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Appeal From United States District Court
For the District of Minnesota
Civil No. 05-CV-1348 (JNE/SRN)
STATEMENT OF ISSUES PRESENTED FOR APPEAL
Did the District Court err in granting summary judgment to Defendants in light of evidence creating genuine issues of material fact for trial?
Fair Housing Act / Disparate Treatment / Disparate Impact
Constitutional Rights Claims / Equal Protection / Substantive Due Process
Void for Vagueness
State Law Claims
Did the District Court err in denying Plaintiffs’ original and renewed motions for sanctions?
Did the District Court err in denying Plaintiffs’ motion to compel?
MOST APPOSITE CASES
Darst-Webbe Tenant Ass’n Bd. v. St. Louis Hous. Auth., 417 F.3d 898, 902 (8th Cir. 2005);
See Griffith v. City of Des Moines, 387 F.3d 733, 736 (8th Cir. 2004);
2922 Sherman Ave. Tenants’ Ass’n v. District of Columbia, 444 F.3d 673 (D.C. Cir. 2006);
E*Trade Sec. LLC v. Deutsche Bank AG, 230 F.R.D. 582, 587 (D.Minn 2005).
REQUEST FOR ORAL ARGUMENT
Appellants request oral argument because they appeal from the District Court's grant of summary judgment. A de novo review of a grant of summary judgment requires detailed analysis of the facts of the case. Oral argument is critical to a full understanding of the fact issues presented. Appellants request an oral argument of thirty minutes.
STATEMENT OF THE CASE
Plaintiffs are or were property owners in the rental business with rental properties located within the City of St. Paul. Plaintiffs’ tenants were almost exclusively African-American, Hispanics, Asians, mixed race couples, individuals with various disabilities, individuals receiving state and federal financial assistance,
and families with children, who were and are individuals protected under anti-discrimination laws, hereinafter defined as “protected class.” Plaintiffs provided housing primarily to low-income, “protected class” tenants in the City of St. Paul and the majority of the time under the Federal Section 8 funded program. Plaintiffs owned and managed older rental properties located in the inner-city neighborhoods where older housing stock was common, where poverty was persistent, and where people of color had a critical need for safe and decent affordable housing.
Commencing in the Fall of 2002, Defendants, all with the approval and participation of the City Council, intentionally and maliciously commenced and continued an illegal policy, custom and practice of discriminatory and predatory code enforcement that aggressively targeted Plaintiffs and other St. Paul landlords, who were lawfully renting to, encouraging, and associating with, individuals with protected rights to housing under Title VIII, Federal Fair Housing Act and Amendments living within the City of St. Paul. This discriminatory and illegal policy, custom and practice had a discriminatory impact on the protected class, and the illegal policy, custom and practice continued at all times thereafter and continues presently in the City of St. Paul. This intentional, malicious and illegal conduct directly caused Plaintiffs and other landlords to be damaged in their property or business and caused injury to tenants.
As a direct result of the individual Defendants’ wrongful conduct and malicious discrimination, illegal code enforcement activities, and pattern of racketeering activity, Plaintiffs and others were forced to incur significant expenses that were unnecessary and which placed a heavy financial burden on said landlords and forced them to close their rental units, and sell their rental properties, thereby decreasing the available rental units for “protected class” members in the City. Further, Plaintiffs suffered from ruined reputations in the rental business community and great emotional distress in their family and social relationships.
Plaintiffs brought claims against Defendant City officials and code enforcement employees, in their individual capacities, under the RICO Act, namely, 18 U.S.C. Sections 1962 (c) (conducting an enterprise through a pattern of racketeering activity) and (d) (conspiring to violate subsection (c) of Section 1962); against Defendants under the Fair Housing Act and amendments, 42 U.S.C. Sections 3601, et seq.; against Defendants under 42 U.S.C. Sections 1981, 1982, 1985 and 1983; and against Defendants for various state based claims including abuse of process, interference with contract, and inference with business expectancy.
The City brought a motion for summary judgment, and the District Court granted the City’s motion.
FACTS BEFORE THE DISTRICT COURT
INTRODUCTION OF THE
DISCRIMINATORY ENVIRONMENT AND ATTITUDE
OF ST. PAUL HOUSING CODE ENFORCEMENT
“The nature of enforcement, especially at the local level, is that it often involves a significant amount of political pressure to achieve certain outcomes. The Ad Hoc Committee identified that it is absolutely essential for the code enforcement function to be guided by a classified manager so that he or she could have the civil service protection to withstand the pressure to bend the rules to achieve a particular end that is inconsistent with the code and/or past practices.” (emphasis added) ADD. 84.
On January 6, 2007, St. Paul’s new director of Neighborhood Housing and Property Improvement (“NHPI”), Bob Kessler, made the above statement about “bending the rules to achieve a particular end/certain outcomes” in response to a committee that discussed the history of the City's management of the Code Enforcement function and noted that “the function has not had a classified manager with subject matter expertise for many years.” Id.
Prior to Mr. Kessler’s directorship, NHPI was directed by Mr. Andy Dawkins. Mr. Dawkins was the Director of NHPI during the time period in which this litigation is based, 2002-2005. The following are examples of Mr. Dawkins’ attitude toward code enforcement and the discriminatory environment he created while the director of NHPI. Mr. Dawkins’ goal was to eliminate rental properties and get rid of the “bottom tier of tenants” and the “down trodden” through the City’s 1) aggressive code
enforcement, 2) City initiated lawsuits, 3) a force ownership change strategy, and 4) eviction strategy.
Mr. Dawkins testified in his deposition as follows:
As to his attitude toward rental property:
Q: So is it better for neighborhoods to have less rental properties?
