IN THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

_________________________________________ Appeal No. 09-1528

FRANK J. STEINHAUSER, III, ET AL.,

Plaintiffs-Appellants,

v.

CITY OF ST. PAUL, ETC., ET AL., Defendants-Appellees

_________________________________________ Appeal No. 09-1579

SANDRA HARRILAL, ET AL., Plaintiffs-Appellants,

v.

STEVE MAGNER, ET AL., Defendants-Appellees

_________________________________________

JOINT REPLY BRIEF OF PLAINTIFFS-APPELLANTS _________________________________________

Appeals from United States District Court, District of Minnesota

Civil No. 04-CV-2632 (JNE/SRN)

Civil No. 05-CV-0461 (JNE/SRN)

_________________________________________________

John R. Shoemaker, Esq.

SHOEMAKER & SHOEMAKER, P.L.L.C.

7900 International Drive, Suite 200

Bloomington, Minnesota 55425 (952) 224-4610

Attorneys for Appellants

ii

TABLE OF CONTENTS

TABLE OF CONTENTS..........................................................................................ii

TABLE OF AUTHORITIES....................................................................................iv

ARGUMENT.............................................................................................................1

I. DEFENDANTS’ SCHEMES APPLICABLE TO ALL CLAIMS………….1

NO ILLEGAL OR INVALID CITY ORDINANCE CAN SUPPORT THEIR SCHEMES EVEN WHEN STYLED AS VALID USE OF MUNICIPAL POLICE POWERS…………………………………………..2 DEFENDANTS’ RETALIATIONS………………………………………...3

ERRORS OF LAW IN GRANTING SUMMARY JUDGMENT…………..5

THE SCHEMES OF DEFENDANTS COMPLETELY UNDERCUT THEIR DEFENSES…………………………………………………………8 STATE BUILDING CODE ITSELF AS HELD BY MINNESOTA SUPREME COURT, PREEMPTS DEFENSES AND ARGUABLY PROVES THE RELEVANCE OF THE DESTROYED ELECTRONIC EVIDENCE…………………………………………………………………9 SUMMARY JUDGMENT – FURTHER ANALYSIS…………………….10 GATE KEEPING IS NOT APPROPRIATE AFTER LAWS HAVE BEEN VIOLATED………………………………………………...11 THESE ARE NOT ISSUES OF FIRST IMPRESSION IN EITHER THE STATE OR FEDERAL COURTS…………………………11 TRAGIC EXAMPLE OF POLICE POWERS INTENTIONALLY GONE WRONG WITH UNDENIABLE APPROVAL OF CITY ATTORNEY’S OFFICE AND OTHER PUBLIC OFFICIALS……13

iii

II. SPOLIATION - DISTRICT COURT ABUSED DISCRETION BY MISAPPLYING SPOLIATION LAW, FINDING NO PREJUDICE AND AWARDING NO SANCTIONS…………………………………….16 STANDARD OF REVIEW………………………………………………..16 CONCLUSION.............................................................................................37

CERTIFICATION OF COMPLIANCE WITH FRAP 32 AND CERTIFICATION OF WORD PROCESSING PROGRAM ……………..39

iv

TABLE OF AUTHORITIES

Federal cases:

Boyle v. United States, 129 S.Ct. 2237 (2009)…………………………………..4, 7

CBOCS West, Inc. v. Humphries, 128 S.Ct. 1951 (2008)………………………..10

Olmstead v. U.S., 277 U.S. 438 (1929)…………………………………………...37

Capellupo v. FMC Corp., 126 F.R.D. 545 (D.Minn. 1989)………………19, 28, 31

Dahlgren v. First National Bank of Holdrege, 533 F.3d 681 (8th Cir. 2008)…….12

Dillion v. Nissan Motor Co., 986 F.2d 263 (8th Cir. 1993)………………16, 19. 34

E*Trade Securities, LLC v. Deutsche Bank AG,

230 F.R.D. 582 (D. Minn. 2005) ……………………………………………..18, 33

Handeen v. LeMaire, 112 F.3d 1339 (8th Cir. 1997)…………………………1, 2, 4

Greyhound Lines, Inc. v. Wade, 485 F.3d 1032 (8th Cir. 2006)………………….17

Kronisch v. U.S., 150 F.3d 112 (2d Cir. 1998)…………………………………...34

Mastercard International, Inc. v. Moulton, 2004 WL 1393992

(S. D. N. Y. June 12, 2004)……………………………………………………….19

Morris v. Union Pac. R.R., 373 F.3d 896 (8th Cir.2004)…………………………18

Mosaid Technologies v. Samsung Electronics, 348 F.Supp.332

(D.N.J. 2004)……………………………………………………………………...36

Residential Funding Corp. v. DeGeorge Fin. Corp.,

306 F.3d 99 (2d Cir. 2002)……………………………………………………33, 34

v

Roberts v. Canadian Pacific Ry. Ltd, 2007 WL 118901

(D. Minn. Jan. 11, 2007)…………………………………………………………..17

Stevenson v. Union Pacific Railroad Company,

354 F.3d 739 (8th Cir. 2004)………………………………………16-19, 31, 33, 34

U. S. v. Cianchi, 378 F.3d 71 (1st Cir. 2004)………………………………………1

United States v. City of Black Jack, Missouri,

508 F.2d. 1179 (8th Cir. 1974)…………………………………………………4, 13

U. S. v. Gilbert, 813 F.2d 1523 (9th Cir. 1987)…………………………………….4

U. S. v. Hively, 437 F.3d 752 (8th Cir. 2006)…………………………………….12

U.S. v. Phillip Morris USA, Inc., 566 F.3d 1095 (D.C.Cir. 2009)…………………4

Webb v. District of Columbia, 146 F.3d 964 (D.C.Cir.1998)……………………19

West v. Goodyear Tire & Rubber Co., 167 F.3d 776 (2d Cir.1999)……………...17

Federal Statutes:

18 U.S.C. § 1961………………………………………………………………...3, 7

18 U.S.C. § 1962(c) and (d)……………………………………………………..3, 7

42 U.S.C. § 1981…………………………………………………………………..3

42 U.S.C. § 1982…………………………………………………………………..3

vi

42 U.S.C. § 1983…………………………………………………………………...3

42 U.S.C. § 3615 …………………………………………………………………..4

42 U.S.C. § 3617………………………………………………………………….. 3

42 U.S.C. § 3631…………………………………………………………………...3

Federal Regulations and Rules:

