Jeramey Jannene
City Hall

Milwaukee Reloads Lawsuit Howitzer

City continuing to fight lawsuit claiming it created containment zones for the poor.

By - Jun 1st, 2023 08:57 am
Clark House, 933 N. 24th St. Photo by Jeramey Jannene.

Clark House, 933 N. 24th St. Photo by Jeramey Jannene.

Milwaukee is reloading its metaphorical howitzer and anticipates firing it at the federal courthouse.

On Tuesday, the Common Council unanimously authorized spending an additional $65,000 on outside attorneys to fight a federal lawsuit that alleges the city has used federal funding to create near-lawless “containment zones” that concentrate poverty and yield “second-class citizens.”

In allocating an initial $125,000 in August, area Alderman Robert Bauman called the city’s legal strategy the equivalent of “literally getting out a howitzer to kill a fly.” The city hired Foley & Lardner and one of the firm’s newest partners, former U.S. Attorney Matthew D. Krueger, to defend itself.

The city once expected it would be defending itself against Krueger’s former employer. the U.S. Department of Justice. The council, with virtually no comment on the record, called a special meeting in July to consider spending $250,000 to defend the city against a sealed complaint, then canceled the meeting as the DOJ quietly backed off.

The lawsuit is now being brought forward by James Dieter and Karen Schwenke. The former lives in a historic mansion on W. Kilbourn Ave. in the alleged zone, while the latter is a Shorewood resident who owns three rental properties on N. 23rd St.

Bauman, in a Judiciary & Legislation Committee meeting on May 22, asked deputy city attorney Robin A. Pederson if the city could pursue a frivolous claim defense against the plaintiffs to recover the money. “This is getting out of control, we keep winning except we keep paying in essence,” said Bauman. He previously called the claims “totally bogus.”

Pederson said he didn’t immediately know if the city could pursue cost recovery, but that it needed to continue to defend itself. The city and its co-defendants, including the Housing Authority of the City of Milwaukee and Milwaukee County, were successful in a motion to dismiss the lawsuit for “failure to state a claim.” But it was granted by Judge J.P. Stadtmueller without prejudice, allowing the plaintiffs to re-file with more detailed claims that allege specific violations of federal law. “We will see where that goes,” said Pederson.

The amended, 90-page complaint was filed two days later, May 24. A copy of it is available on Urban Milwaukee. A copy of the original, 46-page complaint is also available.

“Within the containment zones, zoning ordinances and building codes are ignored, development is discouraged, densification is compounded rather than reduced, community involvement is disregarded, crime is permitted, and community plans are overlooked,” says the 46-page complaint, originally filed in February and unsealed in August. “Containment zones were and are the City’s answer to housing its disabled, minority, and low-income population.”

Dieter and Schwenke are represented by attorney Shannon D. McDonald of McDonald & Kloth. McDonald’s law partner, Christopher M. Kloth, represents the Chinese ownership group of the former Northridge Mall in that lawsuit.

The claim alleges that the two purchased their properties based partly on the city’s 2004 Near West Side Comprehensive Plan. The area plan, similar to those covering the rest of the city, is intended to guide future land use strategies. But the complaint says that the city instead created a containment zone to concentrate poverty in the area, misusing federal funds in the process.

The complaint centers on the Clark House, a series of five rooming houses on the 900 block of N. 24th St. Dieter lives just west of the complex and alleges the city has ignored several violations, including the transfer of the property from owner Anthony Katchever to ProBuColls Association without immediately securing new licenses. Schwenke’s rental properties are one block southeast. Bauman lives five blocks west.

The Clark House includes five contiguous properties, 933 N. 24th St.939 N. 24th St.943 N. 24th St.947 N. 24th St. and 2424 W. Kilbourn Ave.


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Related Legislation: File 230066

Categories: City Hall, Real Estate

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