IN THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT Appeal No. 09-1528 FRANK J. STEINHAUSER, III, ET AL., Plaintiffs-Appellants, v. CITY OF ST. PAUL, ETC., ET AL., Defendants-Appellees, Appeal From United States District Court For the District of Minnesota Civil No. 04-CV-2632 (JNE/SRN) PLAINTIFFS-APPELLANTS BRIEF WITH ADDENDUM John R. Shoemaker, Esq. SHOEMAKER & SHOEMAKER, P.L.L.C. 7900 International Drive International Plaza, Suite 200 Bloomington, Minnesota 55425 (952) 224-4610 [email protected]ATTORNEYS FOR PLAINTIFFS-APPELLANTS
Landlord fight the City St.Paul repeated Pattern of Corporate Wrongdoing's
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
IN THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT
Appeal No. 09-1528
FRANK J. STEINHAUSER, III, ET AL.,
Plaintiffs-Appellants,
v.
CITY OF ST. PAUL, ETC., ET AL.,
Defendants-Appellees,
Appeal From United States District Court For the District of Minnesota
Civil No. 04-CV-2632 (JNE/SRN)
PLAINTIFFS-APPELLANTS BRIEF WITH ADDENDUM
John R. Shoemaker, Esq. SHOEMAKER & SHOEMAKER, P.L.L.C. 7900 International Drive International Plaza, Suite 200 Bloomington, Minnesota 55425 (952) 224-4610 [email protected] ATTORNEYS FOR PLAINTIFFS-APPELLANTS
STATEMENT OF THE CASE
Plaintiffs filed suit in 2004 after Defendants' "forced the sale" of Plaintiffs'
older rental homes through illegal code enforcement and other retaliatory tactics
including repeated false claims of code violations, illegal condemnations of homes and
removals of "grandfathering" protections through forced renovations to present code
under "Code Compliance Certifications" and fraudulent notice and fee schemes, all
resulting in economic losses to Plaintiffs and displacement of "protected class" tenants.
During this litigation, Defendants destroyed written communications and other
electronic documents for the relevant periods, destroyed over 15,000 relevant housing
inspection records and consistently played "hide the ball" during discovery. Despite
the shocking spoliation of evidence, including evidence related to Defendants' "motive
and intent," Plaintiffs' motions for spoliation were denied by the District Court and
summary judgment entered against Plaintiffs for their claimed failure to produce
sufficient evidence. Plaintiffs' subsequent Rule 59(e) motion was denied.
REQUEST FOR ORAL ARGUMENT - 45 minutes
This case is one of three related cases consolidated on appeal from summary
judgment. This Court's de novo review requires detailed review and analysis of the
facts and oral argument is critical to a full understanding the facts.
TABLE OF CONTENTS
STATEMENT OF THE CASE .............................................................. .i
REQUEST FOR ORAL ARGUMENT ..................................................... .i
TABLE OF CONTENTS .......................................................................................... .ii
TABLE OF AUTHORITIES ................................................................................... .iii
STATEMENT OF ISSUES PRESENTED FOR REVIEW ..................................... 2
FACTS BEFORE THE DISTRICT COURT.. .......................................................... 3
SUMMARY OF THE ARGUMENT .................................................................... 19
ARGUMENT ........................................................................................................... 21 I. Summary Judgment Reviewed De Novo .......................................... 21
II. Reasonable Minds Standard ......................................................... 21
III District Court erred in granting summary judgment to Defendants in light of evidence creating genuine issues of material fact for trial... ......... 27
a. Fair Housing Act -Disparate Impact and Disparate Treatment - Section 3617 Retaliation ......................... 33
b. Constitutional Rights I Equal Protection ................................... 52
c. RICO ........................................................................... 55
IV. District Court Erred in Denying Plaintiffs Motion for Sanctions for Spoliation of Evidence ............................................................... 59
Most apposite cases: Trafficante v. Metropolitan Life Insurance Co., 409 U. S. 205 (1972) U. S. v. City of Black Jack, MO, 508 F. 2d 1179 (8th Cir.1974) (rehearing and rehearing en banc denied 1975) Huntington Branch NAACP v. Town of Huntington, 844 F. 2d 926 (2nd Cir. 1988) Otero v. New York Housing Authority, 484 F. 2d 1122 (2nd Cir.1977)
b. Constitutional Rights Claims / Equal Protection
c. RICO, 18 U.S.C. Section 1961, et seq.
