ELR Citation: 50 ELR 20071
No(s). 18-2559 (8th Cir. Mar 25, 2020)

The Eighth Circuit upheld the dismissal of a constitutional challenge to Minnesota's right of first refusal (ROFR) law. An electric transmission company argued the law, which granted incumbent transmission owners a ROFR to construct, own, and maintain transmission lines that connect to their existing facilities, violated the dormant Commerce Clause by discriminating against or placing an undue burden on interstate commerce. The district court found that the law applied equally to all incumbent electric transmission owners and thus did not discriminate in favor of in-state owners or against out-of-state owners. It further found that Minnesota's interest in regulating its local electricity market outweighed any incidental effects on interstate commerce, and thus dismissed the suit. On appeal, the court found that Minnesota's decision to allow entities other than utilities, such as independent transmission companies, to qualify as incumbents did not show an intent to favor in-state interests, and thus found no discriminatory effect. It further found no evidence that the burden imposed by the law was clearly excessive in relation to Minnesota's legitimate state interests in regulating its electric industry and maintaining the status quo. The appellate court therefore affirmed dismissal.