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Housing case before U.S. justices close to settlement: lawyer

By Lawrence Hurley and Joan Biskupic

WASHINGTON (Reuters) - A case before the Supreme Court that could limit housing discrimination claims is close to a settlement, potentially removing an opportunity for the justices to rule on the matter.

Carter Phillips, a Washington lawyer for Mount Holly, New Jersey, one of the parties in the case watched by the insurance and banking community, said on Thursday that an agreement appeared close but was not confirmed. Both sides have been working for months on a settlement.

The Wall Street Journal reported on Thursday that a tentative deal had been reached.

If the case settles, it will mark the second time in two years that civil rights advocates and others have worked to keep a housing-discrimination case away from a Supreme Court dominated by conservatives.

In June, the court agreed to consider whether Mount Holly's plan to demolish lower-income housing and replace it with new units, some available at market rates, violated the 1968 Fair Housing Act because it would be less affordable for minorities.

The court is scheduled to hear oral arguments in the case on December 4. If the parties settled, they would inform the court and arguments would be canceled.

In weighing the lawsuit filed by Mount Holly Gardens Citizens in Action against the township of Mount Holly, the court could decide whether the act allows for so-called "disparate impact" claims.

Such claims target seemingly neutral practices that have a discriminatory effect. For decades such claims have been a way for lawyers representing African Americans and other minorities to attack policies that do not directly discriminate yet have the effect of putting certain groups of people at a disadvantage.

Phillips said he had been told by township officials that they were close to agreement. Yet he cautioned that he did not expect any deal to be finalized before the end of the week. Any agreement would have to be accepted by the plaintiffs and also ratified by the township council.

Olga Pomar, a lawyer with South Jersey Legal Services who represents the residents, said in an email that "negotiations are ongoing and continuing."

James Maley, another lawyer for the town, said in an email: "Talks are ongoing" and that the case had yet to settle.

INSURERS, BANKS FOLLOW CASE

The case is being closely watched by insurance and banking interests because of the effect if could have on similar types of disparate-impact claims made over lending and insurance policies.

The Fair Housing Act, passed by Congress to prohibit bias based on race in the sale or rental of housing and related services, does not explicitly allow disparate impact claims. The Supreme Court has never ruled on the issue.

The case could affect other laws the government has interpreted to allow disparate impact claims. For example, the Consumer Finance Protection Bureau has said it could make such claims over lending practices under the Equal Credit Opportunity Act.

The case is Township of Mount Holly v. Mount Holly Gardens Citizens in Action, U.S. Supreme Court, No.11-1507.

(Reporting by Lawrence Hurley and Joan Biskupic; Editing by Howard Goller and Cynthia Osterman)

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