Housing Provider Files Complaint against Governor Mark Dayton, Metropolitan Council and Minnesota Housing Finance Agency Following Landmark U.S. Supreme Court Decision Affirming Fair Housing “Disparate Impact” Liability
SHOEMAKER and SHOEMAKER, P. L.L.C.
ATTORNEYS AT LAW
Bloomington, MN (952) 224-4610 / 612-245-7310
Housing Discrimination Complaint
Raven Financial, LLC v. Governor Mark Dayton, in his official capacity as Governor of the State of
Minnesota, Minnesota Housing Finance Agency, Metropolitan Council and the State of Minnesota
July 17, 2015
Complaint Challenges Failure to Further Fair Housing,
Failure to Investigate and Eliminate St. Paul’s Continued Abuse of Housing Laws, and participation with St. Paul in Thinning-Out Rental Housing for “Protected Class”
On July 16, 2015, Raven Financial, LLC (“Raven”) a low income rental housing provider in St. Paul, delivered a Housing Discrimination and Federal Funding Complaint to the United States Department of Housing & Urban Development (“HUD”) against Governor Mark Dayton, the Metropolitan Council, the Minnesota Housing Finance Agency, and the State of Minnesota (collectively “Respondents”), challenging Respondents’ failure to take appropriate actions required by federal law, including the State’s federal funding grants and subgrants to St. Paul following a decade of public complaints, numerous federal Fair Housing lawsuits and more recent housing discrimination complaints filed against St. Paul.
Raven Financial’s Complaint closely follows last month’s United States Supreme Court decision in Texas Department of Housing v. Inclusive Communities Project, affirming “disparate impact” as a viable liability theory in Fair Housing claims. See
A multitude of housing discrimination complaints, federal Fair Housing lawsuits and HUD discrimination Complaints since 2004, have challenged St. Paul’s housing policies as violating the Minnesota State Building Code, the Fair Housing Act’s prohibition against housing policies that cause “disparate impact” on protected class” members, federal grant funding requirements and other federal law provisions.
St. Paul’s illegal housing policies act as a major disincentive for private business to continue to provide affordable and available rental housing in St. Paul to those most in need, poor minority families and disabled individuals.
For over a decade, St. Paul’s illegal policies and actions have through illegally raised housing standards and illegal condemnations, displaced “protected class” members from “safe, decent and sanitary” housing compliant with federal “minimum housing standards,” or that with minimal attention and money, could be brought into compliance.
St. Paul’s housing standards far exceed state standards and are admittedly among the most rigorous in the country. St. Paul’s illegal housing standards, policies and actions make affordable large housing units unavailable to immigrant and other needy families and force small rental owners out of the market to make way for the further gentrification of selected inner-city neighborhoods.
For decades, the State of Minnesota has been funded through federal grant, loan and other financial assistance, and since 2009 with Neighborhood Stabilization Program grants (“NSP”). State Respondents have disbursed HUD grant funds to St. Paul on a continual basis since 2009, and NSP funding grant projects have continued within the past 180 days required for HUD’s jurisdiction of Raven’s Complaint. As of the first quarter of 2015, State Respondents have reported to HUD that the NSP 3 funded projects involving the State and subgrantee St. Paul are “on-going”. The projected end date of these federally funded programs is June 30, 2016. See: https://www.hudexchange.info/news/nsp-action-plans-and-qprs-posted.
State Respondents, as recipients of NSP and other federal grant funds, must monitor the planning, analysis and performance of St. Paul, and take appropriate actions when State Respondents, including Governor Mark Dayton, as the Chief Executive of the State, acquire information that recipients are violating state and federal law.
State Respondents are responsible for the policies and actions of its subgrantees that are discriminatory, or in other ways in violation of state and federal law, including St. Paul’s illegally heightened housing standards and illegal code enforcement policies and actions directed against low-income rental dwellings occupied by or available for “protected class” members.
