UPDATE: The Supreme Court dismissed this case after both parties agreed to dismiss on February 10, 2012.
Original post from November 10, 2011:
The Supreme Court recently granted cert in Magner v. Gallagher, a case that will likely have implications for local governments. IMLA submitted an important amicus brief in this case, you can read our brief here and see a mention of our brief in a recent Forbes.com article.
Like many cities, St. Paul has a property maintenance code which establishes minimum maintenance standards for all structures, including provisions on light, ventilation, heating, sanitation, fire safety, etc. In 2002, the City established the Department of Neighborhood Housing and Property Improvement (DNHPI) as an executive department responsible for administering and enforcing the code.
The director of DNHPI increased the level of code enforcement target at rental properties, and directed proactive “sweeps” to detect code violations. DNHPI sought to compel property owners to take greater responsibility for their properties or, alternatively, force changes in ownership. To achieve its objectives, DNHPI employed a variety of strategies for renter-occupied dwellings, including orders to correct or abate conditions, condemnations, vacant-building registration, fees for excessive consumption of municipal services, tenant evictions, real-estate seizures, revocations of rental registrations, tenant-remedies actions, and if necessary, court action.
Plaintiffs in this case are essentially landlords, with portfolios ranging from one property to over forty properties. These landlords received code enforcement citations that in many cases, cited between ten and twenty-five violations per property. As a result, Plaintiffs claim they suffered increased maintenance costs, fees, condemnations, and were forced to sell properties in some instances.
Plaintiffs brought a number of claims (11 in total), and the district court dismissed all on summary judgment. The plaintiffs appealed to the Eighth Circuit Court of appeals, where the Court affirmed in all aspects except one. On review, the 8th Circuit held that disparate impact theory applied to a claim of racial discrimination under the FHA when a city applies its housing maintenance code to substandard housing, because the cost to repair tended to reduce housing options for people of color. The standard used by the 8th Circuit is that a plaintiff “must show a facially neutral policy ha[d] a significant adverse impact on members of a protected minority group.” Plaintiffs are NOT required to show that the policy or practice was formulated with discriminatory intent. The Circuits are split on this. The Seventh Circuit (and a few others have follow) includes the following factors to be used: (1) how strong is the plaintiff’s showing of discriminatory effect; (2) is there some evidence of discriminatory intent, though not enough to satisfy the constitutional standard of Washington v. Davis [426 U.S. 229 (1976)]; (3) what is the defendant’s interest in taking the action complained of; and (4) does the plaintiff seek to compel the defendant to affirmatively provide housing for members of minority groups or merely to restrain the defendant from interfering with individual property owners who wish to provide such housing.
SCOTUSblog is a good place to follow the action.