24 C.F.R. § 91.210(e)……………………………………………………………..29

24 C.F.R. § 91.215(h)…………………………………………………………….29

24 C.F.R. § 91.220(j)……………………………………………………………..29

24 C.F.R. § 91.225………………………………………………………………..29

Fed.R.Civ.P. 26……………………………………………………………………27

Fed.R.Evid. 401…………………………………………………………………...26

State cases:

City of Minnetonka v. Mark Z. Jones, 236 N.W.2d 163 (Minn.1975)……………..9

City of Morris v. SAX Investments, Inc., 749 N.W.2d 1 (Minn.2008)…………….9

Witzman v. Lehrman, Lehrman and Flom, 601 N.W.2d 179 (Minn. 1999)……...12

Minnesota Agricultural Aircraft Association v. Township of Mantrap,

498 N.W. 2d 40 (Minn.Ct.App. 1993)……………………………………………..9

vii

Secondary Authorities:

52 A. L. R. Fed. 818………………………………………………………………..7

CJS MUNCCORP § 62 CJS Municipal corporations § 141, June 2009………….14

6 NO. 21 Lawyers J., 6 October 15, 2004………………………………………...32

1

I. Defendants’ Schemes Applicable to All Claims

A Civil Rights Case With Multiple Other State and Federal Law Violations – Defendants’ Attempt to Rationalize By Their Claimed

Police Powers To Protecting Public Health-Safety Defendants’ claim that Plaintiffs have not provided any evidence to

substantiate their causes of action and avoid summary judgment.

Defs.’Br.18.

Defendants have consistently proclaimed across the City of St. Paul

that Plaintiffs have no evidence, all the while Defendants and their counsel

have attempted to distract the public and the Court from Defendants’

concocted and implemented scheme to deviate from the State Building

Code, despite the State Code’s history since 1974 as having field preemption

over any municipal codes that varied from the State Code. Defendants’ and

their associates have sought to take control over the City’s rental housing

affairs and deceive the public.

It is very troubling the District Court granted summary judgment to let

the Defendants off the hook given the facts in dispute over such a scheme

with the inferences that properly could be drawn in favor of Plaintiffs. See,

e.g., U. S. v. Cianchi, 378 F.3d 71 (1stCir.2004)(scheme of Mayor to protect

power and assets of members of scheme, including municipal departments

and divisions defendants controlled as part of conspiracy); Handeen v.

2

LeMaire, 112 F.3d 1339 (8thCir.1997)(lawyers could be liable under RICO

for operating bankruptcy estate or court as a RICO enterprise). It is the

conduct, not the title of the actor that controls and here the conduct includes

the intentional violations of field preemptive State law, under exactly the

guise of the “valid” exercise of the City’s [field preempted] police powers.

Defendants’ Problem on Summary Judgment – No Illegal or Invalid City Ordinance Can Support Their Schemes

Even When Styled as Valid Use of Municipal Police Powers

Arguably, as supported by actual admissible evidence, and as a rule of

law, the creation or exercise of municipal police powers are, as a matter of

law not nearly so expansive as the City and Defendants contend.

Defs.’Br.p.4-7.

Police powers for municipalities are a creature of State law, and such

powers can only be created or exercised within the Constitutional limits

imposed by the Legislature. If, as alleged and proffered here, a City exceeds

its authorized powers by municipal Code or practice, such excess is not

deserving of any deference and is void as a matter or law.

Such creation or exercise of ultra vires police powers and such

rationalizations are thus as a matter of law improper, and in light of the

inferences to be drawn in favor of the non-moving parties, no summary

judgment arguably should have been granted by the District Court which

3

completely failed to address such excess ultra vires Code enforcement

policies and police powers, let alone the ultra vires significance of such

powers as implemented by policies and procedures, as submitted by

admissible evidence under oath by Plaintiffs in opposition to summary

judgment, who as non-moving parties are entitled to all proper inferences in

the favor.

Defendants’ Retaliations

Further, as part of their scheme, the Defendants decided to retaliate

against victims and witnesses, which is actionable under both Federal Fair

Housing 42 U.S.C. §3617 and for civil and criminal prosecution under

§3631 and 18 U.S.C. §1961–1962(c) and (d), as well as civil rights laws

including Sections 1981, 1982 and 1983.[APP116-291-Gallagher/Collins;

APP292-341-Allison;APP342-415-Kubitscheks;APP435-37-Osterman;

APP438-442-Jayasuriya;APP443-56;APP457-59-Jacobs;APP460-56-

Steinhauser;APP657-66-Meysembourg;APP767-827-Brisson;APP828-886-

Harrilal;APP887-1036-Johnson;APP1286-1312-Doolittle;APP1560-67-

Anderson;APP1568-73-Miller;APP1576-79-Krahn;APP1037;1039;

1075;1117;1138-HedquistReports;APP1046-48-Brisson-Meysbourg-

Steinhauser;APP1082-91-Harrilal-Vues-Johnson; APP1138,1146-Gallagher-

Collins-Allison-Kubitschek].

4

Because it is not necessary that any or every Defendant actually

receive monetary compensation to prove up such a scheme, or that the

scheme was motivated by an economic purpose, unfortunately for

Defendants, it is black letter law that passage of an ultra vires City Code or

set of codes is itself unlawful and a violation of the Constitution(s), both

federal and state, and implementing such a scheme by false code

enforcement activities, is itself also unlawful. See 42 U.S.C.§3615; United

States v. City of Black Jack, Missouri, 508 F.2d. 1179 (8th Cir. 1974)(fair

housing scheme); Boyle v. United States, 129 S.Ct. 2237 (2009)(RICO

scheme and “association in fact”); Handeen v. LeMaire, 112 F.3d 1339 (8th

Cir.1997) (RICO scheme for lawyers/family to operate bankruptcy estate as

RICO enterprise, and deceive courts); United States v. Phillip Morris USA,

Inc., 566 F. 3d 1095 (D.C.Cir.2009)(scheme to employ mail/wire fraud/false

certifications to deceive consumers and regulatory authorities); U. S. v.

Gilbert, 813 F.2d 1523 (9thCir.1987) (elements of criminal prosecution for

violating Fair Housing Act).

Under the Federal Fair Housing Act, Section 3615, “…any law of a

State, a political subdivision, or other such jurisdiction that purports to

require or permit any action that would be a discriminatory housing practice

under this subdivision shall to that extent be invalid.”

5

Defendants’ scheme was exposed before the District Court as

involving City Legislative Codes and enforcement policies arguably void

under the State Building Code and civil rights laws, with illegal participation

by certain judges and officials of the Ramsey County District Court,

members of the City Council and other City officials.

