Fletcher Properties, Inc., et al., Appellants, vs. City of Minneapolis, Respondent.
A18-1271
STATE OF MINNESOTA IN SUPREME COURT
Filed July 29, 2020
Thissen, J. Concurring, Anderson, J., Gildea, C.J.
Court of Appeals Office of Appellate Courts
Erik Nilsson, Interim Minneapolis City Attorney, Kristin R. Sarff, Tracey N. Fussy, Assistant City Attorneys, Minneapolis, Minnesota, for respondent.
Aaron D. Van Oort, Thomas Pryor, Faegre Drinker Biddle & Reath, LLP, Minneapolis, Minnesota; and
Todd B. Liljenquist, Minnesota Multi Housing Association, Bloomington, Minnesota, for amicus curiae Minnesota Multi Housing Association.
Seth Leventhal, Leventhal PLLC, Minneapolis, Minnesota; and
John J. McDermott, National Apartment Association, Arlington, Virginia, for amicus curiae National Apartment Association.
John Cann, Saint Paul, Minnesota, for amicus curiae Housing Justice Center.
Eric Dunn, Richmond, Virginia; and
Renee Williams, San Francisco, California, National Housing Law Project, for amicus curiae National Housing Law Project.
Philip Tegeler, Washington, D.C., for amicus curiae Poverty & Race Research Action Council.
Lawrence R. McDonough, Theresa M. Bevilacqua, Dorsey & Whitney LLP, Minneapolis, Minnesota; and
Samuel Spaid, HOME Line, Minneapolis, Minnesota, for amicus curiae HOME Line.
S Y L L A B U S
- Those portions of title 7, chapter 139, of the Minneapolis Code of Ordinances that prohibit an owner from refusing to rent residential property to an individual because of any requirement of a public assistance program do not violate the Minnesota Constitution’s guarantee of substantive due process.
- Those portions of title 7, chapter 139, of the Minneapolis Code of Ordinances that prohibit an owner from refusing to rent residential property to an individual because of any requirement of a public assistance program do not violate the Minnesota Constitution’s guarantee of equal protection.
Affirmed.
O P I N I O N
THISSEN, Justice.
In this case, we consider a constitutional challenge to an ordinance adopted by respondent City of Minneapolis that prohibits certain property owners, property managers, and others (collectively, landlords) from refusing to rent property to prospective tenants
FACTS
Section 8 of the United States Housing Act of 1937 provides for housing assistance to low-income people in the United States. See generally
Housing choice vouchers are one form of assistance provided under Section 8. See
Under federal law, participation in Section 8 is voluntary for both landlords and tenants. See, e.g., Salute v. Stratford Greens Garden Apartments, 136 F.3d 293, 296 (2d Cir. 1998); Knapp v. Eagle Prop. Mgmt. Corp., 54 F.3d 1272, 1280 (7th Cir. 1995). Landlords who opt to participate in the program are required to enter into a Housing Assistance Payments Contract with HUD. See generally
For years, voucher holders have consistently reported difficulty finding landlords who accept Section 8 housing choice vouchers. In June 2015, the Minneapolis City Council published a notice of intent to introduce an amendment “prohibiting discrimination based on receipt of public assistance, including tenant-based Section 8 assistance, regardless of any requirements of such public assistance program.” Over the next two years, the City conducted private meetings, public hearings, surveys, and focus groups with landlords, tenants, tenant advocates, and representatives of housing industry organizations. The City also conducted research and gathered reports and data to further its understanding of the Section 8 housing choice voucher program, affordable housing, and the Minneapolis housing market, among other topics.
In March 2017, the City amended the section of its civil rights title addressing discrimination in real estate. Before the amendment, the section prohibited landlords from refusing to rent to prospective tenants “because of race, color, creed, religion, ancestry, national origin, sex, sexual orientation, gender identity, disability, marital status, status with
The ordinance was again amended in December 2017. The ordinance now states:
(e) Discrimination in property rights. It is an unlawful discriminatory practice for an owner, lessee, sublessee, managing agent, real estate broker, real estate salesperson or other person having the right to sell, rent or lease any property, or any agent or employee of any of these, when . . . status with regard to a public assistance program, or any requirement of a public assistance program is a motivating factor:
(1) To refuse to sell, rent or lease, or to refuse to offer for sale, rental or lease; or to refuse to negotiate for the sale, rental, or lease of any real property; or to represent that real property is not available for inspection, sale, rental, or lease when in fact it is so available; or to otherwise make unavailable any property or any facilities of real property.
MCO, tit. 7, § 139.40(e) (2020).2 Under the ordinance, the Section 8 housing choice voucher program is a public assistance program. Id., § 139.20 (2020) (defining “[p]ublic assistance program” to include any “tenant-based federal, state or local subsidies, including, but not limited to, rental assistance, rent supplements, and housing choice vouchers“).
(1) The nature and net cost of complying with any requirement of a public assistance program, taking into consideration existing property management processes;
(2) The overall financial resources of the landlord, taking into consideration the overall size of the business with respect to the number of its employees, and the number, type, and location of its housing stock; and
(3) The impact of complying with any requirement of a public assistance program upon the business and dwelling.
Id.
The ordinance also provides that four categories of landlords are exempt from the prohibition on refusing to rent because of the requirements of the housing choice voucher program without needing to prove undue hardship. The ordinance states:
The provisions of section 139.40(e) relating to tenant-based federal, state or local subsidies, including, but not limited to, rental assistance, rent supplements, and housing choice vouchers, or any requirement of such a program, shall not apply to:
(1) Renting or leasing a room in an owner occupied single-family dwelling.