Most apposite cases: Handeen v. LeMaire, 112 F. 3d 1339(8th Cir. 1997) Atlas Pile Driving v. Dicon Financial, 886 F. 2d 986 (8th Cir. 1989) Abels v. Farmers Cooperative Com., 259 F. 3d 910 (8th Cir. 2001) U. S. v. Leyden, 842 F. 2d 1026 (8th Cir. 1988)
2. Did the District Court err in denying Plaintiffs' original and renewed motions for sanctions?
E*Trade Securities, LLC v. Deutsche Bank AG, 230 F. R. D. 582 (D. Minn. 2005) Zubulake v. UBS Warburd LLC, 220 F. R. D. 212 (SDNY 2003) Kobrin v. University of Minnesota, 34 F. 3d 698 (8th Cir. 1994) Reeves v. Sanderson Plumbing, Products, Inc. 530 U. S. 133 (2000)
2
STATEMENT OF FACTS BEFORE THE DISTRICT COURT
City Recipient of Federal Low Income Housing Funds - Affirmative Duty to Further Fair Housing Act and Fair Housing Choice
As a recipient of federal Community Development Block Funds "CDBG," the
City must continually certified to the U.S. Department of Housing and Urban
Development that the City will "affirmatively further fair housing" (AFFH) as well as
identify "impediments [barriers 1 to fair housing choices" within its jurisdiction and
take appropriate action. APP1471; generally, APPI442-1447.
The City certifies each year to HUD that "The jurisdiction will ... conduct an
analysis of impediments to fair housing choice with the jurisdiction, take appropriate
actions to overcome the effects of any impediments identified through that analysis,
and maintain records reflecting that analysis and actions in this regard." Id "City's
obligation to [AFFH} applies to all housing activities in its jurisdiction whether
publicly or privately funded." APP1447.
City Duty to Conduct Analysis of Impediments and Barriers to Fair Housing Choice
As part of the HUD required "Analysis ofImpediments to Fair Housing (AI),
the City claims that it "continually evaluates its housing policy and housing practices to
determine whether the City has deliberately or inadvertently prevented people from
living where they choose." APP 14 70 (emphasis added); 1471. The City claims that it
3
promotes "fair housing choice for all persons." APP1468.
CDBG funds are provided to Block Clubs, District Councils, and
Neighborhood Development Corporations. APP 1517 -18. Caty Royce testified that ,
these non-governmental organizations working closing with and being provided
funds from the City, each took part in selecting rental homes for inclusion on
"problem properties" lists for heavy code enforcement under the direction of Kelly
and Dawkins. APP1253.
The City's 2003 Consolidated Plan Update states that the CDBG funds City
"code enforcement" efforts, City activities related to "rental rehabilitation," "vacant
buildings," "demolition" of housing, and other fair housing related activities.
APP1520-23.
City regulatory policies and building code are barriers to fair housing
In 2000, the City acknowledged that its regulatory policies, including what
some may consider "above standard' development requirements, can pose a barrier
to affordable housing - the City cited its own building code as one such barrier.
APP1525.
The City stated that The Metropolitan Council had determined that Cities
regulations, ordinances and fees as well as administrative practices may exceed
4
reasonable protection of public health and safety and contribute to housing costs. Id.
Saint Paul promised that it "will continue examine its enforcement of the building
code to assess whether new construction or housing maintenance standards are
most appropriate for houses being moved to a new site." APP1525.
City knew older homes not compliant with code but still habitable
Councilmember Mike Harris stated the proposed ordinance "would impose
overly strict standards for aging properties that may be adequate, if not up to code."
APPII73.
The City long ago acknowledged that, "There are few properties in Saint Paul
where a determined inspector could not find a violation of some City ordinance.
APPl175 (City's Chronic Problem Property Case Study, 2002).
Starting in the fall of 2002, the City began to require owners of older rental
homes to renovate their homes to "present code" under a program the City called,
"Code Compliance Certification," a process whereby the City illegal removed
grandfathering protections applicable to the older properties under the State Building
Code. APPI037,1039,1075,1117,1138 (affidavit and four written reports and
qualifications of Don Hedquist, a Certified State Building Official, Plaintiffs' liability
expert).
