Despite the pending settlement discussions, the Township of Mount Holly has filed its opening brief in the U.S. Supreme Court. The question presented in Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc. is whether disparate impact claims are cognizable under the Fair Housing Act (FHA). In the case, the Township’s plan to redevelop a residential area was challenged as having a disparate adverse impact on minorities. Ballard Spahr is representing one of the defendants in the case.
In its brief, the Township argues that the FHA’s text prohibits only “purposeful discrimination,” contrasting the FHA’s text with the text of other federal statutes in which Congress explicitly provided for disparate impact liability. The Township argues that its reading of the FHA is supported by the FHA’s statutory context and history and the FHA’s 1988 amendments. It also argues that HUD’s interpretation allowing disparate impact claims under the FHA is not entitled to Chevron deference because it conflicts with the FHA’s plain language.
The Township makes the further argument that even if the court finds the FHA’s text ambiguous, there are “special reasons” why the FHA should not be interpreted to permit disparate impact claims. According to the Township, if they face disparate impact claims, local governments would be required to account for race when adopting redevelopment plans. The Township asserts that this would result in distorted incentives for local policymakers that would undermine the FHA’s core objectives because (1) the cost and delay associated with disparate impact litigation could severely reduce the effectiveness of a redevelopment plan; (2) there would be strong political and economic incentives to build inefficiencies into a redevelopment plan to prevent a disparate impact claim, such as unnecessarily expanding a redevelopment zone to include areas with different racial demographics; and (3) the prospect of disparate impact suits may deter local officials from taking any action in minority-predominated blighted areas.
A merits brief supporting the Township was filed by Triad Associates, Inc., which had been named as a defendant in the underlying lawsuit challenging the Township’s redevelopment plan. Triad had been retained to assist residents with the relocation activities necessitated by the redevelopment plan. In its brief, Triad tracks the arguments made by the Township and also argues that as a private contractor, it cannot be held liable for local government decisions.