(2) Renting or leasing a single-family dwelling, a single dwelling unit, or a single dwelling unit of a condominium, townhouse, or housing cooperative, by the owner of the dwelling or dwelling unit, for no more than thirty-six (36) months, when such dwelling or dwelling unit is an owner occupied homestead at the start of the thirty-six (36) month period.
(3) Renting or leasing a dwelling with two dwelling units when a person who owns or has an ownership interest in the dwelling is residing in the other dwelling unit.
(4) Renting or leasing a single-family dwelling, a single dwelling unit, or a single dwelling unit of a condominium, townhouse, or housing cooperative, by the owner of the dwelling or dwelling unit, while the owner is on active military duty and when such dwelling or dwelling unit is an owner occupied homestead at the start of the active military duty.
Id., § 139.30(b) (2020).3
The Owners’ complaint alleged that the amended ordinance (1) is preempted by state law; (2) violates the Due Process Clause of the Minnesota Constitution,
ANALYSIS
This case comes to us on appeal from a grant of summary judgment. We review a grant of summary judgment de novo. Kratzer v. Welsh Cos., LLC, 771 N.W.2d 14, 18 (Minn. 2009). We view the evidence “in the light most favorable to the party against whom judgment was granted“—here, the City. See Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). We will affirm the judgment “if no genuine issues of material fact exist and if the court below properly applied the law.” Kratzer, 771 N.W.2d at 18.
The constitutionality of a statute is a question of law which we review de novo. State v. Larsen, 650 N.W.2d 144, 147 (Minn. 2002). Because statutes are presumed constitutional, we “exercise our power to declare a statute unconstitutional with extreme caution and only when absolutely necessary.” Boutin v. Lafleur, 591 N.W.2d 711, 714 (Minn. 1999).
I.
A.
We start with the Owners’ due process challenge to the ordinance. The Due Process Clause of the Minnesota Constitution provides that “no person shall . . . be deprived of life, liberty or property without due process of law.”
First, we must reconcile our fundamental constitutional commitment that generally people should be allowed to go about their business without government interference with
A law is permissible when it is within the power of the governmental decision maker to enact and serves a public purpose. Miller Brewing Co. v. State, 284 N.W.2d 353, 356 (Minn. 1979) (stating that the “purpose of the statute must be one that the state can legitimately attempt to achieve“); Contos 278 N.W.2d at 741 (stating that the law must “serve to promote a public purpose“).6
The means chosen to achieve the purpose are reasonable if the legislative body could rationally believe that the mechanism it chose would help achieve the legislative goal or mitigate the harm the legislation seeks to address. See Boutin, 591 N.W.2d at 718 (rejecting the argument that the State has no interest in registering nonpredatory offenders because
A law is not arbitrary or capricious when it emerged from a reasoned, deliberative process, rather than as a result of legislative chance, whim, or impulse. See Minn. State Bd. of Health v. City of Brainerd, 241 N.W.2d 624, 629–30 (Minn. 1976) (holding that a law requiring water fluoridation was not arbitrary and violative of due process because the Legislature relied on scientific opinion that fluoridation is safe and effective at reducing dental caries); see also State v. Rey, 905 N.W.2d 490, 495–96 (Minn. 2018) (holding that an identity theft statute that allowed some victims to recover restitution in excess of actual losses is not arbitrary because it recognizes the difficulty of discovering and quantifying identify theft losses). When assessing arbitrariness, we have also considered whether the law provides a sufficiently definite standard so that obligations and enforcement authority are clear. See Red Owl Stores, Inc., 210 N.W.2d at 103–04.
Second, due process challenges raise questions about the extent to which courts should disturb decisions of a legislative body. We generally defer to legislative judgments on the wisdom and utility of a law out of concern for democratic legitimacy and institutional capacity. Legislators—as the elected representatives of the people—and
This restriction upon the judicial function, in passing on the constitutionality of statutes, is not artificial or irrational. A state legislature, in the enactment of laws, has the widest possible latitude within the limits of the Constitution. In the nature of the case it cannot record a complete catalogue of the considerations which move its members to enact laws. In the absence of such a record courts cannot assume that its action is capricious, or that, with its informed acquaintance with local conditions to which the legislation is to be applied, it was not aware of facts which afford reasonable basis for its action. Only by faithful adherence to this guiding principle of judicial review of legislation is it possible to preserve to the legislative branch its rightful independence and its ability to function.
Carmichael v. S. Coal & Coke Co., 301 U.S. 495, 510 (1937). Under the due process clause then, “it is not this court’s function, at least in the absence of overwhelming evidence to the contrary, to second-guess the . . . accuracy of a legislative determination of fact. Nor is it within our province to determine the wisdom of or necessity for a legislative enactment.” Minn. State Bd. of Health, 241 N.W.2d at 629.
Accordingly, on a rational basis review, the burden of proving that a statute is invalid rests with the party challenging its constitutionality. Essling v. Markman, 335 N.W.2d 237, 239 (Minn. 1983). We will not strike down a law as irrational when “it is evident from all the considerations presented to [the Legislature], and those of which we may take judicial notice, that the question is at least debatable” and the government decision maker could reasonably have conceived those facts and considerations to be true. Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 464 (1981) (citation omitted)
B.
With these principles in mind, we turn to the question of whether the Minneapolis ordinance violates the Owners’ substantive due process rights. We conclude that it does not.
1.