5
Abandonment of Inner City Older Homes
There is significant evidence of wholesale abandonment of inner city homes due
to the increase in costs to own such homes to meet the City's heightened standards.
On March 31, 2003, there were 367 listed vacant homes in the City of Saint Paul.
APPl176. By November 1,2007, the number of vacant homes had dramatically risen
to 1466. APPll77. Don Hedquist reviewed the City's records and voluminous other
evidence and concluded in his June 2, 2008 report, that "Mandatory renovations under
the City's "code compliance inspection" process, significantly increased the costs to
providers of housing to the point where forced sales and abandonment occurred. The
heightened code standard has contributed to the high number of vacant properties
currently in the City." APPl120.
City knew heavy code enforcement would lead to wholesale abandonment
Dawkins, as Director of Code Enforcement, and former state representative from
the inner city who focused on housing related legislation at the State Capitol from 1987
to 2002, acknowledged that "in most cities a balance has to be struck between
aggressive enforcement to preserve livability and over-zealous enforcement potentially
leading to wholesale abandonment of properties or the inner-city." Docket 211-21, p.
1; 211-22, p. 17 [05-cv-01348]. "All I know is that! read a study that was in ajournal
6
about stepped up code enforcement in Baltimore and that it had tipped the scales so
that there was more abandonment of properties than the city had thought or wanted to
have happen." Id.
City Minimum Maintenance Code Chapter 34 and Section 8 standard
In 1994, the City proposed to PHA, a long term partner, that the City's
Property Maintenance Code (City Code) be substituted for the federally minimum
Housing Quality Standards (HQS) applicable to federally subsidized, Section 8
"low income" housing in the City. Docket 224-12, p. 11 [05-cv-OI348}. 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. Docket 224-12, p.
4-10.
In 1995, the City was informed that BUD tightly controls the variations in
HQS by local jurisdictions due to the adverse effect a higher local housing code can
have on the availability of affordable housing. Docket 224-12, p.II. Al Hester of
PHA informed City personnel on the City's Housing Coordination Team that
"[L J ocal HUD staff feared more stringent standards would reduce the supply of
affordable housing for Sec 8 holders. Id.
7
Defendants' "Code Compliance Certification" to "Present Code" in Violation of State Building Code
Don Hedquist's Expert Testimony
In opposition to summary judgment, Plaintiffs' presented the Court with four
reports from liability expert Don Hedquist, a certified Minnesota Building Official
since 1973. APPl037,1039,1075,1117,1138. Mr. Hedquist is qualified to provide
his opinions based upon his significant experience since 1975, including as a former
Minneapolis building inspector and supervisor, carpenter, construction company
owner, college instructor, owner and manager in the low-income housing market,
and Truth in Housing inspector. APPl099-l116. Hedquist, has issued four reports
since 2006 in the consolidated cases before this Court. APPI039,1075,1117,1138.
Hedquist's opinions were unopposed by the Defendants at summary
judgment and the District Court failed to discuss Mr. Hedquists reports. Hedquist's
supplemental report June 2, 2008 (APPll17) stated that "The City required
Plaintiffs and many other landlords to make substantial changes to their rental
properties that were not mandated by the State Building Code or by the City's
minimum maintenance code." APPlll8. Hedquist stated that the City's "code
compliance" certification process was a "mandatory renovation process where
8
grandfathering protections were eliminated and current codes were applied."
APPll18. Hedquist also opined that "Mandatory renovations under the City's
"code compliance inspection" process significantly increased the costs to providers
of housing to the point where forced sales and abandonment occurred. The
heightened code standard has contributed to the high number of vacant properties
currently in the City." Appl120.
City Inspector Michael Kalis admitted City Code Compliance Certification
process was to "present code". APP. 887-1036. Johnson called inspector Kalis to
inquire why Johnson's 469 Whitall home was posted by Kalis as "vacant" when the
home was in fact occupied. Kalis told Johnson, "Too bad" and stated that Johnson
would need a "full code compliance" - he would need to "complete an upgrade of
the home to current building standards in order to reoccupy the home." Id.
After Meysembourg's duplex was condemned in early 2003, and a Code
Compliance Certification demanded, he was told by City LIEP officials that "code
compliance" inspections were to present or current codes, which required all major
systems in a rental building to be brought up to current code requirements, thereby
removing grand-fathering protections of state law. APP657-766.
