Farmer Runs for School Board That Sued Him for $2.9 Million

A Gaylord chicken farmer plans to turn his campaign for school board into a teachable moment for the Sibley East Public Schools officials who asked a court to award $2.9 million in damages against him, as a result of his fighting a controversial $43 million bond referendum.

After a Sibley County District Court denied the multi-million dollar claim in January, Nathan Kranz could have retreated to his chicken coop. Instead, he announced a bid to run in an April special election to serve on the school board that he says threatened his very livelihood.

“I’m convicted in what I’m doing,” said Kranz, an organic egg farmer. “They have to change, not the people. I look at myself as representing the taxpayers and the people.”

The race already appears to be shaping up as a different sort of bond referendum—the bond between the community and school leadership.

“I think if he gets elected, he’s going to be the worst nightmare that school board ever saw,” said Sandi Rezner, a supporter from Arlington. “He’s going to hold their toes to the fire.”

The fire started when Kranz, backed by a group of farmers concerned over property tax hikes, challenged a November 2014 bond referendum that passed by 96 votes.

A district court agreed that Sibley East officials had failed to comply with some election notification procedures, but declined to overturn the outcome.

After Kranz unsuccessfully appealed all the way to the Minnesota Supreme Court, the school district asserted a claim against him for nearly $3 million in increased interest rates that occurred during the legal challenge.

“Mr. Kranz had the opportunity to limit the potential losses, but steadfastly did everything the he could to cause delay, which resulted in substantially increased cost to School District taxpayers,” stated a September 2015 Sibley East news release announcing the lawsuit.

“For Nathan personally, this was devastating,” said Erick Kaardal, a Twin Cities attorney representing Kranz. “They went after his assets, basically his family and farm, and put him under incredible emotional distress.”

Sibley East Public Schools superintendent Jim Amsden did not respond to an inquiry. But the district’s lawyer maintains school leaders acted to protect taxpayers, not to single out the organic farmer turned education activist.

“The sole purpose for the school district bringing the motions was to obtain relief for school district taxpayers and not for any nefarious reason as alleged by contestant,” Sibley East Schools’ attorney Stephen Knutson said in a statement.

Yet the litigation raised a red flag with the court over the potentially chilling effect on citizen involvement in the political process, particularly given the government’s deep pockets.

“The Court reiterates its concern that if contestants faced potential liability for all possible damages associated with a contest, they may be less likely to assert what may be a valid election contest for fear of the financial consequences of a loss,” wrote District Court Judge Kevin Eide in denying Sibley East’s case.

The ruling means citizens like Nathan Kranz can be held liable for routine costs associated with challenges, but not damages. Instead of $2.9 million for increased municipal bond costs, Kranz was assessed $806.50 for filing fees and similar expenses.

“I think it would have sent a message throughout the whole state of Minnesota, if they had prevailed,” Kranz said. “It was to shut people up in the future, so they never questioned the government or school districts. They want what they want and the taxpayers are just supposed to pay their bill and shut up, don’t ever question them.”

Still, school representatives warn the decision may lead to more costly litigation.

“It could have an unintended result of encouraging contestants to bring unwarranted election contests for the sole purpose of delay and ultimately causing additional costs to taxpayers,” Knutson said.

Many residents may not agree with Kranz on the referendum that so divided their community, but he maintains the district’s lawsuit rubs voters the wrong way.

“They sue me and try to get my farm and they don’t have to apologize to anybody? I think this isn’t going to go over with the community, especially now,” Kranz said.