The City articulated three purposes for the ordinance: (1) increasing housing opportunities for voucher holders, (2) addressing the discriminatory effects of housing denials, and (3) prohibiting prejudice-based discrimination. Each of these is a permissible object of legislation. The Owners neither question that the City can seek to achieve these ends nor contend that these objectives lack a public purpose. We agree that the objectives of the ordinance are permissible.
2.
The Owners assert that the ordinance is not a reasonable means to achieve the City’s purposes. First, they contend that the ordinance will not increase housing opportunities because the ordinance will not overcome the actual barriers that voucher holders face in finding housing in Minneapolis. These barriers include a tight rental market and low vacancy rates, especially for voucher holders; lawful screening criteria that are left untouched by the ordinance; and rent increases driven by the added costs imposed by the ordinance itself. For
Further, based on the evidence in the record, the City’s conclusion that the ordinance will increase housing opportunities for voucher holders is “at least debatable.” See Clover Leaf Creamery Co., 449 U.S. at 464. Under our deferential rational basis test, we cannot conclude that the City acted unreasonably by seeking to create more housing opportunities for voucher holders by prohibiting landlords from refusing to rent to voucher holders to avoid the burdens associated with the housing choice voucher program.
The Owners similarly contend that the ordinance will not reduce the concentration of housing opportunities for voucher holders in certain poor, racially segregated neighborhoods. They argue that the concentration of Section 8 housing is driven by the supply of housing and not the refusal of landlords to participate in the Section 8 housing choice voucher program. The Owners also point out that housing mobility for voucher holders is limited by the lack of job opportunities and social services in areas of the city where fewer voucher holders live.
Although the Owners offer a reasoned argument that the City could have chosen more effective mechanisms to reduce the concentration of housing opportunities in some neighborhoods, they do not satisfy their burden under our deferential rational basis test. The
The Owners finally assert that the ordinance will not reduce prejudice-based discrimination against Section 8 housing choice voucher holders.7 The Owners note that the ordinance independently makes it unlawful for landlords to refuse to rent to prospective tenants because they plan to use housing choice vouchers to help cover payment of the rent. Accordingly, the Owners argue, the additional prohibition on landlords refusing to rent to voucher holders because they do not want to comply with program requirements is unnecessary and redundant. The Owners also point out that many landlords do, in fact, rent some of their properties to voucher holders and other renters who rely on different government subsidies. They vigorously contend that their objection to the housing choice voucher program is motivated solely by the perceived additional burdens and costs that are associated with the Housing Assistance Payments Contract and not by any prejudice against voucher holders. We have no reason to doubt this of the Owners and many other landlords
That the ordinance may impose burdens on some property owners who are not motivated by prejudice against voucher holders does not render the ordinance unconstitutional under the due process rational basis test. Outside of laws directed against protected classes or politically unpopular groups, overinclusive rules—rules that sweep in and burden more people than absolutely required to achieve the legislative purpose—have consistently been upheld against due process challenges because they are rationally connected to the legislative purpose. See N.Y.C. Transit Auth. v. Beazer, 440 U.S. 568, 591–92 (1979) (upholding a rule that individuals in methadone treatment programs cannot work for the transit authority, even though some individuals may be competent and safe employees, because the rule was a legislative policy choice); Mourning v. Family Publ‘ns Serv., Inc., 411 U.S. 356, 377–78 (1973) (upholding a “prophylactic” rule that required certain disclosures to consumers if a loan was to be repaid in four or more installments, even if the lender did not impose a finance charge, under a Truth in Lending Act provision that required certain disclosures for contracts imposing finance charges).
[T]he question . . . is not whether a statutory provision precisely filters out those, and only those, who are in the factual position which generated the [legislative] concern reflected in the statute. Such a rule would ban all prophylactic provisions . . . . Nor is the question whether the provision filters out a substantial part of the class which caused [legislative] concern, or
whether it filters out more members of the class than nonmembers. The question is whether [the legislative body], its concern having been reasonably aroused by the possibility of an abuse which it legitimately desired to avoid, could rationally have concluded both that a particular limitation or qualification would protect against its occurrence, and that the expense and other difficulties of individual determinations justified the inherent imprecision of a prophylactic rule.
Weinberger v. Salfi, 422 U.S. 749, 777 (1975). Once again, the Minnesota Constitution does not require a legislative body “to devise precise solutions to every problem.” Rey, 905 N.W.2d at 495.
Here, the City’s decision to prohibit landlords from refusing to rent to housing choice voucher holders because the landlords do not want to comply with the program requirements is a rational way to reduce refusals to rent based on prejudice against voucher holders. And the reasonableness of the provision is enhanced by the undue hardship exemption that allows landlords to avoid the requirements of the ordinance and the housing choice voucher program altogether when those requirements impose unreasonable burdens.
3.
The Owners also argue that the ordinance violates the Due Process Clause because it creates a constitutionally impermissible irrebuttable presumption that a landlord who refuses to rent to a prospective tenant because of the burdens associated with the Section 8 housing choice voucher program was motivated by prejudice against voucher holders. We disagree.8
Like innumerable statutes and ordinances, the provision establishes a substantive rule of law that prohibits conduct regardless of the actor’s intent. The unlawful conduct prohibited by the ordinance is the refusal of a landlord to rent or lease a property because the landlord wants to avoid complying with the requirements of the housing choice voucher program—plain and simple. Nothing in the specific prohibition at issue here makes an intent to discriminate against a voucher holder an element of the violation.
