Complaint — Heights Apartments v. Walz

Record facts

U.S. District Court for the District of Minnesota · No. 0:20-cv-02051-NEB-DJF · Doc. 1 · 2020-09-24 · Docket on CourtListener

Full text

UNITED STATES DISTRICT COURT 
 
DISTRICT OF MINNESOTA 
 
Heights Apartments, LLC, and Walnut 
Trails, LLLP, 
Plaintiffs, 
v. 
Tim Walz, in his individual and his 
official capacity as Governor of the 
State of Minnesota, and Keith Ellison, 
in his individual and his official 
capacity as Attorney General of the 
State of Minnesota, and John Doe, 
Defendants. 
 
Case No. 20-cv-2051 
COMPLAINT 
 
JURY TRIAL DEMANDED 
 
 
Introduction and Procedural Posture 
The Court needs no primer on the extent of the COVID-19 pandemic has affected 
the lives of Minnesotans and those around the country and the world. Its effects extend into 
every area of healthcare and the economy as a whole. As specific to the issues in this 
Complaint, however, the issue is what authority the current pandemic grants to the 
Governor of Minnesota to take executive action to indefinitely shut the courthouse doors 
to a category of claims without process or compensation when, in the Governor’s sole 
discretion, redress of those claims is not in the public interest. 
The Plaintiffs in this have contracts with their tenants, providing housing in 
exchange for both rent and an agreement from the tenants to follow certain rules relating 
to the management of their rental units and the quality of life for tenants around them. 
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Executive Orders signed by the Governor have substantially impaired those contracts, and 
are enacted in violation of the United States Constitution. This suit follows. 
Jurisdiction and Venue 
1. Jurisdiction in the District of Minnesota is proper under 28 U.S.C. § 1331 (federal-
question jurisdiction), 28 U.S.C. § 2201 (declaratory-judgment jurisdiction), and 42 
USC §§ 1983, 1988 (civil-rights statutes).  
2. Venue is proper in this Court under 28 U.S.C. § 1391 because the defendants are 
Minnesota public officials and reside within this district, and because the events or 
omissions giving rise to the claims presented occurred within this district. 
Parties 
3. Plaintiff Heights Apartments, LLC is a Minnesota limited liability company 
domiciled in Minnesota. Plaintiff Heights is the owner of multiple rental properties 
in Minnesota and derives its income from the rent generated from those properties. 
4. Plaintiff Walnut Trails, LLLP is a Minnesota limited liability limited partnership 
domiciled in Minnesota. Plaintiff Walnut Trails is the owner of a 168-unit apartment 
project in Eagan, Minnesota, and derives its income from the rent generated from 
those apartments. 
5. Defendant Tim Walz is a resident of the State of Minnesota, and in his official 
capacity, is governor of the State of Minnesota. He is sued in both his individual 
and official capacities. 
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6. Defendant Keith Ellison is a resident of the State of Minnesota, and in his official 
capacity, is the Attorney General for the State of Minnesota. He is sued in both his 
individual and official capacities. 
7. Defendant John Doe is a pseudonymous defendant representing the various city and 
county officials, or private individuals or law firms, to whom the State of Minnesota 
has delegated the authority to prosecute misdemeanor offenses including actions 
deemed to violate the Executive Orders outlined below, and whose identities cannot 
be ascertained at this time. John Doe is sued in that capacity. 
Factual Background 
8. On March 13, 2020, in response to a global pandemic which had spread to 
Minnesota, the Governor signed “Executive Order 20-01: Declaring a Peacetime 
Emergency and Coordinating Minnesota's Strategy to Protect Minnesotans from 
COVID-19.” 
9. Since then, the Governor has issued eighty-three executive orders, 20-02 through 
20-84. All executive orders are available through the Office of the Governor, and 
accessible 
online at https://mn.gov/governor/news/executiveorders.jsp (last 
accessed Sep. 24, 2020). 
10. The Governor has claimed legal authority to issue these executive orders pursuant 
to Minn. Stat. § 12.31, subd. 2. 
11. The Governor has issued subsequent executive orders extending the peacetime 
emergency for additional thirty-day periods with Executive Order 20-35 on April 
13, 2020, Executive Order 20-53 on May 13, 2020, Executive Order 20-75 on June 
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12, 2020, Executive Order 20-78 on July 13, 2020, and Executive Order 20-83 on 
August 12, 2020. The last such order was Executive Order 20-89, issued September 
11, 2020.  
12. The executive orders extending the Governor’s peacetime emergency powers have 
generally noted that the governor’s asserted authority could only be rescinded by “a 
majority vote of each house of the legislature pursuant to Minnesota Statute 2019, 
section 12.31, subdivision 2(b).” 
13. Defendant Gov. Walz, in his official capacity as Governor of the State of Minnesota, 
enacted Executive Orders 20-14 on Mar. 23, 2020, 20-73 on June 05, 2020, and 20-
79 on July 14, 2020 (collectively, “EOs”), relating to terminations or non-renewals 
of tenancies, evictions, and writs of recovery. 
14. These EOs were approved by the Executive Council on those same dates. The 
Executive Council consists of officers of the Executive Branch: Defendant 
Governor Walz, the Lieutenant Governor, the Secretary of State, the State Auditor, 
and Defendant Attorney General Ellison. 
15. These EOs have never been codified into state law or ratified by an act of the 
Legislative Branch of the State of Minnesota. 
16. The Judicial Branch of the State of Minnesota has issued orders related to COVID-
19 and access to the courts, but has never issued an order adopting Defendant Gov. 
Walz’s EOs at issue here. 
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17. These orders suspended “the ability to file an eviction action under Minnesota 
Statutes 2019, section 504B.285 or 504B.291” except under circumstances 
delineated in those orders. 
18. The most expansive circumstances permitting evictions delineated in the EOs are 
those in EO 20-79, which permits the filing of an eviction “where the tenant: 
a. Seriously endangers the safety of other residents; 
b. Violates Minnesota Statutes 2019, section 504B.171, subdivision 1; 
c. Remains in the property past the vacate date after receiving a notice to vacate 
or nonrenewal under paragraph 4 of this Executive Order; or 
d. Materially violates a residential lease by the following actions on the premises, 
including the common area and the curtilage of the premises: 
i. 
Seriously endangers the safety of others; or 
ii. 
Significantly damages property.” 
 