A: I will give you your answer. I think that it’s better to have a neighborhood that has more owner occupied housing in it than has rental property in it for the sake of the neighborhood (emphasis added).
ADD. 85, p. 638, lines 18-22.
As to the City’s force ownership change and eviction strategies:
Q: Back to your notes, I think we can start in the top right corner.
A: And then cervantes (sic)[City Attorney] & Mott [District Court Judge], get those meetings going, have an aggressive housing court, lawsuit city initiate city Tenant Remedy actions strategy, the force ownership change strategy, the eviction strategy (emphasis added).
ADD. 86, p. 558, lines 7-8, p. 560, lines 5-9.
As to aggressive code enforcement and its affect on affordable housing:
Q: Was aggressive code enforcement ever a consideration for you or an issue brought up during your directorship?
A: Aggressive code enforcement was the key from the first day that we needed to have a more aggressive consistent stepped-up code enforcement department. That's what everybody told me. That's what was in the city's chronic problem property report. They said, that's your mission, Dawkins, go do it (emphasis added).
Q: Was it ever brought up, either by you or within your considerations as a director, that at some point it may have been eliminating affordable housing?
A: I told you I read the story where Baltimore went over the tipping point. So I told the Sparrow [SPARL] group and some group of realtors and the chamber of commerce and whoever else I was talking to, listen, I need you to help me by
eyes and ears and let me know as soon as you think we have stepped up our aggressive, consistent code enforcement to the point that we are forcing abandonment of properties in the city. I want to know about it. (emphasis added).
ADD. 87, p. 566, lines 23-25, p. 567, lines 1-21.
As to complaints for applying too much pressure to homeowners:
Q: Have you talked with anyone about Steve Magner, applied pressure to homeowners?
A: Steve Magner and every inspector in my department applied pressure to homeowners.
Q: Have you ever had a complaint about Steve Magner applying too much pressure?
A: I had complaints about every inspector in my department applying too much pressure (emphasis added).
ADD. 88, p. 575, lines 23-25, p. 576, lines 1-5.
As to political pressure from city council members:
Q: Did she [Kathy Lantry] tell you anything specific she wanted you to do? Did she have any ideas on how to do code enforcement?
A: Yeah, do code enforcement to the max, do aggressive, consistent stepped-up code enforcement, don't cut down and shorten the time lines for compliance, and a lot of others (emphasis added).
Q: You said Benehoff was worst. Why was he worse than Lantry?
A: He never let up. He or his aid were on the phone with me every day saying, you're not doing enough (emphasis added).
ADD. 89, p. 591, lines 5-11, p. 592, lines 14-18.
Mr. Dawkins documented his approach in a flow chart he developed related to complaints and so called “problem properties.” Dawkins continued the City’s illegal and discriminatory elimination of low income rental properties by promoting “targeting of teetering neighborhoods or redeveloping areas,” “force sales,” “or
eviction” (top right of chart), and “Goal: force sale to responsible owner” (bottom right of chart)(emphasis added). ADD. 90.
Not only did Dawkins have meetings with Chief Judge Mott and City Attorney Cervantes to get “buy in” to his aggressive, force ownership change and eviction strategies, Dawkins goals for 2004 included getting “buy-in” from the Police Department, City Attorney, and Courts. ADD. 91.
In a police training bulletin about “How to Work with the Code Enforcement Problem Property Unit,” co-writers Andy Dawkins and Assistant Police Chief T. Reding discuss “how to eliminate nuisance properties” and use the following language:
THIS INFORMATION IS ESPECIALLY IMPORTANT IF YOU GET INSIDE THE PREMISES because this will allow Code Enforcement to get an administration search warrant that could lead to condemnation of the property. eviction of the occupants and boarding-up the property. ADD. 92-93.
The police training bulletin further emphasizes that “A single nuisance incident, either a public nuisance incident or criminal nuisance incident, is enough to revoke a landlord's rental registration certificate; enough to start an eviction; enough to trigger a §45.04 letter [to] cease and desist or face criminal charges (emphasis added). Id.
Mr. Dawkins sent an email with respect to an apartment in which he referred to the apartment and the people as a “mecca for lots of the down-trodden:” ADD. 94.
Bill Cullen, former president of St. Paul Association of Responsible Landlords (SPARL) testified that Dawkins suggested to landlords that maybe the solution for the City was to try and increase the quality of properties to the point that the lower tier of less qualified tenants would not have places to rent. Cullen testified in his deposition as follows:
A: There were two comments that I recall, one from Leslie and one from Andy. Andy asked me, how would we feel if all those tenants that are at the bottom of the box were no longer in St. Paul (emphasis added).
Q: He asked that question of the group?
Q: Was there any responses to that?
A: I think we were all dumbfounded. I think the question was how are we going to do that. He talked in general terms about improving the city -- now I'm nervous about trying to quote him. I remember him talking about trying to -- the word I would use is gentrify the city. That's what I remember (emphasis added).
A: He did not use that word. I'm translating it. That's how I remember it. Let's gentrify the city to the point that none of these individuals with historical behavioral issues would be in the city at all (emphasis added).
Q: So was it your understanding what he was suggesting is that try to get rid of the tenants that are at the bottom of the box?
A: Very clear, yes. He was very clear about that (emphasis added).
ADD. 95, p. 113, lines 1-25.
Q: Did Mr. Dawkins ever say that maybe the solution for the city, including the private landlords, was to try to increase the quality of properties to such a point that this lower group of less qualified tenants would not have a place to rent?
A: I believe that's what he was implying all along when he asked the question of; how would it be if we just didn't have to deal with the tenants that were at the bottom of this market (emphasis added).
Q: I know that. But was he tying that into the system that he had to have a
higher code enforcement standard so that the properties would be at a higher quality level, therefore, these individuals would not have a place to rent, either because of affordability or too high of cost of the properties, that kind of thing?