Contrary to the Owners’ arguments, using the word “discrimination” in the ordinance does not inherently include a notion of invidious intent. The City chose to expressly define “discrimination” in the ordinance. “When a word is defined in a statute, we are guided by the definition provided by the Legislature.” Wayzata Nissan, LLC v. Nissan N. Am., Inc., 875 N.W.2d 279, 286 (Minn. 2016). The ordinance provides:
Discriminate or discrimination: Includes any act, attempted act, policy or practice, which results in unequal treatment, separation or segregation of or which otherwise adversely affects any person who is a member of a class or combination of classes protected by this title.
MCO, tit. 7, § 139.20. On its face, the definition does not require proof of intent.
section 139.40 and perhaps would have been more properly enacted in the housing regulation title of the Minneapolis Code of Ordinances. But this does not render the provision unconstitutional. See Red Owl Stores, Inc., 310 N.W.2d at 103.
Finally, the responsibility of the Minneapolis Commission on Civil Rights to determine whether a landlord’s refusal to rent is motivated by a desire to avoid complying with Section 8 program requirements, see MCO, tit. 7, § 141.50 (2020), does not compel the conclusion that there can be no violation of section 139.40(e)(1) in the absence of proof of discriminatory intent. The Director of the Minneapolis Department of Civil Rights has authority to investigate and enforce many municipal economic regulations that lack any discriminatory intent, including the City’s prevailing wage law, MCO, tit. 2, § 24.220 (2020), and the City’s minimum wage and sick leave policies, MCO, tit. 2, §§ 40.10–.650 (2020). A finding of “discrimination” by the Commission on Civil Rights simply means that a person engaged in “unfair discriminatory acts” or “unlawful discriminatory practices” as defined in section 139.40. See MCO, tit. 7, § 141.50(r). As set forth above, those determinations neither connote nor require proof that the person acted with discriminatory intent.
The Owners also point to the Minnesota Human Rights Act (MHRA),
The City’s ordinance is fundamentally different from
Indeed, in one of the cases cited by the Owners, the court of appeals distinguished the MHRA from a Massachusetts statute, which, similar to the City’s ordinance, made it unlawful to refuse to rent to an individual receiving Section 8 benefits ” ‘because of any requirement of . . . [a] housing subsidy program.’ ” Edwards v. Hopkins Plaza Ltd. P’ship,
In essence, the Owners’ claim is that due process principles prohibit a legislative body from passing a law that has the goal of stopping prejudicial discrimination unless the law includes proof that the actor had an intent to discriminate as an element of the violation. For purposes of rational basis review, however, the argument improperly conflates a purpose of a law with the mechanism the legislative body chooses to achieve that purpose. There is more than one rational way to reduce or eliminate discrimination against voucher holders. A legislative body rationally could attempt to accomplish that objective by requiring proof that the refusal to rent was “because of” the prospective tenant’s status as a voucher holder. But a legislative body could also rationally attempt to reduce or eliminate discrimination against voucher holders by removing the burden of the program requirements as a lawful excuse for not participating in the housing choice voucher program.
In short, because the language of the Minneapolis ordinance does not require proof that a landlord acted out of prejudice against voucher holders, the Owners’ argument that the ordinance creates a constitutionally impermissible conclusive presumption of discriminatory intent fails.
The statute at issue in Weisman differs in several respects from the City’s prohibition on refusing to rent due to the requirements of the housing choice voucher program. First, for the reasons stated earlier, the ordinance does not presume prejudicial intent. Unlike the statute in Weisman, intent is simply not an element.
Second, in Weisman, we relied primarily on state and federal case law concerning price fixing and price discrimination. See 149 N.W.2d at 703–04 (discussing Fairmont Creamery Co. v. Minnesota, 274 U.S. 1 (1927), and Nebbia v. New York, 291 U.S. 502 (1934); then citing State by Clark v. Wolkoff, 85 N.W.2d 401 (Minn. 1957),
The Fairmont Creamery Court’s focus on freedom of contract—and the date of the decision—make clear that the decision was part of the approach to the due process clause that characterized the Court’s Lochner-era11 cases. The constitutional requirement that price-fixing statutes inherently include proof of injurious intent as an element was rooted in an effort to protect individuals’ freedom to contract, particularly with regard to setting prices for goods. Courts have long since disavowed this Lochner-era approach and moved away from a focus on freedom of contract. See Griswold v. Connecticut, 381 U.S. 479, 481–82 (1965) (“Overtones of some arguments suggest that Lochner v. New York should be our guide. But we decline that invitation . . . . We do not sit as a super-legislature to determine the wisdom, need, and propriety of laws that touch economic problems, business affairs, or social conditions.” (citations omitted)); Nebbia, 291 U.S. at 523 (“[N]either property rights nor contract rights are absolute; for government cannot exist if the citizen
Relying on those older notions of substantive due process, the Weisman court applied a more stringent level of scrutiny than rational basis. The court, echoing strict scrutiny analysis, stated: “A basic assumption in considering this question is the premise that vendors have a right to deal with their property as they wish and that freedom to contract is a liberty which may not be circumscribed except for compelling reasons.” Id. at 702 (emphasis added). When an ordinance deprives a person of fundamental rights, the United States Constitution requires that we apply such a heightened standard. See Salfi, 422 U.S. at 771–72 (distinguishing “conclusive evidentiary presumption” cases like Cleveland Board of Education v. LaFleur, 414 U.S. 632 (1974), and Stanley v. Illinois, 405 U.S. 645 (1972), on the ground that the rights at issue in those cases were fundamental liberties); cf. Fed. Distillers, Inc. v. State, 229 N.W.2d 144, 159 n.19 (Minn. 1975) (“The proper reach or scope of the constitutional standard denouncing the use of irrebuttable presumption is far from settled since we find no cases invalidating its use in the area of economic regulations except for [Weisman].”). But here, the parties agree that the provision in this case is subject to rational basis review which does not require a compelling reason for the government action but rather a legitimate government interest
Finally, in the years since Weisman, the Supreme Court has moved away from a distinct “irrebuttable presumption” analysis of due process challenges and refocuses on the basic rational basis inquiry of reasonable fit between statutory means and purpose. In Michael H. v. Gerald D., the Supreme Court upheld a California statute that conclusively
Consequently, in cases that do not implicate fundamental rights, legislative enactments will be upheld against due process challenges when the means chosen to achieve a permissible legislative objective are reasonable, regardless of whether the law is framed as a substantive rule of law or as a conclusive presumption.
