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PLAINTIFFS-APPELLANTS JOINT RESPONSE TO APPELLEES’ PETITION FOR EN

BANC HEARING

IN THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT
Appeal No. 09-1209
Appeal No. 09-1528
Appeal No. 09-1579
THOMAS J. GALLAGHER, ET AL.,
FRANK J. STEINHAUSER, III, ET AL.,
SANDRA HARRILAL, ET AL.,
Plaintiffs-Appellants,
v.
STEVE MAGNER, ET AL.,
CITY OF ST. PAUL, ET AL.,
STEVE MAGNER, ET AL.,
Defendants-Appellees,
Appeal From United States District Court
For the District of Minnesota
Civil No. 05-CV-1348 (JNE/SRN)
Civil No. 04-CV-2632 (JNE/SRN)
Civil No. 05-CV-461 (JNE/SRN)

Matthew A. Engel, Esq. John R. Shoemaker, Esq.

The Engel Firm, PLLC Shoemaker & Shoemaker, PLLC
333 Washington Avenue North, Suite 300 7900 International Drive, Suite 200
Minneapolis, MN 55401 Bloomington, MN 55425
(612) 373-7060 (952) 224-4610
ATTORNEYS FOR PLAINTIFFS-APPELLANTS

INTRODUCTION
On September 30, 2010, the 8th Circuit Clerk of Court requested a response
from Plaintiffs-Appellants to the City’s Petition for En Banc Hearing and therefore
Plaintiffs-Appellants provide this response.
The City bases their petition on the premise that as a result of the Panel’s
decision, a city or municipality with a protected class population can be prevented
from enforcing its housing code because protected class members may rent
properties subject to the housing code. App. Pet. at 12. Appellee’s claim that:
Under the Panel’s analysis the fact that there is a shortage of affordable
housing, that minorities rely on affordable housing, that 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.
App. Pet. at 12-13.
The City fails to recognize that what is at issue here is the aggressive manner
in which the City enforced its housing code against providers of “protected class”
housing and their tenants.
The Panel’s decision will not negatively impact the legitimate enforcement

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of municipal housing codes.

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ARGUMENT
I. The Panel’s Finding of a Prima Facie Case of Disparate Impact Is
Supported By Its Analysis Of How The City’s Housing Code Was
Enforced.
Absent from the City’s Petition for En Banc Hearing is any discussion or
reference to the aggressive manner in which the City enforced its housing code.
The Panel found significant that the City had raised both the housing
inspection standards and the level of housing code enforcement targeted at low
income, disproportionately minority-occupied rental properties. Op. at 5-7. The
Panel, in reviewing the entire record of evidence, concluded that:
Appellants have consistently challenged the City’s aggressive Housing Code
enforcement practices.
Op. at 14.
The Panel found the evidence demonstrated the City’s aggressive
enforcement of the housing code resulted in increased maintenance costs, fees,
condemnations, vacant properties, forced sales of properties, actual displacement
of “protected class” tenants, decrease in affordable housing and a disproportionate
adverse effect on racial minorities. Op. at 15-16.
The Panel cited the following examples of the City’s aggressive code
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enforcement behavior to find a prima facie case of disparate impact in support of

Appellants’ action for violation of the Fair Housing Act:
The City favored owner-occupied housing over rental housing and the City
increased the level of housing code enforcement targeted at rental properties.
Op. 5.
Furthermore, the City raised inspection standards by directing DNHPI
inspectors to “code to the max.” Op. 6.
The City instituted a system for easier reporting of Housing Code violations.
Id.
The new Housing Code enforcement system was expected to generate an
additional $500,000 in revenue. Id.
The City increased Housing Code Enforcement directed at so-called
“problem properties” seeking to compel compliance or force changes in
ownership. Id.
The City 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. Id.
The City used a procedure known as “Code Compliance Certification” to
require rental properties to meet current housing and building standards and
this allegedly forced property owners to undertake expensive renovations,
especially with regard to older properties, like Appellants’ properties, that
were exempt from current building codes under Minnesota law. Op. 6-7.
The City’s explanation is that it targeted properties for code enforcement
occupied mostly by low-income tenants, and that racial minorities were

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disproportionately represented as tenants. (Op. 13).

Dawkins made statements that demonstrate his desire and intent to reduce
the amount of low-income tenants in the City. Op. 11-12.
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The Panel noted that the common denominator in Appellants’ affidavits,