A: I believe that's exactly what he said (emphasis added).
Q: Was that to you concerning that a city official would be voicing that type of a policy or advocating that kind of a policy?
A: I remember being shocked by Andy's comments, shocked or surprised. I don't know if concern came to mind as much as, wow, that's surprising (emphasis added).
ADD. 96, p. 202, lines 17-25, p. 203, lines 1-16.
Sara Anderson, a housing advocate from Project Hope recalls City Official Dawkins telling her that City officials and employees “don't want low-income people renting in the City”. Anderson testified in her deposition as follows:
Q: Again I want to make sure that we've got everything that you know here today. You indicated in your affidavit that City officials and employees have told you that they don't want low-income people renting in the City. Do you remember who would have told you that at any time (emphasis added)?
A: Andy Dawkins (emphasis added).
Q: Okay. And you mentioned here this morning that you recall him saying that in the initial meeting you had with him, correct?
ADD. 97-98, p. 76, lines 20-25, p. 77, lines 1-6.
The City and Mr. Dawkins also had financial incentive to implement its discriminatory environment and attitude in code enforcement – the goal was to bring in $500,000.00 in inspection fees, which was “theirs to spend” for “a lot of overtime” and new hires, if the code enforcement officers write-up every property the way the Mayor [Randy Kelly] told Harold [Robinson] and Mr. Dawkins. APP. 1.
Mr. Kessler’s statement regarding “the pressure to bend the rules to achieve a particular end that is inconsistent with the code and/or past practices” is exactly what Mr. Dawkins’ achieved in eliminating Plaintiffs’ rental properties and their “bottom tier of tenants” and the “down trodden.” Mr. Dawkins used the City’s discriminatory attitude and environment of aggressive code enforcement, illegal condemnations and code compliance certifications, City initiated lawsuits, a force ownership change strategy, and eviction strategy, even though he knew that his custom and practice could force abandonment of properties in the City of St. Paul and eliminate affordable housing, as it did in the Baltimore study he discussed.
CODE INSPECTOR REACTION TO THE CITY’S DISCRIMINATORY ENVIRONMENT AND ATTITUDE IN HOUSING CODE ENFORCEMENT
During the course of discovery, housing code inspectors were asked about the City and Mr. Dawkins’ discriminatory attitude and environment of aggressive code enforcement.
Code enforcement inspector John Reardon testified in his deposition as follows:
Q: Look at the smaller block there where it's just below that to the left, where it says, "Goal: for [force] sale to responsible owner." Again, in your work with NHPI when Dawkins was a director, did you ever overhear or were you part of a conversation about that kind of a subject?
A: No. In fact, I can't believe it's written down like that.
Q: If you go to the top of that same document -- see where it says "Outcomes" in a horizontal square there?
Q: Again, it says "If correct physical problems (or force sales)."
Q: Same question again, had you ever heard anyone discuss that in the department?
Q: You're saying never and that would include any time prior to Dawkins being a director, too?
A: I have never heard of forcing sales.
Q: Was that -- you seemed surprised by that -- that it's written down?
A: It seems real discriminatory. I'm not a lawyer, but I can't believe that it's even on paper (emphasis added).
APP. 2, p. 157, lines 7-25, p. 158, lines 1-6.
Code enforcement inspector Steve Schiller testified that Mr. Dawkins orders to write up a certain property was “the lowest thing that has ever happened to me.”
Q: What was the nature of the complaint on the property?
A: I was to write up everything.
Q: Who told you that?
A: Andy Dawkins.
Q: Did you go out to the property after you had that conversation?
APP. 3, p. 112, lines 6-12.
Q: Did Mr. Dawkins tell you to write up the property?
Q: To write it up -- did he use the terms "code to the max"?
A: Correct. Not that term. He said to do a thorough inspection.
Q: What else did he tell you?
A: It had to be written up and on the Mayor's desk by that afternoon.
APP. 4, p. 114, lines 15-23.
Q: Was there anything about the orders to you to write up Ms. Rodriguez that you felt were unfair?
A: Only from the standpoint that she was in very poor health.
Q: Was she on Social Security or a limited income at all? Any idea?
A: To the best of my knowledge, yes.
Q: She was disabled?
A: To the best of my knowledge.
Q: Were there other homes in her area that were in similar condition exteriorly?
APP. 4, p. 116, lines 12-23.
Q: Tell me more of what Andy Dawkins made you do that you didn't agree with?
A: Standard procedure when there is a death at the property is to give everyone time and to give the courts time to settle it and time to grieve and all that, that the file is closed.
Q: Dawkins came down on which side of that? Don't close it or do close it?
A: The Mayor said he couldn't close it.
Q: What else?
A: That was my major objection. It was the highlight of my career.
Q: Explain to me the highlight of your career that -- relating to the death situation?
A: Two of my clients died.
Q: Two of your clients died and you weren't allowed to close the file?
A: Two of my clients died and nobody listened to me to even start it in the first place.
Q: What was the result of you not being able to work on that?
A: What do you mean?
Q: Did the properties end up condemned or vacant?
A: They ended up vacant.
Q: Both of them?
A: There was only one property down on Butternut.
Q: Anything else?
Q; So you said, "the highlight of my career," and so the examples are the Butternut property, and then closing a file when there has been a death?
A: I could not do that in this case. I mean this was the lowest thing that has ever happened to me (emphasis added).
APP. 5, p. 194, lines 22-25, p. 195, lines 1-25, p. 196, lines 1-4.
As another example of inspector reaction to the City and Mr. Dawkins’, code
enforcement employee Maureen Mitch wanted to leave the department in October of 2002, after Mr. Dawkins took over as director of NHPI. She stated in an email to her supervisor, Steve Magner: “If I apply in other division's can I still use you as a reference? I think I see where this office is going and I don't want to be a part of it” (emphasis added). APP 6.
