Kubitschek v. Magner

619 F.3d 823

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,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.

Sandra Harrilal, Plaintiff-Appellant,

Bee Vue; Lamena Vue, Plaintiffs,

Steven R. Johnson, doing business as 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.

Nos. 09-1209, 09-1528, 09-1579.

United States Court of Appeals,Eighth Circuit.

Submitted: Feb. 11, 2010.

Filed: Sept. 1, 2010.

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Matthew Allen Engel, argued, St. Paul, MN, for Gallagher, Collins and Dadders.

John R. Shoemaker, argued, Bloomington, MN, for Steinhauser, Meysembourg, Johnson and Harrilal.

Louise Toscano Seeba, argued, St. Paul, MN, for Appellees.

Before WOLLMAN, BYE, and MELLOY, Circuit Judges.

MELLOY, Circuit Judge.

Several owners and former owners of rental properties in St. Paul, Minnesota brought these consolidated actions, challenging the City of St. Paul's (“the City”) enforcement of its housing code. The property owners appeal the district court's (1) dismissal of their claims on summary judgment, (2) denial of sanctions for spoliation of evidence, and (3) denial of discovery regarding Appellee Steve Magner. We affirm in all respects except the dismissal of Appellants' disparate impact claim under the Fair Housing Act.

I. Background

In 1993, the City enacted the Property Maintenance Code (“the Housing Code”), which “[e]stablishes minimum maintenance standards for all structures and premises for basic equipment and facilities for light, ventilation, heating and sanitation; for safety from fire; for crime prevention; for space, use and location; and for safe and sanitary maintenance of all structures and premises.” St. Paul, Minn.Code § 34.01(1). Sometime shortly before or during 2002, the City established the Department of Neighborhood Housing and Property Improvement (“DNHPI”) as an executive department responsible for administering and enforcing the Housing Code. DNHPI was empowered to inspect all one- and two-family dwellings and administer and enforce laws regulating maintenance of residential property.

Appellee Andy Dawkins was the director of DNHPI from 2002 to 2005. In that position, Dawkins favored owner-occupied housing over rental housing “for the sake of the neighborhood [.]” Toward that end, Dawkins increased the level of Housing Code enforcement targeted at rental properties. In addition to responding to citizen complaints about particular properties, DNHPI inspectors conducted proactive “sweeps” to detect Housing Code violations. Furthermore, Dawkins raised inspection standards by directing DNHPI inspectors to “code to the max,” that is, writing up every violation-not just what was called in-and writing up all the nearby properties-not just the reported properties. Lastly, DNHPI instituted a user-friendly system for inspectors and observers to report Housing Code violations. Dawkins expected that this vigilance would help DNHPI raise an additional $500,000 in revenue, which would cover the costs of additional inspections.

Under Dawkins' leadership, DNHPI also increased its Housing Code enforcement efforts regarding so-called “problem properties.” The DNHPI website defined a problem property by saying: “If 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.” 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 actions. DNHPI coordinated its efforts with the St. Paul police and an assistant City attorney.

In addition, the City used a procedure known as “Code Compliance Certification” to require rental properties to meet current housing and building standards. The contours of this procedure are unclear, but it appears that the City required rental property owners to acquire Code Compliance Certification if a property was remodeled or deemed a dangerous structure, a nuisance building, or vacant. Code Compliance inspections were conducted by the City's Office of License, Inspections, and Environmental Protection, which would evaluate the building's structure, plumbing, electrical condition, and mechanical condition. Code Compliance Certification allegedly forced property owners to undertake expensive renovations, especially with regard to older properties that were exempt from current building codes under Minnesota law.

Appellants own or formerly owned rental properties in the City. Appellants' individual rental portfolios ranged from one property to over forty properties. They rented primarily to low-income households, and a majority of their tenants received federal rent assistance. The parties agree that African-Americans generally made up a disproportionate percentage of low-income tenants in private housing in St. Paul, and specifically, Appellants claim that they rented to a higher-than-usual percentage of African-Americans.

Appellants' properties were subject to the City's Housing Code enforcement from 2002 to 2005. They received code enforcement orders that, in many cases, cited between ten and twenty-five violations per property for conditions including rodent infestation, missing dead-bolt locks, inadequate sanitation facilities, inadequate heat, inoperable smoke detectors, broken or missing doors and screens, and broken or missing guardrails or handrails. Several of Appellants' properties were designated as problem properties, subject to Code Compliance Certification, or, in a few cases, both. As a result of the City's Housing Code enforcement, Appellants suffered increased maintenance costs, fees, condemnations, and were forced to sell properties in some instances.

In 2004 and 2005, Appellants filed these actions against the City, the City's mayor (Randy Kelly), the City's fire inspector (Michael Urmann), a police officer who worked with DNHPI (Dean Kohnen), and several DNHPI employees, including Dawkins, a supervisor (Steve Magner), and several code enforcement officers. ¹ We refer to Appelle...