking to dismiss the state’s claims. Home contends that a 1999 settlement agreement with Ford released Home from any liability, thus barring the state’s claims against Home. The LCA requires PRPs to obtain state approval prior to entering into any settlement agreement purporting to release an insurer from liability under which the state may have a claim. Minn.Stat. § 115B.444, subd. 2(b).

Home argues on appeal that it should not be penalized for its settlement with Ford for Ford’s failure to obtain the state’s consent prior to entering the settlement agreement. Home argues that the state’s remedy should have been an action against Ford, not against its insurer. The pertinent provision in the February 1999 settlement agreement reads:

Effective as of its receipt of the Settlement Payment, Ford fully, absolutely, and unconditionally releases and for all purposes forever discharges Home, Risk Enterprise Management Limited (“REM”) and REM’s directors, officers, agents and employees from any and all Claims under, arising out of, or relating in any way to the Policies, except for Claims concerning the enforcement of this Agreement. Ford acknowledges that by this release and this Agreement, Home and REM have been relieved of all liability under, arising out of, or relating in any way to the Policies.

In May of 1995, prior to Home’s settlement agreement with Ford, the state sent both Ford and Home a letter explaining the LCA’s insurance-recovery provisions. As a result, Home knew that Ford could not execute the release without the state’s consent when it negotiated the settlement and release. Moreover, 1995 is the year the state took over cleanup liabilities at the Oak Grove landfill. The state points out that as of that time, the state became equitably subrogated to Ford’s rights to coverage under its policies with Home with respect to the state’s claims for response costs for this site and Ford had no authority to release those subrogation rights. Therefore, because Ford did not have the state’s approval as required by the LCA to execute such an agreement releasing Home from liability, the district court did not err in denying Home’s summary judgment motion.

DECISION

We reverse the district court’s grant of respondents’ summary judgment motion finding the state’s claims are time-barred by the statute of limitations provision in MERLA, and remand for further proceedings consistent with our holding. We affirm the district court’s denial of respondents’ summary judgment motions relating to respondents’ constitutional claims. We also affirm the district court’s denial of Home’s summary judgment motion seeking dismissal based on its settlement agreement with Ford.

Affirmed in part, reversed in part, and remanded.

       Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const, art. VI, § 10.

      . Response costs are the costs of actions implemented to abate or remedy a release or threatened release of hazardous substances in order to protect the public health and environment. Minn.Stat. § 115B.02, subds. 15-18 (2000).

      . The district court, in a footnote, refers to one of the state's responses to an interrogatory served by defendant Commercial Union, and says,
      that the State * * * not only discovered the pollution at East Bethel in 1982 but also began remedial activities there later that year. Similarly, in its responses to the same interrogatories and document requests, the State admitted to discovering the pollution at Oak Grove in 1984 and beginning remedial activities there later that year.
      The district court surmised “that even under the current version of MERLA,” the state’s claims "may not have been timely filed.” We initially note that the state did not say it undertook the activities it referred to in the response, only that "remedial activities commenced,” without indicating who undertook them. The affidavits of Douglas Day and Thomas Newman make clear that the state did not undertake physical activities at either site in the 1980s, but that such activities were undertaken by the responsible parties. Moreover, the state’s interrogatory response refers to ending the "migration of contaminants from the sites and the progressive damages caused by that migration.” It appears to us that the activities the state referred to were more in line with the temporary actions that the statute defines as “removal” ("actions necessary to ⅜ ⅜ * minimize * * ⅜ or mitigate the damage” (Minn.Stat. § 115B.02, subd. 17(5) (2000))), rather than with the permanent type of remedial action necessary for the cause of action to accrue ("actions consistent with a permanent remedy taken instead of or in addition to removal actions” (Id., subd. 16(a) (2000))). In any case, because we are to view the evidence in the light most favorable to the state, this opinion assumes that the state first incurred remedial costs in 1995 and 1996.

      . Under Minnesota common law, a cause of action accrues and the statute of limitations begins to run when the plaintiff discovers or should have discovered the injury/damages. See Dalton v. Dow Chem. Co., 280 Minn. 147, 153, 158 N.W.2d 580, 584 (1968).

