We Win! MN Coin Bullion Dealer law declared unconstitutional by 8th Circuit court of appeals

Tomthecoinguy

I got great news today, the 8th Circuit court of appeals found in my favor in my lawsuit against the State of Minnesota. They ruled that the MN Coin Bullion law was unconstitutional because it regulates transactions that occur outside of the state.

Thank you all of the people on this board that have showed me support throughout this process.

The law now goes back to the district court, to determine if the unconstitutional provisions can be severed from the law, or if the whole law has to be struck down.

Here is summary the 8th Circuit put on their website.

212936P.pdf 08/31/2022 Thomas Styczinski v. Grace Arnold
U.S. Court of Appeals Case No: 21-2936
U.S. District Court for the District of Minnesota
[PUBLISHED] [Grasz, Author with Shepherd and Kobes, Circuit Judges]
Civil case - Civil rights. In-state and out-of-state precious metal
traders challenge the constitutionality of Minnesota Statute Chapters 80G,
which regulate bullion transactions, on the ground the Chapter violates
the dormant Commerce Clause. Held, Chapter 80G, even as amended, is
unconstitutional; the recent amendments did not materially affect the
conduct about which the traders complain and did not deprive the court of
jurisdiction over the appeal; the registry and surety bond provisions of
Chapter 80G violate the dormant Commerce Clause by imposing an excessive
burden on interstate commerce and by having the practical effect of
extraterritorial control; the district court's order partially granting
the defendant's motion to dismiss and partially denying the traders'
motion for summary judgment is reversed; on remand the court leaves it to
the district court to determine in the first instance whether the
extraterritorial provisions of Chapter 80G, as amended, are severable.

Edited to add, here is some more context on the law that I am talking about.

https://forums.collectors.com/discussion/921863/new-draconian-anti-collector-law-takes-effect-in-minnesota

Here is the thread when I originally filed my lawsuit.

https://forums.collectors.com/discussion/1044468/enough-is-enough-lawsuit-filed-coinweek-podcast-link-included

Here is my thread when I appealed to the 8th circuit.

https://forums.collectors.com/discussion/1074147/important-coin-case-heard-before-the-8th-circuit-court-of-appeals-on-4-13-2022

keyman64

HUGE! Big congrats!

TomB

Fantastic news! I know you have put a lot of time, effort and resources into this fight and this is a great result.

giantsfan20

So in plain English what does that mean to the public?

Martin

Congratulations tommy. Great effort and you should be proud of yourself

Thanks
Martin

Barndog

@giantsfan20 said:
So in plain English what does that mean to the public?

I read it as "taxation is theft"

FlyingAl

Congratulations!

davewesen

Good job.

Tomthecoinguy

@giantsfan20 said:
So in plain English what does that mean to the public?

Sure I will try. The appeals court ruled that the Minnesota law is unconstitutional because it regulates coin transactions that happened totally outside of the state of Minnesota. They directed the district court to determine if the whole law needs to be struck down, or if they should just strike down the offending parts.

OwenSeymour

Congratulations, well done

Exbrit

@Tomthecoinguy said:

@giantsfan20 said:
So in plain English what does that mean to the public?

Sure I will try. The appeals court ruled that the Minnesota law is unconstitutional because it regulates coin transactions that happened totally outside of the state of Minnesota. They directed the district court to determine if the whole law needs to be struck down, or if they should just strike down the offending parts.

Hopefully the whole stinkin law will be struck down. Great job.

jmlanzaf

@Tomthecoinguy said:

@giantsfan20 said:
So in plain English what does that mean to the public?

Sure I will try. The appeals court ruled that the Minnesota law is unconstitutional because it regulates coin transactions that happened totally outside of the state of Minnesota. They directed the district court to determine if the whole law needs to be struck down, or if they should just strike down the offending parts.

That's interesting. I've long felt that the commerce clause made taxation of interstate transactions questionable. However. If i may follow up: what do you mean by "totally outside" Minnesota? That would not relate to the Wayfair ruling in any way then?

MFeld

Congratulations!

Namvet69

Very interesting, congrats. Do you get a refund? Peace Roy

cheezhed

How were outside the state transactions being regulated?

logger7

Thanks for those who invested so much in this fight against an unjust sales tax. Now maybe other states will be required to pull their sales taxes on bullion.

PerryHall

Great news! Glad to hear unconstitutional government overreach is finally being shut down.

ricko

Outstanding news!!! Congratulations on the win. You worked hard on this issue. Now we shall see if it may apply to other state tax practices. Cheers, RickO

privatecoin

Congrats!

Tomthecoinguy

@jmlanzaf said:

@Tomthecoinguy said:

@giantsfan20 said:
So in plain English what does that mean to the public?

Sure I will try. The appeals court ruled that the Minnesota law is unconstitutional because it regulates coin transactions that happened totally outside of the state of Minnesota. They directed the district court to determine if the whole law needs to be struck down, or if they should just strike down the offending parts.

That's interesting. I've long felt that the commerce clause made taxation of interstate transactions questionable. However. If i may follow up: what do you mean by "totally outside" Minnesota? That would not relate to the Wayfair ruling in any way then?