The EO also adds a new provision that even when an notice of termination, non-
renewal, or eviction is authorized under the terms above, the property owner must 
still provide “written notice of intent” of at least seven days or the notice period 
provided in the lease, whichever is longer. Under Minnesota law, such notice 
periods are almost always one full calendar month. 
19. EO-79, echoing similar language in EO 20-14 and EO 20-73, makes violation of 
this EO a criminal offense, and also allows Defendant Gen. Ellison to bring civil 
claims against them. 
20. EO 20-14 notes that “Current laws and rules do not allow for cessation of notices to 
terminate tenancies, eviction actions, or issuing of writs of recovery during the 
COVID-19 pandemic.” 
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21. By their terms, the EOs prevent landlords from terminating a tenancy or bringing 
an eviction action for breaches of the lease such as; 
a. Nonpayment of rent; 
b. Assaults on other tenants not deemed a “serious endangerment”; 
c. Damage to property not deemed “significant”; 
d. Materially interfering with the management of the property, such as refusing 
to allow access for maintenance, repairs, or inspections; 
e. Materially interfering with the use and enjoyment of the leased spaces for 
neighbors in a multi-unit building, such as smoking in common areas, 
harassment or theft from other residents, significant disturbances to other 
tenants such as loud parties, fights, or music, or leaving secured buildings 
unsecured; 
f. Exceeding the occupancy limit of the leased property, allowing non-lessees 
to live in the property, or non-lessees who claim the right of possession; or 
g. Abandoning the property. 
22. By their terms, the EOs have turned every lease in Minnesota into an indefinite 
lease, terminable only at the option of the tenant except as noted above. 
23. Because of the EOs, landlords who bring an eviction action, give a notice of 
termination, or give a notice of non-renewal of a lease in violation of the EOs are 
subject to both criminal and civil sanctions. 
24. This threat of sanctions is not speculative. Defendant Gen. Ellison has brought at 
least four suits for sanctions against a landlord for violation of the EOs, and on 
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information and belief, has threatened such sanctions on others to gain compliance 
with the EOs. 
Plaintiff Heights Apartments, LLC 
25. Plaintiff Heights Apartments, LLC is a Minnesota limited liability company formed 
for the purpose of owning and renting real estate. 
26. The lease agreements Heights has with its tenants contains a limitation on 
occupancy of non-tenants and a prohibition on using the running a business from 
the premises, an explicit notice of the right of the landlord to terminate the lease, to 
bring an eviction action, as well as an agreement of the tenants to comply with 
tenancy rules set by the landlord. 
27. As laid out in examples below, Plaintiff Heights has been injured in its ability to 
conduct its business, comply with local authorities, and keep its covenants of quiet 
enjoyment with its tenants. 
28. By way of examples to illustrate this harm, on March 27, 2020, mere days after EO 
20-14 went into effect, Heights closed on the sale of three properties from the same 
seller by the terms of a purchase contract which pre-dated the EO. For the purposes 
of this Complaint and for the protection of the tenants, the properties are referred to 
only as Property A, Property B, and Property C, and tenants referred to by their 
initials only. 
29. Property A is a four-unit building in Minneapolis entirely comprised of low-income 
tenants who receive subsidies for housing. These subsidies are provided by the 
federal government, and Heights has had no issues with the tenancies at Property A. 
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30. Property B is a seven-unit building in St. Paul, which by contrast has caused 
significant problems. One resident, R.U., is four months behind on rent and has been 
operating a car and boat repair shop in the parking lot in violation of city ordinances. 
Heights has received an order to abate the nuisance from the City of St. Paul, but 
despite numerous warnings, R.U. has not complied, and Heights has no way to force 