      . Respondent Wausau asserts that this report was improperly submitted, though fails to explain how. In any event, "groundwater contamination has been recognized in Minnesota for many years,” 3M, 457 N.W.2d at 183, and reviewing courts may consider publicly available articles that were not presented to the district court. Fairview Hosp. Health Care Servs. v. St. Paul Fire & Marine Ins. Co., 535 N.W.2d 337, 340 n. 3 (Minn.1995); see In re Estate of Turner, 391 N.W.2d 767, 771 (Minn. 1986) (denying motion to strike where "[o]n an issue of such magnitude, we see no reason why a party may not submit [a public annual] report to us as part of its brief when we could refer to such a report in the course of our own research, if we were so inclined.”).

      . Congress amended CERCLA in 1986 to include a six-year statute of limitations provision for the recovery of remedial response costs from responsible parties, commencing from the date of "physical on-site construction of the remedial action.” 42 U.S.C. § 9613(g)(2)(B) (1994).

      . Certain CERCLA claims may be asserted directly against a guarantor providing evidence of financial responsibility for particular facilities if the person liable is in bankruptcy, reorganization or arrangement pursuant to the Federal Bankruptcy Code, 42 U.S.C. § 9608(c)(2)

      . Subdivision 1 of the statute permits the state to bring a state action against any insurer for recovery of all environmental response costs incurred that are related to qualified facilities for which the state has assumed response action obligations or responsibilities. Minn. Stat§ 115B.444, subd. 1.


source: Caselaw Access Project

author: FOLEY, Judge.

license: Public Domain

text:
    In re Lawrence A. SENSKE, Petitioner, Respondent, v. Deanna D. SENSKE, Appellant.
    No. C3-01-2209.
    Court of Appeals of Minnesota.
    May 28, 2002.

      Samuel Wertheimer, Little Canada, for respondent.
    David Gronbeck, Law Offices of David Gronbeck, Minneapolis, for appellant.
    Considered and decided by SHUMAKER, Presiding Judge, WILLIS, Judge, and FOLEY, Judge.
   OPINION

FOLEY, Judge.

Appellant challenges the district court’s decision that respondent retained a non-marital interest in a home’s equity even after the property was refinanced. Appellant also argues that, because the equity no longer has a nonmarital component, the Schmitz formula, used to determine what portion of an increase in a property’s value is nonmarital, is inapplicable. Both parties challenge the district court’s calculation of the cash settlement. Because we find that the Schmitz formula does not apply, we reverse and remand for calculation in accordance with this opinion.

FACTS

Respondent Lawrence Senske was the sole owner of a home for 27 years. Appellant Deanna Senske lived with respondent in the home before the parties’ marriage on March 10, 1998. At the time of the marriage, the home had a fair market value of $63,580 and respondent had $50,690 in equity. Soon after the marriage, the parties refinanced the home for its total market value and the proceeds were used to purchase furniture and install a new roof, to fund some home remodeling, and to pay off appellant’s nonmarital debt of $6,483. The parties agree that this loan was used jointly while they resided together.

The parties separated in June 2000, and respondent filed for divorce. Respondent was awarded temporary possession of the home. In violation of a court order, appellant entered the home, removed furniture and electronics, and vandalized the home.

After a trial at which no evidence was entered on the amount of the refinancing proceeds that were used for the new roof and for remodeling, the district court entered an order for dissolution and division of property. At that time, the home’s fair market value was $79,520 with $20,520 in equity. The district court awarded respondent the homestead, and also determined that, at the time of the marriage, respondent had an 80% nonmarital interest in the equity of the home. The court found that respondent retained this non-marital interest after the property was refinanced. Accordingly, the district court awarded respondent $16,416, which represented 80% of the current $20,520 in equity. The district court considered the remaining $4,104 in. equity to be marital property and divided it between the parties, giving each $2,052.

The district court also apportioned part of appellant’s 401K plan. Appellant removed $5,198 from the plan during the separation and the district court ordered her to pay respondent $2,599, representing half of this amount. The district court further ordered appellant to reimburse respondent an additional $1,160 for unpaid mortgage, $456 for unpaid utilities, and $1,000 as a sanction for violating the temporary order, for a total of $5,215.

The district court determined that appellant was entitled to $4,651 in the settlement: the total of half the marital equity, $2,052, plus half the disputed 401K money, $2,599. It then subtracted the amount appellant owed respondent, $5,215, from this number and ordered that appellant pay respondent $564 as a final cash settlement.

This appeal followed.

ISSUES

1. Does the Schmitz formula apply when the parties refinanced the home for its entire market value and none of the proceeds was put into the new equity?

