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HF 2653

Fees and expenses awarded to prevailing party if municipality's position was not substantially justified.

2025-2026 Regular Session Introduced by Steve Jacob

Minnesota bill allowing courts to award attorney fees to parties who prevail against municipalities that lacked substantial justification for their legal positions.

Introduction and first reading, referred to Judiciary Finance and Civil Law
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Bill Summary · HF 2653

Legislative bill overview

HF 2653 allows courts to award fees and expenses to the prevailing party in lawsuits against municipalities when the municipality's legal position was not substantially justified. This shifts the default cost allocation in municipal litigation from each party bearing its own costs to potential cost-shifting in certain cases.

Why is this important

Municipal litigation is common—involving zoning disputes, permit denials, contract disagreements, and other regulatory conflicts. Currently, Minnesota typically follows the "American Rule" where each party pays its own attorney fees regardless of outcome. This bill would change that calculus for municipal defendants, potentially making it more expensive for municipalities to pursue certain legal positions and affecting how they defend contested decisions.

Potential points of contention

  • Municipal budgets and risk: Smaller municipalities may become more cautious about defending positions, potentially limiting legitimate regulatory authority out of fear of fee liability
  • Definition concerns: "Not substantially justified" is a subjective standard that could generate litigation about what qualifies, creating uncertainty
  • Access to justice: Individuals challenging municipalities might find it easier to pursue claims if municipalities fear fee exposure, but municipalities might also settle weaker claims to avoid fees rather than testing legal questions
  • Reciprocal fairness: The bill appears one-directional (against municipalities only), raising questions about whether plaintiffs should face similar exposure

Compiled from official sources — confirm details with the bill’s official record.

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