Errors of Law In Granting Summary Judgment

On the record, given the overwhelming admissible evidence of such

multiple schemes and retaliations, the District Court erred in granting

summary judgment as to the facts on the motive, intent, knowledge and

actual existence and operations of Defendants’ schemes, and the

Defendants’ respective roles as an association in fact. Such facts are in

dispute and reasonable inferences in favor of the non-moving Plaintiffs

could allow a properly instructed jury to find both liability and damages in

favor of Plaintiffs under one or more of these multiple legal theories.

For example, RICO schemes to operate an enterprise through a pattern

of racketeering activity were also alleged and evidence in support of such

claims was also submitted in opposition to summary judgment. [APP435-37-

Osterman;438-442-Jayasuriya;443-56;457-59-Jacobs;460-56-Steinhauser;

657-66-Meysembourg;767-827-Brisson;828-886-Harrilal;887-1036-

Johnson;1286-1312-Doolittle;1560-67-Anderson;1568-73-Miller;1576-79-

6

Krahn;1037;1039;1075;1117;1138-Hedquist-Reports;1046-48-Brisson-

Meysbourg-Steinhauser;1082-91-Harrilal-Vues-Johnson;1138,1146-

Gallagher-Collins-Allison-Kubitschek].

In short, certain Defendants decided upon a scheme by which they

would take control over the City’s deviant versions of the State Building

Code and enforce those deviant standards so as to control hundreds if not

thousands of otherwise affordable, grandfathered-in rental housing units in

the City, whether for personal gain, the financial gain of others associated

with the scheme, or the addictive “high” control of all those City affairs such

a scheme provided.

Plaintiffs’ admissible evidence and the inferences properly drawn

there from, reveal that Defendants re-wrote the City’s laws and then

gerrymandered the County’s court system, so that almost nobody could ever

get a full or fair hearing on anything having to do with the subject matter

fields preempted by those regulated in the controlling State Building Code.

Uncontested evidence also reveals the schemers even set up their own

version of Federal Fair Housing and State Building Code Courts, in which

one or more judges or hearing officers, coordinating in secret with City

officials, pre-determined who would lose, and by what margins of error, by

applying standards that deviated from those required under the field

7

preemption of the State Building Code and/or Federal Fair Housing. [See,

Plaintiffs’ Joint Corrected Brief herein,pp.57-58; Plaintiffs’ sworn evidence

submitted naming public officials, judicial officials and others implicated in

such schemes, also unaddressed on summary judgment even as to the proper

inferences from such sworn evidence].

The recent Boyle v. United States, supra, decision by the United

States Supreme Court, regarding the liberal definition of an “association in

fact,” further buttresses Plaintiffs’ claims the District Court erred. Case law

is replete with rulings that cities and city departments and courts and state

agencies and police departments can be “enterprises” within Title 18 U.S.C.

Section 1962 (c) and (d). 52A.L.R.Fed.818 (“Enterprise,” 18

U.S.C.A.§1961(4),§5 Public entities).

These types of schemes are historically precisely the types of

violations that are properly pled and enforced through civil rights litigation

including the Federal Fair Housing Act, which like other civil rights law and

RICO, is to be broadly construed to effectuate Congressional purposes.

8

The Schemes of Defendants Completely Undercut Their Defenses

The affirmative and/or other defenses of the Defendants herein, as

held applicable on summary judgment by the District Court,1 are to the

contrary completely undercut as a matter of law by such defenses being

premised on ultra vires alterations and enforcements of an invalid set of City

Codes, which are demonstrably at odds with and thus void in comparison

with the subject matter field preemptive Minnesota Building Code, whose

existence, subject matter terms and field preemptive force were completely

ignored by the City Attorney and the District Court.

Ignoring key controlling State law is arguably a novel way indeed to

obtain summary judgment, as is the intentional destruction of material

electronic [e-mail and other] evidence after litigation had commenced, in a

1 The District Court erred as a matter of law in not performing the immunity analysis, but instead seemingly prepared Plaintiffs to be sandbagged so as to prevent the exposure of public corruption “at any costs,” even to the reputation of the District Court. Defendants, including the City for all purposes other than RICO, were on actual notice that: violating field preemption of State Building Code; violating Fair Housing including City’s affirmative duty to further fair housing, conduct “AIs” concerning the effect of City’s building codes on “protected classes”; violating duties to provide true certifications to HUD; violating civil rights law; preserving evidence; violating RICO and conspiracy law; and committing such violations while employed by or associated with the City; would constitute knowing and intentional violations under qualified immunity standards.

9

manner outside the usual and customary data storage practices of

Defendants. Plaintiffs respectfully submit either ignoring State law, un-

denied Federal Fair Housing violations, or destroying electronic evidence, is

not a proper way to obtain summary judgment under controlling Supreme

Court and Eighth Circuit summary judgment standards.

Minnesota Supreme Court – State Building Code Preempts Defenses and Arguably Proves the Relevance

of the Destroyed Electronic Evidence

No less an authority than the Minnesota State Supreme Court has

declared the field preemptive force of the State Building Code in an

unbroken line of decisions dating between 1975 and 2008. City of Morris v.

SAX Investments, Inc., 749 N.W.2d 1 (Minn.2008); City of Minnetonka v.

Mark Z. Jones, 236 N.W.2d 163 (Minn.1975)(city construction ordinance,

purported to adopt more stringent fire prevention measures affecting

building design or construction – preempted by state code); Minnesota

Agricultural Aircraft Association v. Township of Mantrap, 498 N.W.2d 40

(Minn.Ct.App.1993)(“Occupying the field” preemption - it does not matter

whether local regulation coincides with, is complementary to, or opposes

State law which fully occupies the particular field of legislation” -

municipalities cannot invoke power so as to accomplish what is otherwise

preempted by state statute). This Court arguably must respect their decisions

10

as to this controlling issue of State law, which was completely ignored

below by the District Court.

Because the District Court improperly weighed and found facts,

determined credibility, omitted factual analysis of expert opinions required

as a matter of law, and completely failed to render all proper inferences in

favor of the non-moving parties as to the field preemption of the State

Building Code – not only was summary judgment not proper, no immunity

existed for any individual Defendant or the City, as ultra vires passage or

enforcement of codes that violate the subject matter field preemption of the

State Building Code cannot protect the Defendants from further discovery,

liability and trial on the merits as to damages.

Summary Judgment – Further Analysis

Under the standard announced in CBOCS West, Inc. v. Humphries,

128 S.Ct. 1951 (2008), the Plaintiffs exceeded the requirements to avoid

summary judgment by proffering substantial quantities of sworn, admissible

evidence which was either un-contested by Defendants, or if contested,

precludes summary judgment either on the contest, or by inference upon the

undisputed or contested facts.

