2.4. ERMUSR 05-10-2016 - Laserfiche WebLink

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3. Coverage limits Reimer v.City of A 2005 federal court decision,Reimer v. City of Crookston, created a concern Crookston,421 F.3d 673, (8th Circ.,Aug.30,2005). that liability arising from a joint powers entity's activities could exceed the then statutory tort cap of$1 million. In that case, the Court said a claimant could make a claim against each political subdivision that was a member of the joint powers entity, for damages caused by the joint powers entity's activities. The Court also ruled that a claimant could"stack"the statutory liability limits of each member, effectively multiplying the statutory tort caps by the number of members in the joint powers entity. In response to Reimer, the League of Minnesota Cities, in cooperation with other local government organizations, was successful in getting the state legislature to address the concerns caused by this decision. The state Minn.Stat.§471.59. legislature amended the joint powers law by adding two provisions. • The amendment provides that a governmental unit is liable for the acts or omissions of another governmental unit in a joint venture or joint enterprise only if it has so agreed in writing. • The amendment provides that governmental units operating together under the Joint Powers Act, and any joint boards created thereunder, are a single governmental unit. The total liability for the governmental units and any joint board may not exceed the limits on liability for a single governmental unit. The joint powers amendment became effective on May 25, 2006. The risk of liability for the activities of a joint powers entity is now no greater than the risk of liability for a single political subdivision acting alone. A city,however, will still be separately liable for its own independent acts or omissions that are not related to the actions of the joint powers entity. In addition to these provisions,part of the legislation that addressed the"limit stacking"problem like that exhibited in Reimer was to amend the municipal Minn.Stat.§466.04. tort law to increase the tort caps, which today stands at$500,000 per claimant and$1.5 million per occurrence. It is important to keep in mind that there is still a risk of liability above the tort caps because some types of claims are not governed by the statutory liability limits, such as a federal civil rights claim. For this reason, LMCIT's liability See Section ILD,Coverage coverage provides a higher limit of$2 million per occurrence for both a joint limits and Section II.D.3, powers entity and an individual city. There could still be the risk of liability Purchasing higher liability above this limit, which is why it's important for one city or a number of cities limits. cooperating together as a joint powers entity to consider carrying the LMCIT excess liability coverage. 77