2. Did the district court err in calculating the cash settlement?

ANALYSIS

I. Application of Schmitz Formula

Whether property is marital or nonmarital is a question of law, but we defer to the district court’s underlying findings of fact. Olsen v. Olsen, 562 N.W.2d 797, 800 (Minn.1997). All property, “real or personal,” acquired during a marriage is presumed to be marital property. Minn.Stat. § 518.54, subd. 5 (2000). This presumption is overcome by showing that property is nonmarital, meaning any real or personal property,

acquired by either spouse before, during, or after the existence of their marriage, which * * *
(b) is acquired before the marriage;
(c) is acquired in exchange for or is the increase in value of property which is described in [clause (b) ].

Id.

The district court determined that respondent had a nonmarital share in the home’s current equity and relied on the principles set forth in Stroh v. Stroh, 38B N.W.2d 402 (Minn.App.1986), and Schmitz v. Schmitz, 309 N.W.2d 748 (Minn.1981), to calculate his nonmarital percentage. These cases outline a formula to correctly apportion an increase in equity for property having both marital and nonmarital components.

The Schmitz formula has been summarized as follows:

The present value of a nonmarital asset used in the acquisition of marital property is the proportion the net equity or contribution at the time of the acquisition bore to the value of the property at the time of purchase multiplied by the value of the property at the time of separation. The remainder of the equity increase is characterized as marital property * * *.

Brown v. Brown, 316 N.W.2d 552, 553 (Minn.1982). Appellant argues that the formula does not apply because respondent no longer had a nonmarital interest in the home’s equity after the property’s mortgage was refinanced.

No Minnesota case has specifically examined whether the Schmitz formula applies in this particular situation, when the previous nonmarital equity has been extinguished by refinancing during the marriage. In Schmitz, the supreme court first used the formula to determine the non-marital portion of increased homestead equity that had “both marital and nonmarital aspects.” 309 N.W.2d at 750. The courts have continued to use the formula for property having marital and nonmarital components. See, e.g., Brown, 316 N.W.2d at 553 (formula used to “correctly apportion the increase in equity between marital and nonmarital assets”); Freking v. Freking, 479 N.W.2d 736, 739 (Minn.App.1992) (“[t]he Schmitz formula apportions a property’s increased equity between marital and nonmarital interests.”) And in Stroh, this court defined the Schmitz “rationale” as follows:

Except for a proportion of appreciation that is determined exclusively by considering an identified nonmarital investment, any other appreciation is subject to the statutory presumption that property acquired after marriage is marital property.

383 N.W.2d at 405.

Accordingly, the Schmitz formula should be used to apportion an increase in the property’s value only if that property has an identified nonmarital component. In this case, respondent had a nonmarital interest in the home’s equity when the parties married. To determine whether he retained this nonmarital interest after the refinancing and, subsequently, whether the Schmitz formula applies, we turn to the tracing cases.

Minnesota courts may trace a current asset to a nonmarital source. Minn. Stat. § 518.54, subd. 5(c). To claim a non-marital interest in a current asset, a party must “show by a preponderance of the evidence that the asset was acquired in exchange for nonmarital property.” Carrick v. Carrick, 560 N.W.2d 407, 413 (Minn.App.1997). Here, when the parties refinanced the home, all of the equity in the home, including respondent’s nonmar-ital share, was extinguished. The money from this refinancing was used to purchase furniture and for home improvements; it did not go toward payments on the home. And not only does the record not address how much of the home improvements were paid for with the refinancing funds, but the parties agreed that the refinancing proceeds were jointly used during the marriage. Thus, respondent presented no evidence indicating that an identifiable portion of the current equity was acquired with the proceeds of his original nonmari-tal interest in the home. See Prahl v. Prahl, 627 N.W.2d 698, 705 (Minn.App.2001) (nonmarital asset commingled with marital asset may lose its nonmarital status if it cannot be traced to nonmarital source).

Because no identifiable portion of the home’s current equity can be traced to a nonmarital source, the presumption that all of the equity is marital property has not been rebutted and the Schmitz formula does not apply. The district court erred in finding that respondent had a nonmarital share in the home’s current equity.

II. Calculation of Cash Settlement

Both parties argue that the district court erred when calculating the cash settlement. The district court subtracted the amount appellant owed respondent for other reimbursements ($5,215) from the amount she was entitled to receive ($4,651) and determined that appellant owed respondent $564.

This approach is incorrect for two reasons. First, it is based on the district court’s decision that respondent had an 80% nonmarital portion of the home’s current equity. Second, under this approach, respondent is not reimbursed his portion of the money that appellant removed from her 401K plan. Consistent with the agreement of counsel for both parties at oral argument before this court, the cash settlement should be determined by determining the difference in what the parties owe each other.

