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AppelleCitySt.Paul8thCir09-1209PetitionEnBAnc
 

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    AppelleCitySt.Paul8thCir09-1209PetitionEnBAnc AppelleCitySt.Paul8thCir09-1209PetitionEnBAnc Document Transcript

    • Appellate Case: 09-1209 Page: 1 Date Filed: 09/15/2010 Entry ID: 3703709 UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT No. 09-1209 Thomas J. Gallagher; Joseph J. Collins, Sr.; Dadder’s Properties, LLC; Dadder’s Estates, LLC; Dadder’s Enterprises, LLC; Dadder’s Holdings, LLC; Troy Allison; Jeff Kubitschek; Sara Kubitschek, Plaintiffs - Appellants, v. Steve Magner, individually and as a supervisor of City of St. Paul’s Department of Neighborhood Housing and Property Improvement; Mike Cassidy, individually and as a code enforcement officer of the City of St. Paul; Joel Essling, individually and as a code enforcement officer of the City of St. Paul; Steve Schiller, individually and as a code enforcement officer of the City of St. Paul; Joe Yannarelly, individually and as a code enforcement officer of the City of St. Paul; Dennis Senty, individually and as a code enforcement officer of the City of St. Paul; Michael Urmann, individually and as a fire inspector of the City of St. Paul; Andy Dawkins, individually and as Director of City of St. Paul’s Department of Neighborhood Housing and Property Improvement; Randy Kelly, individually and as Mayor of City of St. Paul; John Doe; Jane Doe, individually and in their official capacities as code enforcement officers of City of St. Paul’s Department of Neighborhood Housing and Property Improvement, law enforcement officers or other officials or employees of the City of St. Paul; City of St. Paul, a municipal corporation, Defendants - Appellees.
    • Appellate Case: 09-1209 Page: 2 Date Filed: 09/15/2010 Entry ID: 3703709 No. 09-1528 Frank J. Steinhauser, III; Mark E. Meysembourg; Kelly G. Brisson, Plaintiffs - Appellants, v. City of St. Paul, a municipal corporation; Randy Kelly, individually and as Mayor of City of St. Paul; Andy Dawkins, individually and as Director of City of St. Paul’s Department of Neighborhood Housing and Property Improvement; Lisa Martin, individually and as a code enforcement officer of City of St. Paul’s Department of Neighborhood Housing and Property Improvement; Steve Magner, individually and as a supervisor of City of St. Paul’s Department of Neighborhood Housing and Property Improvement; Dean Koehnen, individually and as a law enforcement officer of City of St. Paul; John Doe; Jane Roe, individually and in their official capacities as code enforcement officers of City of St. Paul’s Department of Neighborhood Housing and Property Improvement, law enforcement officers or other officials or employees of the City of St. Paul, Defendants - Appellees. No. 09-1579 Sandra Harrilal, Plaintiff - Appellant, Bee Vue; Lamena Vue, Plaintiffs,
    • Appellate Case: 09-1209 Page: 3 Date Filed: 09/15/2010 Entry ID: 3703709 Steven R. Johnson, d/b/a Market Group and Properties, Plaintiff - Appellant, v. Steve Magner, individually and as a supervisor of City of St. Paul’s Department of Neighborhood Housing and Property Improvement; Michael Kalis, individually and as a code enforcement officer of City of St. Paul; Dick Lippert, individually and as a code enforcement officer of the City of St. Paul; Kelly Booker, individually and as a code enforcement officer of the City of St. Paul; Jack Reardon, individually and as a code enforcement officer of the City of St. Paul; Paula Seeley, individually and as a code enforcement officer of the City of St. Paul; Lisa Martin, individually and as a code enforcement officer of the City of St. Paul; Dean Koehnen, individually and as a law enforcement officer of the City of St. Paul; Andy Dawkins, individually and as Director of the City of St. Paul’s Department of Neighborhood Housing and Property Improvement; Randy Kelly, individually and as Mayor of the City of St. Paul; individually, jointly and severally; John and Jane Doe, individually and in their official capacities as code enforcement officers of the City of St. Paul’s Department of Neighborhood Housing and Property Improvement, law enforcement officers or other officials or employees of the City of St. Paul; City of St. Paul, a municipal corporation, Defendants - Appellees. APPELLEES’ PETITION FOR EN BANC HEARING