NHPI Rules and Procedures August 1, 2002 adopted by Dawkins with
9
authority of the City Council provided inspectors with authority to issue condemnation
orders on homes in the City as follows:
"When Do We Condemn A Building" ... "Whenever a structure is deemed dangerous or unfit for human habitation, we will order the structure vacated, sometimes immediately, but usually after a short compliance period has expired and the occupants are given 1 to 30 days to find alternative shelter. Condemnation occurs when life-safety violations exist, such as fire hazards, unsanitary conditions, severe rodent and pest infestation, lack of basic facilities, faulty construction or dilapidation. If principal violations are corrected prior to the vacation date, the order to vacate will be lifted. If principal violations are corrected after the vacate date, once corrected the dwelling can be reoccupied. "
APP. 1179; Docket226-48, p. 36 [2002 NHPl Rules, Docket 226-48, p. 27-38]; see also Docket 226-47, pp.1-3 for Steve Mark Aff. and Exh. "B" documents produced to Steve Mark by City of Saint Paul, Bates050023-050369, with Andy Dawkins assistance.
The 2002 NHPI Rules did not provide authorization for Dawkins, Lippert,
Martin, Magner, and other inspectors to condemn homes for less than "severe rat
and pest infestation, or to add additional conditions for removal of the "vacate
order" upon condemnation including keeping the property off-line following
correction of the "principal items" for extended periods of time for a forced
renovation to "present code" under the Code Compliance Certification" process.
Docket226-48, p. 36. The Rules failed to state that "due to the number of
violations" a Code Compliance Certification" process may be required of the
10
owner, or that under such a process, the Defendants would illegally remove the
owner's grandfathering rights, keep the property off-line for extended periods of
time while the owner had to arrange for contractors to renovate the home to
"present code". Id.
The City responded to Steve Marks' Request for Admissions, admitted that
the NHPI Rules were official NHPI policy and Dawkins did not need City Council
approval. Docket 226-48, pp.14.
The City adopted the State Building Code as referenced in Chapter 34 of
Legislative Code [Sec.34.07] a chapter titled, "Minimum Property Maintenance
Standards for all Structures and Premises" (hereinafter "City Minimum Standards").
Docket 226-13, pp. 6-9 (Chapter 33 - adoption); APP. 1189. The City recognized
in many specific references in its "Minimum Property Maintenance Standards" the
State Building Code grandfathering protections, which the City phrases as,
"maintained in accordance with the Building under which it was originally
constructed." APP. 1189 [e.g., Sec. 34.09(2); 34.10(2)(3)].
Senior inspector Harold Robinson explained "grandfathering" protections
as only requiring an existing owner to meet current codes "When they remodel."
APP1206,1211. Robinson testified that if an inspector condemned a building and
11
did not refer it right away to vacant buildings, the owner could get the permits,
complete the repairs and reoccupy the building quicker and not have a "Code
Compliance". APP1210.
Bill Cullen, a realtor, real estate investor and Section 8 housing provider,
testified that he had considerable experience in purchasing homes in the City and
had experienced the City's "Code Compliance" Certification process, a very
expensive process that he expected to cost him at least $40,000 depending on what
was written up by inspectors. APP1214-1216.
Cullen testified that in his discussions with Dawkins that Dawkins knew that
the Code Compliance Certification process was a substantial renovation of an older
home and at times would have a significant financial effect in an adverse way on
rental property owners. Cullen 212-13.
Catv Royce, a tenant advocate from Community Stabilization Project
testified that most homes in the City could not meet pass the onerous City's "Code
Compliance" requirements. APP1217. Royce opined that the Code Compliance
requirement on older homes was very problematic in loss of affordable housing due
to the costs ofthe rehabilitation not being economically viable. APP1229. Royce
with considerable experience in low-income housing, believes that some of the
12
vacant rental homes in the City are a result of the Code Compliance requirement
and landlords not being able to cash flow the rentals due to the costs of the Code
Compliance. APPl229-30. Royce testified that Code Compliances were having
harmful effects on tenants. Id. Royce testified that she knew of no source of
funding assistant made available to the low-income landlords to meet the Code
Compliances Id. Royce testified that the City's code compliance renovation
requirement for older rental homes "requires additional costs that frequently push it
over the edge of economic viability, essentially for the small rna-and pa guys and
gals." APP1235. Royce said that she had seen examples of tenants she was
representing lose their housing in homes subject to the City's Code Compliance
renovation requirement. Id. While the rental property was being renovated, the
home was unavailable for the families for significant time periods and that the code
compliance renovation decreased the number of available rental units in the market.