This case was not about sales tax on bullion, the Minnesota Law was far worse than that. It would require dealers to register, and put onerous provisions on them. Here is a link to the original thread about the law.

https://forums.collectors.com/discussion/921863/new-draconian-anti-collector-law-takes-effect-in-minnesota

As Minnesota started enforcing the law, it became clear they were using it to extort money from out of state dealers. It works like this. The Minnesota department of commerce would accuse an out of state dealer of violating the MN law. They would threaten to sue the out of state dealer, but they would agree to drop the suit if the dealer would agree to pay a fine. It was typically about $10,000, but sometimes more for bigger dealers. Even if the state did not have a case, the outstate dealer would typically pay the fine because the fine would be less than the legal cost of fighting the charge.

The extraterritorial principle that the MN law was struck down under says that one state cannot control the transactions that happen totally outside of their boarders. This is what the MN law was doing.

That extraterritorial principle would not prevent a state from collecting sales tax if one side of the transaction occured in the state. i.e. someone bought something on-line while they were in their home state.

fathom

Thanks for the update, very good news.

jesbroken

Let me be clear about the outcome. This affects coin AND bullion sales or just bullion?
Jim

Tomthecoinguy

@Namvet69 said:
Very interesting, congrats. Do you get a refund? Peace Roy

All legal fees will be paid by the state.

Tomthecoinguy

@cheezhed said:
How were outside the state transactions being regulated?

If a Minnesota dealer went to another state and bought a coin, the Minnesota law would require the out of state dealer to register.

If a Minnesota dealer went out of state and transact business, they would need to register even if they never did a single transaction in the state.

Along with registering (which could be denied) means they would also have to follow the onerous receipt requirements, and have a surety bond. They could be put in jail if they sold a coin without registering once the $25,000 threshold was reached but it would be much more likely that they would just fine them $10,000 per transaction.

golden

Huge win!

MasonG

@Tomthecoinguy said:

@Namvet69 said:
Very interesting, congrats. Do you get a refund? Peace Roy

All legal fees will be paid by the state.

So- by people who live in Minnesota, then.

thefinn

Finally. The do-gooders went too far. Selling bullion to Minnesota residents, even when they called us, was a joke.

Oldhoopster

@MasonG said:

@Tomthecoinguy said:

@Namvet69 said:
Very interesting, congrats. Do you get a refund? Peace Roy

All legal fees will be paid by the state.

So- by people who live in Minnesota, then.

Due to the irresponsibility and poor judgement of their elected officials.

MasonG

@Oldhoopster said:

@MasonG said:

@Tomthecoinguy said:

@Namvet69 said:
Very interesting, congrats. Do you get a refund? Peace Roy

All legal fees will be paid by the state.

So- by people who live in Minnesota, then.

Due to the irresponsibility and poor judgement of their elected officials.

There's a solution for that, but it's up to the people to make the proper arrangements.

Tomthecoinguy

@MasonG said:

@Tomthecoinguy said:

@Namvet69 said:
Very interesting, congrats. Do you get a refund? Peace Roy

All legal fees will be paid by the state.

So- by people who live in Minnesota, then.

Yep, by the people that voted in the legislators that violated our constitutional rights.

Tomthecoinguy

Here is a good article on the ruling.

https://www.courthousenews.com/eighth-circuit-pans-minnesota-gold-rules/

hchcoin

Awesome news. Well done!

erscolo

Good riddance to a piece of garbage, an illegal "law." Dismantling the overreach of big government must be the primary focus of each citizen. Thank you most kindly to your service in this regard. Death to Tyrants.

TwoSides2aCoin

There were several dealers praising the law , however, I have not been back to a coin show in that state since that draconian rule was enacted.

Tomthecoinguy

This good article on the win, was published in Minnesota Lawyer magazine today.

https://minnlawyer.com/2022/09/12/bullion-statute-overturned/

rip_f

--- from the good article you referenced:
“This decision’s going to open up the market in Minnesota so that out-of-state dealers can operate in the state freely.”

So it will now be OK once again for fly-by-night dealers to set up shop in a motel room in your hometown and buy up as much of the junk silver and gold jewelry (and coins) as they can before moving on?
Hope that part of the law was not reversed.

derryb

congrats Tommy and thanks for all the effort.

Like I said in all the relevant threads, it is a matter of jurisdiction. The long arm of state law stops at the state border.

MrEureka

Fantastic news!

Unknown

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Tomthecoinguy

@rip_f said:
--- from the good article you referenced:
“This decision’s going to open up the market in Minnesota so that out-of-state dealers can operate in the state freely.”

So it will now be OK once again for fly-by-night dealers to set up shop in a motel room in your hometown and buy up as much of the junk silver and gold jewelry (and coins) as they can before moving on?
Hope that part of the law was not reversed.

The law didn't do anything to prevent that. They would fly under the radar, and be out of town before the 45 day grace period expired.

The law was mainly used to get the little guy out of business, so the big players (who could afford to hire dedicated compliance people) could scoop up the business.

The other use of the law was a tool for Minnesota to extort out of state coin dealers. Even if they had no case, they would accuse a dealer of violating the law. Then they told the dealer they would settle the case if they pay $10,000 and agree not to sell to Minnesota customers.

JWP