Respondent Owes Appellant Appellant Owes Respondent

$10,260 (⅜ of marital homestead equity) $2,599 (half of 401K)

$1,160 (mortgage)

$ 456 (utilities)

$1,000 (temporary order sanction)

TOTAL: $10,260 TOTAL: $5,215

Thus, respondent owes appellant $5,045 ($10,260 minus $5,215).

DECISION

The district court’s holding that respondent retained a nonmarital percentage in the home’s current equity is reversed. We remand for proper calculation of the cash settlement in accordance with this opinion.

Reversed and remanded.

       Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const, art. VI, § 10.

      . The parties have stipulated to the facts of this case.

      . $50,690 is 80% of $63,580.


author: R.A. RANDALL, Judge.

text:
    STATE of Minnesota, Respondent, v. Daniel Arthur STOSKOPF, Appellant.
    No. C4-01-1473.
    Court of Appeals of Minnesota.
    May 28, 2002.

      Mike Hatch, Attorney General, St. Paul, MN; and Michael D. Williams, Marshall County Attorney, Warren, MN, for respondent.
    David D. Dusek, Grand Forks, ND, for appellant.
    Considered and decided by LANSING, Presiding Judge, RANDALL, Judge, and STONEBURNER, Judge.
   OPINION

R.A. RANDALL, Judge.

Appellant challenges his conviction for driving in violation of the no-alcohol restriction on his driver’s license. Appellant argues that the results of a preliminary breath test should be suppressed because appellant was not given the implied-consent advisory before the test was administered. We affirm.

FACTS

On February 17, 2001, around 3:00 p.m., Sergeant Dean Smith of the Minnesota State Highway Patrol observed appellant Daniel Stoskopfs vehicle driving over the speed limit. Smith stopped Stoskopf a short distance later. Smith approached Stoskopfs car and smelled what he thought was alcohol. Smith then asked to see Stoskopfs license.

Smith ran a driver’s license check and discovered a “no-alcohol restriction” on Stoskopfs license. Smith also informed Stoskopf that he was going to administer a preliminary breath test (PBT). Smith administered the PBT without reading Stos-kopf an implied-consent advisory. This PBT did not produce an adequate sample so Smith administered a second PBT, which yielded a .043 reading. Smith then issued Stoskopf a citation for not wearing a seatbelt and for violating his no-alcohol restriction under Minn.Stat. § 171.09 (2000).

In July 2001, Stoskopf moved the district court to suppress the PBT results and dismiss the case because Smith did not read the implied-consent advisory to Stos-kopf before administering the test. Following the hearing, the district court denied Stoskopfs motion. The court relied on Minn.Stat. § 169A.41 (2000) and determined, for purposes of a B-card issue, that there is neither a statutory requirement to read the implied-consent advisory before requesting a PBT nor a requirement that an officer observe a driver before administering the PBT. Stoskopf waived his right to a jury trial and submitted the case to the district court pursuant to State v. Lothenbach, 296 N.W.2d 854, 858 (Minn. 1980), see Minn. R.Crim. P. 26.01, subd. 3. The district court convicted Stoskopf of violating his no-alcohol restriction on August 24, 2001. Following the conviction, the Commissioner of the Department of Public Safety revoked Stoskopfs B-card. Stoskopf now challenges the district court’s denial of his motion to suppress and dismiss.

ISSUE

Did the district court err in not excluding evidence of the preliminary breath test when appellant was not given an implied-consent advisory and not advised of his right to consult an attorney before being subjected to the test?

ANALYSIS

In reviewing pretrial orders on motions to suppress evidence an appellate court may independently examine the facts and determine de novo whether the district court’s determination was in error. State v. Hams, 590 N.W.2d 90, 98 (Minn. 1999).

Smith administered a preliminary breath test to Stoskopf. An officer may require a driver to provide a breath sample for a PBT when the officer has reason to believe the driver is operating a motor vehicle while impaired. Minn.Stat. § 169A.41, subd. 1 (2000). PBTs are preliminary in nature and are considered investigatory tools. Id., subd. 2 (2000). The PBT allows the officer to determine whether the driver should be arrested or whether additional testing is necessary. Id. The governing statute contains no provision requiring an officer to provide an implied-consent advisory before administering the PBT. Once a PBT is administered, however, additional tests may be required pursuant to Minn.Stat. § 169A.51 (2000). If the officer determines that additional tests are required, the officer must first administer an implied-consent advisory. Minn.Stat. § 169A.51, subd. 2.

