HUD Sued for Records of Obama Administration Involvement in Controversial St. Paul, MN, Housing Discrimination Case

 (Washington, DC) – Judicial Watch announced today that it filed a lawsuit (Judicial Watch, Inc. v. United States Department of Housing and Urban Development (No. 1:12-cv-01785)) on November 2, 2012, in the U.S. District Court for the District of Columbia against the U.S. Department of Housing and Urban Development (HUD) to force compliance with an April 4, 2012, Freedom of Information Act (FOIA) request for documents relating to possible collusion between the Obama administration and the city of St. Paul, MN, in withdrawing a “disparate impact” appeal pending before the U.S. Supreme Court. HUD has refused all JW FOIA requests for public records, even after JW paid in advance for the information.

The disparate impact case arose from a lawsuit by a St. Paul minority contractor claiming that the city’s targeted enforcement of the city’s housing code against rental units reduced the availability of low-income rentals, with a disparate impact upon African-Americans. The Eighth Circuit found in the contractor’s favor, after which the city appealed to the Supreme Court. Generally speaking, under a disparate impact analysis, an entity can be found to have engaged in discriminatory activity for practices that merely have a “disparate impact” on protected minorities, irrespective of any intentional bias.

The Obama DOJ then intervened, apparently persuading St. Paul to take the extraordinary step of withdrawing its cert petition from the Supreme Court docket. On February 13, the Wall Street Journal reported that various federal officials had asked the City of St. Paul to withdraw its petition for certiorari in a controversy that had already been slated for argument before the U.S. Supreme Court.

The Obama administration’s concern, explained the article, was that a legal theory known as “disparate impact” might either: 1) harden into law as used by the landlords who had won at the state level or 2) be eviscerated entirely.  Apparently, several federal agencies that rely on that legal theory to secure out-of-court settlements in the consumer lending and family housing arena were reluctant to risk a change in the legal landscape.  The next day, the parties to Magner v. Gallagher withdrew their case by mutual consent.

Judicial Watch separately obtained documents under the Minnesota Data Practices Act, showing that St. Paul City Attorney Sara Grewing arranged a meeting between the chief of DOJ’s Civil Rights Division, Tom Perez, and Mayor Chris Coleman a week before the city’s withdrawal from the case, captioned Magner v. Gallagher. Following Perez’s visit, the city withdrew its case and thanked DOJ and officials at HUD for their involvement.

On April 4, Judicial Watch sent a FOIA request to the DOJ and HUD seeking access to the following:

1. All communications with or about St. Paul, Minnesota, its residents, landlords, low-income properties or employees, specifically those exchanges:

a. relating to the city’s recent petition for certiorari to the U.S. Supreme Court, including the petition’s withdrawal in February 2012;

b. regarding “disparate impact” theory or analysis in the housing, landlord-tenant, or mortgage arena;

c. involving any member of the U.S. Senate’s Democratic Policy & Communications Committee, the House Democratic Caucus, or the White House, and their respective staffs; and,

d. involving third parties such as the National Low Income Housing Coalition, Thomas Goldstein, orWalter Mondale and their respective staffs;

2.  All invoices for travel, food, lodging, communications, or entertainment expenses incurred in connection with any “disparate impact” lawsuit against St. Paul, Minnesota.

In filing its FOIA request, JW requested a waiver of both search and duplication fees, citing its role as a member of the news media. On June 11, 2012, HUD denied JW’s waiver request, informing JW that it would be required to pay a $1,024.43 fee before HUD would release any records.

On June 21, 2012, JW appealed HUD’s denial of a waiver request. On July 23, HUD denied JW’s appeal, and on July 31, JW paid the waiver fee in full.

Despite payment in full, and despite repeated inquiries from JW about the status of its FOIA request, HUD has continued to refuse to release of the documents requested by JW.

“We have reason to believe that the Obama administration improperly and successfully pressured St. Paul city officials to take the extremely rare action of withdrawing an appeal to the U.S. Supreme Court,” said Judicial Watch President Tom Fitton. “The Obama administration and its liberal activist allies are desperate to protect their ability to use the discredited ‘disparate impact’ legal standard in lawsuits in order to shakedown businesses and reward allies.”