Governor Dayton is also responsible for the State’s compliance with federal funding contracts and related federal law obligations in relation to St. Paul. Respondent Governor Mark Dayton must also "take care that the laws be faithfully executed,” as required by Article V, Section 3 of the Minnesota Constitution.
The federal funding sub-recipient grant agreements require all subgrantees, including St. Paul to affirmatively further fair housing (“AFFH”), and to follow federal law, including the requirements of the Fair Housing Act prohibiting "public sector" policies and actions that intentionally discriminate against or disparately impact "protected class" members, Title VI that prohibits discrimination in federally funded programs, and the anti-discrimination provisions of the Housing and Community Development Act of 1974 (“HCDA”).
Despite over a decade of extensive local and national press coverage, lawsuits and housing discrimination complaints detailing St. Paul’s intentional abuse of state and federal law negatively impacting available and affordable housing for “protected class” minorities and disabled members of the Twin Cities community, Governor Dayton and officials at MHFA and the Met Council have failed to take appropriate action to ensure that the laws of Minnesota, including the State Building Code, and St. Paul’s federal grant subrecipient agreement obligations, and corresponding federal laws and regulations, are finally followed by St. Paul officials and representatives.
The HUD Complaint Respondents have known since 2004 of the multitude of “disparate impact” housing claims against St. Paul by low-income rental housing providers. In September 2010, the United States Court of Appeals for the Eighth Circuit published its decision in the Gallagher v. Magner, City of Saint Paul series of cases (Steinhauser, et al. v. St. Paul – still pending; Harrilal, et al. v. Magner, St. Paul – still pending; and Gallagher, et al. – settled January 2015), holding that there was sufficient evidence for trial that St. Paul had through its housing policies and code enforcement, created and maintained disparate impact upon "protected class" members and thereby violated the Fair Housing Act.
In a high profile, controversial appeal, St. Paul City Officials sought in 2011 to overturn 40 years of civil rights law by challenging the 8th Circuit’s Gallagher decision before the United States Supreme Court. In February 2012, shortly before oral arguments, City officials dismissed their appeal. See Magner v. Gallagher, United States Supreme Court, 2012. http://www.scotusblog.com/case-files/cases/magner-v-gallagher/.
As a party defendant in the United States, ex rel, Ellis, et al. False Claims case in the District of Minnesota during 2011 through 2013, the Met Council was privy to the allegations that the Met Council, St. Paul and Minneapolis in their housing policies and actions were negatively impacting low-income rental housing, and were acting in violation of their federal grant obligations and related federal civil rights and housing laws. While the Ellis FCA whistleblower case was ultimately dismissed by the Court on federal False Claims Act jurisdiction and pleading technicalities that would not have defeated the lawsuit if the United States had pursued the claims, the fact remains that the Met Council acquired knowledge in that lawsuit of housing and related federal funding complaints against St. Paul. Despite knowledge of the Ellis FCA lawsuit details and of the numerous other housing complaints and lawsuits against St. Paul, the Met Council and State Respondents have failed to take appropriate actions required under federal law to eliminate St. Paul’s state and federal law violations.
More recently, the State, through MHFA, was a respondent with St. Paul and city officials in the original housing discrimination complaint brought by Raven Financial to HUD in November 2013. At HUD’s urging in the summer of 2014, Raven withdrew its complaint against MHFA. Despite the notice to State Respondents from Raven’s complaint, including through extensive local press coverage, a decade of other high profile housing complaints and lawsuits, and the September 2014 HUD housing discrimination complaint by Bee and Lamena Vue against St. Paul, also extensively covered by local press, State Respondents have failed to take appropriate action required of them against their subgrantee St. Paul.
Equally as troubling is the evidence that surfaced in February 2015 demonstrating coordinated participation by Respondents in furtherance of St. Paul’s illegal housing policies and actions, as well as false and misleading statements to the public, that in combination, have allowed St. Paul to continue its illegal housing policies and actions in 2015.