Finally, we conclude that the ordinance is not an arbitrary and capricious exercise of the City’s power. Quite the contrary. After considering the ordinance amendment for almost 2 years, the City adopted a definite and understandable standard of conduct for landlords. The City gathered substantial evidence before passing the ordinance. It consulted with stakeholders including landlords, voucher holders, business associations, and housing nonprofit groups. The City held two public hearings on the ordinance, received feedback from focus groups, and was presented with numerous reports regarding the housing crisis within Minneapolis and the broader metropolitan area. The evidence presented to the City supported its conclusion that prohibiting landlords from refusing to rent to voucher holders because of the burden of complying with the requirements of the housing choice voucher program would help remedy the challenges faced by voucher holders in obtaining housing in Minneapolis, reduce the concentration in poor and segregated neighborhoods of housing available to voucher holders, and prevent prejudice-based discrimination. The arbitrary and capricious challenge fails.
We therefore conclude that the Minneapolis ordinance does not violate the Minnesota Constitution’s guarantee of substantive due process.
II.
We now turn to the Owners’ equal protection challenge. As we have acknowledged on several occasions over the past few decades, our precedent on equal protection under the Minnesota Constitution has not been a model of clarity. So today we state our rule: a law subject to rational basis review does not violate the equal protection principle of the
But under our precedent, this rule is subject to an important exception: under the equal protection guarantee of the Minnesota Constitution, we hold lawmakers to a higher standard of evidence when a statutory classification demonstrably and adversely affects one race differently than other races, even if the lawmakers’ purpose in enacting the law was not to affect any race differently. See State v. Russell, 477 N.W.2d 886, 890 (Minn. 1991). In those circumstances, we require actual (and not just conceivable or theoretical) proof that a statutory classification serves the legislative purpose.12
Legislative bodies regularly, and for many different reasons, pass laws that treat people differently. There is nothing inherently wrong with that. Indeed, it is in the nature of the work of balancing different policy considerations in a complex and diverse polity.
The equal protection guarantee in the Minnesota Constitution places limits on the circumstances under and extent to which the Legislature can treat similarly situated people differently.13 In certain circumstances, when a statutory classification impacts fundamental rights or creates a suspect class, the scope of action of the legislative body is significantly constrained and its decision is subject to less deference and heightened scrutiny by the courts. In re Welfare of Child of R.D.L., 853 N.W.2d 127, 133 (Minn. 2014) (stating that when fundamental rights are at issue, a statutory classification is not entitled to the usual presumption of validity and the government must show that the classification is “narrowly tailored to serve a compelling government interest”); see also State ex rel. Forslund v. Bronson, 305 N.W.2d 748, 750 (Minn. 1981) (applying intermediate scrutiny to gender-based classifications).
Over the years, we have used many different formulations to describe rational basis review. We have applied the federal two-part formulation that examines whether the challenged legislation has a legitimate purpose and whether it was “reasonable for lawmakers to believe that use of the challenged classification would promote that purpose.”
These differing formulations are best understood as lenses that courts use to examine different types of equal protection problems that may arise in a given case, rather than a strict checklist that must be run down in every case.14 In the end, they “merely
In applying the standard, we have stated that the first step is to identify whether the law creates distinct classes within a broader group of similarly situated persons or whether those treated differently by the law are sufficiently dissimilar from others such that the law does not create different classes within a group of similarly situated persons. See State v. Cox, 798 N.W.2d 517, 521 (Minn. 2011). To make this determination, we ask whether “‘the claimant is treated differently from other [persons] to whom the claimant is similarly situated in all relevant respects.’” State v. Holloway, 916 N.W.2d 338, 347 (Minn. 2018) (quoting State v. Johnson, 813 N.W.2d 1, 12 (Minn. 2012)) (emphasis added). When the claimant is not treated differently than all others to whom the claimant is similarly situated, there is no equal protection violation. Cox, 798 N.W.2d at 521–22.
This first step is not a contextless comparison of the classes within the broader group. To meaningfully assess whether a claimant is similarly situated to all others in all relevant respects, we examine the positions of the claimant and all others in light of the broad purpose and operation of the statute. Whether a claimant is “similarly situated” to other persons cannot be decided based solely on the very classification challenged as violating equal protection. Stated another way, a classification does not pass equal protection muster simply because the Legislature created two classes. To do so would beg the question and render the equal protection principle meaningless.