    • Appellate Case: 09-1209 Page: 4 Date Filed: 09/15/2010 Entry ID: 3703709 TABLE OF CONTENTS TABLE OF AUTHORITIES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 I. By Finding a Prima Facie Case of Disparate Impact Without Any Statistical Analysis or Any Other Analytical Method to Show a Comparison Between African-Americans That Are Affected by the Neutral Policy and Similarly Situated Persons Unaffected by the Policy, the Panel Departed from Clear Precedent and Created a Circuit Split.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 CERTIFICATE OF COMPLIANCE WITH RULE 32.. . . . . . . . . . . . . . . . . . . . . 14 i
    • Appellate Case: 09-1209 Page: 5 Date Filed: 09/15/2010 Entry ID: 3703709 TABLE OF AUTHORITIES Artisan/Am. Corp. v. City of Alvin, Tex., 588 F.3d 291 (6th Cir. 2009) . . . 7, 9, 11 Charleston Hous. Auth. v. U. S. Dept. of Agric., 419 F.3d 729 (8th Cir. 2005). . . 7 Darst-Webbe Tenant Ass’n Bd. v. St. Louis Hous. Auth., 417 F.3d 898 (8th Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Huntington Branch, N.A.A.C.P. v. Town of Huntington, 844 F.2d 926 (2nd Cir. 1988). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Laub v. U.S. Dept. of Interior, 342 F.3d 1080 (9th Cir. 2003).. . . . . . . . . . . . . . . . 1 Oti Kaga, Inc. v. S. Dakota Hous. Dev. Auth., 342 F.3d 871 (8th Cir. 2003). . . . . 4 Owens v. Charleston Hous. Auth., 336 F. Supp. 2d 934 (E.D. Mo. 2004). . . . . . . 7 Reinhart v. Lincoln County, 482 F.3d 1225 (10th Cir. 2007). . . . . . . . . . . . . . 4, 11 Smith v. Town of Clarkton, N.C., 682 F.2d 1055 (4th Cir. 1982). . . . . . . . . . . . . . 6 Tsombanidis v. W. Haven Fire Dept., 352 F.3d 565 (2nd Cir. 2003). . . . . . 5, 8, 11 ii
    • Appellate Case: 09-1209 Page: 6 Date Filed: 09/15/2010 Entry ID: 3703709 INTRODUCTION The City, its employees, and officials seek en banc review of the Panel’s ruling that found that application of the City’s housing code had a disproportionate adverse effect on African-American tenants. The Panel also found that there was a dispute of fact regarding whether a defunct program called Problem Properties 2000 (PP2000) was a viable alternative to the City’s housing code enforcement practices. Rehearing en banc is necessary to maintain uniformity of decisions regarding prima facie findings of adverse impact and the proceeding involves a question of exceptional importance because it creates confusion for all municipalities seeking to enforce housing codes.1 FACTS These cases have been ongoing since May, 2004. After four years of discovery, Appellants failed to support their disparate impact claim with any statistical evidence or other analytical method. On December 18, 2008, the 1 The City has not abandoned its prudential standing argument as the Panel indicated in its opinion. Standing cannot be waived, and particularly under the analysis by the Panel, prudential standing is even more suspect. Appellants are in no different situation than any other landlord and have no grievance other than that which is general to the population of all landowners, landlords and owner- occupied properties as a whole. Because the issue of standing implicates jurisdiction, it is one which the court is required to consider. Laub v. U.S. Dept. of Interior, 342 F.3d 1080 (9th Cir. 2003). 1
    • Appellate Case: 09-1209 Page: 7 Date Filed: 09/15/2010 Entry ID: 3703709 Honorable Joan Ericksen dismissed Appellants’ disparate impact claim as a matter of law and correctly found that Appellants failed to make the essential comparison of who could afford housing before the City applied its code enforcement and who could afford it afterwards. Without this comparative analysis, Appellants’ claim failed. The Panel reversed the lower court’s findings based on the following evidence the Panel identified in the record: (a) The City experienced a shortage of affordable housing. (b) Racial minorities, especially African-Americans, made up a disproportionate percentage of lower-income households in the City that rely on low-income housing. (c) The City’s aggressive housing code enforcement practices increased costs for property owners that rent to low-income tenants. (d) The increased burden on rental-property owners from aggressive code enforcement resulted in less affordable housing in the City. The Panel found that “though there is not a single document that connects the dots of Appellants’ disparate impact claim, it is enough that each analytic step is reasonable and supported by the evidence.” 2