These code enforcement employees’ responses to Mr. Dawkins illegal and discriminatory environment, attitude, custom and practice are key to the analysis of Plaintiffs’ discrimination claims as well as Defendants’ claims of immunity.
THE CITY’S ACKNOWLEDGEMENT OF
THE DISPARATE TREATMENT AND DISPARATE IMPACT
OF ITS DISCRIMINATORY ENVIRONMENT AND ATTITUDE IN HOUSING CODE ENFORCEMENT
There are numerous examples in which the City of St. Paul has acknowledged or has been put on notice that its aggressive, stepped-up housing code enforcement with its force ownership change strategy and eviction strategy had an adverse impact on protected class members and families living in poverty.
In an email from December of 2005, Jane Prince, legislative aide to council member Jay Benanav, sent an email to a constituent regarding the issue of the City’s code enforcement system unfairly targeting people of color:
“The issue of how a complaint-based system may unfairly target people of color is a huge one, and I'm not sure what we do to get at it. A new mayor and Toni's
and Jay's influence in a new administration can sure help” (emphasis added). APP. 7.
In a memorandum written by Mr. Dawkins to his staff in November of 2004, Mr. Dawkins discusses the impact that the excessive consumption system has on people of color:
“Perhaps a disproportionate number of folks getting EC bills are people of color; but if this is so, then maybe it's because a disproportionate number of families living in poverty are people of color” (emphasis added). APP. 8.
On August 11, 2004, housing law attorney Perry DeStefano, on behalf of Southern Minnesota Regional Legal Services, gave notice to the City about its discriminatory housing code enforcement by sending a letter to the city council president, Kathy Lantry, and cautioned the city about its discriminatory environment and attitude in housing code enforcement: “I was concerned that the City was using the Building Inspection Department to vacate a building of disabling and minority people. Every person in this building was a person in a protected class. They were either minorities or disabled people. Vacating the building by using the inspection department in this manner did have a disparate impact…I thought you should know that as a practicing housing law attorney who knows about discrimination law that there is exposure to a discrimination claim on this matter due to the way it was handled (emphasis added). “I would hate to lose the opportunity to collaborate
together on this case as it does appear that we have got the owner's attention and were making great progress despite the “hide the ball" tactics that were being played by the inspector’s office.” APP. 9-11.
In Mr. DeStefano’s deposition, he was questioned about other instances, which Mr. DeStefano numbered at greater than ten, in which the City displayed its illegal and discriminatory environment and attitude in housing code enforcement. APP. 12-13.
This evidence of the City’s illegal and discriminatory environment, attitude, custom and practice are key to the analysis of Plaintiffs’ claims involving discrimination as well as Defendants’ claims of immunity.
THE CITY’S USE OF
HOUSING CODE ENFORCEMENT
TO CIRCUMVENT CIVIL RIGHTS AND
TO ADDRESS BEHAVIOR ISSUES
There are numerous examples in which the City of St. Paul takes action through housing code enforcement to address behavior issues, effectively circumventing individual’s civil rights. The City has provided documents stating that the civil laws are preferable because the burden of proof is less. In addition, the City is very eager to get inside properties to exercise their illegal and discriminatory housing code custom and practice. Below are two examples.
In a police training bulletin about “How to Work with the Code Enforcement Problem Property Unit,” co-writers Andy Dawkins and Assistant Police Chief T. Reding discuss “what legal action is possible” and tell the officers “this is civil law, so we don’t need proof beyond a reasonable doubt.” In the same bulletin, the co-writers emphasize the importance of “getting inside” the premises in order to further the City’s discriminatory code enforcement environment because “getting inside” could lead to “condemnation of the property, eviction of the occupants and boarding-up the property.” ADD. 92-93.
The City produced through discovery a “Code Enforcement Cheat Sheet” with a couple of examples of ways to circumvent civil rights. First, it encourages Police Officers by telling them that “Civil laws are being used and the preponderance of evidence is lower for proof.” In addition, it encourages the Police Officers to permit warrantless administrative searches by code enforcement officers in furtherance of the City’s force ownership change strategy and eviction strategy: “If officers get inside of a property for whatever reason and see code violations, please call for an inspector. Sweeps of the exteriors are being done by code enforcement, but we don't get interior
inspections” (emphasis added). APP. 14.
The City also used a very large police officer, Dean Koehnen, to further its discriminatory environment and attitude in code enforcement. Below are two
In an email dated June 30, 2006, code enforcement employee Jackie Girling complained to Officer Dean Koehnen about exercising his size and influence to strong arm property owners:
“Dean, please in the future, if you are going out on a property where I have pending orders, I would appreciate a heads up. There was no need for you to go out there other than (what sounds to me like) Pam from crime prevention hoping that you could strong-arm these people with your "size and influence"(emphasis added). APP. 15.
Police Officer Mark Wiegel, who also worked for the housing code department, sent an email on March 29, 2007, indicating that he would take housing code action on a property because there were not enough behavior problems for the police to act. The police officer requesting assistance to “sick you and yours on a property,” stated that “the problem is more about the conduct at the house and the type of people that visit.” Officer Weigel sent Dean Koehnen to the property to “get an inspection and have an impact:”
I need to sick you and yours on a property. 1011 Burn is a single family home/owner occupied by Vickie. I am not sure of her last name. The address has been a problem for well over a year but we haven't been able to do much. It is up off of the street and they do not actually drugs from there. The problem is more about the conduct at the house and the type of people that visit. Vickie is Native American and has had boyfriends arrested off and on.
I’m forwarding this to Dean to see if we can get an inspection and have an impact (emphasis added). APP. 16.
