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Steinhauser et al. v. City of St. Paul et al.: US District Court : MUNICIPAL : ZONING | HOUSING | 1983 | RICO | ANTI-T - St. Paul enforcement of housing code

1
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Frank J. Steinhauser, III, et al.,
Plaintiffs,
v. Civil No. 04-2632 (JNE/SRN)
ORDER
City of St. Paul et al.,
Defendants.
Sandra Harrilal et al.,
Plaintiffs,
v. Civil No. 05-461 (JNE/SRN)
ORDER
City of St. Paul et al.,
Defendants.
Thomas J. Gallagher et al.,
Plaintiffs,
v. Civil No. 05-1348 (JNE/SRN)
ORDER
City of St. Paul et al.,
Defendants.
John R. Shoemaker, Esq., Shoemaker & Shoemaker, PLLC, appeared for Plaintiffs Frank J.
Steinhauser, III, Mark E. Meysembourg, Kelly G. Brisson, Sandra Harrilal, and Steven R.
Johnson d/b/a Market Group and Properties.
Matthew A. Engel, Esq., Aase, Engel & Kirscher, PLLC, appeared for Plaintiffs Thomas J.
Gallagher, Joseph J. Collins, Sr., Dadders Properties, LLC, Dadders Estates, LLC, Dadders
Enterprises, LLC, Dadders Holdings, LLC, Troy Allison, Jeff Kubitschek, and Sara Kubitschek.
Plaintiffs Bee Vue and Lamena Vue did not appear.
Louise Toscano Seeba, Esq., St. Paul City Attorneys Office, appeared for Defendants City of St.
Paul, Randy Kelly, Andy Dawkins, Lisa Martin, Steve Magner, Dean Koehnen, Michael Kalis,
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Dick Lippert, Kelly Booker, Jack Reardon, Paula Seeley, Mike Cassidy, Joel Essling, Steve
Schiller, Joe Yannarelly, Dennis Senty, Michael Urmann, Rich Singerhouse, John Doe, Jane
Doe, and Jane Roe.
These three related cases are before the Court on Defendants motions for summary
judgment.1 The cases are unwieldy because each of the sixteen separate plaintiffs makes
different factual allegations about his, her, or its treatment by some subset of the eighteen named
defendants. The number of claims asserted by Plaintiffs compounds the unwieldiness of the
cases. As foreshadowed by the previous two sentences, resolution of Plaintiffs claims requires
lengthy explanation.
Some commonalities exist between Plaintiffs. Plaintiffs are or were private owners of
residential rental properties in the City of St. Paul (City). Plaintiffs rented the properties to lowincome
households. Plaintiffs, as landlords, received multiple code enforcement orders for
conditions existing at their rental properties. In many cases, the code enforcement orders cited
between ten and twenty-five violations for conditions including rodent infestation, missing deadbolt
locks, inadequate sanitation facilities, inadequate heat, inoperable smoke detectors, broken
or missing doors and screens, and broken or missing guardrails and handrails. In some cases,
Plaintiffs properties were condemned as unfit for habitation.
Plaintiffs claim Defendants enforced the Citys minimum residential property
maintenance standards against them in a manner that violated state and federal law because
Plaintiffs are private landlords and because they rented to protected classes. More specifically,
Plaintiffs claim the City, former City Mayor Randy Kelly, the former Director of the Citys
Department of Neighborhood Housing and Property Improvement (DNHPI) Andy Dawkins,
1 For the sake of brevity, the Court refers to the sixteen plaintiffs collectively as
Plaintiffs and the eighteen named defendants collectively as Defendants unless additional
specificity is required.
3
DNHPI supervisor Steve Magner, and other City employees violated Title VIII of the Civil
Rights Act of 1968, as amended by the Fair Housing Act Amendments of 1988 (Fair Housing
Act), 42 U.S.C. 3601-3619 (2000); 42 U.S.C. 1981, 1982, 1983, 1985 (2000); and the
Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961-1968 (2000),
through their enforcement actions. Plaintiffs also make claims under Minnesota law for abuse of
process, tortious interference with contract, and tortious interference with business expectancy.
In addition, plaintiffs Thomas J. Gallagher, Joseph J. Collins, Troy Allison, Jeff and Sara
Kubitschek, Dadders Properties, LLC, Dadders Estates, LLC, Dadders Enterprises, LLC, and
Dadders Holdings, LLC (collectively, Gallagher plaintiffs) assert an antitrust claim under 15
U.S.C. 1, 2, 13, 18 (2000), and claim that chapters 34, 43, 45, and 51 of the St. Paul
Legislative Code are unconstitutionally vague. For the reasons set forth below, the Court grants
Defendants motions for summary judgment and dismisses all three cases.2
I. BACKGROUND
A. City of St. Paul Housing Code and Enforcement
Chapter 34 of the St. Paul Legislative Code (housing code) sets forth the minimum
property maintenance standards for all structures occupied or intended to be occupied for
residential purposes in the City. St. Paul, Minn., Code 34.01, 34.03 (1993). The stated
purpose of the housing code is to protect the public health, safety and welfare in all structures
and on all premises. Id. 34.01. It [e]stablishes minimum maintenance standards for all
structures and premises for basic equipment and facilities for light, ventilation, heating and
2 Plaintiffs ask the Court to reconsider the facts and issues raised in Plaintiffs earlier
motions for sanctions in deciding the present motion. The Court considered these facts and
issues when it affirmed the magistrate judges orders denying the sanctions motions. Plaintiffs
have not shown any reason why the Court should reconsider these issues, and the Court declines
to do so. See D. Minn. LR 7.1(g).
4
sanitation; for safety from fire; for crime prevention; for space, use and location; and for safe and
sanitary maintenance of all structures and premises. Id.
In 2003, the City established DNHPI as an executive department responsible for
administering and enforcing the housing code. Id. 14A.01 (repealed 2008). Randy Kelly, who
was the City Mayor at the time, appointed Andy Dawkins as the director of DNHPI. The
responsibilities of DNHPI included inspecting all buildings and properties as required by the
City codes; administering and enforcing laws regulating the maintenance of residential property,
including the Citys vacant building program and the Citys rental registration program; and
enforcing violations of the Citys codes related to property maintenance. Id. 14A.01(b).
According to the DNHPI website, DNHPIs mission was to keep the city clean, keep its housing
habitable, and make [its] neighborhoods the safest and most livable [of] anywhere in
Minnesota. The DNHPI website identified closing down problem properties as one of
DNHPIs priorities. The DNHPI website described a problem property as [i]f you live next
door to a problem property[,] you know it! Constant calls to get rid of the junk, intolerable
behavior by occupants, and guests, etc. Problem properties included both rental and owneroccupied
properties.
During Dawkinss tenure as director, DNHPI enforced the housing code by conducting
proactive sweeps requested by City District Councils and responding to citizen complaints.
According to the DNHPI website, to respond to a citizen complaint, a housing inspector visited
the subject property and determined if a violation existed. If the complaint was founded, DNHPI
mailed a correction or an abatement order to the occupant and the property owner.
Dawkins created written rules and procedures for DNHPI, which were publicly available
from the DNHPI website. These rules stated that DNHPIs goal was consistent application of the
5
rules, but noted that universal application of the housing code was not possible due to
DNHPIs limited resources. Housing inspectors therefore had discretion in their application of
the rules, in their prioritization of cases, to determine which problems received the closest
scrutiny, and to achieve compliance through a conversation with the property owner rather than
issuing a work order or misdemeanor tag. To aid housing inspectors in exercising their
discretion, the rules established the following priorities: serious health and safety cases, problem
properties, garbage and nuisance violations, falling down/dilapidated structures, interior
habitability cases, and structures with multiple violations.
Enforcement tools available to housing inspectors included orders to correct or abate
conditions, condemnation and vacant building registration, criminal charges, and fees for
excessive consumption of City services. In addition, rental properties were subject to revocation
of rental registration, evictions initiated by the City Attorney, and City-initiated Tenant
Remedies Actions pursuant to Minn. Stat. 504B.395, subd. 1(4) (2006). At times, properties
not in compliance with the housing code were required to undergo a code compliance
inspection by the Citys Office of License, Inspections, and Environmental Protection, which
would evaluate the buildings structure, plumbing, electrical condition, and mechanical
condition.
B. St. Paul Public Housing Agency
The St. Paul Public Housing Agency (PHA), a governmental entity separate and distinct
from the City, owns and manages 4300 units of public housing in the City. The United States
Department of Housing and Urban Development (HUD) funds PHAs public housing program
through an operating subsidy and capital improvement funds. PHAs public housing includes
high-rise properties, family townhome developments, and 450 scattered site properties, which
6
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.
PHA also operates the Section 8/Housing Choice Voucher program (HCV program) for
the City. HUD funds the HCV program. PHA pays HCV program funds directly to landlords on
behalf of households participating in the HCV program.
According to Jon Gutzmann, Executive Director of PHA, there is a shortage of affordable
housing in the City. About 6000 households are on the waiting list for PHA public housing.
Approximately 3000 households are on the HCV programs waiting list, which is closed.
Although the record does not reflect the demographic breakdown for the City, it is undisputed
that non-whites make up a disproportionate percentage of these waiting lists.
PHA properties are subject to the federal Uniform Physical Condition Standard (UPCS).
Properties owned by PHA also are subject to the Citys codes, including the housing code.
According to Henry Petro, Director of Maintenance for PHA, the City sends code enforcement
orders to a single contact person at PHA, who then forwards the order to the appropriate PHA
department. City housing inspectors have ordered repairs on PHA homes, primarily for exterior
deficiencies. The City rarely, if ever, condemns a PHA scattered site property, declares a PHA
scattered site property a vacant building, or subjects a PHA scattered site property to a code
compliance inspection. The City has, however, condemned non-scattered site PHA properties,
including apartments in PHA high-rises.
HUD inspects a subset of PHA properties every two years. HUD consistently rates PHA
as a high performer in overall operations. Between 2002 and 2005, PHA received scores
7
between 88% and 90% for the physical condition of its properties. A score over 80% results in
HUD inspecting PHA properties every other year rather than every year.
In addition to undergoing HUD inspections, PHA properties are subject to frequent
inspections by PHA itself. According to Al Hester, Housing Policy Director for PHA, every
PHA unit is subject to an annual preventative maintenance inspection and an annual
housekeeping inspection. PHA conducts yard-care and building-condition inspections of its
scattered site properties five times a year. PHA also conducts pest-control inspections of its
properties. Petro testified that PHAs maintenance department employs ninety-eight people.
Seventy-seven of the maintenance department employees are maintenance line workers. PHA
documents indicate that in 2002, PHA completed 28,577 non-emergency work orders and 6573
emergency work orders. PHA makes routine repairs in approximately 3.6 days and emergency
repairs within 24 hours.