    • Appellate Case: 09-1209 Page: 8 Date Filed: 09/15/2010 Entry ID: 3703709 The Panel stated that “it is reasonable to infer” a disparate impact on African-Americans. The Panel went on to find that the City’s enforcement of the housing code had a manifest relationship to legitimate, non-discriminatory objectives. The Panel found that on appeal, Appellants identified PP2000 as a viable alternative to the City’s housing code enforcement.2 ARGUMENT I. By Finding a Prima Facie Case of Disparate Impact Without Any Statistical Analysis or Any Other Analytical Method to Show a Comparison Between African-Americans That Are Affected by the Neutral Policy and Similarly Situated Persons Unaffected by the Policy, the Panel Departed from Clear Precedent and Created a Circuit Split. The Panel found that based on evidence in the record the City’s aggressive enforcement of the housing code resulted in a disproportionate adverse impact on African-Americans. The Panel found that viewed in the light most favorable to Appellants, the evidence shows that the City’s housing code enforcement burdened Appellants’ rental businesses which indirectly burdened their tenants. 2 On appeal, Appellants Steinhauser, et al. and Harrilal, et al. did not in any way identify PP2000 as a viable alternative, and also did not challenge the City’s argument on appeal that Appellants Steinhauser and Harrilal abandoned this position. The Panel erred when it identified, on behalf of Appellants Steinhauser and Harrilal, PP2000 as a viable alternative. In any event, there can be no factual dispute that PP2000 is not a viable alternative to the City’s housing code enforcement. PP2000 was a limited program with three inspectors and very few properties. The City’s housing code enforcement applies to the City’s entire housing stock. 3
    • Appellate Case: 09-1209 Page: 9 Date Filed: 09/15/2010 Entry ID: 3703709 In making these inferences, the Panel disregarded the longstanding case law that requires statistical analysis or some other analytical method to show disparate impact. There must be a comparison between two groups; those who could afford the housing before the code enforcement and those who could afford it afterward. To succeed on their disparate impact claim, the landowners must show the facially-neutral policy results in, or can be predicted to result in, a disparate impact on protected classes compared to a relevant population. See Darst-Webbe Tenant Ass’n Bd. v. St. Louis Hous. Auth., 417 F.3d 898, 902 (8th Cir. 2005). Appellants “must show a facially neutral policy ha[d] a significant adverse impact on members of a protected minority group. Oti Kaga, Inc. v. S. Dakota Hous. Dev. Auth., 342 F.3d 871, 883 (8th Cir. 2003). In Reinhart v. Lincoln County, 482 F.3d 1225, 1230 (10th Cir. 2007) the court found that “It is essential to be able to compare who could afford the housing before the new regulations and who could afford it afterwards.” The Panel agreed that a before and after cost comparison is one way to show African-Americans experience adverse impact, but found that it is not the only way. However, the Panel found disparate impact without any statistical comparison, or the use of any analytical method to show any comparison at all. 4
    • Appellate Case: 09-1209 Page: 10 Date Filed: 09/15/2010 Entry ID: 3703709 The Panel decision is in direct conflict with law in other circuits. The comparison must reveal that although neutral, the policy imposes a significant adverse impact on a group of individuals. See e.g., Tsombanidis v. W. Haven Fire Dept., 352 F.3d 565, 575, 576 (2nd Cir. 2003) (The basis for a successful disparate impact claim involves a comparison between two groups - - those affected and those unaffected by the facially-neutral policy.). The Panel found that Appellants were not required to provide a particular statistical comparison. The Panel inferred an adverse impact without any statistics or some other analytical mechanism to show the necessary comparison resulted in a disproportionate impact. In Huntington Branch, N.A.A.C.P. v. Town of Huntington, 844 F.2d 926 (2nd Cir. 1988), the facially-neutral