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Assisted Living Associates of Moorestown, L.L.C. v. Moorestown Township

996 F. Supp. 409 (D. N.J. 1998)

ZONING; FAIR HOUSING—The nature and time of passage of a local ordinance that would have barred development of an assisted care living facility appeared to be motivated by a discriminatory purpose and could not be applied to a proposed project even if its developer had not yet applied for a variance.

A developer of an assisted living facility moved for a preliminary injunction under the Fair Housing Act (FHA), demanding a reasonable accommodation to allow construction of the facility. The proposed use was permissible under then-applicable zoning laws. When the developer cleared all other necessary regulatory hurdles, the municipality passed a zoning ordinance that effectively spot zoned the proposed use out of the chosen area and imposed special requirements on the developer. The municipality argued that the developer did not have standing to bring this suit because it had not yet applied for a variance. Witnesses for the municipality testified that it was “extremely unlikely” that a variance would be granted.

Relying on prior New Jersey decisions, the United States District Court found no requirement that one must make futile gestures in order to establish the certainty and finality required to meet the ripeness requirement. The Court also found that the developer would endure unnecessary delay and expense if consideration of this matter were withheld on ripeness grounds. Additionally, since the New Jersey Department of Health certified that there was a need for an assisted living facility, further delay was not in the public interest. Citing Rycoline Products v. C&W Unlimited, 109 F.3d 883 (3d Cir. 1997), the Court also concluded that the entire controversy doctrine did not preclude this federal suit even though a state action was pending. The Court held that this litigation was not duplicative of the state action, and cited the absence of any res judicata effect of the state action. Relying on prior United States Supreme Court decisions, the municipality argued that the Court should abstain from deciding this case because of the implication of important state interests in the state proceeding, and the opportunity to raise constitutional issues there. Younger v. Harris, 401 U.S. 37 (1971). The Court held that Younger abstention was not warranted, and stated that this lawsuit was not an attempt by the developer to do an end run around state enforcement efforts, but was simply the developer asserting its federal rights in a federal court. Furthermore, the developer was not required to exhaust all federal administrative remedies with the Department of Housing and Urban Development.

Having disposed of all procedural challenges to the developer’s suit, the District Court then considered whether the developer was entitled to its preliminary injunction and an exemption from the new ordinance. The developer claimed a violation of the FHA, which may be proven by disparate treatment (i.e., intentional discrimination), disparate impact, or a refusal to make reasonable accommodation. The District Court found a strong possibility that the ordinance was motivated by a discriminatory purpose. Therefore, it did not matter whether the developer could prove that the timing and content of the ordinance were the result of intentional discrimination or just that it disparately impacted the developer. The Court held that the developer successfully demonstrated a likelihood of success because its requests to the municipality were reasonable, and because the municipality had made similar accommodation for other developments in exchange for multi-million dollar contributions to a municipality fund. In this case, it was enough that the developer agreed to assume the municipality costs of constructing the septic system. The Court concluded that construction of the facility would not substantially or fundamentally alter the nature of the municipality’s zoning scheme or unduly burden its public facilities. Although New Jersey has a “time of decision” rule allowing new ordinances to be applied to pending applications, the Court stated that the municipality “pulled the rug out” from under the developer by passing an ordinance removing assisted living from the list of permissible uses. Given the strong likelihood of success on the merits of the FHA claim, the Court found that a presumption of irreparable harm was warranted. Additionally, the potential economic damage to the municipality was outweighed by the potential harm to the developer. The suspicious timing of the ordinance, the testimony by the municipality’s witnesses, and the denial of a reasonable accommodation led the Court to conclude that the developer’s request for a preliminary injunction should be granted. The Court also exempted the developer from the ordinance, opining that such relief was reasonable and necessary to afford them equal housing opportunities.

In April, 1998, the District Court heard motions for reargument and concluded that reargument was not justified because it had previously and properly considered all available evidence.


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