A license restriction under Minn.Stat. § 171.09 (B card) is governed by the notice and hearing requirements under Minn. Stat. § 171.18, subds. 2, 3 (2000). Unless the Commissioner of Public Safety determines that a license must be suspended immediately to protect public safety, the department may not suspend a license until 14 days after the department mails the licensee written notice of its intent to suspend the license. Minn.Stat. § 171.18, subd. 2. The licensee may request a hearing in writing. Minn.Stat. § 171.18, subd. 3. PBT results may be used in prosecuting a driver for violating a restriction on his license. Minn.Stat. § 169A.41, subd. 2(6) (2000). Neither provision discusses whether an implied-consent advisory must precede the administration of a PBT for the purpose of enforcing Minn.Stat. § 171.09.

Stoskopf argues that the district court erred in not granting his motion to suppress his PBT results and dismiss the case. He claims that because he was neither issued an implied-consent advisory nor advised of his right to consult with counsel before the PBT was administered, he was denied an opportunity either to assert or to waive his right to counsel. Since he was not afforded such opportunity, he argues that the PBT was administered illegally, and the results should have been excluded as fruit of the poisonous tree.

Stoskopf contends that the decision to submit to chemical testing under the implied consent law is a “critical stage” in a DWI proceeding and thus the right to consult counsel attaches before deciding whether to consent to the test. Appellant correctly assesses the current state of Minnesota law, which provides a limited state constitutional right to consult with counsel before considering whether to take a test because the consequences of such a decision are severe. Friedman v. Comm’r of Pub. Safety, 473 N.W.2d 828, 835 (Minn. 1991). In Friedman, the supreme court determined that a right to counsel attached when a driver, stopped for a possible DWI violation, was asked to take a chemical test. Id. at 832. It was at that moment, when chemical testing was requested, that a “critical stage” arose. Id. The court reasoned that a critical stage includes pretrial procedures that would impair a defense on the merits if the accused is required to proceed without counsel. Id.

Stoskopf argues that when he was stopped and he turned over his license to Smith, he was at a “critical stage” because Smith then became aware of the no-alcohol restriction on his license. He argues that, because Smith smelled alcohol on his breath and knew that any amount of alcohol registered on the PBT would result in a violation of his no-alcohol restriction, at that moment Stoskopf became the object of individualized suspicion whereby some sort of warning, such as the implied-consent advisory, is required. Stoskopf asserts that Smith’s failure to provide this warning requires the PBT results be excluded.

As appellant correctly points out, his B card status is a status where the drinking alone triggers a criminal statute. It is unlawful to drive in violation of any restrictions imposed on a driver’s license by the commissioner. Minn.Stat. § 171.09 (2000). It is a misdemeanor for any person to willfully violate any of the provisions of chapter 171 unless the violation is declared by any law to be a felony or gross misdemeanor. Minn.Stat. § 171.241 (2000).

This court has held that

[r]ead together, sections 171.09 and 171.241 make it a misdemeanor for any person to operate a vehicle in any manner in violation of a restricted license.” State, City of Loretto v. Tofte, 563 N.W.2d 322, 324 (Minn.App.1997).

Additionally, the supreme court has explained that it is clear that it was the legislature’s intent to make it a misdemeanor for any person to operate a vehicle in any manner in violation of the restrictions imposed on a restricted license. State v. Moseng, 254 Minn. 263, 266, 95 N.W.2d 6,10 (1959).

This court has found that “B card” restrictions stating “any use of alcohol or drugs invalidates license” provide sufficient notice “as to what is prohibited and the consequences of violating the restrictions” and “are not void for uncertainty.” Tofbte, 563 N.W.2d at 325. The administrative regulations require that the “restriction must be placed on the person’s driver’s license and driving record.” Minn. R. 7503.1700, subp. 4 (1999). The commissioner has the authority to require total abstinence from alcohol as a continuing condition for retaining a driver’s license. Askildson v. Comm’r of Pub. Safety, 403 N.W.2d 674, 678 (Minn.App.1987), review denied (Minn. May 28, 1987). Thus, appellant argues the identical limited right to counsel should attach at the PBT stage as it does at the implied-consent stage when law enforcement’s goal is not intoxicated driving, but simply proving “you have consumed alcohol,” which is the violation regardless of whether it is driving related.

