Attorneys wanting the U.S. Supreme Court to elaborate on whether disparate impact claims can be successfully filed under the Fair Housing Act may get another chance with a new case called Mount Holly v. Mount Holly Gardens Citizens in Action Inc., according to a legal report from Ballard Spahr law firm.

The Mount Holly case ties back to a lawsuit filed by residents in New Jersey who pushed back against a redevelopment plan for a state township, saying the redevelopment would have a disparate impact on minorities by creating a community they could no longer afford. Their suit, which was initially filed with the U.S. federal court, claims the plan to redevelop the township will have a disparate impact on minorities, thereby violating the Fair Housing Act.

The government originally built the Mount Holly area as a housing development for military personnel stationed nearby. There were nearly 400 housing units on several multifamily properties.Today, many residents have moved on and many properties are demolished. The residents who stayed charge that buy-out offers are below market value and seek to block redevelopment. Blight abounds.

A district court dismissed the case, saying a disparate impact claim was never established, but the Third Circuit Court of Appeals overturned the lower court's ruling saying a prima facie case of disparate impact under the Fair Housing Act was made.

The New Jersey township has now filed a petition with U.S. Supreme Court asking them to grant certiorari (or accept the case). It's unknown if the case will actually be accepted by the court.

If it is accepted, analysts with Ballard Spahr believe it will be Magner v. Gallagher part two. The Magner case was a disparate impact suit scheduled to be heard by the U.S. Supreme Court in February of this year, but it was dumped from the Supreme Court's docket in February.  It also addressed the question of whether disparate impact claims are available under the Fair Housing Act. If the latest case is accepted, it could serve as an adequate replacement, allowing attorneys to get clarity on disparate impact claims under the FHA, Ballard Spahr said.

Ballard Spahr sent out an advisory on the case saying, "Mount Holly’s petition to the Supreme Court focuses on the purely legal question of whether such disparate impact claims are permissible under the Fair Housing Act."

kpanchuk@housingwire.com