Private-sector properties rented to HCV program tenants must meet the federal Housing
Quality Standards (HQS) set forth in 24 C.F.R. 982.401 (2008), as well as the Citys housing
code. According to Hester, the HQS is a lower standard than the UPCS. In 1995, the City Fire
Department compared the Citys housing code to the HQS and concluded that the housing code
was stricter than the HQS for seventy-seven of the ninety-four items compared, or 82% of the
items. The housing code was as strict as the HQS for twelve items, and the housing code was
less strict than the HQS for three items.3
3 The Fire Department classified the relative strictness of two of the ninety-four items as
undetermined.
8
C. Plaintiffs
Plaintiffs are current or former owners of residential rental properties in the City. Of the
sixteen plaintiffs, three are non-whites. Plaintiffs describe Sandra Harrilal as Black American
and Bee and Lamena Vue as Asian-American. According to Plaintiffs, between 60% and 70% of
their tenant base is African-American.
Throughout their Complaints, Plaintiffs allege Defendants committed multiple acts of
wrongdoing. Plaintiffs challenge the legitimacy of code enforcement orders they received and
claim that neighboring properties also had code violations but did not receive code enforcement
orders. Plaintiffs claim City housing inspectors and law enforcement personnel conducted
unconstitutional searches or inspections of Plaintiffs rental properties. Plaintiffs challenge the
designation of certain properties as vacant buildings and the legality of code compliance
inspections. Plaintiffs contend that PHA received preferential treatment from the City with
respect to housing code enforcement while the City took a heavy enforcement and code to the
max approach with Plaintiffs. In addition, Plaintiffs claim Defendants targeted them for code
enforcement because Plaintiffs rented to protected classes. Finally, Plaintiffs claim the City
intentionally delayed mailings or intentionally sent mailings containing code enforcement orders
to wrong addresses to prevent Plaintiffs from responding before a deadline expired.
II. DISCUSSION
Summary judgment is proper if the pleadings, the discovery and disclosure materials on
file, and any affidavits show that there is no genuine issue as to any material fact and that the
movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The movant bears the
initial responsibility of informing the district court of the basis for its motion, and must identify
those portions of [the record] which it believes demonstrate the absence of a genuine issue of
9
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant satisfies its
burden, the nonmovant must respond by submitting evidentiary materials that set out specific
facts showing a genuine issue for trial. Fed. R. Civ. P. 56(e)(2); see Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). In determining whether summary judgment is
appropriate, a court must look at the record and any inferences to be drawn from it in the light
most favorable to the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
A. Claims Against John Doe, Jane Doe, and Jane Roe
Defendants argue that Plaintiffs claims against John Doe, Jane Doe, and Jane Roe should
be dismissed because Plaintiffs have not identified them or set forth their involvement with the
matters alleged in the Complaints. The true identity of those defendants was not uncovered
during discovery. Accordingly, the Court dismisses the claims against John Doe, Jane Doe, and
Jane Roe without prejudice. See Munz v. Parr, 758 F.2d 1254, 1257 (8th Cir. 1985) (discussing
when dismissal of claims against John and Jane Does is appropriate).
B. Fair Housing Act Claims
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.
Until oral argument, it was unclear which protected class Plaintiffs claimed was
discriminated against by Defendants. In their Complaints, Plaintiffs identified not only African10
Americans, Hispanics, Asians, American-Indians, families with children, individuals with
disabilities, [and] those receiving state and federal financial assistance, but a broad category
they termed others less fortunate. At oral argument, counsel for Plaintiffs clarified that the key
to Plaintiffs FHA claims is that Plaintiffs rent to a higher percentage of African-Americans than
PHA does. The Court therefore analyzes Plaintiffs FHA claims in the context of disparate
impact on African-Americans and disparate treatment of African-Americans.
1. Standing
Defendants contend that Plaintiffs lack prudential standing to bring their FHA claims. By
imposing prudential limits on standing, the judiciary seeks to avoid deciding questions of broad
social import where no individual rights would be vindicated and to limit access to the federal
courts to litigants best suited to assert a particular claim. Gladstone, Realtors v. Vill. of
Bellwood, 441 U.S. 91, 99-100 (1979). Accordingly, a plaintiff may have Article III standing yet
lack prudential standing because the asserted harm is a generalized grievance shared in
substantially equal measure by all or a large class of citizens. See Warth v. Seldin, 422 U.S.
490, 499 (1975). The test for prudential standing is whether the constitutional or statutory
provision on which the claim rests properly can be understood as granting persons in the
plaintiffs position a right to judicial relief. Id. at 500.
Congress intended standing under the FHA to extend to the full limits of Article III.
See Oti Kaga, Inc. v. S.D. Hous. Dev. Auth., 342 F.3d 871, 881-82 (8th Cir. 2003). Plaintiffs
need not be members of a protected class to suffer harm from discrimination. See id. at 881.
Plaintiffs claim that Defendants enforcement of the housing code against Plaintiffs because of
their tenants race has caused Plaintiffs harm in the form of increased maintenance costs, and in
some cases, forced Plaintiffs to sell their properties. These injuries, which result from the
11
alleged discrimination, are distinct and unique, and fall within the zone of interests protected by
the FHA. Plaintiffs have prudential standing to bring their FHA claims. See id.
2. FHA Disparate Impact
To succeed on their disparate impact claim, Plaintiffs must show that a facially neutral
policy results in, or can be predicted to result in, a disparate impact on protected classes
compared to a relevant population.4 See Darst-Webbe Tenant Assn 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. Id. 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.
In their memorandum in support of their motion, Defendants argue that Plaintiffs
disparate impact claim fails because Plaintiffs failed to identify a facially neutral policy. At oral
argument, Plaintiffs identified for the first time Defendants enforcement of the Citys housing
code instead of the federal HQS as the challenged facially neutral policy.5 Defendants made
4 Counsel for Plaintiffs argued for the first time at oral argument that the federal HQS
preempts the Citys housing code and that Defendants conduct violated their duty to
affirmatively further fair housing. As Plaintiffs did not raise these arguments in their motion
papers (despite describing the duty in their recitation of the facts), Defendants have had no
opportunity to address them. Plaintiffs belated claims of preemption and violation of the duty to
affirmatively further fair housing are insufficient to avoid summary judgment. See N. States
Power Co. v. Fed. Transit Admin., 358 F.3d 1050, 1056-57 (8th Cir. 2004).
5 In their brief, Plaintiffs direct the bulk of their disparate impact arguments to Defendants
alleged targeting of Plaintiffs for aggressive code enforcement and Defendants alleged
preferential treatment of PHA. The Court considers these arguments in the context of Plaintiffs
FHA disparate treatment claim and equal protection claim.
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arguments in their memoranda addressing whether the Citys housing code policies have an
adverse impact on a protected class, whether the Citys policies are justifiable as necessary to
achieve legitimate policy objectives, and whether an alternative policy exists that would permit
Defendants to achieve those objectives without discriminatory effects. Because Defendants
addressed these aspects of Plaintiffs disparate impact claim, the Court considers Plaintiffs
disparate impact claim despite Plaintiffs untimely identification of the challenged facially
neutral policy.
Plaintiffs claim that enforcement of the housing code, which is stricter than the HQS for
82% of the items considered,6 has a disparate impact on African-Americans because compliance
with the housing code increases the costs of low-income housing and African-Americans make
up a disproportionate percentage of low-income tenants.7 Plaintiffs argument, without
supporting evidence, is insufficient to withstand summary judgment. Plaintiffs must do more
than show that the housing code increases the cost of low-income housing and that minorities
tend to have lower incomes. See Reinhart v. Lincoln County, 482 F.3d 1225, 1230 (10th Cir.
2007) (It is not enough for the [plaintiffs] to show that (1) a regulation would increase housing
costs and (2) members of a protected group tend to be less wealthy than others. It is essential to
6 Plaintiffs place great weight on the City Fire Departments conclusion that the Citys
housing code was stricter than the HQS for 82% of the items considered. The 82% figure, in
isolation, is not particularly helpful to the disparate impact analysis because the cost of
complying with each item varies. For example, the cost of ensuring that structural members are
structurally sound would differ greatly from the cost of ensuring that deadbolt locks have a oneinch
throw. Accordingly, the Court cannot conclude that the Citys housing code is 82% stricter
than the HQS as a whole, or perhaps more critically to the question of disparate impact, that the
cost of compliance with the Citys housing code is 82% greater than the cost of compliance with
the HQS.
7 The parties agree that African-Americans make up a disproportionate percentage of lowincome
tenants in both private and PHA housing.
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be able to compare who could afford the housing before the new regulations with who could
afford it afterwards.). To make a prima facie case of disparate impact and withstand
Defendants motion for summary judgment, Plaintiffs needed to offer evidence establishing what
rents are under the Citys housing code, what rents would be under the HQS, and the percentages
of African-Americans and non-African-Americans who could not afford to rent in the City
because the City enforced the housing code rather than the HQS. See id. at 1230-31. Plaintiffs
offered no such evidence.8
Instead, Plaintiffs argue that two pieces of evidence support their claim of disparate
impact: the shortage of affordable housing in the City and the 2006 Mortgage Foreclosure and
Vacant Buildings Trends in St. Paul report (Vacant Buildings report). The Court addresses each
in turn.
First, Plaintiffs contend that the Citys affordable housing shortage supports a conclusion
of disparate impact. No evidence suggests that Defendants enforcement of the housing code
8 At oral argument, counsel for Plaintiffs argued that Kelly Brisson had passed an HQS
inspection shortly before receiving code enforcement orders from DNHPI. Plaintiffs did not
present evidence of the costs incurred by Brisson in complying with housing code requirements
that exceeded HQS requirements. Further, the HQS inspection encompassed only the lower unit
and basement of Brissons property. Because Plaintiffs put forth no evidence showing which
violations were found in the portions of Brissons property that passed the HQS inspection and
which were not, the Court cannot determine whether Brisson received correction orders for
conditions that complied with the HQS. At least two of the conditions for which DNHPI cited
Brisson after the HQS inspectiona missing interior handrail and a missing upper-story window
screenalso violated the HQS. Brisson admitted these conditions existed. Thus, the fact that
Brisson received code enforcement orders two months after a portion of his property passed an
HQS inspection does not establish that enforcement of the Citys housing code rather than the
HQS increases costs or rents, much less the extent of the increase.
Counsel also argued that Bee and Lamena Vue received code enforcement orders after
passing an HQS inspection. The Vues did not appear for their noticed deposition, and no
evidence in the record supports this claim. The Court will not consider counsels argument
regarding the Vues. See Wittenburg v. Am. Exp. Fin. Advisors, Inc., 464 F.3d 831, 838 (8th Cir.
2006) (arguments of counsel are not evidence).
14
caused or contributed to the Citys affordable housing shortage. Jon Gutzmann, Executive
Director of PHA, identified insufficient federal funding as contributing to the affordable housing
shortage. He did not identify the housing code as a contributor. His testimony is undisputed.