In late 2014, St. Paul and Minneapolis, working side-by-side with the Met Council, and other local government consortium members, jointly funded and prepared an updated “Analysis of Impediments to Fair Housing Choice” in preparation of their required 2015 Consolidated Plan submissions to HUD. The final version of the “2015 Analysis of Impediments to Fair Housing Choice – Twin Cities Region,” was published on February 13, 2015.
The “draft” and “final” versions of the 2015 AI contain false and deceptive statements concerning the details and outcome of the long-standing, high profile Magner v. Gallagher lawsuits against St. Paul. The false statement used in the Met Council, St. Paul 2015 Analysis of Impediments to Fair Housing is phrased in a similar manner to the false statement published by State Respondents in their October 2012 Analysis of Impediments to Fair Housing. This demonstrates that State Respondents and officials at the Met Council have been coordinating and assisting St. Paul in masking the serious and ongoing state and federal housing and funding law violations causing “disparate impact” to protected class members in the inner-city neighborhoods targeted for gentrification, thinning-out poor, minority rental housing and influx of higher income occupants.
The 2015 Analysis of Impediments to Fair Housing falsely states that the federal fair housing lawsuits brought against St. Paul in 2004 and 2005 by twelve (12) low-income rental housing providers were dismissed by the U.S. Supreme Court and instead of informing the public that the challenge related to rental housing, terms such as “property owners” and “residents” replaced “landlords” and “tenants”:
Magner v. Gallagher (Feb 14, 2012) Property owners in St. Paul claimed the city’s aggressive housing code enforcement was impacting minority residents and was thus in violation of the Fair Housing Act on the basis of disparate impact. The Eighth Circuit Court ruled in favor of the property owners but the case was ultimately dismissed by the Supreme Court.” (emphasis added).
http://www.housinglink.org/Files/2014%20FHIC%20AI.pdf (page 72, emphasis added). Compare to State Respondents’ October 3, 2012 Analysis of Impediments to Fair Housing Choice, page 81, see link at:
The 2015 AI prepared by the Met Council, St. Paul and Minneapolis does not contain required “racial analysis” related to the housing policies and actions of St. Paul. The 2015 “AI” published for public consumption as required by federal law, was prepared and funded with participation by the Met Council, St. Paul and Minneapolis, as part of the State’s Regional Planning.
The 2015 AI does not contain the required reference and analysis of St. Paul ordinances, policies or actions related to housing. In fact, there is a complete lack of any mention of St. Paul public sector policies in the 2015 AI.
The 2015 AI does not mention HUD housing discrimination and federal funding Complaints against St. Paul, including complaints and lawsuits filed by Builders Association of Minnesota (2012), Raven Financial (11/2013), Bee and Lamena Vue (9/2014) and the 14 member Rock of Ages housing coalition (11/2012), or any of the many other housing lawsuits filed and pending against St. Paul (Steinhauser, et al. v. St. Paul; Harrilal, et. al. v. Magner, et al.).
The February 2015 Analysis of Impediments to Fair Housing also fails to mention other significant Twin Cities fair housing lawsuits, including the August 22, 2014 Minnesota Federal District Court ruling allowing Ron and Julie Folger’s federal Fair Housing lawsuit against Minneapolis to proceed with a challenge to Minneapolis’ rental licensing revocation ordinance that has been displacing substantial numbers of “protected class” tenants from their homes without a showing that the homes were uninhabitable. See http://www.startribune.com/judge-allows-minneapolis-landlord-s-federal-suit-against-city-to-continue/272383901/
Surprisingly, the St. Paul and Met Council February 2015 AI also fails to mention the August 22, 2014 dismissal of the “Quid Pro Quo,” Ellis, et al. v. Minneapolis, St. Paul and Met Council False Claims Act lawsuit, a case similar to the Westchester County, New York false claims lawsuit that State Respondents claimed in the State’s 2012 AI was so significant:
The ramifications of this case are expected to affect housing policies of both states and entitlement communities across the nation; activities taken to affirmatively further
fair housing will likely be held to higher levels of scrutiny to ensure that federal funds are being spent to promote fair housing and affirmatively further fair housing.