11

The District Court managed to reach the summary judgment by

completely ignoring the multiple, uncontested expert opinions of Plaintiffs’

expert Don Hedquist and arguably erred as a matter of law.

Gate Keeping Is Not Appropriate After Laws Violated

Summary judgment is a gate keeping function with multiple

supporters and multiple critics. It is not proper where a District Court fails to

consider the evidence in a light most favorable to the non-moving party,

makes credibility findings, weighs the evidence, and rules on issues of

intent, knowledge, motive and opportunity, which are quintessential jury

issues.

While summary judgment can be used as a valid exercise in judicial

efficiency, it is not a substitute for allowing a litigant to proceed with

discovery and trial on state and federal law facts in dispute, which is why

certain presumptions are required, including all inferences to be drawn in

favor of the non-moving party.

These Are Not Issues of First Impression in Either the State or Federal Courts

This Court has previously been confronted with many situations

where a unit of government or its agents or employees have allegedly

committed civil rights and other violations.

12

Hopefully, this Court is not jaded into complacency where as here the

evidence shows a City trying to escape liability for civil rights and other

violations, or lulled to affirm by the City’s legal slight of hand in spoliation

of evidence and ignoring controlling Stated law issues .

Arguably, such violations can result in criminal prosecutions, if not

civil process. See Dahlgren v. First National Bank of Holdrege, 533 F. 3d

681 (8thCir.2008)(outsider RICO liability-State law violation as torts and

predicate acts); Witzman v. Lehrman, et al., 601 N.W.2d 179 (Minn.1999).

(all who actively participate in any manner in commission of a tort, or who

procure, command, direct, advise, encourage, aid, or abet its commission, or

who ratify it, are jointly and severally liable for injury); U. S. v. Hively, 437

F.3d 752 (8thCir.2006)(RICO criminal conviction analyzed-mail fraud-

mailings incident to scheme to defraud, sufficient threat of repetition).

The challenge for a District Court is to separate out legitimate

government functions from those that are illegitimate, and actually illegal or

unconstitutional. While no court should play second guesses as to a

municipality’s proper range of discretionary function decision-making, it is

almost never the case in complex civil rights cases that summary judgment

is granted where motive, knowledge and intent are at issue. Yet it was here.

13

While the presumption may be that government actions are legal, clearly

such presumption can be rebutted.

Such a gate keeping function by the District Court is not aided when

Defendants here hid and destroyed thousands of items of material e-data/e-

mail evidence, the District court excluded expert affidavits sub silentio,

allowed Defendants to justify their own efforts to protect the public under

police powers they clearly do not have under field preemptive controlling

State law, and the Court in fact never discussed that State Law.

“Whatever one thinks of state action as a viable limiting principle on the constitutional command of equality, it should at least be clear that the most outrageous deprivations of equal rights are those perpetrated by the state itself.”

City of Black Jack, 508 F.2d. 1179.

Tragic Example of Police Powers Intentionally Gone Wrong With Undeniable Approval of

City Attorney’s Office and Other Public Officials

In its defense, the City submits that it has the power to enact and

enforce certain police powers related to public safety and public health, as

subject matters under its legislative code, and besides the Plaintiffs’

buildings undeniably violated the City’s current code enforcement

provisions. Defs.Br.4-7.

14

Plaintiffs’ have countered, as the St. Paul City code does not and

cannot control:

(1) there was a prior PP2000 approach that protected residents and

afforded due process to landlords, in compliance with field

preemption of the State Building Code’s grandfathering provisions

and the City’s duties under Federal Fair Housing;

(2) the City only has police powers within limits allowed by the State;

(3) any police powers the City has granted unto itself that exceed

those allowed by the State, are void, and unconstitutional; and

(4) precisely because they violate the field preemptive force of the

State Building Code, such ultra vires police powers are an attempt by

Defendants to knowingly and intentionally exercise void powers.

Thus, when analyzing the disputed facts and all inferences to be drawn in

favor of Plaintiffs, no summary judgment was proper as Defendants’ actions

not only violated the field preemptive State Building Code, they also

violated Federal Fair Housing, civil rights and RICO, as ‘proven’ for

summary judgment purposes by the expert reports of Don Hedquist and the

15

inferences properly drawn from the City’s factually un-denied violations of

the State Building Code.2

Because Defendants’ cannot and have not defended how or why they

can violate the State Building Code’s field preemption, and further at least

de minimus any and all facts are in dispute as to such claims, no summary

judgment as a matter of law could have been granted to any Defendant.3

Arguably, under summary judgment and spoliation analysis, this case

on remand needs some additional discovery as to intentionally destroyed e-

mails and TISH inspection records, who was in charge of the usual and

customary City data retention policy, multiple Defendants’ knowledge and

intent, and a trial before a jury, lest a District Court be found to approve and

2 See, CJS MUNCCORP §62, CJS Municipal corporations §141 Updated June 2009 - Analysis of conflict and field preemption, dating back years – going to actual knowledge of Defendants. 3 This includes the uncontested [completely unaddressed on summary judgment] sworn Plaintiffs’ evidence, including Dawkins depositions admissions and notes, implicating the local state court, City Attorney’s Office, City Council and Dawkins in meeting to pre-determine any civil rights, code enforcement, or Fair Housing claims before court action, in order to fix results for Defendants, which all would have been ipso facto violation of the State Building Code and other laws. Perhaps this evidence could explain any pressures on the District Court and the City Attorney to keep this case from going to trial, as somehow requiring the District Court to violate summary judgment standards.

16

uphold precisely the type of civil rights violations properly condemned by

this Court in Black Jack.

II. DEFENDANTS’ SPOLIATION OF EVIDENCE

District Court Abused Its Discretion By Misapplying Spoliation Law, Finding No Prejudice and Awarding No Sanctions

In their Reply Brief, Defendants contend Plaintiffs failed to show they

were “prejudiced”. Defs.Br.58. Plaintiffs submit the District Court abused

its discretion by misapplying the law on spoliation, failing to find

“prejudice” from said destruction of evidence, refusing to hold an

evidentiary hearing, failing to order sanctions, and rewarding Defendants’

spoliation with summary judgment. It was virtually uncontested that

Defendants had:

(1) failed to place a “litigation hold” on evidence; (2) destroyed virtually all e-data/e-mails of Defendants and other officials/employees for 2000 through 2005; and (3) for three years during litigation, annually destroyed 5,000 to 6,000 Truth-in-Sale of Housing inspection reports (15,000-18,000 inspection reports) of homes inspected by licensed inspectors during 2001-2003.