policy challenged prevented subsidized housing from being built in a predominately white neighborhood. The Panel cited Huntington Branch, N.A.A.C.P. for the proposition that disparate impact was found when evidence established that African-Americans in need of subsidized housing, currently occupied subsidized housing, holding Section 8 certificates, and are on the waiting list for those certificates is disproportionate to the percentage of African-Americans in the general population. In Huntington Branch, N.A.A.C.P. the parties stipulated to statistics that unequivocally showed that a disproportionate number of black families needed subsidized housing and 5
    • Appellate Case: 09-1209 Page: 11 Date Filed: 09/15/2010 Entry ID: 3703709 statistics that showed that a disproportionate number of African-Americans used Section 8 vouchers to supplement their rent or were on waiting lists for such vouchers. The Court compared African-Americans in need of subsidized housing or vouchers to African-Americans in the general population to find disparate impact. In the cases before the Panel, the Panel found disparate impact without any comparison groups at all. The Panel used Smith v. Town of Clarkton, N.C., 682 F.2d 1055 (4th Cir. 1982) as an example of showing disparate impact because the “undisputed statistical picture leaves no doubt that the black population of Blanden County was adversely affected by the termination of the housing project, as it is that population most in need of new construction to replace substandard housing, and it is the one with the highest percentage of presumptively eligible applicants.” (emphasis added). To make this determination the Court had the following information: the facially-neutral policy at issue prevented the construction of fifty units of public housing, 69.2% of all black families in Blanden County are eligible for low income housing and only 26% of the white population is eligible, that the removal of low income housing in the County fell 2.65 times more harshly on the black population than on the white population. The Court compared those that would benefit from the public housing and those who would not to find a disparate 6
    • Appellate Case: 09-1209 Page: 12 Date Filed: 09/15/2010 Entry ID: 3703709 impact on the black population. Again, in the cases before the Panel, the Panel found disparate impact without any comparisons. In Owens v. Charleston Hous. Auth., 336 F. Supp. 2d 934, 943 (E.D. Mo. 2004), aff’d in part, Charleston Hous. Auth. v. U. S. Dept. of Agric., 419 F.3d 729, 740, 741 (8th Cir. 2005), the facially-neutral policy challenged would result in the destruction of low income housing. Tenants put forth an expert witness showing a disparate impact and had “statistical proof” that the destruction of the low income housing would have a disproportionate impact on African-Americans in general, and low-income African-Americans in particular. The comparison was between those who would use the low income housing (the relevant waiting list population, the income eligible population, or the actual apartment population) versus those who would not. In the case at bar, the Panel simply inferred a disparate impact without any expert providing the basis for such, or any statistical proof or any other method of proof. In Artisan/Am. Corp. v. City of Alvin, Tex., 588 F.3d 291, 298 (6th Cir. 2009) the facially-neutral policy challenged was the city’s refusal to permit a low- income housing project. Artisan produced statistics that racial minorities are more likely to rent apartments and more likely to qualify for low-income housing. However, the Court did not find evidence of a disparate impact because Artisan 7