The existence of an affordable housing shortage does not support Plaintiffs claim of disparate
impact.
Second, Plaintiffs put forth the Vacant Buildings report as evidence of disparate impact.
According to Plaintiffs, the number of vacant homes in the City increased from 367 in 2003 to
1466 in 2007. Relying on the statement in the Vacant Buildings report that foreclosed
properties are or were disproportionately renter-occupied, Plaintiffs argue that enforcement of
the Citys housing code caused the increase in vacant buildings. The Vacant Buildings report
suggests that an increase in foreclosures caused the increase in vacant buildings and identifies
equity stripping, predatory lending practices, sub-prime lending, unforeseen life events such as
loss of income and health issues, increasing interest rates, and unemployment levels as causes of
foreclosures. The Vacant Buildings report does not identify enforcement of the Citys housing
code as a cause of increased vacancies or foreclosures. Therefore, the Vacant Buildings report
does not support Plaintiffs disparate impact claim. Plaintiffs have not made a prima facie case
of disparate impact.
Even if Plaintiffs had made a prima facie case, Defendants contend that enforcement of
the housing code rather than the HQS has a manifest relationship to legitimate, nondiscriminatory
policy objectives and is necessary to attain those objectives. See Darst-Webbe,
417 F.3d at 902-03. Defendants identified DNHPIs objectives as providing minimum property
maintenance standards, keeping the City clean and housing habitable, and making the Citys
neighborhoods the safest and most livable of any in Minnesota. Plaintiffs do not dispute that
15
these objectives are legitimate and non-discriminatory, that enforcement of the housing code has
a manifest relationship to these objectives, or that enforcement of the housing code is necessary
to achieving those objectives. Accordingly, Plaintiffs can only prevail on their disparate impact
claim by showing that a viable alternative exists that would allow Defendants to achieve the
same objectives without discriminatory effects. See id. at 903.
At oral argument, counsel for Plaintiffs argued that the HQS is a viable alternative to the
housing code. Plaintiffs have not put forth any evidence showing Defendants could achieve their
legitimate, non-discriminatory policy objectives if they adopted the HQS. According to the Fire
Departments analysis, the HQS contains no provision at all for a number of exterior conditions,
including sanitation, extermination, and lighting. Because these exterior conditions affect the
safety and cleanliness of the City, adoption of the HQS would prevent Defendants from
achieving their policy objectives. Further, although Plaintiffs assume that the HQS would have a
less discriminatory effect because it is a laxer standard, they presented no evidence showing the
effect of adopting the HQS on the availability of low-income housing or the expected decrease in
rents. Thus, even if Plaintiffs had made their prima facie case, they could not prevail on their
disparate impact claim because they have not shown the HQS permits Defendants to achieve
their legitimate, non-discriminatory policy objectives without discriminatory effects.9 See id. at
906.
9 Plaintiffs identified the Citys former Problem Properties 2000 (PP2000) program as a
viable alternative in their brief. The PP2000 program focused on communicating with landlords
of properties having a history of repeated or unresolved code violations to formulate a better plan
for compliance rather than simply imposing punishment. Frank Steinhauser was a participating
landlord. Having identified the Citys use of the housing code rather than the federal HQS as the
challenged facially-neutral policy, Plaintiffs apparently no longer assert that the PP2000 is a
viable alternative. Further, Plaintiffs offered no evidence showing that the PP2000 program
would achieve the DNHPIs objectives without discriminatory effect. Because participating
landlords were not excused from compliance with the housing code, they would still incur the
16
It is for the City, not the Court, to strike the proper balance between the need for safe,
clean, and habitable housing and the need for low-income housing. In the absence of evidence
supporting Plaintiffs allegations of disparate impact on African-Americans, the Court declines
to rewrite the Citys housing code. The Court dismisses Plaintiffs disparate impact claim.
3. FHA Disparate Treatment
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.
Intl 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).
In the context of Plaintiffs disparate treatment claim, direct evidence is not the opposite of
circumstantial evidence. See Griffith, 387 F.3d at 736. Rather, the term direct refers to the
causal strength of the proof. Id. (emphasis added). [D]irect evidence is evidence showing a
specific link between the alleged discriminatory animus and the challenged decision, sufficient to
support a finding by a reasonable fact finder that an illegitimate criterion actually motivated the
adverse action. See id. Direct evidence does not include stray remarks, statements by
same costs of compliance with the housing code, leaving any alleged discriminatory effect on
African-Americans unchanged.
17
nondecisionmakers, or statements by decisionmakers unrelated to the decisional process itself.
See Twymon v. Wells Fargo & Co., 462 F.3d 925, 933 (8th Cir. 2006) (quotation marks omitted);
Harris v. Itzhaki, 183 F.3d 1043, 1055 (9th Cir. 1999) (applying direct evidence exclusions 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 defendants proffered
explanation is a pretext for unlawful discrimination. Id. Plaintiffs make no argument under the
McDonnell Douglas framework. The Court therefore considers whether Plaintiffs have offered
evidence showing a specific link between the alleged discriminatory animus and the challenged
decision that is sufficient to support a finding by a reasonable fact finder that an illegitimate
criterion actually motivated the adverse action.
Plaintiffs contend that a December 2005 e-mail chain originated by Jane Prince, a
legislative aide to former City Council member Jay Benavav, demonstrates that the City knew its
code enforcement targeted minorities, but dismissed the discriminatory effect and took no
18
remedial action. Princes e-mail related to a call from a City resident who was concerned that
her neighbors were calling in complaints about her because she was a person of color. In the
e-mail, Prince said that there was a very real possibility that people of color are unfairly
targeted by the citys complaint[-]based system. Prince also wrote that her office would set up
a block meeting with the neighbors to address this concern.
The e-mail chain demonstrates that the resident was concerned about the neighbors, not
the City, targeting her on the basis of race. Further, it is clear from the e-mail chain that the City
took the residents concerns seriously and sought to resolve the issue. The Prince e-mail chain is
not evidence of discriminatory animus on the part of Defendants.
Plaintiffs contend the City Councils Chronic Problem Properties in Saint Paul: Case
Study Lessons report (Problem Properties report) shows bias and discrimination on the part of
City residents. The Problem Properties report does not condone or even accept City residents
bias, and is not evidence that Defendants harbored any discriminatory animus toward African-
Americans.
Plaintiffs also contend that the Problem Properties report used derogatory labelssuch
as Down n Outto refer to protected class residents. The record does not support this
contention. The Problem Properties report states that Down n Out is a large, old mansion
converted into 20 single resident units. Down n Out refers to the mansion, not the residents.
The Problem Properties report does not use derogatory labels to refer to residents in general or
African-Americans in particular. Nothing in the Problem Properties report suggests any
discriminatory animus on the part of Defendants.
Plaintiffs quote several statements made by Kelly and Dawkins while they were state
legislators back in the 1980s and 1990s. After reviewing the statements, the Court concludes
19
that the statements are not direct evidence of discrimination. For example, Plaintiffs quote Kelly
as saying:
Saint Paul needs to do all that it can to preserve and improve the existing privately
owned rental stock that provides much of our affordable housing, where owners
are now struggling with maintenance and management issues. If we lose that
housing stock, we have lost a great housing resource in the city.
Nothing in this quotation, or any of the others offered by Plaintiffs, suggests any discriminatory
animus toward African-Americans. Rather, this statement evidences Kellys belief that the City
needs to preserve privately-owned affordable housing.
Even if the Court were to assume that these statements evidenced discriminatory animus
toward African-Americans, given that Kelly and Dawkins made these statements at least a
decade before Defendants made any decision challenged in this lawsuit, they would not be direct
evidence of discrimination. At most, they would be statements by decisionmakers unrelated to
the decisional process itself. See Twymon, 462 F.3d at 933.
Plaintiffs offer the Citys decision to use its housing code rather than the HQS as direct
evidence of discrimination. Plaintiffs contend that the City failed to disclose the differences
between the Citys housing code and the HQS to the public and to HUD. The Citys housing
code is set forth in Chapter 34 of the St. Paul Legislative Code. The HQS is set forth in 24
C.F.R. 982.401. Both standards are matters of public record, and the differences are not
concealed from anyone.
Plaintiffs claim the City recognized that proceeding with its housing code instead of the
HQS would adversely affect the availability of affordable housing in the City and proceeded with
the intent of causing that adverse effect. In a memorandum cited by Plaintiffs, Dawkins wrote:
No code enforcement program can be universal 24/7 on every violation
at every property theres just not enough resources; moreover, in most cities a
balance has to be struck between aggressive enforcement to preserve livability
20
and over-zealous enforcement potentially leading to wholesale abandonment of
properties or the inner-city.
In St. Paul the balance has been struck this way . . . [listing measures
permitting the City to become more pro-active without increased resources].
In a section of deposition transcript also quoted by Plaintiffs, Dawkins said:
I used the example of Baltimore where the aggressive enforcement had tipped the
scale so that there was a start of abandonment of properties more than the city had
hoped for in Baltimore. And I wanted to make sure that everyone understood that
using whatever levers or rules or policies the city has, that we need to make sure
that we didnt hit a tipping point.
When considered in context, Dawkinss statements illustrate his desire to avoid wholesale
abandonment of properties and his belief that the Citys policies did not cause wholesale
abandonment. Dawkinss statements do not suggest any discriminatory animus. Further, no
evidence suggests that the City designed and enforced its housing code with the intent of
reducing the availability of affordable housing.
Plaintiffs claim other memoranda authored by Dawkins are direct evidence of
discrimination. One memorandum relates to a request made by Kelly that City departments
think of instances where City government might be susceptible to racism and develop corrective
measures. Plaintiffs claim Dawkinss statement that [p]erhaps a disproportionate number of
folks getting [excessive consumption] bills are people of color, but if this is so, then maybe its
because a disproportionate number of families living in poverty are people of color is evidence
of discriminatory animus. The fact that Dawkins continues [a]nd if this is so, then maybe we
should seriously move forward on hiring someone to . . . help this group find the resources to get
the job done belies Plaintiffs argument. Rather than showing discriminatory animus, this
memorandum is evidence of Dawkinss desire to reduce excessive consumption fees imposed on
people of color by helping them find the resources to repair their properties.
Another memorandum authored by Dawkins and quoted by Plaintiffs states:
21
As you know, the new way to bill-out for excessive consumption is extremely
easy compared to the old way. Everything counts so you dont have to comb
the file for exterior property violations, you dont have to count to four cycles,
etc. And, we get to assess the bill to the property taxes if not paid. I estimate the
new ordinance will bring in half a million dollars or more, and the Mayor has
basically said its [ours] to spend which is good, because . . . the new rental
registration ordinance will likely increase the number of interior inspections we
do by a substantial amount and either were going to get a lot of overtime, or
[were] going to have to do some new hires.
The Court discerns no evidence of discriminatory animus in this description of the new excessive
consumption and rental registration ordinances.