Standard of Review

This Court reviews sanction decisions under the abuse of discretion

standard. Stevenson v Union Pacific Railroad Company, 354 F.3d 739, 745

17

(8thCir.2004) (citing Dillion v. Nissan Motor Co., 986 F.2d 263, 267

(8thCir.1993).

The Court will be found to have abused its discretion, “If the court

bases its ruling on ‘an erroneous view of the law or on a clearly erroneous

assessment of the evidence.” Greyhound Lines, Inc. v. Wade, 485 F.3d

1032, 1035 (8thCir.2006).

“Spoliation” has been defined consistently as “the destruction or

significant alteration of evidence, or the failure to preserve property for

another’s use as evidence in pending or reasonably foreseeable litigation.”

West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2dCir.1999).

Any possible destruction of evidence is to be treated as a serious

transgression of discovery procedures in that it goes to the core of the

Court’s truth-finding mission. Dillon, at 269. “‘Purposeful impairment of

the opposing party’s ability to discover information” justifies invocation of

the Court’s inherent power and duty to insure the integrity of the judicial

proceeding.” Roberts v. Canadian Pacific Ry. Ltd, 2007 WL 118901

(D.Minn. 1-11-07) (document destruction – an attempt to suborn fact-finding

process is an affront to court that has an obligation to maintain integrity of

proceedings).

18

A spoliation sanction requires “a finding of intentional destruction

indicating a desire to suppress the truth.” Greyhound, 485 F.3d at 1035

(citing Stevenson, 354 F.3d at 746). Unfortunately, as this Court well

knows, “Intent is rarely proved by direct evidence.” Morris v. Union Pac.

R.R., 373 F.3d 896, 902 (8thCir.2004).

If the destruction of relevant evidence occurs after litigation is

imminent or has begun, no bad faith need be shown for sanctions.

Stevenson, at 746.

When litigation has already commenced, a party “cannot blindly

destroy documents and expect to be shielded by a seemingly innocuous

document retention policy. Id. at 750.

Moreover, once a party receives a specific document request, a party

cannot rely on its routine document retention policy as a shield. Id.

When spoliation is established, the jury may draw an inference that

the evidence destroyed was unfavorable to the party responsible for its

spoliation. E*Trade Securities, LLC v. Deutsche Bank AG, 230 F.R.D. 582,

587, 589 (D.Minn.2005).

In Stevenson, this Court determined that the continued destruction of

track maintenance records after litigation was commenced and after the

19

receipt of a request for production of documents, was properly sanctioned

with an adverse inference instruction, without “bad faith”. Id. at 750.

Contrary to the twisted application of the law by the District Court in

a desperate attempt to keep Defendants afloat in the river of corruption they

have enjoyed, this Court in Stevenson applied a liberal relevancy standard

for showing “prejudice” from spoliation after litigation has commenced and

after a request for documents submitted.

Significantly, this Court stated that “track maintenance records [were]

of limited use” yet found prejudice justifying an adverse inference

instruction. Id. at 749. See Dillion, 986 F.2d at 268 (“evidence which may

have provided helpful to the defense [had] been destroyed”); Capellupo v.

FMC Corp., 126 F.R.D. 545, 551 (D.Minn.1989) (Defendants having

destroyed a significant quantity of documents, the exact extent now

indeterminable, should not be allowed to claim information contained is

irrelevant or unimportant).

In Stevenson, this Court determined that Union Pacific’s claimed

innocence under its routine document retention policy (sound familiar?) and

a lack of knowledge that the records were relevant, were unavailing as

defenses to an adverse inference instruction sanction: after the specific

document request for track maintenance records, Union Pacific could not

20

rely on its routine document retention policy as a shield. Id. at 749-50

(quoting Webb v. District of Columbia, 146 F.3d 964, 974 n.20

(D.C.Cir.1998) (adverse inference presumption is a common sanction for

spoliation). See Mastercard International, Inc. v. Moulton, 2004 WL

1393992 (S.D.N.Y. June 12, 2004) (court imposed sanctions for failing to

preserve e-mails automatically destroyed by computer server in ordinary

course of business; failure to cease customary destruction of e-mail practices

was breach of duty to preserve and sanctioned by adverse inference).

Steinhauser, et al. filed 5/4/2004 – Document Requests 11/2004

Following commencement of the Steinhauser case in May 2004,

Defendants’ failed to place a litigation hold on e-data/e-mails, TISH and

other potentially relevant evidence. ADD000056-57, 74.

Defendants destroyed e-data/e-mail and TISH Housing Inspection

Records after commencement of this action and also after receiving

Steinhauser document requests in November 2004 for such documents.

ADD000074; Ecf.114,pp.6-7[04-cv-2632].

Defendants destroyed 15,000-18,000 Truth-In-Sale-of-Housing

(“TISH”) housing inspection reports for 2001-2003 after litigation was

commenced. Ecf.143, p.2[04-cv-2632].

21

E-data/E-mail Communications

Steinhauser’s document requests sought production of “electronically

stored information,” “e-mails,” including, “All documents related in any

way to all communications” between the City’s code enforcement, building

permit, Planning and Economic Development, Housing and Redevelopment

Authority, and Human Rights Department, and Citizen Services offices, City

Council members, Mayor’s office, Police Department, and the Public

Housing Agency, Neighborhood Councils and individual defendants.

Ecf.114,pp.5-9-ShoemakerAff.

Steinhauser requested Defendants produce all communications

including e-data/e-mails. Ecf.114,pp.5-9(Request No.13).

The November 2004 Steinhauser document requests also sought “All

documents related in any way to the Department of Neighborhood Housing

and Property Improvement (“NHPI”) and its predecessor departments since

1994, including but not limited to, …reports, …, files, …, computer

maintained information, …, email communications,…”. Id.( Request No.9).

On January 14, 2005, Defendants responded to the Document Request

No. 13 by objecting to production of documents related to communications

defined by Steinhauser as including e-mails – Defendants must have needed

more time to ensure complete destruction of there internal communications.

22

Defendants were the first party here to acknowledge the relevancy of

TISH reports to Plaintiffs’ claims. In January 2005, Defendants responded

to Request No. 9 by describing four categories of files related to homes: (1)

code enforcement files generally retained three years; (2) vacant building

files since 1998; (3) Truth-in-Sale of Housing files [TISH inspection

reports]; and (4) Rental Registration files generally retained three years. Id.

Defendants later produced miniscule e-data/e-mails for the relevant

periods prior to December 2005. Ecf.152,EngelAff.,Ex.12-39[05-cv-

1348];Ecf.183,ShoemakerAff.,paras.68-80(evidence of e-mail destruction).