compliance with the City. Another resident, M.R., has not paid rent since EO 20-14 
went into effect, and has an unauthorized resident living on the property in violation 
of the lease. M.R. and R.U. are so disruptive that they caused another tenant to move 
out, but Heights is hesitant to move another tenant into the vacant unit because of 
these problems. In Property B, only two units have regularly paid rent since the EO 
went into effect. 
31. The violations of the residents in Property B would be sufficient to terminate their 
leases, not renew, or file eviction actions against them, but these options are not 
available to Heights because of the EOs at issue. 
32. Property C is a six-unit building in Columbia Heights, which is also the source of 
significant problems. One resident, S.T., also has an unauthorized person living in 
the unit in violation of the lease, has not paid rent since EO 20-14 went into effect, 
and was the subject of two nuisance letters from the City of Columbia Heights. On 
December 27, 2019, Columbia Heights sent the previous property owner a notice 
demanding that S.T.’s lease be terminated and eviction proceedings started, under 
threat of loss of the rental license. However, despite the fact that Columbia Heights 
takes the position that eviction was warranted, Heights remains concerned that if 
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Columbia Heights is incorrect about the facts or if the tenant otherwise prevails, 
Heights could be subjected to civil and criminal penalties. Property C is also 
occupied by J.J., another tenant who is three months behind on rent, has an 
unauthorized tenant living in the property in violation of the lease, and has caused 
significant disturbances to other tenants due to frequent, loud, and large parties. In 
Property C, only three of the residents regularly pay rent. 
33. The violations of the residents in Property C would be sufficient to terminate their 
leases, not renew, or file eviction actions against them, but these options are not 
available to Heights because of the EOs at issue. 
34. As a result of the EOs at issue, Plaintiff Heights has been damaged. 
Plaintiff Walnut Trails, LLLP 
35. Plaintiff Walnut Trails, LLLP is a Minnesota limited liability limited partnership 
formed for the purpose of owning and renting real estate. 
36. The lease agreements Walnut Trails has with its tenants contains a limitation on 
occupancy of non-tenants, an explicit notice of the right of the landlord to terminate 
the lease, to bring an eviction action, as well as an agreement of the tenants not to 
disturb other residents. 
37. As laid out in examples below, Plaintiff Walnut Trails has been injured in its ability 
to conduct its business. 
38. Plaintiff Walnut Trails is the owner of a 168-unit apartment complex in Eagan, 
Minnesota. 
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39. Since the enactment of the EOs at issue, the income to Plaintiff Walnut Trails, which 
it uses to pay for, maintain, and repair the rental property, has dropped precipitously. 
40. Since the enactment of the EOs at issue, more than ten percent of the renters in the 
complex have not paid rent in full and on time, resulting in a loss of more than 
$36,000 in just the last six months. 
41. These failures to pay rent would be sufficient to terminate the tenants’ leases, not 
renew, or file eviction actions against them, but these options are not available to 
Walnut Trails because of the EOs at issue. 
42. This sharp drop in revenue has caused not just an impairment of Plaintiff’s business, 
but has forced it to raise the minimum rental requirements for tenancy. As a result, 
renters who otherwise would have qualified for tenancy in Plaintiff’s building are 
no longer eligible, and its vacancy rate has risen. 
43. As a result of the actions complained of above, Plaintiffs have suffered harm 
including but not limited to the loss of revenue, inability enforce the statutory and 
common-law covenants of quiet enjoyment, inability to ensure compliance with 
proper rules and regulations including applicable city, and state laws, inability to 
adequately address other breaches of contract, the loss of use and enjoyment of their 
property without compensation or due process, and the loss of their ability to seek 
redress in the courts. 
 