Plaintiffs claim a statement Dawkins made to Bill Cullen, a real estate investor, is direct
evidence of discrimination. Cullen testified that Dawkins had asked a group of landlords how
would [the landlords] feel if all those tenants that are at the bottom of the box were no longer in
St. Paul? Dawkinss statement is facially neutral with respect to race, but Plaintiffs suggest that
this statement reveals a racially discriminatory mindset. The Court therefore considers the
statements context. See Twymon, 462 F.3d at 934.
According to Cullen, Dawkins made this statement during a meeting about how to
improve neighborhood conditions in the Citys Payne/Phalen neighborhood. The executive
director of the Payne/Phalen neighborhood suggested that landlords screen their tenants, which
prompted a discussion about the attributes of low-income tenants. Cullen drew a box for the
meeting participants showing the best tenants as those with the most income, best credit, and
least criminal history. The bottom of the box tenants were those having poor credit scores,
criminal records, poor rental histories, and lower incomes. Race was not one of the attributes
discussed.
Cullen interpreted Dawkinss statement as a statement that Dawkins was trying to get rid
of the bottom of the box tenants. Even if the Court assumes Cullens interpretation is correct,
Plaintiffs ask the Court to then conclude that Dawkinss desire to exclude bottom of the box
22
tenants from the City meant that Dawkins was trying to exclude persons of colorspecifically,
African-Americansfrom the City. While the Court must draw all reasonable inferences in
favor of Plaintiffs on Defendants motion for summary judgment, the Court shall do so without
resort to speculation. See Twymon, 462 F.3d at 934. Dawkinss race-neutral statement made in
the context of a discussion about improving the conditions of the Payne/Phalen neighborhood
reveals no discriminatory animus. See id. (facially race-neutral statements, without more, do not
demonstrate racial animus).
Plaintiffs also offer a statement Dawkins made to Sara Anderson, a housing advocate.
According to Anderson, Dawkins said that he didnt want low-income individuals renting in the
City.10 Dawkins made this statement during a meeting to discuss Steinhausers properties
attended by Dawkins, Steinhauser, and Anderson. No evidence suggests that this facially raceneutral
statement arose from racial animus on the part of Dawkins. See id.
Plaintiffs claim an affidavit from Steve Mark, a St. Paul landlord, supports their disparate
treatment claim. According to Mark, a City Fire Inspector issued an overcrowding citation for
an apartment containing three Hispanic tenants but did not issue an overcrowding citation for an
identically-sized apartment in the same building housing three white tenants. Mark claims the
square footage of both apartments complied with City codes regarding occupancy. The housing
code sets forth several criteria in addition to the required space in a dwelling unit for determining
legal occupancy, including minimum ceiling height, required space in sleeping rooms, and the
presence of an escape window meeting certain specifications. St. Paul, Minn., Code 34.13.
Marks affidavit did not provide the stated basis for the overcrowding order or indicate whether
10 Anderson also testified that she never heard Dawkins make any other negative statements
about low-income tenants, nor did she ever hear any other City employee say they did not want
low-income people renting in the City during subsequent discussions.
23
the apartments and sleeping rooms were equivalent with respect to all relevant criteria. The
record does not indicate that Mark appealed the overcrowding order. The Court therefore cannot
conclude that the overcrowding order was improper, much less that it was based on racial
animus. Even if the Court assumed that the overcrowding order demonstrated racial animus
toward Hispanics, the order would not support Plaintiffs claim of discrimination against
African-Americans. See Griffith, 387 F.3d at 736 (evidence that employer made insensitive
remarks about African-American and women employees not direct evidence of discrimination
against Hispanic employee).
Plaintiffs point to the deposition testimony of former Legal Aid attorney Perry DeStefano
as direct evidence of discrimination.11 DeStefano testified regarding his representation of Robert
King, an African-American tenant/caretaker of a building located at 321 Bates Avenue. King
was challenging the decision of the Citys Department of Fire and Safety Services (DFSS) to
revoke the certificate of occupancy for 321 Bates Avenue.
DeStefano testified that his client had not received correction orders from the City. The
St. Paul Legislative Code states [t]he fire marshal may, in writing, issue a notice to the owner(s)
and the interested parties known to the fire marshal of the citys suspension or revocation of a
fire certificate of occupancy. St. Paul, Minn., Code 40.06(a). The minutes from Kings
legislative appeal indicate that DFSS sent the correction orders to the property owner, who lived
in Georgia. The property owner did not give written authorization to the City to send copies of
DFSS notices, reports, and other correspondence to King or inform the City that King had the
authority to evict tenants and manage the property until after King appealed the notice of
11 For the most part, DeStefanos testimony and supporting exhibits are likely hearsay.
Because Defendants did not make this argument in their motion papers, the Court considers
DeStefanos testimony and supporting exhibits for the purposes of this motion.
24
condemnation. The Citys decision to mail correction orders to the property owner in
accordance with the law is not direct evidence of intentional discrimination on the basis of race.
DeStefano believed that a letter dated July 22, 2004, from DFSS listing a number of code
deficiencies identified during a July 12, 2004, inspection was backdated because it indicated
that a re-inspection would occur on or after July 12the same date as the inspection and ten
days before the date on the letter. Plaintiffs offer no evidence that the letter was backdated rather
than simply delayed. Further, no evidence suggests that the delayed mailing was intentional,
motivated by the race of the tenants residing at 321 Bates Avenue, or anything other than clerical
or computer error. The delayed mailing is insufficient to raise an inference of discrimination.
See Daniels v. Dillards, Inc., 373 F.3d 885, 887 (8th Cir. 2004) (no inference of discrimination
when inability of one African-American to pay by check was likely computer malfunction).
Finally, although DeStefano believed that neighbors were making false allegations to the
police because of the tenants protected class status, discriminatory animus on the part of
neighbors is not evidence of discriminatory animus on the part of Defendants.12
Plaintiffs offer a statement by Assistant City Attorney Maureen Dolan as direct evidence
of intentional discrimination. Bee Vue, a Laotian immigrant, stated in an affidavit that Dolan
told him [p]ersonally, I dont think you people deserve to be in this country. According to
Vue, Dolan made this statement after Vue expressed his concern that a misdemeanor criminal
citation for a housing code violation could affect his application for U.S. citizenship. While the
Court does not condone such a statement, it is a stray comment unrelated to the decision to issue
the misdemeanor citation or any other challenged decision, and is not direct evidence of
12 DeStefano himself recognized this, as he stated in a letter regarding his representation of
King I know the City did not intend to have a disparate impact.
25
discrimination. See Twymon, 462 F.3d at 934. It was a housing inspector, not Dolan, who issued
the misdemeanor citation.
Moreover, Plaintiffs FHA claim is premised on their argument that the City prefers
Asian-American tenants to African-American tenants. Dolans statement, directed toward a
Laotian immigrant, could not possibly refer to African-Americans, and therefore does not
support a claim of discrimination based on the African-American status of Plaintiffs tenants.
See Griffith, 387 F.3d at 736.
Plaintiffs argue that the opinion of Cathleen Royce, leader of the Community
Stabilization Project (CSP), that Magner is racist is direct evidence of intentional
discrimination.13 Royce testified about her opinion of Magner as follows:
Q: Now, you mentioned Steve Magner. When did you first have any contact
with Steve Magner in any shape within the City of St. Paul structure?
A: Back in the day, so James Trice, who was with CSP as an organizer for the
first year maybe that I was director, maybe two years, and James is an
African American man, fairly intelligent, very outspoken and had very
negative interactions with Magner.
Q: Was this back in the mid 1990s?
A: Probably, even earlier than that maybe.
Q: Did you ever have any observations as to Mr. Trice and Mr. Magners
interactions that you personally saw?
A: Yeah. And here were riding on the edge of my memory, but I had strong
feelings about it that Im there were a couple of interactions that I either
was a party to over the phone or in person that I again its a very vague
13 Royce also testified that tenants renting from Steinhauser, Johnson, and Bee Vue came to
CSP for assistance in forcing these landlords to make repairs. Royce testified that she visited
one of the properties for which Steinhauser challenges code enforcement activity after CSP
received a complaint from the tenant, who was caring for an infant. The tenants apartment
lacked adequate heat and did not have a door between the apartment and a common hallway.
The stove and refrigerator did not work. There were holes in the wall, and Royce saw two mice
while she was present.
26
memory, but and Ive had I believe Magner is racist and had some
issues with James.
Royce was unable to provide any specifics as to Magners allegedly racist behavior. Royces
opinion, based on two vaguely remembered interactions she observed several years before the
events giving rise to this lawsuit, is not direct evidence of discrimination.
Finally, Plaintiffs argue that the Citys decision to terminate the PP2000 program,
through which the City worked with landlords to achieve their compliance with the housing
code, is direct evidence of discrimination. Plaintiffs contrast the Citys decision to terminate the
PP2000 program with the City/PHA partnership on crime prevention at PHAs family townhome
developments through the A Community Outreach Program (ACOP). Plaintiffs do not explain
the relevance of the Citys crime-prevention efforts to the Citys relationship with landlords,
including Steinhauser, who owned properties with a history of unresolved or repeat [housing
code] violations. Plaintiffs have offered no evidence that discriminatory animus motivated the
Citys decision to terminate the PP2000 program. In the absence of evidence that an illegitimate
criterion actually motivated the Citys decision to terminate the PP2000 program, it is not the
Courts role to second-guess the wisdom of the Citys policies. The Court cannot conclude that
the Citys decision is direct evidence of discrimination.
Much of Plaintiffs evidence does not support a conclusion of racial animus toward
African-Americans, and none of the evidence shows a specific link between the alleged racial
animus and any challenged decision sufficient to support a finding by a reasonable finder of fact
that an illegitimate criterion actually motivated a challenged decision. For these reasons,
Plaintiffs have not supported their claims of disparate treatment using direct evidence. See
Griffith, 387 F.3d at 736. Because Plaintiffs have failed to create a genuine issue of material fact
as to whether Defendants intentionally discriminated against Plaintiffs on the basis of their
27
tenants African-American status, the Court dismisses Plaintiffs FHA disparate treatment
claims.
C. Section 1981 and 1982 Claims
Plaintiffs are required to show discriminatory intent to prevail on their claims under 42
U.S.C. 1981, 1982. Dirden v. Dept of Housing and Urban Dev., 86 F.3d 112, 114 (8th Cir.
1996). As discussed with respect to Plaintiffs FHA disparate treatment claim, Plaintiffs have
not shown discriminatory intent on the part of Defendants.
Plaintiffs argue that 2922 Sherman Ave. Tenants Assn v. District of Columbia, 444 F.3d
673 (D.C. Cir. 2006), supports their 1981 claim. In 2922 Sherman, the District of Columbias
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. Here, Plaintiffs submit
maps showing their properties are located in areas having a high percentage of minorities, but
offer no evidence showing their properties were targeted while other properties in similar
condition located in areas having a low percentage of minorities were not. Plaintiffs maps are
not evidence of intentional discrimination. Plaintiffs 1981 and 1982 claims fail.