TISH Housing Inspection Records

In January 2005, as Defendants were disclosing to Plaintiffs the

existence of TISH inspection report/files within the realm of “NHPI files”

requested by Plaintiffs, Defendants were actually shredding the City’s copies

of 2001 TISH inspection reports/files; in January 2006 and January 2007,

Defendants destroyed 2002 and 2003 TISH files respectively.

Ecf.114,ShoemakerAff.paras.26,31,41[04-cv-2632].

While Defendants in 2005 through 2007, were destroying TISH

inspection reports/files of properties neighboring Plaintiffs’ properties,

Defendants’ requested Plaintiffs’ produce copies of TISH inspection records

on Plaintiffs’ properties, obtained those TISH records, provided those

23

records to Defendants’ liability expert, obtained an expert opinion that those

TISH records were relevant to the parties claims and defenses, and used

those TISH records in depositions of Plaintiffs. Ecf.114,ShoemakerAff.

pp.13-18[04-cv-2632].

Even the Court recognized the relevancy of these TISH reports.

ADD000076,fn.3.

But, the Court cleverly cited Defendants’ knowing false statement

that, “Defendants also reminded Plaintiffs that they had not even asked for

the [TISH] reports until 2007, approximately two years after they first

learned of the reports, and that the City had produced all of the reports in its

possession to Plaintiffs at that time [2007].” ADD000064. Both the Court

and Defendants knew of Defendants’ duty to maintain TISH records for

Plaintiffs’ eventual inspection and use and knew that destruction of same

would constitute spoliation. Instead, Defendants secretly shredded the TISH

records without informing Plaintiffs, until it was too late.

Ecf,114,ShoemakerAff.,paras.16,18. Prior to early 2007, Plaintiffs were

kept busy fighting Defendants’ motions to strike and for protective order

protection, as well as taking almost 50 depositions, and prioritizing which of

the many groups of documents to first inspect. Defendants’ took advantage

by using the time wisely to destroy as much evidence as possible.

24

Due to Defendants’ destruction of the TISH reports that were centrally

located at Dawkins’ office, Plaintiffs were faced with a cost and time

prohibitive hurdle of seeking TISH reports from 45 inspectors at offices

around the Twin Cities Metro Area, with no assurance the inspectors had

maintained their copies of inspection records for 5,000-6,000 inspections

each year, when the three year normal retention period applicable to both the

City and TISH inspectors had already expired.

The Court erred in determining that, “Plaintiffs never subpoenaed the

TISH evaluators. Such a failure to pursue discovery is incongruent with

Defendants’ claim of prejudice.” ADD000064. The Court had suggested

Plaintiffs seek replacement TISH reports from inspectors through subpoenas

but only requiring the minimal subpoena costs be paid by Defendants.

ADD000081. Arguably, the Court’s Order included service fees, but there

was no provision for $15,000 in copy costs of the replacement records

(15,000 reports, four pages each, at $.25/page), for $13,500 from 45

deposition transcripts ($300 each), or for Plaintiffs’ attorney fees for the

time consuming task of attempting to recreate the City’s central depository

collection of 2001-2003 TISH records, all with no guarantee the City files

could be restored. Defendants’ knew their intentional destruction would

create that additional mountain for Plaintiffs to climb. But for Defendants’

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destruction of centrally stored TISH reports, Plaintiffs would not have been

faced with these prohibitively burdensome additional costs and fees.

Plaintiffs’ objections to the magistrate’s order were denied by the District

Court. ADD000083.

The District Court abused its discretion by misapplying the law on

spoliation as set out by this Court in Stevenson. The District Court

determined Plaintiffs had failed to demonstrate they were prejudiced by the

destruction of the e-data including e-mails and TISH housing inspection

reports. ADD000064-68;80.

The Court made the following clearly erroneous factual determination

concerning the destruction of e-data prior to December 2005: “Other than

the reasons already discussed, Defendants offer an additional reason:

because Plaintiffs’ counsel had explicitly limited the discovery request to

emails from December 2005 onward, in a letter dated June 6, 2007.”

ADD000067. This is another example of the District Court adopting a

deliberate false statement as the Court’s own finding without labeling it as

such.

Plaintiffs never limited their document request to email

communications from December of 2005 forward so as to waive their claims

of spoliation of the pre-December 2005 e-mails. One has to wonder why

26

Plaintiffs would have brought motions for sanctions if they had agreed, as

Defendant’s counsel falsely represented, to limit their e-mail requests. As

Mr. Shoemaker stated to Ms. Seeba in a letter dated May 15, 2007:

We understand from you that the electronic communications such as emails between City departments and third parties have not been retained for the period prior to December 2005.

Ecf.217-6,p.9[-04-cv-2632].

In Plaintiffs June 6, 2007 letter, Plaintiffs again sought emails from

1994 to present:

Emails both within the City and to and from third parties have been relevant to the claims herein since 2002. …inspectors also testified to use of the e-mail system in their work for the City. It certainly appears …Defendants…did not take action to preserve the written communications … for the time period prior to December 2005, ...

Ecf.217-7,p.6[-04-cv-2632].

Defendants’ failure to place any litigation hold on e-data/e-mails after

the commencement of litigation in May of 2004 and failure to preserve all

back-up tapes prior to December of 2005, allowed Defendants to destroy

relevant evidence for the relevant periods prior to December 2005, which

created an absence of communications between and among Defendants and

other city officials and employees and third parties, including neighborhood

councils, PHA, and HUD from 1999 through 2005.

27

Plaintiffs were clearly prejudiced by such destruction during this

litigation as the destroyed e-data/e-mails easily meet the definition of

“relevancy” under Rule 401, F.R.E. (“evidence having the tendency to make

the existence of any fact that is of consequence to the determination of the

action more probable or less probable that it would be without the

evidence”).

Additionally, under Rule 26, Fed.R.Civ.P., the destroyed TISH

inspection records and e-data/e-mails were a proper subject of the

Steinhauser document requests to Defendants in November 2004, as they

were “relevant to any party’s claim or defense” and were “reasonably

calculated to lead to the discovery of admissible evidence.”

