43 F. Supp. 3d 922
D. Minnesota2014Background
- Plaintiffs Ronald and Julie Folger and RBE Properties owned ~20 rental homes in Minneapolis rented largely to low‑income, majority-minority tenants; Minneapolis requires individual rental licenses.
- City revoked licenses for two Folger properties after code proceedings and, under an ordinance (the “two‑strikes”/automatic revocation rule, Minneapolis Code § 244.1910(13)), sought revocation of the remaining licenses and declared Plaintiffs ineligible for licenses for five years.
- Plaintiffs allege disparate‑treatment and disparate‑impact claims under the Fair Housing Act (Count I), a claim under 42 U.S.C. § 3608/AFFH (Count II), injunctive relief under the FHA (Count III), and discrimination claims under §§ 1981, 1982, and § 1983 (Counts IV–VI).
- City moved for judgment on the pleadings under Fed. R. Civ. P. 12(c). Plaintiffs opposed and sought sanctions; no Rule 11 motion was filed.
- Court accepted disparate‑impact theory for part of Count I as plausibly pleaded but held that Plaintiffs failed to plead non‑conclusory factual allegations of intentional discrimination; it granted judgment to City on disparate‑treatment claims (Count I portion), Count II (with prejudice), and Counts IV–VI, and denied judgment on the disparate‑impact portion of Count I and Count III (injunctive relief) to the extent a substantive violation survives.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiffs pleaded actionable disparate‑treatment (intentional discrimination) under the FHA | Folger alleges City adopted and applied the automatic‑revocation ordinance with knowledge it would disproportionately displace minorities and thus inferred intent | City argues pleading is conclusory, cites Iqbal/Twombly; no specific non‑conclusory facts tying motive to race | Court: Judgment for City — allegations of intent are conclusory and insufficient to survive Rule 12(c) |
| Whether Plaintiffs stated a disparate‑impact FHA claim | Folger alleges the automatic revocation disproportionately harmed protected renters and viable alternatives existed (preferential treatment to MPHA, HUD AI guidance available) | City argues statistics aren’t compared to a proper reference population and Plaintiffs suffered no concrete injury | Court: Disparate‑impact claim in Count I survives the Rule 12(c) pleading stage as plausibly alleged |
| Whether Count II (failure to AFFH / failure to conduct AI) states an independent FHA claim | Folger treats failure to conduct Analysis of Impediments as independently actionable under § 3608/AFFH | City argues § 3608 does not create independent private causes of action like § 3604; pleading is not pleaded as a § 3604 violation | Court: Count II dismissed with prejudice — AFFH/AI allegations have no independent significance apart from § 3604 analysis |
| Whether §§ 1981, 1982, § 1983 (Equal Protection) claims survive | Folger relies on same allegations of discriminatory intent and effects to support these claims | City argues those claims require intentional discrimination and pleadings are deficient | Court: Judgment for City on Counts IV–VI (duplicative of FHA intent theory) — intentional discrimination not plausibly pleaded |
Key Cases Cited
- Gallagher v. Magner, 619 F.3d 823 (8th Cir. 2010) (discussing FHA disparate‑treatment and disparate‑impact frameworks and applying Arlington Heights analysis)
- Village of Arlington Heights v. Metropolitan Hous. Dev. Corp., 429 U.S. 252 (1977) (factors for inferring discriminatory intent from disparate impact and legislative history)
- Ricci v. DeStefano, 557 U.S. 557 (2009) (characterizing disparate‑treatment claims and pleading standards)
- Smith v. City of Jackson, Miss., 544 U.S. 228 (2005) (statutory interpretation limits of disparate‑impact liability in certain statutes)
- Washington v. Davis, 426 U.S. 229 (1976) (equal protection claims require proof of discriminatory intent, not just disparate impact)
- McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) (burden‑shifting framework for disparate‑treatment claims)
- Feeney v. Personnel Administrator, 442 U.S. 256 (1979) (discriminatory purpose requires more than awareness of consequences)