City council president Kathy Lantry made an email request to Officer Mark Wiegel to take code enforcement action against a property with behavior issues. When the property didn’t meet the criteria for an excessive consumption violation, Officer Mark Wiegel again indicated that he would send a message through housing code enforcement:
I realize that there are too many calls overall to this area but from my jobs perspective I'm stuck. I was even looking for any that could have fallen into excessive consumption for police but none fit that criteria either. I think at least somewhat of a message can be sent through making them register and by code enforcement issuing orders (emphasis added). APP. 17.
As can be seen on the email chain below from August 16, 2004, Officer Wiegel again sent code enforcement to issue orders on a property, even though it didn’t have any behavior or code issues, and even though the code enforcement officer questioned the inspection, but simply because it was requested by council member Dave Thune.
“Can you check 348 W. Winona. No dangerous police issues and no current open code.”
“Sure, but why are we checking it then?”
“It came from a citizen through Thune's office and has some police issues, but not enormous” (emphasis added). APP. 18.
The misuse of the housing code by the City to address behavior problems lends the housing code to political pressure and to abuse of the complaint based system and is further evidence of the City’s “bending the rules of code enforcement to achieve a
particular outcome inconsistent with the code” which creates the City’s discriminatory environment and attitude in code enforcement.
Even Norm Coleman has the Right to "due process" Traffic Tickets are minor, ELECTIONS ARE MAJORhttp://minnesota.publicradio.org/features/2009/05/Appellants_Reply_Brief.PDF
INTRODUCTION OF THE CITY’S WORKING RELATIONSHIP AND PREFERRENTIAL TREATMENT OF THE PUBLIC HOUSING AGENCY
The St. Paul Public Housing Agency (PHA) owns and manages 4300 units of public housing in the City. PHA’s public housing includes high-rise properties, family town home developments, and 450 scattered site properties, which are single family or duplex properties located throughout the City. Plaintiffs claim these scattered site properties are similar to their rental properties. According to PHA documents, the scattered site properties’ tenant base is about 32% African-American and 58% Asian/Pacific Islander. ADD. 5-6.
PHA has been chronically underfunded for almost the entire existence of public housing. PHA admits that it has to prioritize the repairs - life safety and exterior envelope to keep out the moisture. APP. 19. Hester testified that every year for PHA staff have to ask how much money they have – have to prioritized the work – in a general sense there are a lot of needs that are being deferred because of insufficient funds. APP. 20.
Gutzmann testified that PHA has been in crisis mode due to federal funding cutbacks and PHA had to sell off on two recent occasions many of its homes, where
on average those homes needed $40,000 in repairs. PHA conducted an internal analysis of the costs needed for each of almost 20 homes, with the estimates running from a low of $13,000 to a high of $199,000. Gutzmann said the average costs to repair was $40,000. APP. 21. PHA needed to sell these properties to get the money out of them and to avoid making expensive repairs. APP. 22.
City TISH evaluators conducted city code review prior to PHA sale of those homes and found that many of PHA’s homes were in fact not compliant with City Codes. APP 23-105. Further, the City has acknowledged through a TISH report study conducted in 2005 that “as many as 60% of all properties sold in the city in 2005 had serious code violations. APP. 107.
The City and PHA admit that at no time has the City designated any PHA home as vacant, required a “Code Compliance” or condemned any of its homes. Docket, 228, Ex. 304. There has never been a requirement by the City that PHA homes be substantially renovated. APP. 108.
PHA and the City have long recognized that PHA, while maintaining “high performer” status under HUD regulations, owns and manages significant numbers of “problem properties” due to criminal behavior of residents, guests and third parties on PHA properties. Docket, 224, Exs. 202, 203. Since 1991, the City and PHA have had a special partnership called “ACOP” whereby a platoon of City police are devoted
solely to policing PHA family developments. The City police services under ACOP are above and beyond the “baseline” police services PHA is provided with like any other resident or business in the City. The City has received over $8 million from PHA for supplemental police services since 1991. Docket, 224, Exs. 159, 160, 161. The City and PHA detail the significant criminal activity at PHA properties that supports their conclusion that PHA owns and manages “problem properties”. Docket, 224, Exs. 155, 156, 157, 158, 162, 163, 193, 199, 201, 202, 203, 204, 205.
In 1994, the City proposed to PHA, its long term partner, that the City’s Property Maintenance Code (City Code) be substituted for the federally mandated Housing Quality Standards (HQS) applicable to federally subsidized, Section 8 low income housing in the City. During this process, the City and PHA discovered that the City’s code was actually “more stringent” 82% of the time when compared to the federal code. APP. 109-115.
In 1994, PHA informed City leaders that “local HUD staff feared more stringent standards would reduce the supply of affordable housing for Sec 8 holders.” Docket, 224, Ex. 172.
10th Cir Interesting Read
Appeals Court Dismisses Section 1983 Suit against Municipal Officials Alleging Eminent Domain Was Used in Retaliation
INTRODUCTION OF THE PLAINTIFFS
Plaintiffs Thomas Gallagher and Joseph Collins were born and raised in St. Paul and in 1998 began providing rental housing in the City of St. Paul. Gallagher and
Collins are co-owners of Dadder’s Properties, LLC. Dadder’s Properties, LLC is the owner of three subsidiary limited liability companies, Dadder’s Holdings, Dadder’s Enterprises, and Dadder’s Estates, LLC. Their rental portfolio is diversified among these subsidiary limited liability companies owned by Dadder’s Properties, LLC. At the height of their business, they owned 44 investment properties, 29 of which provided single family and duplex residential housing, and 9 multi-unit buildings, which in sum consisted of approximately 200 residential rental units. Their tenant base had a majority of people of color and included Section 8 recipients. During the period of approximately 2002 through 2005, about Eighty percent (80%) of their tenants were African-American and mixed race couples. Approximately 10 of the 29 tenants have or did receive federal rent subsidies under the Section 8 program. In each of their rental properties that housed Section 8 tenants, they passed the PHA inspection before being approved for receipt of Section 8 rent subsidies. Approximately 19 of the 29 tenants were members of a protected class. APP. 117-119.