Defendant’s duty to preserve evidence arose no later than when they

were served with the Steinhauser Corrected First Amended Complaint (87

pgs) filed May 28, 2004 (Ecf.7[04-cv-2632) detailing the Plaintiffs claims

that:

(1) Defendants had selectively targeted and were continuing to target Plaintiffs and other low-income landlords; (2) Defendants were ignoring clearly visible code violations on exteriors of properties in Plaintiffs’ neighborhoods so the condition of Plaintiffs’ and surrounding properties were at issue; (3) All inspection programs for rental homes in the City were relevant;

28

(4) Communications between City officials and employees and third parties were relevant; (5) PHA had rental properties and tenants that were similar in many respects to those of Plaintiffs and had their own inspection system; (6) Plaintiffs considered the City’s “Problem Property 2000” initiative to be very significant to Plaintiffs’ claims; (7) Code enforcement conduct challenged by Plaintiffs was contrary to the City’s federal funding; and (8) Certain of Plaintiffs’ tenants were receiving federal Section 8 assistance and with HUD funding for housing placement services into properties owned by Steinhauser and other landlords.

Here, as in Capellupo, Plaintiffs were “deprived of significant

amounts of potentially helpful information,” relevant evidence concerning

“claims or defenses” of the parties. Defendants’ destruction of e-data

including internal/external e-data/e-mails of City officials and employees,

and external e-data/e-mail communications with third parties, prejudiced

Plaintiffs by eliminating naturally relevant evidence related to issues of

intent and motive of Defendants on Plaintiffs’ claims that the City was

violating the State Building Code, such violations constituted a “disparate

treatment” and “disparate impact” on protected classes, constituted

intentional discrimination under Section 1981, 1982 and 1983 (equal

protection), RICO, as well as directly related to defenses raised by

Defendants, including immunity defenses and that there was no evidence of

29

“disparate impact” or “intentional discrimination”. City officials misused

code enforcement inspectors to placate White neighbors and deleted

smoking gun e-mails from Defendants’ e-mail production. Ecf.143,p.8[04-

cv-2632](Plaintiffs uncovered these e-mails in paper files maintained by the

Legislative Hearing Officer prior to City officials and employees’ personal

review and selection of e-mails to disclose to Plaintiffs).

Additionally, the destruction of e-data/e-mails deprived Plaintiffs of

evidence on whether the City had “affirmatively furthered fair housing” by

conducting “analysis of impediments to fair housing choice” (“AI”) required

under federal law concerning the City’s building code and code enforcement

policies applicable to “protected class” housing, taking appropriate actions,

and maintaining records on the “AIs”. 24C.F.R.§91.225 (City’s

certifications); §91.210(e)(City’s public policies, including building codes as

barriers to affordable housing – whether those policies affect cost of housing

or incentives to develop, maintain, or improve affordable housing – affect

return on investment, and act as barrier); §91.215(h)(public polices as

barriers); §91.220(j)(building codes as barriers).

The internal/external e-data/e-mail communications would have

provided evidence of the deliberations behind the scenes of the intent,

motive and opportunity of Defendants, City Council members, and others

30

concerning federally mandated “AIs” concerning City building code and

code enforcement policies and the application to “protected class” housing,

costs of same and displacement effect from such illegal application of the

City’s ultra vires police powers and code polices.

The destroyed e-data/e-mail internal/external communications for

2000 through most of 2005, covered the period that the City suddenly

abandoned its successful PP2000 code enforcement program (early 2002),

adopted and implemented a heavy-handed, “code to the max” approach

(2002-present), including aggressively designating properties as “vacant”

buildings,” dramatically increasing condemnations of homes and illegally

demanding older homes meet “present code” under the City’s Code

Compliance inspection and certification process that Defendants’ knew was

in direct violation of the State Building Code and Minnesota court decisions,

that both provided grandfathering protections to existing structures.

The destroyed e-mails deprived Plaintiffs of evidence going to

Defendants’ discussions on how to violate the State Building Code, how to

falsify HUD funding certifications without conducting the required and

legitimate “AIs,” and how to keep the public and Plaintiffs’ in the dark about

these issues, and other communications in furtherance of the schemes and

criminal conspiracy.

31

The Court failed to consider that the written, electronic

communications of Defendants and City officials and employees would have

been the best source of evidence directly bearing on all these matters and

thus directly related to the claims and defenses of the parties.

The Court denied Plaintiffs’ requests for sanctions, including costs

and attorney’s fees related to bringing its motion (ADD000055) and failed to

grant Plaintiffs’ request for an evidentiary hearing (Ecf.183,ShoemakerAff.

paras88-90[04-cv-2632].

The Court made a decision contrary to the law in failing to award

Plaintiffs’ their costs and attorney’s fees incurred as a result of Defendants’

conduct when the Court acknowledged Plaintiffs may have been harmed.

ADD000062,68. The Court erred by failing to award Plaintiffs’ their costs

and attorney’s fees incurred as a result of Defendants’ conduct. Here, as in

Capellupo, the actions of Defendants “imposed an enormous burden on

counsel for plaintiffs.” Capellupo, 126 F.R.D. at 553.

Defendants’ Bad Faith In Spoliation of Relevant Evidence

Under this Court’s ruling in Stevenson, no bad faith showing is

necessary but is relevant on the issue of what sanctions would be appropriate

to meet the policies supporting sanctions. Here, Defendants’ destruction of

evidence was so egregious that the district court abused its discretion in

32

denying Plaintiffs any of the relief requested: judgment against Defendants

on liability and damages; monetary sanctions; dismissal of Defendants’

summary judgment motion; directing factual findings in favor of Plaintiffs;

an adverse inference jury instruction; an award of attorneys fees, expert fees

and costs from March 2, 2007 through the hearing March 2008; discovery

related to the spoliation; Ecf.183,ShoemakerAff.[04-cv-2632(Defendants’

litigation tactics caused undue expense, fees for Plaintiffs-

pars.17,18,27,50,88-89)].

Even though Plaintiffs were not required to demonstrate Defendants’

“bad faith,” Plaintiffs submit that Defendants conduct rose to the level of

“bad faith” thereby justifying a finding of “prejudice” because the evidence

was relevant, would have been helpful to Plaintiffs and could have led to

discovery of other evidence.

The duty to preserve evidence is imposed on counsel as officers of the

court. See 6 NO. 21 Lawyers J. 6 October 15, 2004 (Duty of preservation

and protection of electronically stored information that may be relevant to

potential or actual litigation show a clear trend to judicially impose a duty on

counsel to safeguard and preserve potentially relevant evidence.).

The substantial and complete nature of the destruction of virtually all

e-data/e-mails of Defendants, City Council members and other key players

33

for all periods prior to December 2005, the time periods relevant to

Defendants’ claims of immunity and Plaintiffs constitutional and statutory

claims, and the complete destruction of three years of TISH housing

inspection reports, all destroyed during litigation, justifies a “bad faith”

finding, a determination of “prejudice” to Plaintiffs from said destruction

and sanctions including monetary sanctions, attorney’s fees and costs,

reversal of summary judgment, and an adverse inference instruction. See

E*Trade, 230 F.R.D. at 592.

