931 N.W.2d 410
Minn. Ct. App.2019Background
- Minneapolis amended Title 7 (civil rights ordinance) in 2017 to prohibit landlords from using requirements of public-assistance programs (including Section 8) as a motivating factor to refuse to rent, with limited exemptions and an undue-hardship defense; effective May 1, 2018 (final version amended Dec. 2017).
- The ordinance aimed to increase housing access for HUD Housing Choice Voucher (Section 8) holders after local data showed few affordable listings accepted vouchers and concentrations of voucher acceptance in high-poverty areas. MPHA administers ~4,870 vouchers in Minneapolis.
- Fletcher Properties (owners of multi-tenant properties) sued seeking declaratory relief, arguing the ordinance is preempted, violates substantive due process and equal protection (Minnesota Constitution), effects an unlawful regulatory taking, and infringes freedom of contract. The district court granted summary judgment to Fletcher on due process and equal protection and enjoined enforcement.
- On appeal, the City contended rational-basis review applies and the ordinance is rationally related to legitimate objectives (increasing voucher housing opportunities, reducing discrimination and disparate impacts); Fletcher argued the ordinance implicates a fundamental property right requiring strict scrutiny and is unconstitutional under either standard.
- The appellate court held the ordinance does not implicate a fundamental right, applied rational-basis review, and concluded the ordinance is rationally related to legitimate public purposes; it reversed the district court and remanded for further proceedings on Fletcher’s other claims.
Issues
| Issue | Plaintiff's Argument (Fletcher) | Defendant's Argument (City) | Held |
|---|---|---|---|
| I. Does the ordinance implicate a fundamental right? | Right to rent/use property is a fundamental property right requiring strict scrutiny | Right-to-rent is not historically a fundamental right; housing regulation evaluated under rational basis | No fundamental right implicated; rational-basis review applies |
| II. Does the ordinance violate substantive due process? | Ordinance arbitrarily interferes with property and business, creates unconstitutional presumption against landlords, and is not rationally related to legitimate goals | Ordinance advances legitimate public purposes (increase voucher housing access, reduce discrimination) and includes hardship defense and landlord incentives | Ordinance survives rational-basis review; does not facially violate substantive due process |
| III. Does the ordinance violate equal protection? | Classifications/exemptions are arbitrary and permit continued discrimination; means are illegitimate | Exemptions are sensible (small subset, owner-occupied single units), relevant to objectives, and purpose is legitimate | Classification meets rational-basis equal-protection test; no facial violation |
| IV. Are Fletcher's other claims moot (preemption, takings, contract)? | District court held them moot after granting constitutional relief | City requested remand to consider remaining claims if constitutional ruling reversed | Appellate court reversed constitutional rulings and remanded; declined to decide mootness of other claims and ordered district court to consider them |
Key Cases Cited
- State v. Holloway, 916 N.W.2d 338 (Minn. 2018) (standard for identifying fundamental rights rooted in history and tradition)
- Minn. Voters All. v. City of Minneapolis, 766 N.W.2d 683 (Minn. 2009) (presumption of constitutionality and heavy burden on facial challenges)
- Boutin v. LaFleur, 591 N.W.2d 711 (Minn. 1999) (rational-basis framework for substantive-due-process challenges)
- Hegenes v. State, 328 N.W.2d 719 (Minn. 1983) (rational-basis review for laws affecting rental-property classifications)
- Arcadia Dev. Corp. v. City of Bloomington, 552 N.W.2d 281 (Minn. App. 1996) (upholding housing-regulation ordinance under deferential rational-basis review)
- Twin City Candy & Tobacco Co. v. A. Weisman Co., 149 N.W.2d 698 (Minn. 1967) (struck statute that created irrebuttable presumption of predatory intent)
- Fed. Distillers, Inc. v. State, 229 N.W.2d 144 (Minn. 1975) (upheld statute requiring licensed sellers to offer goods on equal terms; distinguished from Weisman)
- Thiede v. Town of Scandia Valley, 14 N.W.2d 400 (Minn. 1944) (protection of right to occupy one’s home; distinguished as not extending to general rental-use rights)