Id. Royce was against demanding a Code Compliance renovation requirement in
City civil actions against landlords because a significant number of rental properties
that would normally be at safe and decent, became economically unviable and
leading to abandonment APP1248. Royce was in favor of simply requiring the
landlord to repair the principal code violations. "The rather recent (five years)
13
strategy of requiring the highest level of rehab, I think they call it code compliance,
on a vacant building, even if it's only been vacant for a short amount of time is not
a policy conducive to preserving our existing stock of housing. It is [a] policy that
should be analyzed as people look over this issue in general. Not many of our
homes, including mine, could withstand the level of scrutiny created by this code
compliance inspection." APP1254. Royce testified that Dawkins knew ofthese
concerns and that Dawkins knew the code compliance inspection requirement was a
higher level of rehabilitation to an older property and that Royce informed Dawkins
of her concerns. APP1254.
Senior Inspector Lippert Dick sometimes required "Code Compliance
inspections" conducted by the City's LIEP office before re-occupancy was allowed,
and at other times, he either not require a "Code Compliance" inspection, or he
waived the requirement. APP1257-1285. In all examples, Lippert testified that life
safety issues were present to justify the condemnations, but in some cases he only
required the "principal violations" to be corrected before re-occupancy, when in
other cases, with fewer number of violations, he added a requirement that the owner
obtain a LIEP Code Compliance Certification inspection. APP1258-60. Plaintiffs'
counsel presented multiple exhibits to Lippert during his deposition from his
14
condemnations between May and August 2001 and between 2002-2003 and
inspector notes and legislative hearing notes. APPI257-1285.
Defendants Martin, Dawkins and Lippert demanded Steinhauser,
Meysembourg, Brisson and Johnson complete the Code Compliance Certification
The issue of material fact required to proceed to trial, is not required to be
resolved conclusively in favor of the non-moving party; rather, all that is required is
that sufficient evidence supporting the claimed factual dispute be shown to require a
jury to resolve the parties' differing versions ofthe truth. See, Anderson, 477 U.S. at
248-49 citing First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 288-
89 (1968).
The United States Supreme Court has many times reiterated that the trial court's
sole function on summary judgment is to determine whether disputed fact issues exist;
it may not weigh the evidence and determine the truth ofthe matter. See Anderson. 477
U.S. at 2510-11; United States v. Diefold, Inc., 369 U.S. 654 (1962).
22
The District Court ignored the summary judgment standard on all of Plaintiffs'
claims, and without exception on each of Appellants' claims, the Court weighed the
evidence, draw conclusions from the evidence always in favor of the Defendants. The
Court in selecting certain statements of Plaintiffs and third parties for discussion,
analyzed the "context" of the statements and in each example drew all inferences in
favor of the Defendants. The degree to which the Court used this approach against
Plaintiffs in direct violation of the standard set by the U.S. Supreme Court is absolutely
shocking.
Unfortunately for Plaintiffs and other members of the public who necessarily
enter the federal court system in search of justice and accountability for abuses of
power by state and local public servants, this kind of disregard for the standard at
summary judgment has become so common that it endangers the very fabric of our
democratic society and certainly deprives plaintiffs of their right to a trial by jury under
the United States Constitution.
An example of the misuse of the standard here can be found upon brief
review ofthe actual facts available for a jury. The Court makes passing reference
to Plaintiffs' claims that the City'S demands for "Code Compliance Certifications"
are illegal (ADD00005):
"At times, properties not in compliance with the housing code were required to
23
undergo a "code compliance" inspection by the City's Office of License, Inspections, and Environmental Protection, which would evaluate the building's structure, plumbing, electrical condition, and mechanical condition. "
The Court also admitted that "Bringing a property up to the current housing
code rather than the "as built" housing code would increase the cost of compliance.
ADD000039. The Court then states, "Plaintiffs rely on Meysembourg's affidavit as
a 'particularly egregious example' of the City's intent to 'force as many illegal code
compliances as possible"'. Id. At that point, the Court begins to misstate the
evidence and abuse the summary judgment standard in order to isolate
Meysembourg's experience and claims, and then dismiss the evidence of
Defendants direct violation of State law; the Court footnotes its incorrect assertion
that "Plaintiffs offered no facts specific to Steinhauser and Brisson." ADD000039.