allegations, and briefs is that the City issued false Housing Code violations
and punished property owners without prior notification, invitations to
cooperate with the City, or adequate time to remedy Housing Code
violations. Punishment included fines, evictions, condemnations, revocation
of rental registrations, and the financial burden of Code Compliance
Certification. Op. 14.
Appellants produced at least six affidavits [this is incorrect, as ten affidavits
of owner-Appellants were presented] describing the increase in costs to
operate their low-income rental properties due to the City’s aggressive code
enforcement policies and adverse effect of forced sales and evictions of
tenants. Op. 15.
The Panel concluded that it was the aggressive manner in which the City
enforced its housing and building codes that was at the heart of the Fair Housing
claim by Appellants and was the trigger for the adverse impact on protected class
tenants.
The City argues that rehearing en banc is necessary to maintain uniformity
of decisions regarding prima facie findings of adverse impact and this proceeding
involves a question of exceptional importance because it creates confusion for all
municipalities seeking to enforce housing codes. However, the City of St. Paul did
not simply enforce its housing code to provide safe housing - it enforced the code
in an aggressive manner that created a disparate impact on racial minorities. The
Panel’s decision and opinion should not confuse the City here or other
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municipalities in the 8th Circuit. A municipality may enforce its housing and
building codes in a lawful manner but it cannot target rental properties with
increased inspection standards and increased enforcement operations, including
aggressive “code to the max” policies and practices, so as to force ownership
change and “protected class” tenant displacement when the municipality has
knowledge that a disproportionate number of those targeted rental properties are
occupied by racial minorities who are already burdened in their housing choice.
II. The Panel’s Finding of a Prima Facie Case of Disparate Impact Is
Supported By Statistical Evidence.
Appellants claim that Appellants failed to support their disparate impact
claim with any statistical evidence and that the Panel’s opinion is a significant
departure from rulings in other Circuits. Pet. 12. The City fails to acknowledge
the significant statistical evidence cited by the Panel, including from the City’s own
studies, reports and other documents, and from HUD’s studies and statistics, all
supporting the Panel’s prima facie findings. The Panel cited statistics including but
not limited to the following:
1. 27.6% of Saint Paul’s lower income residents cannot find affordable
housing in the City.
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2. 32% of the households in St. Paul had unmet housing needs in 2005, as
estimated by the City (cost burdens, overcrowding, etc.).
3. 11.7% of the City’s population was African-American in 2000, 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.
4. 52% of minority-headed renter households were in the bottom bracket for
household adjusted median family income, compared to 32% of all renter
households.
5. The City’s housing code was more strict than HQS in regards to 82% of
examined categories1.
6. The number of vacant buildings in the City rose from 367 to 1,466
between March 2003 and November 2007, which was a nearly 300%
increase.
The Panel stated that a before and after cost of rent comparison is one way to
show that African-Americans experience a disproportionate adverse effect;
however, it is not the only way. Further, the Panel noted that Appellants are not
required to provide a particular statistical comparison - statistics to prove
discrimination come in infinite variety and their usefulness depends on all of the
surrounding facts and circumstances. Op. at 19.

1 In its Petition, on two occasions the City misstates the nature of the 1995 City
Report comparing the City’s Code to the federal Section 8 Housing Quality
Standards (“HQS”). On pages 9 and 10, the City incorrectly states that HQS
standards are more strict 82% of the time in examined categories when in fact the
opposite was found by the City to be true – the City’s own study demonstrated the
City Code was more strict than federal Section 8 standards 82% of the time.
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The City argues that an affidavit of one member of a protected group does
not show a significant adverse impact on the protected group. The Panel relied on
numerous affidavits and depositions submitted by Appellants, including ten (10)
affidavits of Appellants, depositions and/or affidavits of three African-American
tenants (Cousette, Churcher and Goode), and affidavits or deposition testimony of
disabled tenants (Sider and Doolittle), to support the panel’s holding of disparate
impact. Each of the Affidavits of Appellants demonstrated that a majority of their
tenants were minorities and disabled and the large percentage of tenants were
African-Americans.
Finally, the City argues that in the Steinhauser, et al. and Harrilal, et al.
cases, Appellants “did not in any way identify PP2000 as a viable alternative” and
that “[t]he Panel erred when it identified, on behalf of Appellants …, PP2000 as a
viable alternative” to the City’s aggressive code enforcement policies. Pet. at 3.
Such a claim by the City is without merit as the Steinhauser and Harrilal
Appellants repeatedly made reference in their Joint Corrected Brief to the City’s
abandonment of its successful PP2000 code enforcement program. Brief at 25,
34-35, 38, 39, 40, and 41. Appellants stated that “there is a reasonable alternative
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in the PP2000 program to achieve those policy objectives through nondiscriminatory

means.” Brief at 35; Reply Brief at 14, 28 and 30.

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CONCLUSION
The Panel’s opinion was proper and correct in determining Appellants Fair
Housing claim is supported by statistical evidence and Appellants respectfully
request the Court deny Appellees’ Petition for En Banc Hearing.
Respectfully submitted,

THE ENGEL FIRM, PLLC

Dated: October 12, 2010 By: s/ Matthew A. Engel
Matthew A. Engel (Attorney Lic. #315400)
333 Washington Avenue North, Suite 300
Minneapolis, Minnesota 55401
T: (612) 373-7060
Attorney for Plaintiffs-Appellants Gallagher,
et.al.

SHOEMAKER & SHOEMAKER, PLLC

Dated: October 12, 2010 By: s/ John R. Shoemaker
John R. Shoemaker (Attorney Lic. #161561)
7900 International Drive, Suite 200
Bloomington, Minnesota 55425
T: (952) 224-4610
Attorney for Plaintiffs-Appellants
Steinhauser, et al., and Harrilal, et al.
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Wednesday, October 13, 2010 AOL: Sharon4Anderson