In Schatz v. Interfaith Care Center, we held under the Workers’ Compensation Act that Minnesota providers who treat injured workers are not in the same class as out-of-state providers who treat injured workers. 811 N.W.2d 643, 656–57 (Minn. 2012). We reached that conclusion because the Workers’ Compensation Act “has a mechanism for employers . . . to challenge the reasonableness of the charges of medical providers subject
After we identify the appropriate group of similarly situated persons, we determine the two critical nodes of equal protection analysis: the precise nature of the challenged distinction between members of the group and the legislative purpose for that distinction. Finally, we apply the rational basis test, asking if the distinction is a rational way to achieve the legislative purpose.
To be clear, however, this analysis does not mean that we are compelled to interpret or apply the equal protection guarantee in the Minnesota Constitution identically to the Equal Protection Clause of the
I would question whether we should harness interpretation of our state constitutional guarantees of equal protection to federal standards and shift the meaning of Minnesota’s constitution every time federal law changes. Such a result would undermine the integrity and independence of our state constitution and degrade the special role of this court, as the highest court of a sovereign state, to respond to the needs of Minnesota citizens.
391 N.W.2d at 773 (Wahl, J., concurring specially) (footnote omitted). But we emphasize that the uniqueness of Minnesota’s equal protection guarantee does not turn on the specific formulation used to describe the standard. Rather, in certain circumstances, the Minnesota Constitution’s equal protection guarantee demands more rigorous analysis from lawmakers when they are determining whether a classification will, in fact, achieve a statutory goal. In other words, in a narrow range of cases, we apply a more searching level of scrutiny and
In particular, we hold lawmakers to a heightened standard of proof as to the fit between the means chosen by the Legislature and the government interest to be achieved when a statutory classification demonstrably and adversely affects one race differently than other races, even if the lawmakers’ purpose in enacting the law was not to affect any race differently. In State v. Russell, we considered a law providing for longer sentences for possession of crack cocaine than for possession of the same amount of powder cocaine. 477 N.W.2d 886, 887 (Minn. 1991). We struck down the law on equal protection grounds. Id. at 891. The Legislature adopted the distinction between crack cocaine and powder cocaine in an effort to stop street-level dealers of cocaine. Id. at 889. Evidence presented to a legislative committee suggested that a person who possessed three grams of crack cocaine was likely a dealer while a person who possessed powder cocaine was unlikely a dealer unless he possessed 10 grams or more. Id.
The record in Russell, however, also demonstrated that “the law ha[d] a discriminatory impact on black persons.” Id. at 887. The district court found that “crack cocaine is used predominantly by blacks and that cocaine powder is used predominantly by whites,” and thus, “a far greater percentage of blacks than whites are sentenced for possession of three or more grams of crack cocaine . . . with more severe consequences than their white counterparts who possess three or more grams of cocaine powder.” Id. (footnote omitted).
Accordingly, because of the disparate effect of the law on African Americans, we more closely scrutinized whether the distinction between crack cocaine and powder cocaine accurately reflected whether the person possessing a determined amount was a street-level dealer. Id.; see State v. Frazier, 649 N.W.2d 828, 842 (Minn. 2002) (Page, J., dissenting) (interpreting Russell to hold that “[u]nder Minnesota law . . . a defendant who challenges the constitutionality of a statute on the basis that it has a disparate impact on the members of a minority racial group is entitled to review of the statute under the Minnesota rational basis test if the defendant shows that the statute falls more harshly on one group than another”). In other words, we considered whether the evidence proved a sufficiently
Rather than allowing lawmakers to rest on the theoretical assumption that a person who possessed three grams of crack cocaine was a dealer and someone who possessed three grams of powder cocaine was not a dealer, we demanded that the legislation be supported by actual proof that that was the case. Russell, 477 N.W.2d at 890. We found such proof lacking because the Legislature relied on “anecdotal testimony” of a Hennepin County attorney which was contradicted by a report by the Minnesota Department of Safety Office of Drug Policy that rejected the “street dealer” distinction in possession amounts. Id. at 889–90; see also id. at 891 (“Without more [actual] evidence, it is as easily assumed that individuals jailed with possession of three grams of crack are mere personal users who are arbitrarily penalized as dealers.”).
Since Russell, we have not employed its higher scrutiny of means-end connection—requiring actual proof as opposed to theoretical or hypothesized proof—to strike down any law under the Equal Protection Clause of the Minnesota Constitution. In Frazier, we faced a similar challenge to a longer sentence imposed for a controlled substance crime committed for the benefit of a gang than would be imposed for someone who violated the Racketeer Influenced and Corrupt Organizations statute. 649 N.W.2d at 832. We did not have occasion to more closely examine the connection between the means of imposing a longer sentence for gang crimes and the ends to be achieved by the distinction because we determined that the evidence that the benefit-of-a-gang enhancement has a disparate impact on minorities was insufficient. Id. at 836–37. Contra id. at 842 (Page, J., dissenting). And
In Russell, we cited a law review article that analyzed Wegan v. Village of Lexington, 309 N.W.2d 273 (Minn. 1981), Thompson v. Estate of Petroff, 319 N.W.2d 400 (Minn. 1982), and Nelson v. Peterson, 313 N.W.2d 580, 580–81 (Minn. 1981), to support the conclusion that the Minnesota equal protection guarantee requires more searching judicial scrutiny of the evidence on which the Legislature relied to support a law. Russell, 477 N.W.2d at 889 (citing Deborah K. McKnight, Minnesota Rational Relation Test: The Lochner Monster in the 10,000 Lakes, 10 Wm. Mitchell L. Rev. 709 (1984)). We disagree with the article’s interpretation of the cases. Those cases were not about imposing more robust judicial scrutiny of—and second-guessing—the evidence before the Legislature. Rather, those decisions turned on a conclusion that it is not rational for the Legislature to treat two similarly situated individuals differently when there is absolutely no difference between them regarding the purpose the Legislature was attempting to achieve.