 
 
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Count I: 
Violations of the Contracts Clause of the United States Constitution 
(Against Defendant Gov. Walz in his official capacity) 
44. Plaintiffs restate and reallege every paragraph set forth above as if fully incorporated 
herein. 
45. Plaintiffs have contracts with their tenants which are executed and enforceable. The 
contracts at issue are residential leases between Plaintiffs and their tenants, which 
are governed by Minn. Stat. § 504B and common law. 
46. Minn. Stat. § 504B.285 and § 504B.291 provide for eviction as a remedy for a 
breach of the contract. Breaches which might merit eviction under the statutes 
include, but are not limited to, holding over on real property, non-payment of rent, 
or other violations of contract terms. Both Minnesota statutes and common law also 
provide the mechanism for landlords to terminate or not to renew a tenant’s contract. 
Notice of these rights and remedies are given in the contracts at issue. 
47. Absent an order from the court under Minn. Stat. § 504B or the voluntary surrender 
of a rental unit by the tenant, landlords retain no right to re-enter and take possession 
of their properties. 
48. Defendant Gov. Walz’s EOs at issue here have effectively extinguished any remedy 
Plaintiffs have for breaches of contract by their tenants, and as a result, are a 
substantial impairment of Plaintiffs’ contracts. 
49. Such actions are unconstitutional under Article I, Section X, Clause 1 of the United 
States’ Constitution. 
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50. By the actions stated above, Plaintiffs have been harmed in their ability to collect 
rent, enforce material terms of the contracts including terms intended to provide for 
the quality of life of other tenants, and in their ability to seek redress in the Courts. 
Count II: 
Violations of Right to Trial Under the First Amendment 
(Against Defendant Gov. Walz in his official capacity) 
51. Plaintiffs restate and reallege every paragraph set forth above as if fully incorporated 
herein. 
52. The Minnesota Judicial system is empowered to hear cases and controversies 
including common-law claims for breach of contract and statutory claims under 
Minn. Stat. § 504B for eviction. 
53. Except under certain, limited circumstances, the EOs prohibit Plaintiffs from filing 
an eviction action. 
54. As complained of above, Plaintiffs have multiple tenants who have breached their 
contracts and/or who would otherwise be subject to termination or eviction under 
Minn. Stat. § 504B. 
55. The EOs prohibit Plaintiffs from vindicating their rights under the First Amendment 
to a right to trial. 
56. By the actions stated above, Plaintiffs have been harmed in their ability to collect 
rent, enforce material terms of the contracts, and in their ability to seek redress in 
the Courts. 
 
