Minneapolis landlord ordered to reimburse State $1M in legal fees after violating tenants’ rights

Hennepin County court makes award after November 2021 ruling that Steven Meldahl engaged in ‘brazen and deplorable illegal business conduct,’ allowed tenants to live in infestations ‘of Biblical plague proportions’

March 23, 2022 (SAINT PAUL) — Today, a Hennepin County court ordered Minneapolis landlord Steven Meldahl to reimburse the State of Minnesota more than $1 million for its costs of investigating and prosecuting Meldahl’s violations of Minnesota’s landlord-tenant and consumer-protection law.

Minnesota Attorney General Keith Ellison filed suit against Meldahl in October 2019. In November 2021, the court ruled that Meldahl knowingly and in bad faith violated the rights of 267 families who rented from him, primarily in North Minneapolis. Meldahl was found guilty of charging tenants more than 8% in late fees and preventing his tenants from having their homes inspected by the City of Minneapolis. The court found then that Meldahl had engaged in “brazen and deplorable business conduct,” citing as just one example that he allowed tenants to live with wild-animal infestations “of Biblical plague proportions.”

In last November’s ruling, the court ordered Meldahl to pay a fine of $133,500 for his “disrespectful and unlawful treatment of vulnerable low-income residential tenants.” At that time, the court also said the State could petition to recover its costs, which the court ruled on today.

“Most landlords are doing the right thing by their tenants, and I thank them for it. But let this ruling be a strong deterrent to those landlords who are abusing their tenants and the people of Minnesota: if you do not stop, we will hold you accountable with all the tools the law allows,” Attorney General Ellison said.

Today’s fee order recognized the substantial undertaking by the Attorney General’s Office and reflects the complexity of the case. As the court wrote in the order: “This case entailed taking on pattern and practices by a recalcitrant landlord who openly bragged for years that he better understood the housing laws and court processes than the regulators and other court participants. The Attorney General’s Office had to compile information regarding widespread violations of consumer protection laws that could be documented in affidavit form prior to suit to establish support for emergency injunctive relief.” (p. 8)

In ruling that Meldahl must pay for the State’s expenses in pursuing this action, the court stated that fee awards are “a recognition by policy makers that consumer protection litigation is important.” (p. 8) The court ordered Meldahl to reimburse the State for its time investigating and bringing Meldahl to trial, awarding the State $1,010,370 in attorney’s fees, $48,637.50 in costs of investigation, and $13,811.24 in costs and disbursements, for a total of $1,072,818.74. 

The Attorney General’s Office does not keep the awarded costs. By law, they will be deposited into the State’s General Fund.