Steinhauser and Brisson, like Meysembourg and Johnson, presented detailed
affidavits on personal knowledge with supporting exhibits buttressing their sworn
statements (uncontested by the Defendants in their Reply) detailing Defendants
illegal demands that Plaintiffs' properties undergo a code compliance inspection
certification process to "current code" or "present code". Steinhauser Aff.,
APP460-656; Brisson Aff., APP767-827; Johnson Aff. APP887-1036. Each of
these Plaintiffs detailed the facts of Defendants' violation of the State Building
24
Code and City Minimum Maintenance Standards of Chapter 34 of the Legislative
Code by "Code Compliance" to "current" or "present" code" that removed
grandfathering" protections provide by State law and City code for existing
buildings. Plaintiffs' Joint Memorandum of Law opposing summary judgment
included numerous arguments of Plaintiffs claims concerning the Defendants
violation of State law through the "Code Compliance" certification process. Docket
258,p.2,38,39,41,56-7[04-cv-2632]. The Defendants' Reply Memorandum and its
counsel's oral argmnent, failed to mention or contest these claims and evidence.
Docket 263 [04-cv-2632].
Moreover, the Court completely ignored the uncontested testimony with four
expert reports by a Minnesota State Building Official who has spent over three
years looking at Plaintiffs' evidence and has concluded that the actions of
Defendants challenged by Plaintiffs related to the "Code Compliance Inspection
Certification" process, is in violation the State Building Code. APPll17-18,133-34.
The Court dismissed Meysembourg's "Code Compliance" inspection claims based
on an apparent exhaustion of remedies requirement that is not required under the
Fair Housing Act. ADD000040.
Another egregious example of the Court turning the summary judgment
25
standard on its head is the way the Court looked at the evidence in a light most
favorable to Defendants on Plaintiffs claims that the City had continued a working
relationship with PHA after abandoning that same working relationship with so
called "problem landlords" under PP2000, a City code enforcement program
inspectors called successful. The Court claiming to have reviewed the record,
dismissed Plaintiffs claims that evidence showed the City had closed inspection
files for PHA properties without appropriate action or follow-up inspection.
ADD000029.
Inspector Seeger testified while reviewing extensive City inspection records
of PH A properties that City inspectors repeatedly failed to conduct interim and final
safety inspections on permits for replacements of gas lines, furnaces, roofs and
other components in PHA homes. Docket 220-6,p.l, 220-7,pp17-25. Plaintiffs
also presented substantial evidence from City records, that PHA was slow to take
action when its tenants made complaints of mold, mice and rats and PHA frequently
had serious issues of non-compliance with City codes including multiple re
inspections, frequently requiring third and fourth re-inspections. APP 115 8-1172.
The Court also failed to consider Plaintiffs' submissions of City's Truth-in
Sale of Housing (nSH) inspection reports for PHA scattered site homes showing
26
PHA rental homes had numerous deficiencies under the City's Minimum
Maintenance Standards. APP23-105. The Court again twisted the evidence in
favor of the Defendants.
Because of space limitations here and many other matters necessary for
discussion, Plaintiffs conclude that these are mere examples of the abuse of the
summary judgment standard by the Court.
III. Did the District Court err in granting summary judgment to Defendants in light of evidence creating genuine issues of material fact for trial?
a. FAIR HOUSING ACT CLAIMS
Plaintiffs have presented evidence of disparate impact due to Defendants' violation of the Fair Housing Act
Section 3604 of the Fair Housing Act (FHA) makes it unlawful to refuse to
sell or rent to any person or discriminate in the terms, conditions, or privileges of
sale or rental of a building on the basis of race, color, religion, sex, familial status,
or national origin. 42 U.S.C. §3604(a)-(b). The FHA also makes it "unlawful to
coerce, intimidate, threaten, or interfere with any person in the exercise or
enjoyment of, or on account of his having exercised or enjoyed, or on account of his
having aided or encouraged any other person in the exercise or enjoyment of, any
right granted or protected by" section 3604. Id. §3617. See CBOCS West, Inc. v
Humphries, 128 S. Ct. 1951 (2008) (summary judgment analysis under 42 U.S.C. §
27
1981 which encompasses an action claiming retaliation, involving post-contract and
also parallel to property rights). Plaintiffs claim that in many cases Defendants
retailitated against them for renting to "protected classes," for challenging the
Defendants' heavy-handed code enforcement, abuses of power, and violations of
law, and for bringing claims in this Court to vindicate their rights and hold
Defendants accountable for their abuse of public trust and authority.
