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3rd Cir Disparate Impact FHA Case to Be Heard by SCOTUS

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By Brett Snider, Esq. on June 19, 2013 10:01 AM

The Supreme Court will soon rule on a Third Circuit decision defining the role of disparate impact claims under the Fair Housing Act (FHA), after the Court accepted certiorari on Monday.

The case involves a New Jersey subdivision with a traditionally non-white population that faced a significant change in demographics once the town decided to redevelop the area and housing at market rate, reports Reuters.

How will the Supreme Court view the evaluations of the Third Circuit when they decide this case in 2014?

Question to Be Taken By SCOTUS

Although the Third Circuit and district court tackled a number of issues, including those about burden shifting between parties, the Supreme Court has only granted cert. to the general question: "[a]re disparate impact claims cognizable under the Fair Housing Act?"

In Township of Mount Holly v. Mt. Holly Gardens Citizens In Action, Inc., et al., the Third Circuit determined that the redevelopment plan would have statistically affected blacks and Hispanics about 8 - 11 times more than white residents, which was sufficient to make a prima facie case under the FHA.

The crucial question to be evaluated by SCOTUS is whether the Third Circuit was correct in allowing this disparate impact claim, as the Circuits are split on the issue.

3rd Circuit Support for Disparate Impact Cases

The Mt. Holly Court relied heavily on its 1977 decision in Resident Advisory Bd. v. Rizzo, in which they considered a waiting list for public housing in Philadelphia which was 85% black, and the city cancelling the public housing project would have a "racially disproportionate effect" adverse to blacks.

Rizzo seems to stand for the proposition that statistical evidence of disparate racial impact in housing projects can be proven with ... statistics.

In addition, the Third Circuit strongly chastises the lower court for misapplying disparate impact analysis; reminding them that facially neutral laws which more harshly burden protected groups (via statistical showing) are within the ambit of the FHA.

Possible Stumbling Points

The Supreme Court is likely to address the Third Circuit's treatment of their decision in City of Memphis v. Greene, a case which denied disparate impact relief where ethnic neighborhoods might be affected.

Although this case dealt with "badges of slavery" under the 13th Amendment, this case is otherwise uncomfortably on point, with the Greene court arguing that this kind of disparate impact was an "inevitable consequence" of urban neighborhoods having common racial makeup.

It seems time that the Supreme Court did some updating on disparate impact cases, and the Third Circuit has softballed this one in for them.

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