WASHINGTON -- The court file tells the story of a young African-American woman with a troubled past, a rat in the house and a pair of rambunctious preschoolers who had plugged the toilet with a toy.

Lawyers aren't sure what became of LaChaka Cousette since her St. Paul tenement was condemned by city inspectors a decade ago, forcing her into the streets.

But her name is part of a case that had been headed for the U.S. Supreme Court -- until Friday, when Mayor Chris Coleman, under pressure from civil rights and housing advocates nationwide, abruptly asked that the city's petition be dismissed.

The move, coming weeks before the high court was scheduled to hear oral arguments, represents a new twist in a convoluted, years-long legal battle between St. Paul and a group of mostly white landlords alleging discrimination on the basis of their minority tenants. Among the protagonists in the case is Cousette's landlord, Frank Steinhauser, a property owner frequently cited over the years for a large number of police calls and housing code violations at his buildings.

Steinhauser did not respond to requests for comment, but his lawyers have argued in court that he and other inner-city landlords were targeted for aggressive code enforcement primarily because they rent to low-income and minority tenants in aging neighborhoods that some would rather see gentrified. His lead attorney, John Shoemaker, said the effect of the city crackdown was to shut down properties, increase costs and limit the supply of affordable housing in the Twin Cities. "What it does is displace tenants," Shoemaker said.

In an interview Friday, Coleman called the landlords' allegations "absurd" and said he is confident the city would have prevailed before the Supreme Court. He and other St. Paul officials say they will go to trial instead to defend the city's building standards. To do otherwise, he said, would relegate the poor to the substandard conditions of a bygone era.

"The facts of the case are we had children living with rats, with inadequate heating and with toilets in their kitchens," Coleman said. "Our children deserve better than that."

But the tricky question facing St. Paul is that the lawsuit going before the Supreme Court alleged violations of the federal Fair Housing Act -- not on the basis of intentional discrimination, but because of enforcement policies that the landlords contend have a "disparate impact" on minorities.

The concept of disparate impact undergirds much of civil rights and housing law, including, Coleman noted, the U.S. Justice Department's recent $335 million settlement with Countrywide Financial over predatory lending practices.

Among those weighing in on the case are the Obama administration, the NAACP and a host of business and advocacy groups taking different sides in the national debate over "disparate impact" -- the idea that some government and corporate practices, while not intentionally discriminatory, amount to the same thing.

Facing what many Democrats view as an increasingly conservative, pro-business Supreme Court, Coleman and others fear that a Supreme Court showdown with the landlords could produce a Pyrrhic victory for St. Paul that weakens the notion of "disparate impact" in civil rights enforcement -- hardly the result Coleman wants.

Among those counseling caution was former Vice President Walter Mondale, who sponsored the Fair Housing Act as a U.S. senator from Minnesota in the 1960s.

"There was a risk that the Supreme Court would find that the disparate impact provisions of the Fair Housing Act, which have been essential all the way through, would be found unconstitutional," he said.

"That would largely de-fang the Fair Housing Act."


The case, titled Magner vs. Gallagher, mirrors a long history of tensions between housing officials in the Twin Cities and "problem" landlords who find themselves on the firing line for the decrepit conditions of some of the affordable housing they provide in low-income neighborhoods.

"It's very much a battle," said William McGaughey, a Minneapolis landlord and organizer in the Metro Property Rights Action Committee, which supports the St. Paul landlords' suit. "It's been built into the system for a long time that renters are inherently undesirable."

It's been a legal fight notable for its unlikely partnerships, with inner-city property owners sometimes getting backup from tenant rights advocates.

"The question comes as to whether the enforcement process is really aimed at getting housing up to a fair and decent level, or whether it's really aimed at thinning out the low-income population in certain areas," said Peter Brown, a volunteer attorney with the Minnesota Tenants Union.

But others see the landlords' claims as a sham. In a brief filed by the Eagle Forum in support of the city, Lawrence Joseph wrote, "It is troubling on several levels that the landlord(s) in this action seek to deflect enforcement of housing codes designed to protect tenants by relying on their tenants' anti-discrimination rights."

But the support of right-leaning groups like the Eagle Forum also has fed the fears among some liberals that the landlords' case offered conservatives on the high court a prime opportunity to weaken civil rights protections considered vital on the left.

"It's so full of irony that landlords who have been under tremendous pressure for code violations could somehow morph this case into a fair housing issue," Mondale said.

Under the city's decision to withdraw their Supreme Court petition, the landlords -- who have agreed to the withdrawal -- would still get their day in court. The move clears the way for a trial in a federal court in Minnesota, where their case was summarily dismissed in 2008. That dismissal prompted a series of appeals that led to the nation's high court.

City Attorney Sara Grewing said she was confident that she could defend the city's code enforcement at trial without the baggage of a potential Supreme Court precedent.

"We will achieve the same result in trial that we would have through the completion of the appeal," she said.

Where that leaves LaChaka Cousette is unknown. After her duplex was condemned in 2002, she and her children bounced around between relatives and emergency shelters, where a son eventually was molested.

Caught in the middle, she told the lawyers in a 2007 deposition, the experience had been a "nightmare."

Kevin Diaz is a correspondent in the Star Tribune Washington Bureau.