United States District Court, D. Minnesota
Ronald Folger, Julie Folger, and RBE Properties, L.L.C., a Minnesota limited liability company, Plaintiffs,
City of Minneapolis, a municipal corporation, Defendant
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John R. Shoemaker, and Paul F. Shoemaker, Shoemaker & Shoemaker, P.L.L.C., Minneapolis, MN, for Plaintiffs.
Tracey Fussy, and Sarah C.S. McLaren, Assistant City Attorneys, City Attorney's Office, Minneapolis, MN, for Defendant.
MEMORANDUM OPINION AND ORDER
SUSAN RICHARD NELSON, United States District Judge.
This matter is before the Court on Defendant City of Minneapolis's Motion for Judgment on the Pleadings (Doc. No. 10). For the reasons stated below, this Court grants the motion in part and denies the motion in part.
I. FACTUAL AND PROCEDURAL BACKGROUND
According to the Complaint, Plaintiffs Ronald and Julie Folger and their company, RBE Properties, LLC, allege that they owned twenty homes in the City of Minneapolis, and rented the properties to low income tenants, many of whom received federal subsidies for housing. (Doc. No. 1, ¶ ¶ 7, 9 & 10.) Most of Plaintiffs' tenants were African-American or members of another " protected class." (Id. ¶ ¶ 11, 12.) The homes were older and " located in the inner-city areas of Minneapolis," areas of poverty and with a " higher concentration of 'protected class' members." (Id. ¶ ¶ 13, 17, 21.)
Minneapolis requires owners of residential rental dwellings to license the properties with the City. (Id. ¶ 56.) Each of Plaintiffs' properties was licensed separately. (Id. ¶ 8.) Under the City's housing code, Plaintiffs were required to comply with certain specified minimum housing standards or face the denial, refusal to renew, revocation or suspension of a rental dwelling license. (Id. ¶ 57.) " Minneapolis has revoked numerous residential rental licenses of housing providers each year since 1991 and displaced hundreds of 'protected class' tenants from their homes." (Id. ¶ 58.)
In September 2010, Minneapolis commenced revocation proceedings against Plaintiffs with respect to the license for their rental property located at 1651 Penn Avenue North based on a failure to submit a written plan in response to a notice of disorderly use involving narcotics on the premises. (Id. ¶ 60.) In early 2011, the City approved the revocation of the license and ordered the property vacated. (Id. ¶ 62.)
In October and November 2010, the City pursued license revocation proceedings against Plaintiffs' property located at 3622 Humboldt Avenue North based on the alleged failure of Plaintiffs to allow an inspection. (Id. ¶ ¶ 63, 64.) The City approved the revocation and ordered the property vacated. (Id. ¶ 66.)
Shortly after the second revocation order, the City notified Plaintiffs that, based on the revocation with respect to the licenses for these two properties, they were, under the City's housing code, " ineligible to hold or have an interest in a rental dwelling license or provisional license for a period of five (5) years." (Id. ¶ 68.) The City thus notified Plaintiffs that the City was seeking to revoke all of the remaining licenses Plaintiffs had for rental properties in the City, without any determination of whether those properties were in compliance with the housing code. (Id. ¶ ¶ 70, 79.) Plaintiffs' appeals were unsuccessful and the City issued a final decision revoking the remaining licenses but providing that the Plaintiffs' tenants would have ninety days to find replacement housing, with assistance from the City. (Id. ¶ 76.) Plaintiffs allege that their tenants claimed that the City " failed to follow through" with its promises of relocation assistance. (Id. ¶ 81.)
Plaintiffs then filed the present action. Their Complaint asserts six claims: (1) a claim under the Fair Housing Act (" FHA" ), alleging a violation of 42 U.S.C. § 3604 (Count I); (2) a claim under 42 U.S.C. § 1983 alleging a violation of the FHA, 42 U.S.C. § 3608 (Count II); (3) a claim for injunctive relief under Section 3613 of the FHA (Count III); (4) a claim under 42 U.S.C. § 1981 (Count IV); (5) a claim under 42 U.S.C. § 1982 (Count V); and (6) a claim under 42 U.S.C. § 1983 alleging violation of federal rights, " including the right to equal protection of the laws guaranteed by the Fourteenth Amendments [sic] and rights established by 42 U.S.C. Sections 1981, 1982 and 1983" (Count VI).
Defendant filed its Answer and now seeks judgment on the pleadings under Rule 12(c).
