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8th Circuit Court of Appeals rules in favor of landlords

City of St. Paul Inspection Dept to go to trial for Fair Housing violations.

Federal Court of Appeals ruled today that the combined cases of Gallagher, Steinhauser,Harrilal (rental
property owners) vs St. Paul will go to trial.

This case alleges that St Paul housing inspection programs were used in a racially motivated manner to
force racial minorities out of St Paul and that such actions violated the Fair Housing rights of the
occupants.

A very interesting point is a number of city employees including inspectors are on the hook personally
in this suit. From a legal perspective each city employee must defend themselves as they, their co-
workers and their employer have disparate interest.

For the city to win if the allegations are proven true they must claim rouge employees were acting
outside of the law and contrary to department policy. For the inspectors to win they must argue that they
were following instructions from their supervisors that they believed were legal. And the employee need
to name their union as a third party defendant , arguing the union failed to step in and protect them from
bad rules enforced by their supervisors The inspectors may have a hard time at this however as the
owners had provided the inspectors with documentation that the inspectors’ acts were contrary to Fair
Housing, yet the inspectors continued with their agenda.

From my conversations with two of the plaintiffs over the past five or six years they seem to be just a
handful of hard working landlords who independently found themselves on the losing end of
government behaving badly. The current case is a consolidation of three or four cases that started
independent of each other, but the claims were so similar that the federal court combined them. Most of
the cases claimed RICO (racketeering) on the part of the city employees.

Much of this is so similar to what we are seeing in Milwaukee.

Note the vacant building ordinance for example. Our former Commissioner of Neighborhood Services
had a number of conversations with his counterparts in MN, and proposed a number of ordinances that
were based on what was on the books there.

Here is an except from today’s ruling

To demonstrate a disparate impact, Appellants have offered evidence supporting the

following conclusions:

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(a) The City experienced a shortage of affordable housing. The City represented in its
2003 report to the U.S. Department of Housing and Urban Development (“HUD”) that
“the lack of affordable housing opportunities remains a major issue facing many Saint
Paul lower income households, who are also protected class members,” and that
“27.6% of Saint Paul’s lower income residents cannot find adequate affordable
housing in the City.” Then, in 2005, the City estimated that 32% of the households in
St. Paul had unmet housing needs (cost burdens, overcrowding, etc.).

(b) Racial minorities, especially African-Americans, made up a disproportionate

percentage of lower-income households in the City that rely on low-income housing.
The district court noted that the parties agree that African-Americans make up a
disproportionate percentage of low-income tenants in the City. The City’s 2000 census
data showed that 11.7% of the City’s population was African-American, whereas data
from October 2004 showed that 61% and 62% of those on waiting lists for public
housing and Section 8 assistance, respectively, were African- American. Further, the
City’s 2000 report to HUD showed that 52% of minority-headed renter households
were in the bottom bracket for household adjusted median family income, compared to
32% of all renter households.

(c) The City’s aggressive Housing Code enforcement practices increased costs for
property owners that rent to low-income tenants. Appellants produced at least six
affidavits describing the toll that the City’s aggressive Housing Code enforcement took
on their rental business. They reported a substantial increase in costs, resulting in
evictions for tenants and “forced sales” of their properties in some cases. These
allegations are corroborated by an internal memorandum from the City’s fire marshal
in 1995, comparing the Housing Code and the HQS and concluding that the Housing
Code was more strict in regard to 82% of the examined categories.

(d) The increased burden on rental-property owners from aggressive code enforcement
resulted in less affordable housing in the City. Documents from the City and the Public
Housing Authority acknowledged that any decrease in federally assisted rental housing
would reduce the amount of affordable housing in the City. Those predictions were
supported by the City’s Vacant Buildings Report, which showed that the number of
vacant homes listed in the City rose from 367 to 1,466 between March 2003 and
November 2007, which was a nearly 300% increase. Further, Appellants submitted
affidavits from three tenants who alleged that they endured hardship when their homes
were condemned for minimal or false Housing Code violations.

These premises, together, reasonably demonstrate that the City’s aggressive enforcement of
the Housing Code resulted in a disproportionate adverse effect on racial minorities,
particularly African-Americans. Viewed in the light most favorable to Appellants, the
evidence shows that the City’s Housing Code enforcement temporarily, if not permanently,
burdened Appellants’ rental businesses, which indirectly burdened their tenants.

Read the entire decision here. I have a fairly complete set of pleadings if anyone wishes to study this
more.

A lively discussion of the case on Ademocracy

I and others were crying tears of joy when we heard this news. It has been a long emotional

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ordeal for many of us.

There isn’t a jury in the entire world who could listen to this story and not favor the
plaintiffs!

ABC News -Landlord Suit Could Cost City Millions

A legal battle between the City of Saint Paul and a handful of landlords could force the city
to pay millions.

It all centers around code enforcement.

Pioneer Press on the lawsuit.

A set of lawsuits alleging St. Paul’s housing-code enforcement discriminated against black
tenants was given new life Wednesday when a federal appeals panel reinstated a portion of
the case.

The allegations “reasonably demonstrate that the city’s aggressive enforcement of the
housing code resulted in a disproportionate adverse effect on racial minorities, particularly
African-Americans,” a three-judge panel for the 8th Circuit Court of Appeals wrote in
overturning part of a 2008 dismissal of the case by U.S. District Judge Joan Ericksen.

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This entry was posted on Wednesday, September 1st, 2010 at 9:33 am and is filed under Code Enforcement, Fair Housing,
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One Response to “8th Circuit Court of Appeals rules in favor of landlords”

1. Sharon Anderson Says:

September 1st, 2010 at 5:15 pm

Thanks for posting the brief: Sharon4mnag has trie to bring similar issues of Corruption in the
City of St.Paul http://www.taxthemax.blogspot.com Threats against Sharon ie:
http://www.sharon4anderson.org has forced a POA online.
http://www.sharonagmn2010.blogspot.com

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The observations of Tim Ballering, a Milwaukee landlord since 1977, director of the Apartment
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