D. Section 1983 Claims
Plaintiffs make claims under 42 U.S.C. 1983 for alleged violations of their rights under
the Fourth, Fourteenth, and Fifth Amendments 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).
28
1. Fourth Amendment
Plaintiffs claim Defendants violated Plaintiffs Fourth Amendment right to freedom from
unreasonable searches and seizures when City code enforcement and law enforcement officers
conducted warrantless searches of Plaintiffs rental properties without valid consent. Defendants
contend that Plaintiffs lack standing to assert this claim because Plaintiffs have no reasonable
expectation of privacy in their tenants apartments.14 Plaintiffs did not respond to this
argument.15 Nothing in the record suggests that these landlords had a reasonable expectation of
privacy in their tenants apartments. Plaintiffs therefore lack standing to bring 1983 claims
based on searches of their tenants apartments. See Rozman v. City of Columbia Heights, 268
F.3d 588, 591 (8th Cir. 2001).
2. Fourteenth Amendment
Plaintiffs allege violations of their Fourteenth Amendment right to equal protection as a
result of the Citys 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
14 Technically speaking, there is no doctrine of standing in Fourth Amendment law.
However, courts in the Eighth Circuit use the term standing as a shorthand reference to the
issue of whether a partys Fourth Amendment interests are implicated. See United States v.
Green, 275 F.3d 694, 698 n.3 (8th Cir. 2001).
15 Plaintiffs asserted for the first time at oral argument that their Fourth Amendment claim
was really an interference claim under the FHA. As Plaintiffs did not plead this claim in their
Complaints or raise it in their motion papers, Defendants have had no opportunity to address this
argument. The Court will not consider Plaintiffs FHA interference argument as it relates to the
challenged searches and inspections. See N. States Power Co., 358 F.3d at 1056-57.
29
treatment, Plaintiffs must also show intentional or purposeful discrimination. See Lewis v. Jacks,
486 F.3d 1025, 1028 (8th Cir. 2007).
Plaintiffs allege violations of equal protection based on several grounds. First, Plaintiffs
contend that Defendants targeted Plaintiffs properties because Plaintiffs rented to African-
Americans. As discussed with respect to Plaintiffs FHA disparate treatment claim, Plaintiffs
have put forth no evidence showing intentional discrimination on the part of Defendants.
Plaintiffs equal protection claim based on race fails. See id.
Plaintiffs make a class of one equal protection argument based on what Plaintiffs
describe as the Citys 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 States 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).
Plaintiffs first contend that the City routinely closed housing code inspection files for
PHA properties without action or a follow-up inspection. Plaintiffs cited a number of inspection
records in support of this claim. The Courts review of the inspection records reveals that they
fail to support Plaintiffs allegation of inaction or no follow-up inspections. For example, the
inspection records indicate that DNHPI received a complaint about a PHA property on May 1,
2003, for debris and furniture in the yard. The inspector left a message with PHA. When the
inspector rechecked the property on May 12, the furniture and debris were gone. DNHPI
30
received a complaint about three abandoned vehicles in the yard and alley at another PHA
property on May 13, 2003. The inspector checked the property and found that all three vehicles
had current license plate tabs. He called PHA and was told that PHA would tell the tenants to
move the cars off the grass. DNHPI kept the file open until the inspector verified that all of the
vehicles were removed. While conducting a sweep in July 2004, DNHPI found a PHA property
that had household items and vehicle parts in the back yard. The inspector called PHA. When
the inspector checked back in early August, the items and vehicle parts were gone.
Further, the records offered by Plaintiffs show that a PHA property received a correction
order for sanitation in August 2001, another PHA property received a vehicle abatement order in
May 2002, and a third PHA property received a correction notice for refuse, lack of garbage
bins, and inadequate paint/siding underneath a window. In short, the evidence does not support
Plaintiffs claims of inaction and no follow-up inspections.
Plaintiffs also make allegations of preferential treatment because the City has never
subjected a PHA scattered site property to a code compliance inspection, condemned a PHA
scattered site property, or declared a PHA scattered site property a vacant building. As an initial
matter, Plaintiffs do not identify any PHA scattered site property that should have been subject to
these regulatory activities. Instead, Plaintiffs make the broad claims that PHA has a history of
being subject to serious health and safety complaints on [its] properties and PHA homes also
appear to be frequently subject to mold growth and wet basements. The record indicates that
four scattered site propertiesout of 450experienced mold problems. In the most severe case,
after working with the tenant for several years, PHA installed a new roof and siding and then
hired an independent contractor to test for mold and make additional recommendations for
31
repair. This evidence does not demonstrate that any PHA property should have been subject to a
code compliance inspection, declared a vacant building, or condemned.
Plaintiffs also contend the residents at one of PHAs high-rise buildings complained of
and had to live with deadly mold conditions for a considerable period of time. The record
reflects that PHA became aware of a mold problem in a high-rise building on March 8, 2000,
after residents in seven apartments complained. An April 14, 2000, report from an indoor air and
mold expert retained by PHA indicated that the expert found high levels of potentially toxic
mold in one apartment and growth of the mold on sheetrock in a second apartment. Leaky
showers caused the mold problem. PHA released emergency funds and began repairs of the 124
leaky showers in May 2000. No evidence suggests that PHA failed to correct the mold problem
in a timely manner once it became aware of it, much less that DNHPI should have condemned
the apartments, declared the high-rise or portions of it a vacant building, or subjected the highrise
to a code compliance inspection.
Finally, Plaintiffs cite a 2001 list of high-rise resident comments on PHAs capital fund
program as evidence that PHA had a wide variety of other problems with proper maintenance of
its public rental units. Plaintiffs have put forth no evidence showing these comments
demonstrate the need for a code compliance inspection, condemnation, or vacant building
declaration. Many of the comments do not even relate to the housing code. (E.g., Install more
shade trees on the Hi-Rise grounds, Install more storage would like lockers in the basement,
Install a large screen TV, and Need more grocery carts.)
Even if the Court assumed that PHA properties received preferential treatment from the
City, Plaintiffs would still be required to show there is no rational basis for the difference in
treatment between Plaintiffs and PHA to prevail on their class-of-one equal protection claim.
32
See Costello, 266 F.3d at 921. PHA is an organization with a comprehensive inspection
schedule, staff dedicated to maintenance, and a demonstrated record for maintaining its
properties. Plaintiffs have not put forth any evidence showing that PHAs properties are in poor
condition or that PHA fails to make repairs or correct situations after receiving notification of a
violation of the housing code. On the contrary, the record indicates that PHA responds
appropriately to DNHPI correction orders and makes repairs in a timely manner. Given the
Citys limited resources and PHAs record of maintaining its properties, Defendants have a
rational basis for permitting PHA to manage its own repairs.
Plaintiffs also appear to make a class-of-one equal protection argument on the grounds
that they received housing code enforcement orders when property owners having similar code
violations were not cited. To succeed on such a claim, Plaintiffs must demonstrate that their
neighboring property owners were not just similar, but prima facie identical in all relevant
respects. See Lerch v. City of Green Bay, 271 F. Appx. 528, 529-30 (7th Cir. 2008). Plaintiffs
face a high bar in showing their neighboring property owners were similarly situated because
various factual traits, circumstantial nuances, and peculiarities can set entities apart, rendering
them, by virtue of their differences, amenable to disparate treatment. Id. at 530. Here, although
several Plaintiffs testified that violations existed on neighboring properties, Plaintiffs have not
shown that the neighboring properties were prima facie identical in all relevant respects, nor
have they shown that DNHPI was aware of the alleged violations. In fact, several Plaintiffs
testified that they did not complain to DNHPI about the alleged violations. Further, although
Plaintiffs assume the neighboring property owners did not receive enforcement orders for the
alleged violations, no evidence in the record supports this conclusion. Because Plaintiffs have
failed to show the neighboring properties were prima facie identical in all relevant respects,
33
Plaintiffs class-of-one equal protection claim based on differential treatment between Plaintiffs
and their neighbors fails.
3. 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, 268 F.3d at 593.
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 argue that Defendants policy of coding to the max to force landlords to evict
their tenants or sell their properties and declaring properties vacant to facilitate their
condemnation is such an egregious case. Plaintiffs base these claims on a November 13, 2002,
tabular listing of problem properties containing annotations reading code to the max or
similar.16 Nothing on the problem properties listing suggests that DNHPI was enforcing the
housing code in an arbitrary or oppressive manner. On the contrary, it is evident from the listing
that the City had received multiple calls alleging code violations and illegal activity at the many
of the properties. Enforcement of the housing code and related provisions of the St. Paul
Legislative Code achieves the legitimate interests of keeping the Citys neighborhoods safe and
housing habitable. Plaintiffs have not explained how Defendants enforcement of these codes at
properties having a documented history of non-compliance constitutes a substantive due process
violation.
16 Plaintiffs characterization of these statements as Dawkinss notes is incorrect, as he
repeatedly testified during his deposition that he did not enter the comments Defendants rely on,
and no evidence suggests otherwise.
34
Plaintiffs also contend that Defendants intentionally delayed mailing notices. Although
Plaintiffs did not identify evidence supporting this claim in their brief, the Court notes that
Sandra Harrilal testified during her deposition that she received two mailings that were
postmarked two weeks after the date on the letter. The City also sent a correction notice and
notice of Tenant Remedy Action (TRA) to the rental property rather than to Harrilals residence,
and she received her rental registration certificate several days after the postmarked date.
Harrilal received notice of the TRA before the hearing date when a housing inspector orally
notified her of the TRA. Harrilal also received the correction notices before the hearings.
Plaintiffs speculate that the delays and misdirection were intentional, but offer no evidence in
support of this claim. While the Court must draw all reasonable inferences in favor of Plaintiffs
on Defendants motion for summary judgment, the Court shall do so without resort to
speculation. See Twymon, 462 F.3d at 936. Even if evidence of intentionally delayed or
misdirected mailings existed, mailings that did not result in adverse action against Harrilal would
not rise to the level of a substantive due process violation.
Plaintiffs third argument in support of their substantive due process claim is that
Defendants employed a large and physically imposing police officer to force his way into
residences to discover interior code violations. Plaintiffs substantive due process claim based
on forced entries appears duplicative of their Fourth Amendment claims and therefore should be
analyzed as such. See Albright v. Oliver, 510 U.S. 266, 273 (1994) (Where a particular
Amendment provides an explicit textual source of constitutional protection against a particular
sort of government behavior, that Amendment, not the more generalized notion of substantive
due process, must be the guide for analyzing these claims. (quotations omitted)). Even if this
claim is not subsumed by Plaintiffs Fourth Amendment claim, Plaintiffs failed to put forth
35
deposition testimony from the tenants supporting Plaintiffs claims of forced entries, much less
demonstrate a substantive due process violation based on these entries. Further, as discussed
with respect to Plaintiffs Fourth Amendment claims, Plaintiffs lack standing to bring claims
based on searches of their tenants apartments. See Rozman, 268 F.3d at 591.
