Defendant, Township of Mount Holly, proposed a redevelopment plan that would remove existing homes in the Gardens neighborhood, which is primarily low income housing, and replace these structures with housing options that were more expensive. The plaintiff community group filed suit claiming the plan violated anti-discrimination laws, but the District Court granted summary judgment in favor of the Township. The U.S. Court of Appeals, Third Circuit reversed, finding the District Court failed to apply the correct standard and failed to provide reasonable inferences in favor of the plaintiff.
The plaintiff community group first sought relief from the Township’s plan in state court. The New Jersey courts found no violation of state law and also ruled that the antidiscrimination claims were not ripe as the plan had not yet been implemented. The plaintiffs then brought suit in federal court, alleging violations of the Fair Housing Act, Title VIII of the Civil Rights Act 1968, the Civil Rights Act of 1866 and the Equal Protection Clause of the 14th Amendment. During the course of the state and federal litigation, much of the property subject to the plan had been acquired and demolished by the Township in order to remove the blighted neighborhood, clearing the land for future development under the plan. Even with relocation funds and resources being made available, many of the displaced residents were forces to move outside the Township. Many of these displaced residents where low-income and African-American or Hispanic.
The plaintiffs could have made a prima facie case of discrimination if they meet the disparate impact standard. This standard requires less than intentional discriminatory conduct, being satisfied where there is a “necessary and foreseeable consequence of furthering segregation[.]” This can be found where the effect of the government act disproportionately impacts a certain group of people. In this case, the Third Circuit found that such a disproportionate impact was present as the demolition of the neighborhood affected African-Americans residents eight times more likely than White residents, and it affected Hispanic residents eleven times more likely than White residents. Additionally, White residents of the county would be much more able to live in the area once the plan is finalized. Given this disproportionate effect, the Third Circuit found there was a disparate impact and a prima facie case.
In addition to the District Court’s failure in not finding a disparate impact, which would have precluded summary judgment in favor of the Township, the Third Circuit also corrected numerous instances in which the District Court made incorrect inferences that should have been made in favor of the plaintiffs. Given these deficiencies, the summary judgment in favor of the Township was vacated, and the matter was submitted back to the District Court for further pleadings and discovery. At this point, the parties and the court would need to explore whether there was a legitimate government interest in the redevelopment plan and if there where alternatives to the plan that would have had less of a discriminatory affect on the Township’s minority residents.
Mt. Holly Gardens Citizens in Action, Inc. v. Township of Mount Holly, 658 F.3d 375 (3d Cir. 2011),
The opinion can be accessed at: http://www.ca3.uscourts.gov/opinarch/111159p.pdf.