Plaintiff Troy Allison was born and raised in St. Paul and in February of 2005, started in the business of providing rental housing in the City of St. Paul. Allison is an independent business owner, having operated a handyman business and dumpster roll-off business since 2004. Allison was the owner of seven (7) rental properties within the City of St. Paul. Four (4) of his seven (7) tenants received Section 8 assistance or
other assistance. Four (4) of his seven (7) tenants were members of a protected class. In each of his rental properties that housed Section 8 tenants, he passed the PHA inspection before being approved for receipt of Section 8 rent subsidies. Due to the Defendants’ conduct, he lost each of these properties to foreclosure in 2006. APP. 292-294.
Jeff and Sara Kubitschek are residents of White Bear Township. The Kubitschek’s started in the business of providing rental housing in the City of St. Paul in 1999. The Kubitschek’s were owners of four (4) rental properties within the City of St. Paul. Seven (7) of their eight (8) tenants received Section 8 assistance or other assistance. All eight (8) of their tenants were members of a protected class. In each of their rental properties that housed Section 8 tenants, they passed the PHA inspection before being approved for receipt of Section 8 rent subsidies. APP. 343-344.
There maybe copy errors.
Plaintiffs make a claim for disparate treatment under the FHA. Disparate treatment, which occurs when some people are treated less favorably than others because of their race, color, religion, sex, or national origin, “is the most easily understood type of discrimination.” Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n.15 (1977). Proof of discriminatory motive is crucial to a disparate treatment claim. Id. Plaintiffs may survive summary judgment on their disparate treatment claims by presenting either “direct evidence” of discrimination or “creating the requisite inference of unlawful discrimination” under the framework set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-03 (1973). See Griffith v. City of Des Moines, 387 F.3d 733, 736 (8th Cir. 2004); East-Miller v. Lake County Highway Dept., 421 F.3d 558, 563 (7th Cir. 2005) (distinguishing between “direct evidence” and McDonnell Douglas framework in FHA context).
A plaintiff with direct evidence that illegal discrimination motivated the adverse action does not need the three-part McDonnell Douglas analysis to survive summary
judgment, even if the strong evidence is circumstantial. See Griffith, 387 F.3d at 736. A plaintiff who lacks evidence that clearly points to the presence of an illegal motive, however, can only avoid summary judgment by creating the requisite inference of unlawful discrimination under the McDonnell Douglas framework. Id. Under the McDonnell Douglas framework, once the plaintiff establishes a prima facie case of discrimination, the burden shifts to the defendant to articulate a legitimate, nondiscriminatory reason for its actions. See Gilbert v. Des Moines Area Cmty. Coll., 495 F.3d 906, 914 (8th Cir. 2007). If the defendant offers a legitimate, nondiscriminatory reason, the burden shifts back to the plaintiff to put forth evidence showing the defendant’s proffered explanation is a pretext for unlawful discrimination. Id.
Although Plaintiffs did not cite the McDonnell Douglas case until their analysis under their §1981 analysis, Plaintiffs still provided a three-part McDonnell Douglas analysis in their discussion of the Fair Housing claims: the City operates with a discriminatory environment and attitude in housing code enforcement, the City claims that the actions are legitimate to achieve their policy objectives, and there is a reasonable alternative in the PP2000 program to achieve those policy objectives through non-discriminatory means.
In the facts section above, a December 19, 2005 email message from Jane
Prince, legislative aide to former council member Jay Benanav, is discussed in which Ms. Prince states: “the issue of how a complaint based system may unfairly target people of color is a huge one, and I’m not sure what we do to get at it...they can help us think through the very real possibility that people color are targeted by the city’s complaint based system.” APP 7. The reason a complaint based system can possibly target people of color is because the complaint based system is used for reasons other than housing code enforcement, “to achieve particular outcomes” as stated by Mr. Kessler, such as addressing behavior issues better suited for Police.
With respect to PHA, “The parties agree that African-Americans make up a disproportionate percentage of low income tenants in both private and PHA housing.” Order p. 12. From at least 1995, the City and PHA have known that the City’s more stringent code standards are applied to Section 8 and privately owned rental properties occupied disproportionately by “protected class” members.
Plaintiffs make claims under 42 U.S.C. §1983 for alleged violations of their rights under the Fourteenth Amendment to the United States Constitution. Success on a §1983 claim requires a showing of: “(1) [a] violation of a constitutional right, (2) committed by a state actor, (3) who acted with the requisite culpability and causation to violate the constitutional right.” Shrum v. Kluck, 249 F.3d 773, 777 (8th Cir. 2001).
Plaintiffs allege violations of their Fourteenth Amendment right to equal protection as a result of the City’s code enforcement policies. The Equal Protection Clause of the Fourteenth Amendment requires state actors to treat similarly situated people alike and permits state actors to treat dissimilarly situated people dissimilarly. Ganley v. Minneapolis Park & Recreation Bd., 491 F.3d 743, 747 (8th Cir. 2007). As a threshold matter, Plaintiffs must establish that Defendants treated them differently from similarly situated landlords. Id. In addition to unequal treatment, Plaintiffs must also show intentional or purposeful discrimination. See Lewis v. Jacks, 486 F.3d 1025, 1028 (8th Cir. 2007).