Statutes and case law discussing PBT’s are written with the assumption that, in the normal course of events, the PBT is a preliminary part of a DWI investigation. See e.g., Knapp v. Comm’r Pub. Safety, 610 N.W.2d 625 (Minn.2000) (stating PBT is investigatory tool to aid officers in determining if violation has occurred). Since the PBT is perceived as an investigatory tool, the right to counsel would not yet attach. See generally, Kirby v. Illinois, 406 U.S. 682, 689, 92 S.Ct. 1877, 1882, 32 L.Ed.2d 411 (1972) (holding the right to counsel attached only after formal judicial proceedings have begun). It is when the investigatory process focuses in on an individual’s potential violation that the statutory protection of the implied-consent rule attaches. At that moment, a driver has entered a critical stage and is entitled to consult with an attorney before agreeing to further chemical testing. Friedman, 473 N.W.2d at 832. There is no criminal penalty for refusing a PBT, as there is for refusing a chemical test. Thus, there is no statutory provision or caselaw providing a limited right to counsel before a driver takes or refuses a PBT, as there is before a driver takes or refuses a breath test. In the normal course of events, drunk driving is the “end game,” and the implied-consent procedure is merely a means of acquiring evidence of DWI. That is why Friedman and its progeny attached its holding to the implied-consent process. For example, in State v. Nielsen, this court held that when the implied-consent process was not used to obtain intoxication evidence the right to counsel did not attach until the commencement of formal judicial proceedings. State v. Nielsen, 530 N.W.2d 212, 215 (Minn.App.1995), review denied (Minn. June 14, 1995).

The legislature addressed the need for some protections when specifically delineating in Minn.Stat. § 169A.51 the requirement of an implied consent advisory. Such specificity suggests the legislature determined when, in traffic stops, a critical stage arises. The supreme court in Friedman could have, but did not, recognize a right to counsel attaching at the PBT stage rather than the implied-consent stage. See Friedman, 473 N.W.2d at 833. Since the legislature made such a provision in one section and not another and Friedman did not incorporate the PBT stage for its limited right to counsel, that extension rests for another day.

Stoskopf s argument is logical and raises the possibility of uncounseled PBTs unleashing potentially unfair results to drivers carrying B-cards. We understand Stoskopfs claim. He may have “fallen through the cracks” when he ended up in the situation where the PBT, administered without the benefit of counsel, was as detrimental to him as a failed BAC is to a driver. The serious consequences in Minnesota for a failed BAC helped lead to the Friedman limited right to counsel. However, the courts have yet to add to the Friedman right to counsel a similar right to a request by law enforcement for a PBT when the only issue is the consumption of alcohol, and not driving conduct. Stos-kopfs case presents unfortunate results under the statutory scheme of preliminary (no Friedman), then specific (Friedman kicks in), chemical testing of drivers for DWI.

Nothing in the record indicates that the district court misread or misapplied Minn. Stat. § 169A.41. Minnesota has yet to extend the limited right to counsel before chemical testing to the earlier stage, meaning administering a PBT, when the only issue is a B-card violation.

DECISION

The district court did not err when it denied appellant’s motions to exclude the results of his preliminary breath test and dismiss the case. No implied-consent advisory is required and the Friedman right to counsel does not attach when someone is offered a PBT test for the purpose of determining the presence of alcohol in that individual.

Affirmed.

      . A "B card,” is a license conditioned on abstention from alcohol or drugs, and any condition that is violated is ground for cancellation and denial of driving privileges.

      . By agreement of the defendant and the prosecuting attorney, a case may be submitted to and tried by the court based on stipulated facts * * ⅜. [I]f the defendant is found guilty based on the stipulated facts, the defendant may appeal from the judgment of conviction and raise issues on appeal the same as from any trial to the court.


author: FOLEY, Judge

text:
    STATE of Minnesota, Appellant, v. Brian Victor MYRLAND, Respondent, Mark Robert Norlander, Respondent.
    Nos. C8-01-2223, CX-01-2238.
    Court of Appeals of Minnesota.
    June 4, 2002.

      Mike Hatch, Attorney General, St. Paul, MN; and James C. Backstrom, Dakota County Attorney, Kathryn M. Keena, Lawrence F. Clark, Assistant Dakota County Attorneys, Hastings, MN, for appellant.
    Jeffrey Dean, Minneapolis, MN, for respondents.
    Considered and decided by HANSON, Presiding Judge, KLAPHAKE, Judge, and FOLEY, Judge.
   OPINION

FOLEY, Judge

In these consolidated appeals, the state challenges the dismissal of charges against respondents for possession of child pornography. The state contends that the district court erred in finding that the affirmative defense in Minn.Stat. § 617.247, subd. 8 (2000), unconstitutionally requires defendants to prove the age of the person in the pornographic work. Because we find the statute only imposes on the defendant the burden of production, we reverse and remand.

