Fair Housing Act Case Settles…Again

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Lisa Soronen is the Executive Director of the State and Local Legal Center and a regular contributor to CitiesSpeak.

For the second time in two years, the parties have settled a dispute before the Supreme Court over whether the 1968 Fair Housing Act (FHA) allows plaintiffs to bring disparate impact claims.  These claims are brought when actions are perceived to have a discriminatory effect on specific groups, either as an intended or unintended consequence. Local governments across the country have been subject to these claims.

The FHA makes it unlawful to refuse to sell or rent a property to any person because of race, color, religion, sex, familial status, or national origin.  The question presented in Mount Holly Gardens Citizens in Action v. Township of Mount Holly, which has now been removed from the Supreme Court’s December docket due to the settlement, was whether a policy or action that disproportionately affects a protected class of citizens but does not intentionally discriminate on the basis of race or other factors can give rise to an FHA claim.

In this case, residents sued the Township of Mount Holly, NJ over a plan to redevelop a low-income minority neighborhood on the basis that it violated the FHA, because the redevelopment would disproportionately impact the township’s minority population.

All of the federal circuit courts have ruled that disparate impact claims are recognized under the FHA, and this year the Department of Housing and Urban Development adopted final rules stating the same. The USA Today reports that the financial services industry has vowed to find another case to bring to the Supreme Court — one that won’t settle.

It is widely speculated that the current Supreme Court would hold that disparate impact claims cannot be brought under the FHA.

The International Municipal Lawyers Association filed a brief on behalf of the Township.