Finally, Plaintiffs contend Defendants engaged in widespread falsification of code
enforcement orders. Plaintiffs conceded the legitimacy of many of the violations they received.
Plaintiffs do, however, dispute the legitimacy of some violations on narrow grounds. For
example, Mark Meysembourg received a correction order citing him for a number of violations,
including broken kitchen cabinets. He claims that only one cabinet was broken. Assuming for
the purposes of summary judgment that this type of distinction renders a citation illegitimate,
Plaintiffs have put forth no evidence showing any erroneous citations were intentional. Citations
containing minor errors do not rise to the level of a substantive due process violation.
In other instances, Plaintiffs argued that violations were illegitimate because their tenants
created the conditions that gave rise to the violations. The housing code provides landlords with
an affirmative defense to misdemeanor prosecutions on those grounds, but does not preclude
enforcement of the housing code through an injunction or an order to correct violations. See St.
Paul, Minn., Code 34.18. In the absence of evidence demonstrating that Plaintiffs raised this
defense in response to code enforcement orders or that they were entitled to do so, the Court
declines to find that issuing an enforcement order for tenant-caused damage violates substantive
due process.
4. Fifth Amendment Takings Claim
Plaintiffs claim Defendants have taken their property without just compensation in
violation of the Fifth Amendment. Plaintiffs make two arguments in support of this claim:
36
(1) that Defendants enforcement of the housing code at their properties was unconstitutional and
(2) that Defendants illegally required Plaintiffs to bring their properties up to the current building
code through code compliance inspections. Defendants contend that Plaintiffs takings claims
are not ripe because they have failed to pursue Minnesota state court procedures for
compensation.
[I]f a state provides an adequate procedure for seeking just compensation, the property
owner cannot claim a violation of the Just Compensation Clause until it has used the procedure
and been denied just compensation. Koscielski v. City of Minneapolis, 435 F.3d 898, 903-04
(8th Cir. 2006) (quoting Williamson County Regl Planning Commn v. Hamilton Bank, 473 U.S.
172, 194-97 (1985)). Plaintiffs may seek just compensation through an inverse condemnation
action brought in Minnesota state court. See Wilson v. Ramacher, 352 N.W.2d 389, 394 (Minn.
1984). Plaintiffs have not pursued inverse condemnation actions. The Court lacks jurisdiction
over Plaintiffs takings claims because they are not ripe for review. See Koscielski, 435 F.3d at
903-04.
5. Ninth Amendment Claim
In their Complaint, Plaintiffs asserted that Defendants violated the Ninth Amendment,
which provides that (t)he enumeration in the Constitution, of certain rights, shall not be
construed to deny or disparage others retained by the people. U.S. Const. amend. IX.
Defendants argue that the Ninth Amendment has never been recognized as independently
securing any constitutional right for purposes of pursuing a civil rights claim, see Strandberg v.
City of Helena, 791 F.2d 744, 748-49 (9th Cir. 1986), and never been used as a solid basis for
any decision from the Supreme Court, see Natl Assoc. of Property Owners v. United States, 499
F. Supp. 1223, 1246 (D. Minn. 1980).
37
Plaintiffs did not respond to this argument and no evidence suggests that Plaintiffs have
made a viable Ninth Amendment claim. The Court dismisses Plaintiffs 1983 claim based on
the Ninth Amendment.17
E. Section 1985
Plaintiffs claim Defendants violated 42 U.S.C. 1985 by conspiring to deny Plaintiffs
and their tenants their civil rights. Defendants contend that Plaintiffs have put forth no facts
showing any intent to violate Plaintiffs civil rights, any conduct in furtherance of a conspiracy to
do so, or any damages resulting from such a conspiracy.
To prove the existence of a civil rights conspiracy under 1985(3), the Plaintiffs must
prove: (1) that Defendants did conspire, (2) for the purpose of depriving, either directly or
indirectly, any person or class of persons of equal protection of the laws, or equal privileges and
immunities under the laws, (3) that one or more of the conspirators did, or caused to be done, any
act in furtherance of the object of the conspiracy, and (4) that another person was injured in his
person or property or deprived of having and exercising any right or privilege of a citizen of the
United States. Larson by Larson v. Miller, 76 F.3d 1446, 1454 (8th Cir. 1996) (quotation marks
omitted). The purpose element of the conspiracy requires Plaintiffs to prove a class-based
invidiously discriminatory animus. See id. Plaintiffs must allege with particularity and
specifically demonstrate with material facts that Defendants reached an agreement, for example,
by pointing to at least some facts which would suggest Defendants reached an understanding to
violate Plaintiffs civil rights or their tenants civil rights. See id.
17 Because the Court finds no constitutional or statutory violation the part of any individual
defendant, any inquiry into whether the individual defendants are entitled to qualified immunity
or the Citys liability pursuant to Monell v. New York City Dept of Soc. Servs., 436 U.S. 658
(1978), is unnecessary. See Hayek v. City of St. Paul, 488 F.3d 1049, 1054-55 (8th Cir. 2007).
38
In their memorandum in opposition to Defendants motion, Plaintiffs recited the
applicable law, but put forth no evidence or arguments in support of their 1985 claim. No
evidence demonstrates the requisite agreement. The Court grants summary judgment on
Plaintiffs 1985 claim.
F. RICO Claims
Plaintiffs brought RICO claims against Defendants claiming violations of 18 U.S.C.
1962(c), (d). A plaintiff who brings suit under 18 U.S.C. 1962(c) must prove that the
defendant engaged in (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering
activity. Handeen v. Lemaire, 112 F.3d 1339, 1347 (8th Cir. 1997).18
Racketeering activity is defined in 18 U.S.C. 1961(1). That section lists as predicate
acts certain state law crimes, conduct that is indictable under various federal provisions, and
numerous other offenses. Handeen, 112 F.3d at 1353. In their Complaints, Plaintiffs based
their RICO claims on seven predicate acts: mail fraud, bank fraud, wire fraud, the Hobbs Act,
tampering, bribery, and interstate travel or transportation in aid of racketeering enterprises.
However, in Plaintiffs brief, they base their RICO claims on alleged false claims of housing
code violations, Defendants use of the Citys housing code rather than the HQS,
misrepresentations of code compliance inspections, and extortion. The Court considers each
proposed predicate act in turn.
18 Counsel for Defendants brought the parties stipulation that Plaintiffs do not assert RICO
claims against the City or the individual defendants in their official capacity, filed as Docket No.
12 in Steinhauser v. City of St. Paul, Civil No. 04-2632, to the Courts attention at oral argument.
It is unclear whether this stipulation applies to the related cases Gallagher v. City of St. Paul,
Civil No. 05-1348, and Harrilal v. City of St. Paul, Civil No. 05-461. Regardless, the Court
concludes that Plaintiffs have failed to raise a genuine issue of material fact as to whether
Defendants violated RICO.
39
Plaintiffs allege Defendants violated RICO by making false claims of housing code
violations. As discussed with respect to Plaintiffs substantive due process claim, Plaintiffs have
not put forth any evidence showing Defendants intentionally falsified code violations. Plaintiffs
also claim Defendants violated RICO by concealing the differences between the housing code
and the HQS from the public and from HUD. Defendants could not have concealed the
differences because the Citys housing code and the HQS are publicly available. Further,
Plaintiffs fail to explain how this supposed concealment qualifies as a predicate act. Plaintiffs
arguments regarding false claims of housing code violations and concealment of the differences
between the housing code and the HQS are unavailing.
Plaintiffs also contend that Defendants engaged in racketeering activity by
misrepresenting the nature of a code compliance inspection to Steinhauser, Brisson, and
Meysembourg. Plaintiffs assert that one or more of Defendants told these plaintiffs that a code
compliance inspection would require the property to meet the housing code that was effective the
date the property was built (as built), when in actuality a code compliance inspection required
the property to meet the current housing code. Bringing a property up to the current housing
code rather than the as built housing code would increase the cost of compliance. Plaintiffs
rely on Meysembourgs affidavit as a particularly egregious example of the Citys intent to
force as many illegal code compliances as possible.19
Meysembourgs code compliance inspection arose from the settlement of a TRA filed by
the City against Meysembourg in which he agreed to undergo a code compliance inspection in
exchange for dismissal of the TRA. While representing the City during the hearing on the TRA,
Dolan informed the housing court referee:
19 Plaintiffs offered no facts specific to Steinhauser and Brisson.
40
Just so the record is clear, Counsel asked the inspector, Are you going to be
requiring him to bring it up to the 2003 code? The answer was, No. This
building is not a newly built building. It will be expected to be compliant as it
was built the year it was built.
When Meysembourg contacted the Office of License, Inspections, and Environmental Protection
(LIEP) to schedule the code compliance inspection, he was told that there was no such thing as
an as built code compliance inspection and that LIEP only inspected to the current code.
Meysembourg testified that the LIEP inspector stated that he would have to talk to his supervisor
about the situation, but Meysembourg did not pursue the matter further with LIEP because
Meysembourg knew it was [the inspectors] way of brushing [Meysembourg] off. Instead,
Meysembourg simply arranged for the inspection and pointedly did not talk to [the inspectors]
about the as built issue.
Based on the housing court record, Dolan took pains to ensure that the record reflected
that Meysembourgs code compliance inspection would be as built. There is no evidence that
she was familiar with the details of code compliance inspections, which LIEP, not the City
Attorneys office, conducted. The Court is unable to reconcile Plaintiffs assertion that Dolan
intentionally misrepresented the nature of a code compliance inspection with these facts.
Further, given that Meysembourg pointedly did not talk to the inspectors again about the as
built issue, the record does not even show that LIEP refused to conduct an as built inspection.
Even if Dolan had intentionally misrepresented the nature of a code compliance
inspection, Plaintiffs would still be required to show that her conduct constituted a predicate act
giving rise to RICO liability. Generic allegations of common law fraud do not constitute
racketeering activity under RICO, see Giuliano v. Fulton, 399 F.3d 381, 388 (1st Cir. 2005), and
Plaintiffs have put forth no evidence showing Dolans conduct implicated the mail or wires.
Further, Dolans conduct does not qualify as extortion or attempted extortion because she did not
41
obtain or seek to obtain property from Meysembourg. See Scheidler v. Natl Org. for Women,
Inc., 537 U.S. 393, 405 (2003) (holding that shutting down abortion clinic was not extortion
because protestors neither pursued nor received something of value from respondents that they
could exercise, transfer, or sell). Even if Dolan had intentionally misled Meysembourg,
Plaintiffs have not established that her conduct constituted a predicate act.
