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Will Mount Holly go the distance where Saint Paul did not?

Posted in Fair Lending

The Township of Mount Holly, New Jersey has filed a petition for certiorari in the U.S. Supreme Court raising the issue of whether disparate impact claims are available under the Fair Housing Act.  You can see a copy of the petition here.  The petition has been docketed and given case number 11-1507 in the Supreme Court.  Here’s a link to the docket page so you can follow the case.  Ballard Spahr represents one of the non-township defendants in the case.

The issues raised in the Mount Holly petition are virtually a carbon-copy of those in Magner v. Gallagher, the case which would have decided the disparate impact issue but for the City of Saint Paul’s last-minute decision to dismiss its appeal. 

The CFPB, joined by HUD and the Department of Justice, has insisted recently that disparate impact claims are viable under the Fair Housing Act and ECOA. If the Court agrees to hear the Mount Holly case, these agencies will have the opportunity to test their interpretations of these statutes against the plain text of the statutes themselves.  As I predicted before Magner was dismissed, I strongly suspect that the Supreme Court will find an absence of any plain-language support for disparate impact claims, and the Court’s recent decision in Freeman v. Quicken Loans makes me even more doubtful that the Court will defer to the government’s views on this issue.

Speaking of which, this case will present yet another opportunity for HUD’s proposed disparate impact rule under the Fair Housing Act to interact with the Court’s decision on granting certiorari.  Recall that the proposed rule was released just over a week after certiorari was granted in Magner.  Will the final rule come out as the Court considers the Mount Holly case?  I think it’s very possible.

Stay tuned and watch the Mount Holly case to see if the opportunity lost in Magner will be regained in this case.