The facts and evidence submitted in support of discriminatory intent to prove their FHA claims also supports Plaintiffs §1983 claims. The City’s discriminatory environment and attitude in housing code enforcement, force ownership change
strategy and eviction strategy were known by the City to eliminate affordable housing and to have a disproportionate impact on protected class members.
Plaintiffs make a “class of one” equal protection argument based on the City’s preferential treatment of the St. Paul Public Housing Agency. The purpose of a class-of-one equal protection claim is “to secure every person within the State’s jurisdiction against intentional and arbitrary discrimination, whether occasioned by express terms of a statute or by its improper execution through duly constituted agents.” Vill. of Willowbrook v. Olech, 528 U.S. 562, 564 (2000). Plaintiffs may prevail on their class-of-one claim by showing they have been “intentionally treated differently from others similarly situated and that there is no rational basis for the difference in treatment.” Id.; see also Costello v. Mitchell Pub. School Dist. 79, 266 F.3d 916, 921 (8th Cir. 2001).
The parties agree that African-Americans make up a disproportionate percentage of low income tenants in both private and PHA housing. ADD. 12. From at least 1995, the City and PHA have known that the City’s more stringent code standards are applied to privately owned rental properties occupied disproportionately by “protected class” members. The City’s “minimum housing maintenance code” was actually “more stringent” 82% of the time when compared to the federal mandated Housing Quality Standards (HQS) applicable to federally subsidized, Section 8 “low
income” housing in the City. APP 109. The City and PHA privately admitted that HUD would not approve a City and PHA plan to substitute the City’s higher code for HQS in Section 8 inspections of privately owned low-income rental housing because HUD, the City and PHA recognized that application of a higher code standard to City housing stock would adversely affect availability of affordable housing stock. APP 416.
Substantive Due Process
Plaintiffs contend Defendants’ enforcement of the housing code violated their substantive due process rights. Plaintiffs must show that a governmental power was exercised arbitrarily and oppressively to succeed on their substantive due process claims. See Rozman v. City of Columbia Heights, 268 F.3d 588, 591 (8th Cir. 2001). The government action must be arbitrary in the constitutional sense. Id. “[T]he theory of substantive due process is properly reserved for truly egregious and extraordinary cases.” Id.
Plaintiffs have provided sufficient evidence to withstand summary judgment because the City’s enforcement of the housing code in a discriminatory environment and manner is truly egregious - aggressive, force ownership change strategy and eviction strategies - even with a facially neutral housing code, were not necessary for achieving their policy objectives. In fact, it was documented that their PP2000
program was a great success in achieving their policy objectives.
Further, evidence presented to the Court also demonstrates that the Defendants applied an illegal “code compliance” requirement in violation of State law and selectively to Plaintiffs and other private owners, but not to PHA who was similarly situated with problem properties and poor housing stock. The City’s “Code Compliance Inspection Certification” requirement for older homes to be stripped of their “grandfathering” protections under the State Building Code and brought to “present code” is a significant burden to older homes and all other illegal and retaliatory actions are designed to accomplish that main illegal goal in the City’s discriminatory environment and attitude in housing code enforcement. Defendants have no discretion to violate State law, and have no legitimate policies, interests or objectives that justify the deliberate violation of State law by requiring code compliance certification and stripping grandfathering protections for older homes.
Portions of the City’s own code recognize the “Building Code under which” a building was “originally constructed”. For example, City’s 2002-03 Minimum Property Maintenance Standards for all Structures and Premises, Sections 34.09 (2) (a) and (b); and 34.10 (2), (3) (“maintained in accordance with the Building Code in effect when originally constructed”). Don Hedquist’s supplemental report details the Defendants’ violations of the State Building Code.
§1981 and §1982
Plaintiffs are required to show discriminatory intent to prevail on their claims under 42 U.S.C. §§ 1981, 1982. Dirden v. Dep’t of Housing and Urban Dev., 86 F.3d 112, 114 (8th Cir. 1996).
The facts and evidence submitted in support of discriminatory intent to prove their FHA claims also supports Plaintiffs §1981 and §1982 claims. The City’s discriminatory environment and attitude in housing code enforcement, force ownership change strategy and eviction strategy were known by the City to eliminate affordable housing and to have a disproportionate impact on protected class members.
Plaintiffs cited and the District Court discussed 2922 Sherman Ave. Tenants’ Ass’n v. District of Columbia, 444 F.3d 673 (D.C. Cir. 2006), where the District of Columbia’s lack of explanation for how it narrowed a list of seventy-five properties recommended for closure that were evenly distributed across the city down to five apartment buildings located in neighborhoods having an average Hispanic population 4.4 times that of the city as a whole supported an inference of intentional discrimination. 444 F.3d at 684.
The District Court isolated Plaintiffs’ maps and failed to consider the evidence from the FHA analysis - that the City’s discriminatory environment and attitude in housing code enforcement, force ownership change strategy and eviction strategy
were known by the City to eliminate affordable housing and to have a disproportionate impact on protected class members. The discriminatory environment Plaintiffs refer to includes animus toward rental properties (Andy Dawkins’ own statements), a complaint based code enforcement system that has a problem with targeting people of color (Jane Prince’s email and Dawkins’ memo) , and getting rid of the bottom tier of tenants and low income people in the City (Cullen’s and Anderson’s testimony).
To prevail on a §1985 claim, the plaintiffs must show that “(1) the defendants conspired, (2) with the intent to deprive them, either directly or indirectly, of equal protection of the laws, or equal privileges and immunities under the laws, (3) an act in furtherance of the conspiracy, and (4) that they or their property were injured, or they were deprived of exercising any right or privilege of a citizen of the United States.” Barstad v. Murray County, 420 F.3d 880, 887 (8th Cir. 2005).