FACTS

On March 22, 2001, respondent Mark Robert Norlander was charged with possession of pornography involving minors under Minn.Stat. § 617.247, subd. 4 (2000). He moved to dismiss the charge on the constitutional grounds that (1) the affirmative defense in Minn.Stat. § 617.247, subd. 8 (2000), shifts the burden of proof by requiring that he prove the age of the persons in the pornographic work; (2) the statute contains no mens rea element; and (3) the statute is overbroad. Several months later, respondent Brian Victor Myrland was charged under the same statute in an unrelated incident. He moved to dismiss for the same reasons.

The district court granted both motions and dismissed the cases in separate orders, finding that the affirmative defense violates respondents’ due process rights by requiring them to prove an essential element of the crime, namely, the age of the persons in the pornographic work. The court denied respondents’ motions to dismiss on the other grounds. The state filed separate notices of appeal, respondents cross-appealed, and we consolidated the appeals.

ISSUE

Does the affirmative defense in Minn. Stat. § 617.247, subd. 8 (2000), unconstitutionally shift the burden of proof to the defendant?

ANALYSIS

The relevant statute prohibits knowingly possessing

a pornographic work or a computer disk or computer or other electronic, magnetic, or optical storage system or a storage system of any other type, containing a pornographic work.

Minn.Stat. § 617.247, subd. 4 (2000). “Pornographic work” is defined as:

(1) an original or reproduction of a picture, film, photograph, negative, slide, videotape, videodisc, or drawing of a sexual performance involving a minor; or
(2) any visual depiction, including any photograph, film, video, picture, drawing, negative, slide, or computer-generated image or picture, whether made or produced by electronic, mechanical, or other means that:
(i) uses a minor to depict actual or simulated sexual conduct;
(ii) has been created, adapted, or modified to appear that an identifiable minor is engaging in sexual conduct; or
(in) is advertised, promoted, presented, described, or distributed in such a manner that conveys the impression that the material is or contains a visual depiction of a minor engaging in sexual conduct.
For the purposes of this paragraph, an identifiable minor is a person who was a minor at the time the depiction was created or altered, whose image is used to create the visual depiction.

Minn.Stat. § 617.246, subd. 1(f) (2000); see Minn.Stat. § 617.247, subd. 2(a) (2000) (adopting the definition of “pornographic work” in section 617.246 for section 617.247). A “minor” is a person under the age of 18. Minn.Stat. § 617.246, subd. 1(b) (2000). Finally, the defense at issue provides:

It shall be an affirmative defense to a charge of violating this section that the pornographic work was produced using only persons who were 18 years or older.

Minn.Stat. § 617.247, subd. 8 (2000).

The state argues the statute is constitutional because it requires the state, not respondents, to prove that the person in the pornographic work is a minor. It contends that the affirmative defense only requires respondents to make a prima fa-cie showing that the age of the person is a disputed issue, at which point the burden shifts back to the state to disprove the defense. Respondents counter that the statute is unconstitutional on its face because it requires them to prove the person is older than 18.

Whether a statute is constitutional is a question of law, which we review de novo. State v. Grossman, 622 N.W.2d 394, 396 (Minn.App.2001). Due process requires that the state prove every element of a crime beyond a reasonable doubt. Patterson v. New York, 432 U.S. 197, 204, 97 S.Ct. 2319, 2324, 53 L.Ed.2d 281 (1977); State v. Auchampach, 540 N.W.2d 808, 816 (Minn.1995). It also prohibits the state from imposing the burden of persuasion on the defendant to disprove or negate an element of the crime. State v. Hage, 595 N.W.2d 200, 204 (Minn.1999). But once the state proves each element of the crime beyond a reasonable doubt, it may impose on the defendant the burden of proving by a preponderance of the evidence that his or her conduct should be excused by some mitigating circumstances or issues. Id. at 207 (allowing state to impose burden of persuasion on defendant to prove it was necessary for her to be in control of a vehicle while under the influence of alcohol).