Plaintiffs have shown a per se unlawful policy facially neutral policy results
in, or can be predicted to result in, a disparate impact on protected classes compared
to a relevant population. See Darst-Webbe Tenant Ass'n Bd. v. St. Louis Hous.
Auth., 417 F.3d 898, 902 (8th Cir. 2005). If Plaintiffs make that showing,
Defendants must demonstrate that the objected-to policy has a "manifest
relationship" to legitimate, nondiscriminatory policy objectives and "is justifiable
on the ground it is necessary to" the attainment of those objectives. rd. If
Defendants make that showing, the burden shifts back to Plaintiffs to show that a
viable alternative means is available to achieve the legitimate policy objectives
without discriminatory effects. Id. at 902-03. See also Trafficante v. Metropolitan
Life Insurance Co., 409 U. S. 205 (1972); U. S. v. City of Black Jack, MO, 508 F.
2d 1179 (8th Cir.l974)(rehearing and rehearing en banc denied 1975); Huntington
28
Branch NAACP v. Town of Huntington, 844 F. 2d 926 (2nd Cir. 1988); Otero v.
New York Housing Authority, 484 F. 2d 1122 (2nd Cir.1977).
In 215 Alliance, et al. v. Andrew Cuomo. et aI., (Minnesota District Court
No. 98-64, 1999), Judge Donovan Frank determined that "in light ofthe general
crisis in availability of housing and the more-acute specific crisis of these
disadvantaged demographic groups," HUD's approval of a low-income landlord's
termination of project-based Section 8 contracts was contrary to federal
requirements APP1390, 1407. Judge Frank noted that "HUD has recognized that a
disproportionate number oflow-income tenants are minority, elderly, or disabled"
and "minority, elderly, and disabled tenants fact significant hurdles in locating
housing above and beyond the mere shortage oflow-income housing. Despite the
nominal protection of federal laws, minority tenants continue to experience
discrimination by landlords and hostility from non-integrated communities .... Any
policy which results in the displacement of low-income tenants will
disproportionately affect these particular low-income citizens whose housing
options are especially constrained." APP1407 (citing Affidavit ofJohn Cann and
HUD position papers - see APP 1409.
In its Five Year Plan for 2005, PHA admitted that there would be an adverse
29
affect on the availability of affordable housing in the community from conversion
of only 1 or 2 units in scattered site housing. APP 1325.
Plaintiffs presented the affidavits and deposition testimony of their tenants
displaced by Defendants' illegal code enforcement showing that the basis of
Plaintiffs' disparate impact claims were not merely "cost" driven, but actually were
based on the tenants' right to housing choice.
Caty Royce testified that minorities from outside Minnesota were having an
extremely difficult time locating affordable housing in the City. APP1236.
City Admissions of disparate impact
The City stated, "While the City does not collect data related to the race or
ethnicity of those households with identified housing needs, it would not be surprising
if those data revealed a disproportionate impact on persons of color." APP 1442-43.
"The number of new immigrants ... coupled with historic settlement patterns that find
racial and ethnic communities more heavily concentrated in central cities and the
reality of racial and ethnic bias in the housing market all contribute to such a
differential impact." APP 1443.
In 2000, the City acknowledged that African-Americans were disproportionately
represented in emergency shelters (A-A 52%; Hispanics 16%, Whites 33%) and
30
transitional housing indicating that they were most likely to be without any housing at
all. APP1446.
Protected class members tend to have lower incomes, less expensive rental
units/homes - more likely to be renters. APP 1449.
HUD CHAS Data
HUD's 2000 Census "CHAS" data for St. Paul showed that among renters in
the City, 37.1 % of White renters had housing problems (cost burdens of greater than
30% of income and/or overcrowding or without complete kitchen or plumbing
facilities) while 53.9% of Blacks had such problems, and Hispanics had 57.5% Black
family households had 59.3% and Hispanics families had 64.9%. APP1326-1332.