Although the Complaint is not entirely clear, it is at least evident that all of Plaintiffs' claims, with the exception of Count III, allege discrimination with respect to housing, based largely on race. With respect to the individual claims other than Count III, some include allegations of both disparate treatment and disparate impact. Count I, alleging a violation of 42 U.S.C. § 3604, asserts that the City " intended that [its] facially neutral . . . policy would have a discriminatory impact" on, and that the policy " did in fact disparately impact" members of certain protected groups. (Doc. No. 1, § 128.) Similarly, it alleges that the City's " policy and practice" of enforcing its housing codes " is facially neutral but discriminatory in intent and disparately impacts 'protected class' members." (Id. § 130; accord § 131.) Plaintiffs also allege, as a separate claim under Section 3608 (Count II), that the City's " intentional failure" to conduct an " 'Analysis of Impediments' to fair housing" (an " AI" ) violates the FHA, and that the City's " intentional failure to conduct the 'AIs' demonstrates the intent . . . to intentionally discriminate" against certain protected class members. (Id. § § 142, 146.) Yet " [s]uch failure of the City also demonstrates the recognized disparate impact on" such protected class members. (Id. § 147; accord id. § 150 (alleging policies " were facially neutral but which had a disparate impact" ).)
In contrast, Counts IV and V are expressly confined to allegations of intentional discrimination. (Id. § § 163, 164 (alleging that City acted " with racially discriminatory intent" ) (Count IV); id. § 168 (alleging that City has denied certain protected class members, " on account of race," their rights under Section 1982), § 169 (alleging that City's " discriminatory" policies " impaired Plaintiffs' property rights" (Count V).) Finally, Count VI alleges that certain City " officials, employees, representatives and agents" acted " intentionally and maliciously," and their " intentional and malicious conduct" violated Plaintiffs' rights. (Id. § § 179, 180.)
In sum, the Court understands Plaintiffs to allege (1) claims of disparate treatment (parts of Counts I & II, and Counts IV, V & VI), and (2) claims of disparate impact (the remaining parts of Counts I & II).
A. Judgment-On-The-Pleadings Standard
Judgment on the pleadings is appropriate if there is no material issue of fact to be resolved and the moving party is entitled to judgment as a matter of law. Buddy Bean Lumber Co. v. Axis Surplus Ins. Co., 715 F.3d 695, 697 (8th Cir. 2013). Rule 12(c) " primarily is addressed to the . . . function of disposing of cases on the basis
of the underlying substantive merits of the parties' claims and defenses as they are revealed in the formal pleadings." 5C Wright & Miller, Federal Practice and Procedure § 1367, at 205-06 (3d ed. 2004). It is applicable " when the material facts are not in dispute between the parties and a judgment on the merits can be achieved by focusing on the content of the competing pleadings" and related materials. Id. at 206-07. It " only has utility when all material allegations of fact are admitted or not controverted in the pleadings and only questions of law remain to be decided by the district court." Id. at 207-08. The Eighth Circuit has described the standard as " strict." Lion Oil Co. v. Tosco Corp., 90 F.3d 268, 270 (8th Cir. 1996) (stating that movant must " clearly" establish lack of factual issues and entitlement to judgment as a matter of law).
Analysis of a Rule 12(c) motion is governed by the same standard that applies to a Rule 12(b) motion. The Court accepts as true the factual allegations of the Complaint and grants Plaintiffs all reasonable inferences from the pleadings. Noble Systems Corp. v. Alorica Central, L.L.C., 543 F.3d 978, 981 (8th Cir. 2008). But it does not defer to any legal conclusions or formulaic recitations of the claims' elements. Minneapolis Firefighter Relief Ass'n v. MEMC Electronic Materials, Inc., 641 F.3d 1023, 1027 (8th Cir. 2011).
At the outset, the Court must address what materials may be considered in ruling on the City's motion because Plaintiffs strenuously object to certain materials submitted by the City. On a motion under Rule 12(c), as on a motion to dismiss for failure to state a claim, the Court may consider only certain limited materials beyond the relevant pleadings themselves, here the Complaint and the Answer. " Ordinarily, only the facts alleged in the complaint are considered in ruling on a 12(b)(6) motion. However, materials attached to the complaint as exhibits may be considered in construing the sufficiency of the complaint." Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). Accord County of St. Charles, Missouri v. Missouri Family Health Council, 107 F.3d 682, 684 n.3 (8th Cir. 1997); Hilton v. Pine Bluff Public Schools, 796 F.2d 230, 231-32 (8th Cir. 1986). As the court explained in Gibb v. Scott, this strict rule--precluding consideration of " 'any written or oral evidence in support of or in opposition to the pleading that provides some substantiation for and does not merely reiterate what is said in the pleadings'" --" will necessarily restrict a district ...