Again, the District Court failed to consider the evidence from the FHA analysis - that the City’s discriminatory environment and attitude in housing code enforcement, force ownership change strategy and eviction strategy which were known by the City to eliminate affordable housing and to have a disproportionate impact on protected class members. Plaintiffs alleged with particularity and
specificity the City’s understanding of the impact of their discriminatory environment and attitude in housing code enforcement, force ownership change strategy and eviction strategy. Further, this discriminatory environment in housing code enforcement was “agreed to,” or an “understanding was reached,” when Dawkins had meetings with Chief Judge Mott and City Attorney Cervantes to get “buy in” to his aggressive, force ownership change and eviction strategies (Dawkins goals for 2004 included getting “buy-in” from the Police Department, City Attorney, Courts and Neighborhoods). ADD 91.
Void for Vagueness.
Plaintiffs claim that chapters 34, 43, 45 and 51 of the St. Paul Legislative Code (“City Code”) are void for vagueness because they fail to provide landlords and other property owners with sufficient notice of their basic obligations under law, thereby placing unwarranted discretion in the hands of those charged with code enforcement.
The void-for-vagueness doctrine is embodied in the due process clauses of the fifth and fourteenth amendments. Woodis v. Westark Community Coll., 160 F.3d 435, 438 (8th Cir. 1998). A vague regulation violates the Constitution because it fails (1) to define the offense with sufficient definiteness that ordinary people can understand prohibited conduct and (2) to establish standards to permit enforcement of the law in a non-arbitrary, non-discriminatory manner. Id. “In a facial vagueness challenge, an
enactment reaching a substantial amount of constitutionally protected conduct may withstand constitutional scrutiny only if it incorporates a high level of definiteness. An enactment imposing criminal sanctions or implicating constitutionally protected rights demands more definiteness than one which regulates the economic behavior of businesses.” Id.
Plaintiffs Gallagher, Collins, Dadder’s and Kubitschek (as well as Steinhauser and Harrilal), had properties labeled by the city as “problem properties.” Plaintiffs Steinhauser, Meysembourg, Johnson, Brisson, Allison, and Kubitschek were all subject to “code compliance certifications.”
Plaintiffs have not received adequate notice of proscribed conduct, or in other cases under city code, required conduct, in maintaining their rental properties. For example, with tenant turnover, Plaintiffs typically clean the property in order to re-rent the premises. On many occasions, it may take several weeks to several months to re-let the property, depending on the amount of tenant damage that needs repair and the rental market.
With Plaintiffs Allison and Dadder’s, 1522\1524 Carroll was designated as vacant just 23 days after sale of the property. Gallagher provided signed leases and rent deposit slips on appeal of the vacant building designation, but the appeal was denied. Defendant Senty declared the building vacant by looking through a second
story window while standing on the ground. Defendant Senty could not define “legally occupied.” APP 124.
Dawkins, an attorney, a 15 year servant in the Minnesota House of Representatives, and as the former 4 year director of the City’s code enforcement division (NHPI), could not describe the three categories of vacant buildings, could not define code compliance, and did not know if “legally occupancy” was defined in the Code as the Code states it should (which it does not). When asked about vacant buildings, Dawkins stated: “It was always confusing to me, and I’m not sure I can get it right even today.” APP 432. When asked about code compliance, Dawkins stated, “That’s always been confusing to me. The best I can tell you is that I attempted to learn about it when I heard that it became part of the settlement of the first Tenant Remedy Action”. Id. In his duties as Director of NHPI, Dawkins never had any discussions with his inspectors between 2002-2005 as to when a code compliance would be required. Id. When asked about “legal occupancy” in an email from a resident trying to understand the vacant building code, and whether the term even appears in the City’s code, Dawkins wrote, “I am not sure it appears anywhere. I would interpret this to mean not over-occupied and not trespassers.” APP 433.
Code enforcement manager Lippert, former head of the Problem Property 2000 program, could not define a problem property. When asked about problem properties,
Lippert stated, “I don’t use the term and I don’t have a definition.” APP 434. When asked why he doesn’t use the term, Lippert states, “That term has been used so often by so many people, it means so many different things to so many different people that I don’t think it uniformly defines anything. So there is too much chance of misunderstanding by using the term, so I don’t use it.” Id.
This Court has seen the facts and evidence behind the City’s discriminatory environment and attitude in housing code enforcement and the force ownership change strategy and eviction strategies. Because many of the significant terms used in the City’s code are insufficiently defined, because the City code lends itself to arbitrary enforcement by different application, and because Plaintiffs and others are forced to guess at the code’s prescriptions, the code should be declared unconstitutionally vague because the housing code is being abused.
The Order of the District Court is replete with examples of the Court ignoring the standard for summary judgment motions. Repeatedly, the District Court weighed evidence, stating that the Court was “not persuaded” or that the evidence did not “show” discrimination, that there was no evidence, or the Court “concluded” that the evidence was insufficient. This disregard for the summary judgment standard has become the norm, and this kind of “trial on the paper” violates plaintiffs’ Constitutional right to trial by jury. The facts, when all inferences are drawn in favor
of Plaintiffs, clearly present evidence from which a reasonable fact finder could conclude that the City’s custom, policy and practice was a discriminatory environment and attitude in housing code enforcement, that the force ownership change strategy and eviction strategy were known by the City to eliminate affordable housing and to have a disproportionate impact on protected class members. For these reasons, Plaintiffs ask this Court to reverse the District Court’s grant of summary judgment and remand the case for trial.
AASE, ENGEL & KIRSCHER, PLLC
Dated: May 5, 2009 By: s/ Matthew A. Engel
Matthew A. Engel (Attorney Lic. #315400)
180 East 5th Street, Suite 255
Saint Paul, Minnesota 55101
T: (651) 209-6884
Attorney for Plaintiffs-Appellants Gallagher, et.al.