U.S. Supreme Court may hear Mount Holly case

Though the U.S. Supreme Court agreed Monday to take on the Mount Holly housing discrimination case, some lawyers involved say that settlement talks have turned serious and that it may become moot for the justices to step in.

For the first time, after five years of litigation, both sides are scheduled to sit together Thursday with federal Magistrate Judge Joel Schneider in Camden to discuss resolving the case. That includes about 20 low-income African American and Hispanic households that sued the township in 2008, claiming the town's plan to demolish their rowhouses in the Mount Holly Gardens and replace them with market-rate housing was discriminatory.

"We definitely have had some forward progress," said Kenneth Goldman, a litigation director with South Jersey Legal Services, which represents the homeowners and a few renters.

"We're looking into resolving the issues. . . . Those are our marching orders from the township council," said George Saponaro, the town's solicitor. He noticed significant movement, he said, in the last three to four weeks, just after the attorneys met with the magistrate judge.

The Supreme Court said it would review the case after it returns from a summer recess. Mount Holly Citizens in Action v. Mount Holly Township was heading to trial as discovery was being completed.

Initially, a U.S. District Court judge tossed out the homeowners' claims, but the U.S. Court of Appeals for the Third Circuit ruled they had a right to a trial to see if the redevelopment plan disproportionately affected minorities. Seventy-five percent of the homeowners who lived in the 320-unit in the Gardens were minorities, according to the 2000 census.

The township appealed, and the high court would focus on whether minorities may sue under the Fair Housing Act when a policy has a "disparate impact" on them even if there is no proof of intentional discrimination.

The case has attracted national attention because a ruling could set a precedent on whether a housing policy may be subject to litigation if it results in unintended discrimination or has the potential to deny housing based on race, religion, sex, or national origin.

Such claims have been used in housing discrimination cases for decades, though the law does not explicitly address this. Appeals courts - 11 of them - have unanimously upheld the validity of such claims.

But in 2011, the high court agreed to take up the issue in a case that questioned whether St. Paul, Minn.'s enforcement of low-cost rentals disproportionately affected minorities.

Justice Department lawyer Thomas Perez, now nominated to serve as labor secretary, then prevailed on St. Paul to drop its appeal because the outcome could have harmed the department's approach to housing discrimination cases, according to the Associated Press.

The case was withdrawn shortly before the high court was scheduled to begin its review.

M. James Maley Jr., Mount Holly's special counsel, resurrected the issue, arguing in his appeal that the town's redevelopment plan was designed to get rid of blight and crime in the Gardens. He said disparate-impact claims make it nearly impossible for a town to improve troubled areas with a large minority population.

"We're pleased the court has taken the case. . . . It's an issue that's been debated in a lot of places across the country," Maley said.