 
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Count III: 
Violations of The Takings Clause of the Fifth Amendment 
(Against Defendant Gov. Walz in official capacity) 
57. Plaintiffs restate and reallege every paragraph set forth above as if fully incorporated 
herein. 
58. Under the Takings Clause of the Fifth Amendment, Plaintiffs have the right to just 
compensation for the taking of their private property for public use. 
59. Under the EOs, Plaintiffs are required under threat of both civil and criminal 
sanctions to acquiesce to the physical presence of tenants in their properties, 
regardless of whether the tenant would otherwise have a right to remain in the 
property and regardless of the wishes of Plaintiffs to end the tenancy. 
60. Because of the nature of the EOs at issue, the takings here involve the taking of 
distinct, investment-backed expectations in that Plaintiffs have each bought the 
properties which are subject to the takings complained of in the expectation of a 
return on their investment in the form of rental income. 
61. Underlying its enactment, EO 20-14 and, by implication, its subsequent orders, 
invoked “emergency and disaster powers” “to ‘protect the public peace, health, and 
safety.’” It went on to state that “[p]ublic health and safety are promoted by 
stabilizing households.” However, these regulations are directed at a distinct subset 
of the population—rental property owners—who must alone bear the burden 
intended for the public good. 
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62. Plaintiffs have a fundamental property interest in the real properties they own, their 
contracts, and the business activities related to their rental businesses, which are 
protected by the Takings Clause of the Fifth Amendment. 
63. By the actions stated above, Plaintiffs have been deprived of the economic and 
beneficial use and decision making related to their own property and investments, 
and have received no compensation for the taking. 
Count IV: 
Violations of Right to Due Process Under the Fifth and Fourteenth 
Amendments 
(Against Defendant Gov. Walz in his official capacity) 
64. Plaintiffs restate and reallege every paragraph set forth above as if fully incorporated 
herein. 
65. Plaintiffs have a fundamental property interest in the real properties they own, their 
contracts, and the business activities related to their rental businesses, which are 
protected by the Due Process Clause of the Fifth and Fourteenth Amendments. 
66. Defendant Gov. Walz, by the enactment of the EOs at issue in this litigation, has 
unconstitutionally impaired Plaintiffs’ fundamental interest in their real property 
and business activity. 
67. Defendant Gov. Walz, by the enactment of the EOs at issue in this litigation, has 
impaired Plaintiffs’ property interest in their real property and business activity in 
an arbitrary manner. 
68. Defendant Gov. Walz, by the enactment of the EOs at issue in this litigation, has 
impaired Plaintiffs’ property interest in their real property and business activity 
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without notice or the right to a hearing to challenge the impairment of these interests 
or seek compensation. 
69. By the actions stated above, Plaintiffs have been harmed in their ability to collect 
rent, enforce material terms of the contracts including terms intended to provide for 
the quality of life of other tenants, and in their ability to seek redress in the Courts. 
Count V: 
Section 1983 Claims 
(Against Defendants Gov. Walz and Gen. Ellison in their official and 
individual capacities) 
70. Plaintiffs restate and reallege every paragraph set forth above as if fully incorporated 
herein. 
71. Defendants in their official capacities as public officials of the State of Minnesota, 
have taken the above actions complained of under color of state law. 
72. As outlined above, these actions have deprived Plaintiffs of their rights under the 
First, Fifth, and Fourteenth Amendments, as well as under Article I, Sec. X of the 
United States Constitution. 
73. As a result of the actions complained of above, Plaintiffs have suffered harm 
including but not limited to the loss of revenue, inability enforce the statutory and 
common-law covenants of quiet enjoyment, inability to ensure compliance with 
proper rules and regulations including applicable city, and state laws, inability to 
adequately address other breaches of contract, the loss of use and enjoyment of their 
property without compensation or due process, and the loss of their ability to seek 
redress in the courts. 
 
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Count VI: 
Ultra Vires Acts 
(Against Defendant Gov. Walz in his official and individual capacities) 
74. Plaintiffs restate and reallege every paragraph set forth above as if fully incorporated 
herein. 
75. The authority for the EOs invoked by Defendant Gov. Walz is under Minn. Stat. 
§ 12.21, which grants emergency powers to the governor under certain 
circumstances. 
76. Nothing in the rulemaking provisions of Minn. Stat. § 12.21, or in any other 
authority under which the EOs may be executed, grants Defendant Gov. Walz the 
authority to wield the powers granted under the Minnesota Constitution to the 
Legislative or Judicial Branches. 
77. Article 3, § 1 of the Minnesota Constitution provides that 
The powers of government shall be divided into three 
distinct departments: legislative, executive, and 
judicial. No person or persons belonging to or 
constituting one of these departments shall exercise any 
of the powers properly belonging to either of the others 
except in the instances expressly provided in this 
constitution. 
 
