U.S. Supreme Court Agrees to Hear Mount Holly Case

Scarinci hollenbeck malpracticeThe New Jersey municipality of Mount Holly will take center stage before the U.S. Supreme Court next term. The justices have agreed to consider Mount Holly v. Mount Holly Gardens Citizens in Action, which centers on whether disparate impact claims can be brought under the Fair Housing Act.

The Fair Housing Act makes it unlawful “[t]o refuse to sell or rent after the making of a bona fide offer . . . or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.” Disparate impact refers to policies or practices that are not overtly discriminatory, but still have a discriminatory effect on a certain protected classes of people.

The case involves the Township of Mount Holly’s plan to redevelop a blighted residential area known as the Gardens. The plan called for demolishing the neighborhood and building new, significantly more expensive housing units. Many Mount Holly residents objected to the redevelopment, arguing that they would no longer to be able to afford to live in the township. A group of residents eventually filed suit to prevent the redevelopment, alleging that the plan violated the Fair Housing Act by having a disparate impact on minorities.

As summarized by the Supreme Court, the Third Circuit Court of Appeals concluded that the residents presented a prima facie case under the Fair Housing Act because the municipality sought to redevelop a blighted housing development that was disproportionately occupied by low and moderate income minorities and because the redevelopment sought to replace the blighted housing with new market rate housing which was unaffordable to the current residents within the blighted area. The ruling was significant because the Third Circuit further held that a prima facie case had been made despite the fact that there was no evidence of discriminatory intent and no segregative effect.

On appeal before the U.S. Supreme Court, Mount Holly argues that unlike other federal anti-discrimination laws, the Fair Housing Act was not intended to allow for disparate impact claims. The township further argues that allowing such suit to proceed would leave municipalities open to significant liability for otherwise lawful activities. “Allowing disparate impact claims under the FHA would render illegal many legitimate governmental and private activities designed to promote the general welfare of the community,” the writ for certiorari argues.

We will be closely following this case, which will be heard sometime during the October 2013 term. We encourage you to check back for updates.

For more information about this case or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.

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