Court Opinion

ID: 4392069
Source: CourtListenerOpinion
Date Created: 2019-04-30 16:00:21.731078+00
Date Added: 2024-06-11T12:09:35.809387
License: Public Domain

United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 18-1654
                         ___________________________

                                    Mahmood Khan

                         lllllllllllllllllllllPlaintiff - Appellant

                                            v.

             City of Minneapolis, a municipal corporation; Does 1-10

                       lllllllllllllllllllllDefendants - Appellees
                                       ____________

                     Appeal from United States District Court
                    for the District of Minnesota - Minneapolis
                                   ____________

                             Submitted: March 12, 2019
                               Filed: April 30, 2019
                                  ____________

Before SHEPHERD, ARNOLD, and KOBES, Circuit Judges.
                          ____________

ARNOLD, Circuit Judge.

      Landlord Mahmood Khan sued the City of Minneapolis, Minnesota, after it
revoked his rental-dwelling licenses. The district court1 granted the city judgment on

      1
      The Honorable Patrick A. Schiltz, United States District Judge for the District
of Minnesota.
the pleadings—a determination that Khan appeals and that we review de novo. Ellis
v. City of Minneapolis, 860 F.3d 1106, 1109 (8th Cir. 2017). We affirm.

       Because we are reviewing the grant of judgment on the pleadings, we accept
as true the facts as alleged in the complaint and grant Khan all reasonable inferences
from those facts. See id. Khan had 43 rental-dwelling licenses that permitted him to
rent homes to about 350 people. All but two of Khan's tenants were protected class
members under the Fair Housing Act, a federal law that generally prohibits making
unavailable or denying a dwelling because of a person's "race, color, religion, sex,
familial status, or national origin." See 42 U.S.C. § 3604(a).

       Because of housing-code violations, the city revoked one of Khan's licenses in
2010 and another in 2014; each time, Khan appealed the revocation of his licenses to
the Minnesota Court of Appeals, and each time that court upheld the revocation. See
In re Khan, 804 N.W.2d 132 (Minn. Ct. App. 2011); Khan v. Minneapolis City
Council, No. A14–0455, 2014 WL 7237193 (Minn. Ct. App. Dec. 22, 2014). The city
then revoked Khan's remaining licenses under a Minneapolis ordinance that prohibits
a person from holding a rental-dwelling license for five years if the city has revoked
two or more licenses from that person. See Minneapolis, Minn., Code of Ordinances
§ 244.1910(a)(13)(a). Khan again appealed but to no avail. See Matter of Khan, No.
A16–0633, 2017 WL 1376379 (Minn. Ct. App. Mar. 20, 2017).

        Khan then brought his cause to federal court, asserting various claims against
the city for revoking the licenses. Khan has since abandoned all his claims except a
disparate-impact claim under the FHA, a claim that challenges practices having a
disproportionately adverse effect on minorities without a justifiable rationale. See
Ellis, 860 F.3d at 1110. The Supreme Court has explicitly recognized these kinds of
claims, but it has cautioned that they are "properly limited" to the removal of
"artificial, arbitrary, and unnecessary barriers, not the displacement of valid
governmental policies." Tex. Dep't of Hous. & Cmty. Affairs v. Inclusive Cmtys.

                                         -2-
Project, Inc., 135 S. Ct. 2507, 2522 (2015). It explained, moreover, that the FHA "is
not an instrument to force housing authorities to reorder their priorities" or to prevent
them "from achieving legitimate objectives, such as ensuring compliance with health
and safety codes." Id. at 2522, 2524. So courts must "examine with care," and
promptly decide, whether plaintiffs have made out a prima facie disparate-impact
case. Id. at 2523.