In Wegan, we considered an equal protection challenge to a provision of the dram shop statute that established a 1-year statute of limitations on claims brought by an injured individual against a bar that served an impaired driver “intoxicating liquors.” 309 N.W.2d at 278. In contrast, an individual injured by a driver impaired by drinking 3.2 beer had 6 years to bring a common law negligence action against the bar.16 Id. Applying basic equal
In Nelson, we struck down, as an equal protection violation, a statute that prevented state-employed lawyers who represented petitioners in workers’ compensation proceedings from serving as workers’ compensation judges until 2 years had elapsed since leaving state employment. 313 N.W.2d at 583. No other lawyers who represented parties in workers’ compensation cases faced a similar prohibition, including state-employed lawyers who represented the State in workers’ compensation cases. Id. at 581. Although we acknowledged that the Legislature could have believed that former petitioners’ counsel would be perceived as biased in favor of employees, we concluded that the same argument would apply equally to most other lawyers working in the workers’ compensation arena,
Our rationale in Thompson was the same. There, we held unconstitutional a statute that prohibited the victim of an intentional tort from recovering in an action against the estate of a deceased tortfeasor, but allowed recovery by victims injured as a result of negligence or intentional conduct that interferes with property rights. Thompson, 319 N.W.2d at 406. We reasoned that the Legislature’s rationale—that intentional claims are harder to prove after the alleged wrongdoer dies—was belied by the fact that other claims requiring proof of intent survived. Id. at 404–05. We stated that even if the Legislature was correct that intentional torts are more difficult to prove if the defendant is dead, “its failure to place intentional torts on an equal footing with other causes of action for which proof is no less difficult was unreasonable.” Id. at 407 n.10.17
B.
With this background in mind, we turn to the specific equal protection challenge before us. Once again, the ordinance provides that owner-occupied duplexes and previously homesteaded single-family homes rented for 36 or fewer months are not subject to the no-refusal-because-of-Section-8-requirements provision of the ordinance.
Next, we precisely identify the distinction at issue. The Owners argue that the distinction is between those residential landlords who are subject to the prohibition on refusing to rent because of voucher program requirements and those residential landlords who are not. We disagree.
The distinction that the Owners draw does not consider the entire ordinance. In fact, no residential landlord is absolutely subject to the prohibition on refusing to rent because of voucher program requirements. Every residential landlord has the opportunity to seek an exemption from the ordinance provision if compliance with housing choice voucher requirements will impose an undue hardship on the landlord. See
Accordingly, the real distinction at issue in this case is between residential landlords who may refuse to rent without proving an undue hardship (the exempt residential landlords) and residential landlords who may refuse to rent only if they establish that compliance with the requirements will impose an undue hardship (the nonexempt residential landlords). In other words, the different burden imposed on the Owners is not that they must comply with the provision, but rather that they must bear the burden of proving undue hardship while other residential landlords do not. And so the question we must answer is whether exempting certain residential landlords from the burden of proving
One of the reasons that the City exempted previously homesteaded single-family homes rented for 36 or fewer months and owner-occupied duplexes from the requirement of proving an undue hardship was administrative efficiency. Owners of those types of properties are likely to be able to demonstrate undue hardship and, accordingly, the limited government resources needed to conduct a case-by-case analysis of such properties would be better used for other purposes.
We have recognized administrative efficiency as a valid reason for a legislative body to distinguish between classes. See In re Harhut, 385 N.W.2d 305, 311 (Minn. 1986) (holding that an indeterminate commitment to state hospitals for mentally disabled individuals was not unreasonable because it was “the more effective and efficient way to deal with the state‘s responsibility to treat mentally [disabled] persons“); Bituminous Cas. Corp. v. Swanson, 341 N.W.2d 285, 289 (Minn. 1983) (“Under the rational basis standard, administrative ease is an adequate justification.“). It is not irrational for the City to conclude that owners of formerly homesteaded single-family homes and owner-occupied duplexes are likely to be able to demonstrate undue hardship as defined in the ordinance.
It is certainly conceivable that those owners are less likely to have property management processes, that the nature and net cost of complying with Section 8 requirements will be relatively significant for those owners, that the overall financial resources of those owners will be relatively low, that those owners are unlikely to have employees or own a large number of properties, and that there will be a relatively
The Owners offer several reasons why the City‘s administrative efficiency argument should be rejected. First, the Owners argue that the premises underlying the City‘s position are based on anecdotal evidence and unproven assumptions and, consequently, the administrative efficiency rationale for allowing those owners to be automatically exempted from the ordinance does not satisfy the heightened scrutiny required under the Minnesota Constitution‘s equal protection guarantee. But the Owners do not contend that the exemptions demonstrably and adversely affect residential landlords of one race differently than residential landlords of another race or make any argument that landlords as a category have unique characteristics or rights that justify a similar departure from traditional rational basis scrutiny. Accordingly, a heightened standard of means-end scrutiny does not apply.
