With highly anticipated decisions on affirmative action and voting rights imminent, the justices added a case to their calendar for the fall that involves the Fair Housing Act, which bars discrimination on the basis of race, among other categories, in residential property sales and rentals. The issue in the case is whether it is enough to show that a practice has a disproportionate effect on a group or whether there must be proof of intent to discriminate.
The outcome also could affect other laws, including one that prohibits discrimination in lending and is enforced by the Consumer Financial Protection Bureau.
African-American and Hispanic residents of a neighborhood pegged for demolition and redevelopment in Mount Holly, N.J., sued to block the project, saying it targeted a predominantly minority area.
Unlike other anti-discrimination laws, the housing act does not explicitly cover disparate impact claims.
The housing law prohibits discrimination in all sorts of transactions involving real estate and applies to banks and mortgage companies as well as governments, like the one involved in this case.
The Obama administration tried to ward off high court review by telling the justices that the Housing and Urban Development Department has recently adopted a new regulation to deal with the sorts of claims at issue in the case and that no federal appeals court has yet addressed the new rule. The administration also said that 11 federal appeals courts have held that the law does allow for claims based on the results of a project or practice, not just intentional discrimination.
The court originally agreed to take up the issue in 2011 in a case from St. Paul, Minn., questioning whether the city's enforcement of its housing code in low-cost rentals disproportionately occupied by African-Americans violated the fair housing law. But Justice Department lawyer Thomas Perez, now nominated to serve as Labor secretary, prevailed on St. Paul to withdraw its appeal because the outcome could have harmed the department's approach to housing discrimination cases.
Republicans have criticized Perez for his role in a deal between the department and St. Paul that also kept the federal government out of two whistleblower lawsuits against the city that could have returned millions of dollars in damages to the federal government.
In Mount Holly, the township has been trying since 2002 to clear the Mount Holly Gardens neighborhood, described by the municipality as "problematic" for many years because of high crime, poor maintenance and overcrowding. Blacks and Hispanics made up three-quarters of the area in the 2000 census. In all, Mount Holly is about 60 percent white.
The residents and former residents who sued claimed that much higher percentages of Mount Holly's black and Hispanic households would be affected by the redevelopment than would white households. Conversely, a far larger share of white residents would be able to afford the new housing, the plaintiffs said.
The 3rd U.S. Circuit Court of Appeals in Philadelphia agreed that the residents had made enough of a claim to go to trial on the disparate impact of the township's plan. But the court also found that there was insufficient evidence of intentional discrimination.
The case, Township of Mount Holly v. Mount Holly Gardens Citizens in Action, 11-1507, will be argued in the fall.
Copyright 2013 The Associated Press.