       After the Court established the ground rules for FHA disparate-impact claims,
two Minneapolis landlords who rented primarily to members of protected classes
brought such a claim against the city, alleging that its "heightened enforcement of
housing and rental standards has a disparate impact on the availability of housing for
individuals protected under the" FHA. See Ellis, 860 F.3d at 1107. The landlords
alleged that the city's overzealous enforcement of its housing code, its policy of
discouraging for-profit rental housing, and its revocation of rental licenses had
displaced several protected class members from their homes. We affirmed the district
court's grant of judgment on the pleadings for the city, concluding that the landlords
had failed to point to an artificial, arbitrary, and unnecessary policy that an FHA
disparate-impact claim could remedy. See id. at 1109, 1114.

        We see no reason why Ellis does not control this case. Khan tries to escape
Ellis's grip by arguing that "an honest, fair assessment" of his entire complaint would
show that, though "a couple paragraphs" of the complaint declared that Khan "had
been picked on," "complaints and claims regarding code enforcement were nowhere
to be found" in the complaint. We have given Khan's complaint the honest, fair
assessment he invites, and though the allegations are somewhat discursive, we are,
despite his protestations, left with the inescapable conclusion that his claim is indeed
about the city's alleged hyper-enforcement of its housing code against for-profit
landlords, which is essentially the same allegation that this court considered and
rejected in Ellis.

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       The complaint's opening paragraph states that the city over the past decade
"ha[d] subjected Plaintiff to a jaw-dropping onslaught of fines, fees, penalties,
hearings, condemnations, demolitions, and landlord license revocations, despite the
fact that all of his properties have passed inspection." Later in his introduction Khan
asserts that the city had tried to pin blame for its urban blight on landlords like Khan
and that "[t]he years of fines, fees, penalties, hearings, condemnations, demolitions,
and rental dwelling license revocations constitute a custom, practice, policy, or
pattern of discrimination against racial minorities and other 'protected class'
members." Such allegations about housing-code enforcement and penalties don't
appear in the introduction alone; they are ubiquitous. See also, e.g., Khan's Compl.
at ¶¶ 52, 62, 65, 66,, 67, 77, 82, 83, 90, 91, 92, 93, 98, 103, 104, 111, 112, 113, 114,
115, 116, 123, 124, 126, 134, 135, 140, 149. Though Khan takes a slightly different
tack when challenging specific code violations, arguing essentially that the violations
were out of his control, whereas the plaintiffs in Ellis challenged in some instances
whether code violations had occurred at all, the overriding theme of both cases is the
city's alleged policy of discouraging for-profit housing rentals at the expense of
protected class members and landlords who rent to them.

        Khan also maintains that his case is different from Ellis because, unlike the
landlords there, he alleges that the city required him "to refuse housing to persons
who have criminal records." He makes no further allegations about that requirement
in his complaint. But without his having alleged more, we cannot say Khan has raised
a plausible claim that such a requirement had a disparate impact on protected class
members. For instance, he does not allege that he actually heeded the city's directive
or that, if he had, he wouldn't have rented to other members of the protected class
who did not have a criminal record. In addition, we have reviewed the document that
Khan submits as reflecting the city's directive that he complains about, which we may
do at this stage because Khan's complaint necessarily embraces it, see Porous Media
Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999), and we see nothing in it
that directs Khan not to rent to people with criminal records. The city merely asked

                                          -4-
if Khan conducted background checks on prospective tenants and asked about the
criteria Khan used when accepting tenants with criminal histories, including whether
certain convictions precluded the tenant from renting with Khan. These questions fall
well short of establishing that the city instructed Khan not to rent to people with
criminal records.

       Most important, Khan's allegation does not even begin to describe a city policy.
See Ellis, 860 F.3d at 1111. Khan admits as much, conceding "that ordering just one
landlord to deny housing to persons with criminal histories or unlawful detainers does
not constitute a policy." He maintains, though, that we should hand him the keys to
discovery so he can determine the number of landlords to whom the city has issued
a similar directive. But nowhere in his complaint does Khan allege that the city
instructed other landlords not to rent to people with criminal records.

       In short, we think Ellis controls. We therefore conclude that Khan has failed
to allege a plausible claim to relief under the FHA and that judgment on the pleadings
was appropriate.

      Affirmed.
                       ______________________________

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