Finally, Plaintiffs base their RICO allegations on alleged attempts at extortion by
Magner. Plaintiffs contend that Magner attempted to extort their properties from them by
excessively enforcing the housing code at their properties with the intent of forcing them to sell
the properties to Magner or his friends. Plaintiffs do not offer evidence showing that Magner
tried to purchase their properties. Instead, Plaintiffs offer the affidavits of non-parties Nancy
Osterman and Lois Jacobs, who claim that after the City condemned their properties, Magner
tried to convince them to sell their properties to him or one of his friends at below-market rates
or risk demolition of their properties.20 For the purposes of summary judgment, the Court
assumes that enforcement of the housing code to force property owners to sell their properties to
Magner or face demolition of the properties could constitute extortion and qualify as a predicate
act. See 18 U.S.C. 1951(b)(2) (defining extortion as obtaining . . . property from another,
with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or
under color of official right.).
The Court turns to whether Magners acts constituted conduct of an enterprise. See
Handeen, 112 F.3d at 1347. Plaintiffs identified the City as the requisite enterprise at oral
20 Defendants contend that Plaintiffs lack standing to assert RICO violations based on
Magners acts with respect to the two non-party affiants because Plaintiffs did not suffer injury
as a result of those acts. A person has standing to assert RICO claims if she experienced injury
to her business or property that occurred by reason of a RICO violation. See Bowman v. W. Auto
Supply Co., 985 F.2d 383, 384 (8th Cir. 1993). Plaintiffs are not claiming standing on behalf of
the affiants, but instead rely on the affidavits to establish a pattern of behavior.
42
argument. A city may constitute an enterprise within the meaning of RICO. See United States
v. Clark, 646 F.2d 1259, 1263 (8th Cir. 1981). Nevertheless, Plaintiffs have put forth no
evidence showing that Magner was doing anything more than conducting his own affairs. See
Reves v. Ernst & Young, 507 U.S. 170, 185 (1993) (liability depends on showing that the
defendants conducted or participated in the conduct of the enterprises affairs, not just their
own affairs); Bennett v. Berg, 710 F.2d 1361, 1364 (8th Cir. 1983) (Mere participation in the
predicate offenses listed in RICO, even in conjunction with a RICO enterprise, may be
insufficient to support a RICO cause of action.).
Plaintiffs contend that Magners conduct was a regular way of conducting the Citys
business because the City refused to address Magners conduct when brought to its attention. In
support of this contention, Plaintiffs submitted an affidavit from Julian Jayasuriya, the purchaser
of Jacobss property. Jayasuriya stated:
On June 15, 2005, at the City Council hearing, I showed the City Council my
receipt for the ,000 [performance deposit] paid to the City earlier that day. I
reminded the council of our prior deal that gave me sixty days, or 30 more days
from June 15, 2005, to complete the work on the Property at 14 East Jessamine.
The City Council rejected my requests and voted to demolish the property in five
days. During the Councils hearing, no one from the City ever answered my
questions as to who was really benefiting from the forced demolition of the
Property, or ever explained how Inspector Magner can operate his own real estate
placement firm or tie forcing sales of properties into Code compliance. Magner
did not reveal his own misconduct or his real reasons for retaliating against me
and this property.
In addition to Jayasuriyas affidavit, Plaintiffs submitted an affidavit from Jacobs stating:
I was upset and decided to go to the City to meet with City officials to voice my
complaints about what happened to my home. I told the City staff that I thought it
was improper for someone who worked for the City and was involved in the
condemnation of my home to then make an offer to purchase my home. Mr.
Magner was present at the meeting but he made no comments.
It is unclear from these affidavits whether the City was aware of Magners alleged
extortionate conduct. These affidavits, without more, are insufficient to permit a jury to
43
reasonably find that Magners attempts at extortion were a regular way of conducting the Citys
business or the conduct of the City. The mere existence of a scintilla of evidence in support of
the plaintiffs position will be insufficient; there must be evidence on which the jury could
reasonably find for the plaintiff. Anderson, 477 U.S. at 252. Plaintiffs RICO claims fail
because they have not put forth evidence that raises a genuine issue of material fact as to whether
Magner engaged in conduct of an enterprise. The Court therefore need not address the parties
arguments regarding the remaining elements of a RICO claim.
Plaintiffs also make RICO conspiracy claims under 1962(d). A RICO conspiracy
requires proof of the additional element of an agreement, that is, the defendant must have
objectively manifested an agreement to participate directly or indirectly, in the affairs of an
enterprise through the commission of two or more predicate crimes. United States v. Bennett, 44
F.3d 1364, 1374 (8th Cir. 1995). Plaintiffs have put forth no evidence that any Defendant
entered into the requisite agreement. Plaintiffs RICO conspiracy claim fails.
G. Void for Vagueness Claim
The Gallagher plaintiffs contend that certain terms found in the Citys housing code or
used by DNHPI as part of its code enforcement policies are unconstitutionally void for
vagueness.21 Defendants contend that Plaintiffs did not set forth any evidence establishing that
these terms are unconstitutionally vague. In their memorandum in opposition to Defendants
21 Plaintiffs brief identifies the following plaintiffs as injured by the alleged vagueness of
these terms: Steinhauser, Harrilal, the Dadders entities, the Kubitscheks, Meysembourg,
Johnson, Brisson, and Allison. As Plaintiffs acknowledge in their brief, only the Gallagher
plaintiffs made a void for vagueness claim in their Complaint. The Court will not consider any
void for vagueness claim by Steinhauser, Harrilal, Meysembourg, Johnson, and Brisson because
they did not plead a void for vagueness claim in their Complaints, the time for amending has
passed, and these plaintiffs have not made a motion to amend their Complaints. Further,
Plaintiffs have not put forth evidence establishing that these plaintiffs have standing to assert a
void for vagueness claim or relating to any such claim.
44
motion, the Gallagher plaintiffs challenge the terms vacant building, code compliance, and
problem properties. Plaintiffs offered evidence relating to a property located at 1522/1524
Carroll Avenue in support of their argument regarding the term vacant building. This property
is an upstairs/downstairs duplex and one of seven properties Troy Allison purchased from the
Dadders entities.
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. (citations omitted).
The Court must first determine whether the enactment reaches a substantial amount of
constitutionally protected conduct. Id. Where the enactment does not reach constitutionally
protected conduct, a plaintiff may succeed in a vagueness challenge only if the enactment is
impermissibly vague in all of its applications. Id. (quotation marks and citations omitted). For
these reasons, the Court must examine the [plaintiffs] conduct before analyzing other
hypothetical applications of the law, because a plaintiff who engages in some conduct that is
clearly proscribed cannot complain of the vagueness of the law as applied to . . . others. Id.
(quotation marks and citations omitted).
45
The St. Paul Legislative Code defines vacant building as:
A building or portion of a building which is:
a. Unoccupied and unsecured;
b. Unoccupied and secured by other than normal means;
c. Unoccupied and a dangerous structure;
d. Unoccupied and condemned;
e. Unoccupied and has multiple housing or building code violations;
f. Condemned and illegally occupied; or
g. Unoccupied for a period of time over three hundred sixty-five (365) days
and during which time the enforcement officer has issued an order to
correct nuisance conditions.
St. Paul, Minn., Code 43.02(7). There is no suggestion that the definition of vacant building,
which rests on the occupancy of a building, whether it is secure from entry, and the condition of
the building, reaches constitutionally protected conduct. The Court therefore examines the
Gallagher plaintiffs arguments regarding the vagueness of vacant building in light of the their
conduct. See Woodis, 160 F.3d at 438.
The Gallagher plaintiffs challenge focuses on the meaning of unoccupied as used in
the definition of vacant building. The St. Paul Legislative Code defines unoccupied as [a]
building which is not being used for a legal occupancy as defined in the Saint Paul Legislative
Code. St. Paul, Minn., Code 43.03(5). The St. Paul Legislative Code does not define legal
occupancy, but does define residential occupancy as [o]ccupancy in a building or portion
thereof, for residential purposes, used or intended to be used for living, sleeping, and/or cooking
or eating purposes. Id. 40.03.
During his deposition, Allison testified that the downstairs tenant had moved out shortly
before Allison purchased 1522/1524 Carroll Avenue. Allison also testified that the downstairs
46
unit was vacant when he purchased the property and when the City declared the property a
vacant building. Thus, Allison does not dispute that the downstairs unit was unoccupied when
the City declared the property vacant. Further, Allison does not dispute that the property had
housing code violations. A unit that is unoccupied and has multiple housing code violations, as
the downstairs unit of 1522/1524 Carroll Avenue did, falls within the definition of a vacant
building, see id. 43.02(7)(e), and is clearly proscribed. Allison lacks standing to challenge the
term vacant building on the grounds that it is unconstitutionally vague because a plaintiff who
engages in some conduct that is clearly proscribed cannot complain of the vagueness of the law
as applied to . . . others. See Woodis, 160 F.3d at 438 (quotation marks and citations omitted).22
The Gallagher plaintiffs also cite to testimony from Dawkins and Dick Lippert, the
former head of DNHPIs problem property unit, that they did not have a definition for problem
property, code compliance, legal occupancy, or vacant building. Because the Gallagher
plaintiffs have set forth no facts establishing their standing to raise void for vagueness claims as
to these terms, this testimony is unavailing. The Court dismisses the Gallagher plaintiffs void
for vagueness claims.
22 The Gallagher plaintiffs also base their void for vagueness challenge on the fact that a
tenant was living in the upstairs unit of 1522/1524 Carroll Avenue when the inspector declared
the building vacant. The inspector based his decision to declare the entire building vacant on the
vacancy of the lower unit and his observation of the second story while standing on the ground.
While the decision to declare the entire building vacant was incorrect, this does not make the
term vacant building unconstitutionally vague. In fact, the definition of vacant building
permits for the designation of a portion of a building as a vacant building. St. Paul, Minn.,
Code 43.02(7).
47
H. Antitrust Claim
1. Antitrust Standing
The Gallagher plaintiffs contend that Defendants conduct violates the antitrust laws. To
succeed on their antitrust claims, the Gallagher plaintiffs must first demonstrate that they have
suffered an antitrust injury as a result of the alleged conduct of Defendants and have standing
to pursue a federal antitrust claim. See In re Canadian Import Antitrust Litig., 470 F.3d 785, 791
(8th Cir. 2006). An antitrust injury is an injury of the type that the antitrust laws were
intended to prevent and that flows from that which makes defendants acts unlawful. Id.
(quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977)). Defendants
contend that the Gallagher plaintiffs lack antitrust standing because they have not suffered an
antitrust injury.
Other than reciting the legal standard for antitrust standing and injury, the Gallagher
plaintiffs devote a single sentence in their brief to their antitrust standing:
In this case, the 82% more stringent code that the City applies to the private
market landlords, and the failure to enforce its own code against its sister agency
PHA, in light of the knowledge the City possesses with respect to the application
of a more stringent code and the effect that it has on affordable housing providers,
meets the factors discussed above as Plaintiffs have been injured in their business
by the Citys conduct.
