The U.S. Supreme Court Grants Cert To Decide Whether The Fair Housing Act Allows For Disparate Impact Claims In Township Of Mount Holly v. Mt. Holly Gardens Citizens In Action, Inc.

On June 17, 2013, the U.S. Supreme Court granted a petition for certiorari in a case that will decide whether "disparate impact" liability — liability based solely on a practice's alleged discriminatory effect, though the actor had no intent to discriminate — can be imposed under the Fair Housing Act. The Court took the case despite urging from the federal government to decline it. The Court appears poised to reject disparate impact liability.

This is not the first time the Court has granted review in a case raising the viability of disparate impact claims under the Fair Housing Act. The last time the Court took the issue, the petitioner withdrew the case prior to argument. There is some evidence that officials in the U.S. Department of Justice may have encouraged that decision in order to prevent the Court from ruling. It remains to be seen whether a similar outcome will occur here.

The Decision Under Review

The case now before the Supreme Court is Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc. It arose from efforts by the Township of Mount Holly, in Burlington County, New Jersey, to redevelop a blighted neighborhood known as the Gardens. The redevelopment plan called for the demolition of all of the existing homes in the Gardens, to be replaced by homes of higher value. Most of the residents of the Gardens were low to moderate income minorities, many of whom would not be able to afford the new homes in the redeveloped neighborhood.

Residents of the Gardens brought suit in federal district court in New Jersey, alleging that the redevelopment plan discriminated against minorities in violation of the Fair Housing Act. The district court granted summary judgment in favor of the township, finding that the redevelopment plan was not discriminatory "because 100% of minorities will be treated the same as 100% of non-minorities in the Gardens," given that the plan required the demolition of all of the homes. Mt. Holly Garden Citizens in Action, Inc. v. Township of Mount Holly, 658 F.3d 375, 383 (3d Cir. 2011) (describing district court opinion). The citizens appealed to the U.S. Court of Appeals for the Third Circuit, which reversed the district court. The Third Circuit criticized the district court's "conflation of the concept of disparate treatment with disparate impact." The Third Circuit explained that the township's redevelopment plan potentially violated the Fair Housing Act not because it deliberately treated minority...