PHA provides the statistics 10-21-04 on waiting lists for protected class and
lists African-Americans (61 %), Whites 26%, for PHA housing with limited
turnover with 91 % in the extremely low income level. Section 8 housing as 10-21-
04, with 62% Blacks and 30% Whites with 86% at extremely low income, and low
turnover with Section 8 list closed as of 11-2002. Docket 226-40, p2,14-15.
PHA listed the strategies for addressing the shortage of affordable housing as
(1) maximize the number of units by minimizing the number of units off-line; (2)
reducing the time to renovate PHA units, (3) maintaining or increasing Section 8
31
lease-up rates by marketing to owners, (4) apply for additional Section 8 units.
These strategies of PH A, a partner of the City, demonstrate that Defendants knew
that every low-income rental unit in the city was significant in meeting the needs of
protected class tenants especially those like African-Americans disproportionately
disadvantaged in housing.
While Defendants knew PHA was trying to reduce turnover and renovation
time to get empty units back on-line, Defendants were coordinating to get
Plaintiffs' homes off-line for extended periods of time with the goal of permanent
closure. While PHA was striving to encourage the private market to invest in
Section 8, Defendants were doing everything they could to create huge
disincentives to the private housing providers for extremely low-income "protected
class" members, all contrary to the City's affirmative duty to further fair housing
choice.
The testimony of Royce, Cullen, Dawkins and others demonstrate that there was
a clear understanding by Defendants that their aggressive code enforcement would
have the predictable result it did in disparately impacting minorities, especially the
many African-Americans Plaintiffs served.
The City acknowledged the need but failed to provide the assistance
32
Plaintiffs needed to meet the City's insistence on higher and higher standards and
predictably Plaintiffs were forced to sell their properties (a result Defendant
Dawkins admitted was his goal) and tenants were forced to leave their homes.
Steinhauser Aff., APP460-656; Brisson Aff., APP767-827; Johnson Aff. APP887-
1036; Harrilal Aff., APP828-886; Docket 226-48, p.39 [05-cv-1348] [forced sale
policy].
Defendants Failed to Produce Analysis of Impediments to Fair Housing Choice and Destroyed Electronic Communications
and Other Key Documents Related to Impact
In over four years of discovery herein, Defendants failed to produce any
evidence that Defendants ever conducted a required Analysis of Impediments to
Fair Housing Choice (AI) for disclosure to the U.S. Department of Housing and
Urban Development and the public on whether the "protected class" was adversely
impacted by the City's application of its illegal policy of removing "grandfathering
rights" and application of "present code" to older homes through the City's "Code
Compliance Certification" process.
FAIR HOUSING ACT CLAIMS
Plaintiffs have presented evidence of disparate treatment due to Defendants' violation of the Fair Housing Act
The Court in looking at the "Disparate Treatment" standard, once again
33
choose which evidence to ignore. There was considerable evidence going to
intentional discrimination to meet the summary judgment standard and send
Plaintiffs' claims to the jury.
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
for older buildings in violation of the State Building Code, brings into question
whether the City falsified its certifications to HUD through material non-disclosures.
CONCLUSION
Nowhere in the District Court's Order granting summary judgment did the
District Court draw inferences in favor of Plaintiffs, nor consider whether a reasonable
juror could view the evidence differently. This disregard for the summary judgment
standard and this kind of "trial on the paper" violates Plaintiffs' Constitutional right to
trial by jury.
Plaintiffs ask this Court to reverse the District Court's grant of summary
judgment and remand the case for trial.
Dated: May 6, 2009
SHOEMAKER & SHOEMAKER, P.L.L.C.
By: s/ John R. Shoemaker John R. Shoemaker (Attorney Lic. #161561) 7900 International Drive International Plaza, Suite 200 Bloomington, Minnesota 55425 (952) 224-4610
Attorney for Plaintiffs-Appellants
61
CERTIFICATION OF COMPLIANCE WITH FRAP 32
AND CERTIFICATION OF WORD PROCESSING PROGRAM
Counsel for Plaintiffs-Appellants-prepared its brief using Microsoft Word 2003
for its word processing program. This brief contains 12,081 words. Counsel also
certifies that the attached CD has been scanned for computer viruses and there are no
viruses on the CD. The only document contained on this CD is the Appellant's Briefin
the PDF file format.
Dated: May 6, 2009 By: s/ John R. Shoemaker John R. Shoemaker, Esq.