    • Appellate Case: 09-1209 Page: 13 Date Filed: 09/15/2010 Entry ID: 3703709 did not provide analysis of the racial make-up of the relevant income pool. The Panel here found that the relevant comparative analysis need not be made to find disparate impact. A plaintiff does not meet its burden to show disparate impact if it merely raises an inference of discriminatory impact. Tsombanidis, 352 F.3d at 574. Furthermore, a plaintiff must show a causal connection between the facially- neutral policy and the alleged discriminatory effect. Id. Appellants here, as correctly found by the district court, failed to meet this burden. The Panel inferred, based on evidence in the record, that a facially-neutral housing code that applies undisputedly to all properties in the City of St. Paul, those rented and those owner-occupied, those owned by the Public Housing Agency and those owned by private parties, had a disparate impact on African-Americans. The “evidence” the Panel relied upon did not have any analytical showing of a comparison between the two groups who could afford the property before the housing code was applied and who could afford it afterward. The Panel relied upon evidence that showed the City experienced a shortage of affordable housing. But there is absolutely no evidence in the record that any shortage was because of anything done by the City. The Panel relied upon evidence that African-Americans make up a disproportionate percentage of low- 8
    • Appellate Case: 09-1209 Page: 14 Date Filed: 09/15/2010 Entry ID: 3703709 income tenants. However, there was no analytical method to determine how the City’s housing code would affect those tenants. Like Artisan/Am. Corp., 588 F.3d 291, this evidence, without the relevant comparison, is not enough to find a disparate impact. In fact, the evidence showed that some of Appellants’ properties that Appellants claim were targeted by code enforcement oftentimes did not have African-American tenants, did not have tenants at all, or Appellants did not recall the race of their tenants. Not only was there no analytical method used to show a comparison between those affected by the policy and those not affected by the policy, Appellants could not even show a comparison within their own properties. Many of the properties they claimed were affected did not have African-American tenants or any tenants at all. The Panel found that the City’s aggressive housing code enforcement increased the costs for property owners who rent to low-income tenants. The evidence that the Panel relied upon was (1) affidavits of the Appellants that say that they have reported substantial increases in costs because of code enforcement, and (2) a 1995 report that the HQS standards were more strict 82% of the time in examined categories. There is no analytical method from this evidence that compared those unaffected and those affected by the City’s code enforcement. At most, Appellants have affidavits saying that they had increased costs at some 9
    • Appellate Case: 09-1209 Page: 15 Date Filed: 09/15/2010 Entry ID: 3703709 properties. Those properties were not even identified as properties with African- Americans. Furthermore, this is a far cry from an analytical method that shows a significant adverse impact on African-Americans. The HQS standards that the Panel relied upon as evidence of disparate impact that were more strict in 82% of the examined categories did not show the necessary comparison. The City’s housing code applies to all properties; and it is the application of that facially- neutral policy that must be analyzed. The fact that there is a HQS that may be less strict does nothing to further any analysis of the more strict City housing code. Finally, in support of its finding that there was an increased financial burden on rental property owners because of aggressive code enforcement and that resulted in less affordable housing in the City, the Panel relied upon (1) the City’s vacant building report and (2) Appellants’ affidavits and tenants’ affidavits. There was no evidence or analysis that tied the City’s vacant building report to the City’s code enforcement. This conflicts with requirements in other circuits, that by making the relevant comparisons, there be some analytical mechanism or statistical analysis to show a significant adverse impact. The affidavits by a portion of Appellants that stated that those Appellants had increased costs, and three tenants (the City can only locate affidavits of two tenants in the record) averring that Appellants had to fix up rental properties in which they lived, is not an analysis showing a significant 10