78. Defendant Gov. Walz’s actions in issuing the EOs are without any authority 
whatever, as they are an improper exercise of legislative power, including the power 
to modify or abridge statutes, which properly rests with the Legislature and has not 
been delegated. 
79. Defendant Gov. Walz’s actions in issuing the EOs are without any authority 
whatever, as they are an improper regulation of the judicial power inherent to the 
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Judiciary to exercise control over the operation of the Courts, including its ability 
to hear cases and controversies, which properly rests with the Judiciary and has not 
been delegated. 
80. The EOs at issue improperly exercise both legislative and judicial power, as they 
add a notice provision entirely absent from Minn. Stat. § 504B, and they prevent the 
judiciary from hearing cases and controversies based on breaches of contract or 
statutory protections. 
81. As a result of the actions complained of above, Plaintiffs have suffered harm 
including but not limited to the loss of revenue, inability enforce the statutory and 
common-law covenants of quiet enjoyment, inability to ensure compliance with 
proper rules and regulations including applicable city, and state laws, inability to 
adequately address other breaches of contract, the loss of use and enjoyment of their 
property without compensation or due process, and the loss of their ability to seek 
redress in the courts. 
Count VII: Declaratory Relief and Injunctive Relief 
(Against all Defendants) 
82. Plaintiffs restate and reallege every paragraph set forth above as if fully incorporated 
herein. 
83. Under 28 U.S.C. § 2201, Plaintiffs have the right to seek a declaration that the acts 
of Defendants, as complained of above, are taken in violation of the United States 
Constitution. 
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84. This case presents an actual case or controversy, as the actions complained of are 
not hypothetical, theoretical, or speculative, but currently act to impair Plaintiffs’ 
rights and cause the damages complained of above, and adverse action against 
similarly-situated persons has already been undertaken by Defendants. 
85. By the actions complained of above, Defendants have acted to impair Plaintiffs’ 
rights under the United States Constitution. 
86. Under 28 U.S.C. § 2202, 42 U.S.C. § 1988, and applicable case law, Defendants are 
entitled to an order enjoining the unconstitutional conduct complained of. 
 
 
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Prayer for Relief 
Under the circumstances presented here, Plaintiffs will take the unusual step of not merely 
reciting the relief prayed for, but explaining the relief prayed for—and the relief not prayed 
for. Plaintiffs fully recognize the depths of the crisis facing the State, while also 
recognizing the hundreds of billions of dollars the state and federal governments have 
invested in ensuring that citizens are able to provide for necessities for themselves and their 
families, including for housing. If there were a cause of action granting Plaintiffs the ability 
to fashion their own remedy and require the State to both protect the housing interests of 
Minnesota citizens and the property interests of property owners and their tenants, this 
would surely be the relief prayed for. There is not. Wherefore, Plaintiffs pray an Order 
from this Court: 
1. Declaring that the actions complained of by Defendants Gov. Walz and Gen. Ellison 
above are taken in violation of the Unites States Constitution; 
2. Vacating Executive Orders 20-14, 20-73, and 20-79, or any subsequent Executive 
Orders which similarly violate the Constitution; 
3. Permanently enjoining all Defendants from enforcing Executive Orders made in 
violation of the United States Constitution under 28 U.S.C. § 1343, including by 
bringing civil or criminal actions for violations of the Executive Orders at issue or 
any subsequent Executive Orders which similarly violate the Constitution; 
4. Granting compensatory damages, and attorney’s fees and other fees as permitted 
under 42 U.S.C. § 1988 and other applicable law; and 
5. Granting such other relief as may be just and proper. 
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Dated:  September 24, 2020 
 
HANSEN, DORDELL, BRADT, ODLAUG 
& BRADT, P.L.L.P. 
By:  /s/  Michael Kemp                     
 
     Michael Kemp #390426 
Attorneys for Plaintiffs 
3900 Northwoods Drive, Suite 250  
St. Paul, MN 55112-6973  
mkemp@hansendordell.com  
 
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