This sentence is insufficient to raise a genuine issue of material fact as to antitrust standing or
antitrust injury, particularly given the absence of evidence showing that the Citys enforcement
of its housing code has any impact on consumers of low-income housing or demonstrating that
the City does not enforce its housing code against PHA. Skeletal allegations, unsupported with
specific facts or evidence, are insufficient to create a genuine issue of fact so as to preclude
summary judgment. Thomas v. Corwin, 483 F.3d 516, 530 (8th Cir. 2007).
48
Further, the Gallagher plaintiffs make arguments with respect to the injury the Citys
housing code inflicts on affordable housing providers. It is the consumers of low-income
housing who are protected by the antitrust laws, not competitors. See Brunswick, 429 U.S. at
488. Injury to competitors is not an antitrust injury because it is not the type of injury the
antitrust laws were intended to prevent. See id.
The Gallagher plaintiffs assert in their Complaint both PHA and Plaintiffs are providing
low income housing to a low income market and are competitors of each other for low income
tenants in the City. The Gallagher plaintiffs also claim:
If Defendants applied the same nature and volume of code enforcement
operations against PHA that Defendants have directed, and continue[] to, direct
against Plaintiffs and other similarly situated landlords, PHA would suffer short
and long term adverse financial consequences, including an adverse effect on
PHAs cash flow, forced sale of rental properties to make up cash short falls,
increased layoffs of PHA employees, which would all result in an adverse impact
on the protected class tenants renting from PHA.
Thus, the Gallagher plaintiffs base their antitrust claims on the fact that PHA has an economic
advantage over them because PHA is subject to a lower level of code enforcement.
Although preferential treatment of PHA may concern the Gallagher plaintiffs, they have
not shown an antitrust injury because they have shown no harm to consumers or competition.
See Juster Assoc. v. City of Rutland, Vt., 901 F.2d 266, 270 (2d Cir. 1990) (no antitrust injury
when city subsidized new shopping mall even though it placed plaintiff at a disadvantage
because no harm to consumers). The Gallagher plaintiffs therefore lack antitrust standing.
2. Local Government Antitrust Act
Defendants also contend that the Local Government Antitrust Act (LGAA), 15 U.S.C.
34-36 (2000), provides them with immunity from antitrust damages. The LGAA prohibits
recovery of damages, interest on damages, costs, or attorneys fees for damages from any local
government, or official or employee acting in an official capacity as a result of a private antitrust
49
action. 15 U.S.C. 35(a). The City of St. Paul is a local government within the meaning of the
LGAA. See id. 34(1)(a). The Gallagher plaintiffs have not offered evidence showing that any
City officials or employees exceeded their authority. The LGAA immunizes the City and the
individual defendants, to the extent they were working in their official capacities, from the
Gallagher plaintiffs suit seeking damages for antitrust violations. See id. 35.
3. State Action Doctrine
To the extent that the Gallagher plaintiffs seek injunctive relief for Defendants allegedly
anticompetitive conduct, Defendants contend that that the state action doctrine articulated in City
of Columbia v. Omni Outdoor Advertising, Inc., 499 U.S. 365 (1991), bars the Gallagher
plaintiffs antitrust claim. Under Omni, a municipalitys conduct is immune from antitrust
scrutiny if the state granted the municipality both (1) the authority to regulate and (2) the
authority to suppress competition. 499 U.S. at 372-73. To satisfy the second prong, the
municipalitys acts must be the foreseeable result of the state authorization. Id.
The Minnesota Legislature has granted municipalities the following authority:
For the purpose of promoting the public health, safety, morals, and general
welfare, a municipality may by ordinance regulate on the earths surface, in the
air space above the surface, and in subsurface areas, the location, height, width,
bulk, type of foundation, number of stories, size of buildings and other structures,
the percentage of lot which may be occupied, the size of yards and other open
spaces, the density and distribution of population, the uses of buildings and
structures for trade, industry, residence . . . and may establish standards and
procedures regulating such uses.
Minn. Stat. 462.357, subd. 1 (2006). Minnesota Statutes 462.362 (2006) authorizes
municipalities to enforce any provision of sections 462.351 to 462.364 or of any ordinance
adopted thereunder by mandamus, injunction, or any other appropriate remedy in any court of
competent jurisdiction.
50
In addition, the Minnesota Legislature grants city councils the power to provide for . . .
promotion of health, safety, order, convenience, and the general welfare by such ordinances not
inconsistent with the Constitution and laws of the United States or of this state as it shall deem
expedient, Minn. Stat. 412.221, subd. 32 (2006), and requires residential landlords to
maintain the premises in compliance with the applicable health and safety laws of the state, and
of the local units of government where the premises are located, id. 504B.161, subd. 1(a)(4).
Thus, the State of Minnesota has expressly authorized municipalities such as the City to enact
zoning ordinances regulating the uses of buildings and structures . . . for residence, to
establish standards and procedures regulating such uses, and to enforce those uses through
ordinances or other appropriate remedies. The Citys housing code, which is a standard
regulating the use of residential property and promoting the health and safety of City residents,
falls within this grant of legislative authority, thereby meeting the first Omni requirement.
With respect to the second prong of the Omni test, a grant of zoning authority has the
foreseeable result of restricting competition. 499 U.S. at 373 (The very purpose of zoning
regulation is to displace unfettered business freedom in a manner that regularly has the effect of
preventing normal acts of competition . . . .). Further, the Minnesota Legislature expressly
requires residential landlords to comply with the health and safety laws of the local units of
government where the premises are located. Minn. Stat. 504B.161, subd. 1(a)(4). The
housing code meets the second Omni requirement. The state action doctrine bars the Gallagher
plaintiffs from seeking injunctive relief under the antitrust laws.
I. State Law Claims
Plaintiffs make three state law claims: (1) abuse of process, (2) tortious interference with
contract, and (3) tortious interference with Plaintiffs business expectancy. To succeed on an
51
abuse of process claim, Plaintiffs must show that there was an ulterior purpose and that
Defendants used the process to achieve something not within the scope of the proceedings.
Kittler & Hedelson v. Sheehan Props., Inc., 203 N.W.2d 835, 840 (Minn. 1973). To prevail on a
tortious interference with contract claim, Plaintiffs must show (1) the existence of a contract; (2)
Defendants knowledge of the contract; (3) Defendants intentional procurement of its breach;
(4) without justification; and (5) damages resulting therefrom. See Bouten v. Richard Miller
Homes, Inc., 321 N.W.2d 895, 900 (Minn. 1982). Success on Plaintiffs tortious interference
with business expectancy claim requires a showing of (1) the existence of a reasonable
expectation of economic advantage or benefit belonging to Plaintiffs; (2) that Defendants had
knowledge of that expectation of economic advantage; (3) that Defendants wrongfully and
without justification interfered with Plaintiffs reasonable expectation of economic advantage or
benefit; (4) that in the absence of the wrongful acts of Defendants, it is reasonably probable that
Plaintiffs would have realized their economic advantage or benefit; and (5) that Plaintiffs
sustained damages as a result of this activity. See Harbor Broad., Inc. v. Boundary Waters
Broad., Inc., 636 N.W.2d 560, 569 (Minn. Ct. App. 2001).
Defendants contend that Plaintiffs have not have not shown any ulterior motive behind
the Citys code enforcement, that Defendants used the process to achieve something not within
the scope of code enforcement proceedings, or that Defendants intentionally procured breaches
of Plaintiffs contracts with their tenants. Defendants additionally contend that Plaintiffs could
not have had a reasonable expectation of economic advantage in renting properties that had
housing code violations to low-income households. Plaintiffs cited the legal standard in
response, but made no argument and offered no evidence in support of their state law claims.
Because Plaintiffs fail to sustain their burden as to their state law claims, the Court grants
52
Defendants summary judgment on all three claims.23 See Rodgers v. City of Des Moines, 435
F.3d 904, 907-08 (8th Cir. 2006) (Without some guidance, we will not mine a summary
judgment record searching for nuggets of factual disputes to gild a partys arguments); Nw.
Natl Ins. Co. v. Baltes, 15 F.3d 660, 662-63 (7th Cir. 1994) (District judges are not
archaeologists.); United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991) (per curiam)
(Judges are not like pigs, hunting for truffles buried in briefs.); Nicholas Acoustics & Specialty
Co. v. H & M Constr. Co., 695 F.2d 839, 846-47 (5th Cir. 1983) (Judges are not ferrets!).
Finally, the Court addresses the voluminous materialsfour file boxes worth
submitted by Plaintiffs in opposition to Defendants motions for summary judgment. The
volume of documents submitted, of course, is not a dispositive factor in determining whether
summary judgment is proper. The multitudinous documents filed by Plaintiffs increased the
burdensomeness of the Courts task in deciding these motions, for Plaintiffs failure to winnow
out the relevant documents meant that the burden of doing so fell to the Court. In the immortal
words of [perhaps] Mark Twain, Im sorry this letter is so long, but I did not have time to make
it shorter.24 However, the Court has carefully considered the documents submitted and the
arguments made by the parties in making its decision, and determines that summary judgment is
warranted.
23 Defendants also contend that statutory and official immunities bar Plaintiffs state law
claims. Because Plaintiffs have not shown a genuine issue of material fact as to any of their state
law claims, the Court need not decide whether Defendants are entitled to these immunities.
24 It appears that this quotation is properly attributed to seventeenth century French
mathematician and philosopher Blaise Pascal, who wrote in 1656 I have made this letter longer
than usual only because I had not the time to make it shorter. See Ralph Keyes, The Quote
Verifier: Who Said What, Where, and When 119-20 (2006).
53
III. CONCLUSION
Based on the files, records, and proceedings herein, and for the reasons stated above, IT
IS ORDERED THAT:
1. Defendants Motions for Summary Judgment [Docket No. 198 in Civil
No. 04-2632, Docket No. 173 in Civil No. 05-461, and Docket No. 166 in
Civil No. 05-1348] are GRANTED.
2. All Counts in Civil Nos. 04-2632, 05-461, and 05-1348 are DISMISSED
WITHOUT PREJUDICE as to John Doe, Jane Doe, and Jane Roe.
3. Counts VI in Civil Nos. 04-2632, 05-461, and 05-1348 are DISMISSED
WITHOUT PREJUDICE to the extent they are based on the right to
freedom from the taking of property without just compensation under the
Fifth Amendment to the U.S. Constitution.
4. Count VIII in Civil No. 05-1348 is DISMISSED WITHOUT
PREJUDICE.
5. Except as stated in paragraphs 2-4, all remaining claims in Civil Nos.
04-2632, 05-461, and 05-1348 are DISMISSED WITH PREJUDICE.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: December 18, 2008
s/ Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge
 

 
 
 

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