    • Appellate Case: 09-1209 Page: 16 Date Filed: 09/15/2010 Entry ID: 3703709 adverse impact on a protected group. At best, it would show an impact on the three African-Americans with supporting affidavits, three of possibly thousands of tenants, but does not provide the statistical analysis or other analytical method necessary to show a significant adverse impact on a protected group of individuals. Furthermore, the City could only locate two affidavits of tenants – Suzanne M. Tourville and Lachaka Cousette. Suzanne M. Tourville is Caucasian and Lachake Cousette is African-American.3 An affidavit of one member of a protected group does not show a significant adverse impact on the protected group. The affidavit of a Caucasian tenant actually supports the argument that there was not a disparate impact on African-Americans. The Panel departed from well-settled law that a significant adverse impact must be shown in order to succeed in a disparate impact claim. The Panel found that data, not analyzed or used in any way to show a significant impact, is enough evidence to make it “reasonable to infer” that African-Americans were disproportionately affected by the City’s code enforcement. Under law in other circuits, this inference is not enough to survive a motion for summary judgment. See e.g., Reinhart, 482 F.3d 1225; Artisan/Am. Corp., 588 F.3d 291; Tsombanidis, 3 The tenants’ affidavits do not state the race of the tenants. However, Appellants identified in their sworn Answers to Interrogatories the race of Susan Tourville and Lachaka Cousette. 11
    • Appellate Case: 09-1209 Page: 17 Date Filed: 09/15/2010 Entry ID: 3703709 352 F.3d 565. The Panel’s finding significantly and devastatingly lowers the bar for a disparate impact claim to one that a finding of disparate impact can be inferred by innocuous and unanalyzed data such as the increase in foreclosed or vacant homes during a time where the same is happening in similar municipalities, and self-serving affidavits stating that the cost of renting homes has increased because of the City’s requirement that the homes be safe. Not only is there “not a single document that connects the dots of Appellants’ disparate impact claim” there is no comparison made at all between the two groups necessary -- those affected and those unaffected by the City’s code enforcement. A review of this decision en banc is absolutely necessary to clarify the way by which a disparate impact can be shown. If a disparate impact showing can be met by data and self-serving affidavits with no necessary comparison made between groups, municipalities within the 8th Circuit must be made aware of this significant departure from other Circuits. The issue before this Court also involves a question of exceptional importance: Can a City with a protected class population be prevented from enforcing its housing code because protected class members may rent properties subject to the housing code? Under the Panel’s analysis the fact that there is a shortage of affordable housing, that minorities rely on affordable housing, that 12
    • Appellate Case: 09-1209 Page: 18 Date Filed: 09/15/2010 Entry ID: 3703709 housing code enforcement increased costs to landlords who rent to low-income tenants, and because of that increase in cost there will be less affordable housing in the City is enough to find a disparate impact of a housing code on minorities. All housing codes in racially diverse municipalities with a shortage of affordable housing meet this criteria. If municipalities are prevented from enforcing housing codes when there is a shortage of affordable housing, they must be made aware of this significant restriction on their powers. This ruling may have the unintended result of promoting segregation. Why live in a city that cannot enforce its code because of the shortage of affordable housing and the existence of a minority population? CONCLUSION For all the above reasons, Appellees’ respectfully request that this Court grant the Appellees’ petition for rehearing en banc. Dated: September 15, 2010 GERALD T. HENDRICKSON Saint Paul City Attorney s/ Louise Toscano Seeba LOUISE TOSCANO SEEBA, #292047 Assistant City Attorney 750 City Hall and Court House 15 West Kellogg Boulevard St. Paul, Minnesota 55102 (651) 266-8772 Attorneys for the Appellees 13
    • Appellate Case: 09-1209 Page: 19 Date Filed: 09/15/2010 Entry ID: 3703709 CERTIFICATE OF COMPLIANCE WITH RULE 32 This petition was prepared using WordPerfect Office 12, Times New Roman 14 and complies with the typeface requirements of FRAP 32(a) and the type style requirements of FRAP 32(a). This brief has been scanned for viruses and is believed to be virus free. 14