Second, the Owners argue that exempting owners of formerly homesteaded single-family homes and owner-occupied duplexes is inconsistent with the broader purposes of the ordinance; namely, to increase the stock of affordable housing available to voucher holders and to prevent discrimination against voucher holders. The argument, however, focuses on the wrong purposes. While those may be the purposes of the ordinance provisions, the purpose of distinguishing between landlords who are automatically exempt from the provision and those who must prove undue hardship to
Third, the Owners argue that the exemption is both overinclusive and underinclusive. They state that there are likely owners of formerly homesteaded single-family homes and owner-occupied duplexes who could not satisfy the undue hardship exemption and that there are likely nonexempt residential landlords who could qualify for the undue hardship exemption. Even if that were true, we do not require that legislation be perfect. See Westling, 581 N.W.2d at 822 (noting that a statute that treated certain property differently from other property for taxation purposes did not violate the equal protection guarantee, even though the classification scheme was imperfectly related to the legislative objectives, because “imperfection is not a constitutional defect“); see also Rey, 905 N.W.2d at 495 (stating in a rational basis due process case that “[t]he United States and Minnesota Constitutions do not require the Legislature to devise precise solutions to every problem“). “When the basic classification is rationally based, uneven effects upon particular groups within a class are ordinarily of no constitutional concern. The calculus of effects, the manner in which a particular law reverberates in society, is a legislative and not a judicial responsibility.” Guilliams, 299 N.W.2d at 143 (Minn. 1980) (quoting Personal Adm‘r of Mass. v. Feeney, 442 U.S. 256, 272 (1979)).
In Guilliams, we analyzed the farm loss modification law. The Legislature enacted the law to create a disincentive to a growing tax shelter scheme. Id. at 140. Because farm income received unique treatment under the tax code, increasing numbers of taxpayers were buying farms for the sole purpose of using the farm losses to offset their nonfarm
Even though we acknowledged that some full-time farmers who did not own their farm for tax shelter purposes might still have nonfarm income greater than $15,000 to offset, we upheld the statute. “If the classification has some reasonable basis, it does not offend the constitution simply because it is not made with mathematical nicety or because in practice it results in some inequality.” Id. at 143 (citation omitted) (internal quotation marks omitted); see also State v. Barnes, 713 N.W.2d 325, 333 (Minn. 2006) (stating that “substantial deference is given to the legislature where an underinclusiveness challenge is made on rational basis review“).
Finally, it is not irrational line-drawing to treat owners of duplexes any differently than owners of triplexes or fourplexes, notwithstanding that the latter owners may face the same likelihood of qualifying for an undue hardship exemption as owners of duplexes or formerly homesteaded single family homes. Under rational basis review, we have consistently rejected such arguments, including in the context of nearly the precise line-drawing at issue here. See Hegenes v. State, 328 N.W.2d 719, 722 (Minn. 1983). In Hegenes, we rejected an equal protection challenge to a property tax classification that treated residential properties of three units or less differently from those with four or more units. Id. at 720. We stated:
When a legal distinction is determined, as no one doubts that it may be, between night and day, childhood and maturity, or any other extremes, a point has to be fixed or a line has to be drawn, or gradually picked out by successive decisions, to mark where such change takes place. Looked at by itself without regard to the necessity behind it the line or point seems arbitrary. It might as well or nearly as well be a little more to one side or the other. But when it is seen that a line or point there must be, and that there is no mathematical or logical way of fixing it precisely, the decision of the Legislature must be accepted unless we can say that it is very wide of any reasonable mark.
Id. at 722 (quoting Louisville Gas & Elec. Co. v. Coleman, 277 U.S. 32, 41 (1928) (Holmes, J., dissenting)); see also Gluba, 735 N.W.2d at 724–25 (rejecting an equal protection challenge to a Workers’ Compensation Act provision that treated a 49-year-old worker differently than a 50-year-old worker).
We conclude that the distinction between owners who must show undue hardship and those who are automatically exempt from the ordinance is a rational method to achieve the exemptions’ legislative purpose. Therefore, we conclude that the Minneapolis ordinance does not violate the Minnesota Constitution‘s equal protection guarantee.
CONCLUSION
For the foregoing reasons, we affirm the decision of the court of appeals.
Affirmed.
Fletcher Properties, Inc., et al., Appellants, vs. City of Minneapolis, Respondent.
A18-1271
STATE OF MINNESOTA IN SUPREME COURT
Filed July 29, 2020
Anderson, J. (concurring).
ANDERSON, Justice (concurring).
I concur in the result reached by the court on the due process issue. I also concur with the court‘s holding that the deference afforded by the federal rational basis test applies to equal protection claims brought under the Minnesota Constitution. We have inconsistently applied the rational basis test, vacillating between various iterations of a Minnesota specific standard and the federal standard. See State v. Cox, 798 N.W.2d 517, 525 (Minn. 2011) (Stras, J., concurring) (“[O]ur equal protection jurisprudence is inconsistent and confusing.“). Adopting the federal rational basis test, as we do today, brings predictability and greater certainty to our law.
I write separately to briefly address the court‘s discussion of State v. Russell, 477 N.W.2d 886 (Minn. 1991). In dicta unnecessary to reach today‘s result, the court mentions a possible disparate impact exception to the federal equal protection standard that we adopt. This is not a case that implicates the considerations of Russell, and the court need not carve out any exceptions to the federal rational basis test to reach its decision. In addition, given the high bar we set in State v. Frazier for the type of evidence required to establish a disparate impact claim, it is unlikely the disparate impact evidence in Russell would survive this scrutiny even under a Minnesota specific rational basis test. See State v. Frazier, 649 N.W.2d 828, 834–37 (Minn. 2002). Further, the particular issue in Russell is now moot as the offending statute has been amended.
We should neither weigh the credibility of legislative testimony nor second-guess the accuracy of legislative determinations of fact absent overwhelming contrary evidence.
GILDEA, Chief Justice (concurring).
I join in the concurrence of Justice Anderson.