The e-data/e-mail written communications of Defendants and City

officials/employees and third parties relevant to the claims and defenses of

the parties is similar to the only recording of conversations contemporaneous

to an accident. Stevenson, 354 F.3d at 748. There is no substitute evidence.

The District Court, contrary to this Court’s holding in Stevenson,

placed too high of a burden on Plaintiffs to demonstrate “prejudice”. Courts

have warned against applying too high a standard on victim litigants of

spoliation:

“Courts must take care not to ‘hold the prejudiced party to too strict a standard of proof regarding the likely contents of the destroyed [or unavailable] evidence,’ because doing so ‘would subvert the…purposes of the adverse inference and would allow parties who have…destroyed evidence to profit from that destruction.”

34

Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 109

(2dCir.2002).

The Second Circuit Court of Appeals has stated, “[t]he task is

unavoidably imperfect, inasmuch as, in the absence of the destroyed

evidence, we can only venture guesses with varying degrees of confidence

as to what that missing evidence may have revealed.” Kronisch v. U.S., 150

F.3d 112, 128 (2dCir.1998) (Wigmore’s admonition - holding prejudiced

party to too strict a standard of proof regarding the likely contents of the

destroyed evidence would subvert the prophylactic and punitive purposes of

the adverse inference).

Moreover, as can be seen by this Courts’ decisions in Stevenson

(finding prejudice and approving an adverse inference jury instruction) and

in Dillion (finding prejudice and approving the exclusion of evidence), if the

evidence destroyed would have been helpful to the opposing party, even if

that evidence was of “limited use,” this Court will approve sanctions

including a adverse inference instruction.

Here, the District Court determined that Plaintiffs had not shown what

the missing e-data/e-mails would have contained - but Plaintiffs had

demonstrated that the missing e-data consisted of written communications of

Defendants, City officials and employees and influential third-parties on

35

subjects relevant to the parties claims and defenses but from a period after

the relevant claim/defense period. Under Stevenson, even if this e-data was

of limited use, its destruction during litigation should have resulted in a

prejudice finding and an adverse inference instruction and/or other

sanctions.

During the filings of these three lawsuits, Defendant Dawkins, a

licensed attorney, headed the main City code enforcement department

responsible for conduct challenged in these three cases. Defendants had a

large full service law firm at their disposal. Defendants were familiar with

Court rules due to experience with litigation. Yet the District Court held that

the destruction of the written communications of City officials and

employees and the housing inspection reports for the relevant time period

prior to December 2005 was not in “bad faith” and that the other related

destruction and obstructive litigation tactics, taken together with e-data/e-

mail destruction, did not demonstrate bad faith.

Plaintiffs submit that at the very least public defendants should be

held to the same standard of preserving evidence applicable to private

corporations. When considering the important policies of honesty and

openness by government officials and employees in public matters including

federal court litigation, the Court abused its discretion in placing a heavy,

36

almost impossible burden on Plaintiffs to demonstrate they were

“prejudiced” by such destruction.

Plaintiffs submit that the Court should consider the serious public and

judicial policies implicated by the Defendants’ destruction of massive

volumes of evidence during this litigation:

Spoliation sanctions serve a remedial function by leveling the playing field or restoring the prejudiced party to the position it would have been without spoliation. They also serve a punitive function, by punishing the spoliator for its actions, and a deterrent function, by sending a clear message to the other potential litigants that this type of behavior will not be tolerated and will be dealt with appropriately if need be.

Mosaid Tech. v. Samsung, 348 F.Supp.332, 335 (D.N.J.2004).

Plaintiffs and their counsel strongly submit that it is imperative this

Court reverse the District Court’s rulings on spoliation, sanctions and

summary judgment, thereby correcting the false impression that violation of

state and federal laws, Court rules, including massive destruction of

evidence, and other wrongful acts, are a legitimate way of conducting

government business.

Additionally, as it currently stands, there is more than an appearance

of impropriety in the handling of these cases by the Minnesota District

Court. The District Court has from the commencement of these cases,

downplayed and soft pedaled the claims and evidence of violations of state

37

and federal laws, court rules and the corruption by public officials-

employees, and State Court personnel, has seriously abused the summary

judgment standard, dismissed the evidence that a reasonable jury could view

as supporting Plaintiffs’ claims, and has worked diligently to undermine

Plaintiffs’ ability to hold accountable before the law, a City run by those

who see the law as an inconvenience to be subverted at every opportunity no

matter what the cost to other members of society. The message heard by all

from the District Court of Minnesota through its decisions here is that

politically connected lawbreakers have immunity without worry of the

consequences. This Court must not let this message stand without challenge.

As Justice Brandeis stated in his dissenting opinion in Olmstead v.

U.S.:

Crime is contagious. If the government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy.

277 U.S. 438, 485 (1929).

CONCLUSION

Plaintiffs respectfully request the Court:

(1) overturn summary judgment and remand these cases for trial on all of

Plaintiffs’ claims;

38

(2) determine that prior to trial, full discovery on spoliation and sanctions

with an evidentiary hearing is appropriate with Plaintiffs’ costs and

attorney’s fees during such discovery paid by Defendants;

(3) that Plaintiffs be awarded their reasonable attorney’s fees and costs due

to Defendants’ wrongful litigation conduct during 2007 and 2008;

(4) that sufficient prejudice has been established to warrant an adverse

inference jury instruction;

(5) that a federal circuit judge from outside Minnesota be appointed as the

judge responsible for these cases on remand; and

(6) such other relief that this Court determines is warranted under the

circumstances.

Respectfully submitted,

SHOEMAKER & SHOEMAKER, P.L.L.C.

Dated: July 31, 2009 By: s/ John R. Shoemaker John R. Shoemaker (Attorney Lic. #161561) 7900 International Drive International Plaza, Suite 200 Bloomington, Minnesota 55425 (952) 224-4610 Attorneys for Plaintiffs-Appellants Steinhauser, et al. and Harrilal, et al.

39

CERTIFICATION OF COMPLIANCE WITH FRAP 32 AND CERTIFICATION OF WORD PROCESSING PROGRAM

Counsel for Plaintiffs-Appellants prepared its brief using Microsoft

Word 2003 for its word processing program. This brief contains 6,994

words. Counsel also certifies that the attached CD has been scanned for

computer viruses and there are no viruses on the CD. The only document

contained on this CD is the Joint Reply Brief of Plaintiffs-Appellants in

the PDF file format.

Dated: July 31, 2009 By: s/ John R. Shoemaker John R. Shoemaker, Esq.