See page 76 of the State’s October 3, 2012 released AI. See also link at MHFA’s website:
The 2015 AI fails to mention HUD’s release in February 2013 of its first ever “disparate impact” administrative rule applicable to Respondents and St. Paul. See: http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2013/HUDNo.13-022; https://www.nmhc.org/Content.aspx?id=4130.
The 2015 AI fails to mention the highly publicized U.S. Supreme Court challenges by St. Paul officials in 2011, by the Township of Mount Holly, N.J. in 2013, or by the Texas Dept. of Housing in 2014, all significantly impacting the fair housing community.
St. Paul and Minneapolis officials and representatives working with State Respondents and the Met Council in preparation and publication of their 2015 federal funding “AI,” falsely stated that Magner v. Gallagher was dismissed, and ensured that there was no other reference to “disparate impact,” to the many other complaints against public sector housing policies, to federal funding fraud complaints, or to their policies impacting “protected classes”.
The federally required “2015 Analysis of Impediments to Fair Housing” by St. Paul, Minneapolis and the Met Council has been sufficiently sanitized to cover official misconduct of local and state officials.
On July 8, 2015, HUD published its final rule on Affirmatively Furthering Fair Housing; the rule becomes a final administrative rule 30 days after July 8, 2015. State Respondents and subgrantee St. Paul are bound by HUD’s former AFFH, “AI” requirements for the 2015 Consolidated Plan submission cycle. HUD announced the AFFH rule was designed “to equip communities that receive HUD funding with data and tools to help them meet long-standing fair housing obligations in their use of HUD funds.” HUD further stated that, “For more than forty years, HUD funding recipients have been obligated by law to reduce barriers to fair housing, so everyone can access affordable, quality housing (emphasis added). See
HUD's Investigative Role
HUD has the statutory authority to enforce compliance with the Fair Housing Act, Title VI, HCDA, and related statutes and regulations. HUD has authority from Congress to provide funding grants to states, counties and municipalities as grantees and subgrantees only if the recipients of federal funding provide the required submissions and civil rights certifications.
HUD is prohibited from providing federal funds to a city or state grantee that has failed to either make the required certifications or has issued a false certification. Federal grants are specifically conditioned upon legitimate and valid certifications requiring compliance with all federal laws.
Raven Financial seeks a determination from HUD following an investigation that the State of Minnesota, MHFA, the Met Council and St. Paul are in violation of their statutory and contractual duties and certifications. Raven is requesting that HUD deem Respondents’ funding certifications insufficient to support their receipt of federal funding applicable to all civil rights certifications.
Raven is petitioning HUD to withhold all HUD funding until the State of Minnesota, MHFA, Met Council and St. Paul meet all of their statutory and contractual obligations, take appropriate actions to remedy the adverse impact of such policies, and provide full restitution to all victims of said illegal policies.
Representing Raven Financial, LLC:
John R. Shoemaker (Attorney at Law)
Paul F. Shoemaker (Attorney at Law)
SHOEMAKER & SHOEMAKER, P.L.L.C.
Highland Bank Building
5270 West 84th Street
Bloomington, MN 55437
Phone: (952) 224-4610
Shoemaker and Shoemaker, P.L.L.C. also represents Bee and Lamena Vue in their HUD Housing Discrimination Complaint, and the Plaintiff housing providers in Steinhauser, Meysembourg & Brisson v. St. Paul, et al., in Harrilal, Johnson, et al. v. Magner, City of St. Paul, et al., in Ron and Julie Folger v. City of Minneapolis, and in Andrew Ellis and Harriet Ellis v. City of Minneapolis.
Challenge from host Bob Johnson- I challenge Walter Mondale, Mark Dayton, and Chris Coleman to a debate on this issue.