However, if these mitigating circumstances or issues disprove or negate an element of the crime, then “the greatest burden a state may impose upon a defendant is that of shouldering the burden of production.” Id. at 205; see State v. Charlton, 338 N.W.2d 26, 30-31 (Minn. 1983) (defendant had only burden of production regarding claim of duress because otherwise he would be forced to disprove or negate his intent to commit robbery where intent was element of crime). A defendant meets this lesser burden by making “a prima facie showing that the proffered defense is an issue in the case,” at which point the burden of persuasion reverts to the state to prove beyond a reasonable doubt that the defense does not exist. Hage, 595 N.W.2d at 205. Therefore, due process is violated if (1) the proffered defense disproves or negates an element of the charged crime, and (2) the defendant has the burden of persuasion with respect to the defense.

It is the duty of courts to interpret statutes as the legislature intended. Minn.Stat. § 645.16 (2000) (instructing courts to interpret laws in accordance with legislative intent). To that end, we first look to the legislature’s guidance before employing other interpretative devices. Our state legislature has at times imposed the burden of persuasion on defendants when raising affirmative defenses. See Minn.Stat. §§ 609.344, subd. 1(b) (2000) (regarding age in criminal sexual conduct); 609.205(4) (regarding provocation of animal in second-degree manslaughter); 169A.46 (regarding drinking and driving). But at other times the legislature has provided for affirmative defenses without addressing whether the burden of persuasion or production applies. See Minn.Stat. §§ 609.26, subd. 2 (2000) (regarding deprivation of parental and custodial rights); 169.09 (regarding leaving the scene of an accident).

This inconsistent treatment also exists in our appellate court decisions, which at times impose the burden of persuasion for affirmative defenses and other times impose only the burden of production. See Auchampach, 540 N.W.2d at 817 n. 7 (noting inconsistent treatment); 9 Henry W. McCarr & Jack S. Nordby, Minnesota Practice § 7.1 (2001) (same). Without resolving the dilemma, the Minnesota Supreme Court instructed those encountering the inconsistency to look beyond the classifications and, in the words of Justice Oliver Wendell Holmes, “think things, not words.” Auchampach, 540 N.W.2d at 817 n. 7 (citing Holmes-Laski Letters: The Correspondence of Mr. Justice Holmes and Harold J. Laski 1916-1935 738 (Mark DeWolfe Howe ed., 1953)). Thus, the proper approach is to disregard labels such as “affirmative defense” and instead focus on what the defense substantively requires. See Auchampach, 540 N.W.2d at 817 n. 7.

Respondents’ contention that the statute, on its face, imposes the burden of persuasion is without merit. To the contrary, nothing in this statute indicates what burden the legislature intended to place on a defendant raising the defense. Therefore, we are left to our rules of interpretation.

[W]hen confronted with a statute susceptible to multiple interpretations, we adopt the one that stands in harmony with the Constitution, even if the alternative construction might otherwise seem a more accurate reflection of legislative intent.

State v. Carroll, 639 N.W.2d 623, 627 (Minn.App.2002) (quotation omitted); see Minn.Stat. § 645.17(3) (2000) (“The legislature does not intend to violate the constitution of the United States or of this state”). In this case, the possible interpretations are either that it imposes a burden of persuasion with respect to an element of the crime, which is unconstitutional, or it imposes a burden of production, which is constitutional. Given this choice, we must adopt the constitutional interpretation and find that the defense imposes merely the lesser burden of production.

Thus, the defense does not violate respondents’ due process rights because it does not impose upon them a burden of persuasion regarding an element of the crime. Rather, it merely requires respondents to make a prima facie showing that the age of the persons involved is a disputed issue. As such, the state is never freed of its burden to prove the age of the persons involved and the charges will be dismissed if it fails to meet that burden.

DECISION

Because the affirmative defense in Minn. Stat. § 617.247, subd. 8 (2000), imposes on defendants only the burden of production regarding the age of the persons in the pornographic work, the district court erred in finding the statute unconstitutional and in dismissing the charges against respondents.

Reversed and remanded.

       Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const, art. VI, § 10.

      . We do not address the issues raised by respondents because they failed to brief them. See Rainer v. State, 566 N.W.2d 692, 694 n. 1 (Minn. 1997) (holding that a party waives the issues it appeals if it fails to brief them).

      . Respondents note the United States Supreme Court's concern over a similar affirmative defense provision in the federal child pornography law. Ashcroft v. Free Speech Coalition, U.S.-,-, 122 S.Ct. 1389, 1404, L.Ed.2d-,-(2002), aff'g 198 F.3d 1083 (9th Cir.1999) (“The Government raises serious constitutional difficulties by seeking to impose on the defendant the burden of proving his speech is not unlawful.”). This concern is met here because we find the affirmative defense in Minnesota's law does not impose the burden of proof, but merely the burden of production.