                                                                                                                           Opinions of the United
1998 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


7-30-1998

NJ Coalition Rooming v. Mayor & Cncl Asbury
Precedential or Non-Precedential:

Docket 97-5483




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Filed July 30, 1998

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

NO. 97-5483

NEW JERSEY COALITION OF ROOMING AND BOARDING
HOUSE OWNERS; LOUIS COOK; JOHN E. BROWN;
LEONARD LEVY; CAROL WISE; BRENDA COPELAND;
MICHAEL BYRNE; BEVERLY DEMING; EUGENE HODAS
       Appellants

v.

MAYOR AND COUNCIL OF THE CITY OF ASBURY PARK;
THE CITY OF ASBURY PARK, A MUNICIPAL
CORPORATION OF THE STATE OF NEW JERSEY; MAYOR
AND COUNCIL OF THE TOWNSHIP OF NEPTUNE; THE
TOWNSHIP OF NEPTUNE, A MUNICIPAL CORPORATION
OF THE STATE OF NEW JERSEY; MAYOR AND COUNCIL
OF KEANSBURG; BOROUGH OF KEANSBURG, A
MUNICIPAL CORPORATION OF THE STATE OF
NEW JERSEY

MAYOR AND COUNCIL OF THE CITY OF ASBURY PARK;
THE CITY OF ASBURY PARK
       Defendants/Third-Party Plaintiffs

v.

STATE OF NEW JERSEY
       Third-Party Defendant

On Appeal From the United States District Court
For the District of New Jersey
(D.C. Civ. No. 94-cv-05134)
Argued: May 4, 1998

Before: BECKER, Chief Circuit Judge,
SCIRICA and COWEN, Circuit Judges.

(Filed July 30, 1998)

       ROBERT C.   GRIFFIN, ESQUIRE
        (ARGUED)
       Griffin &   Griffin
       415 Route   10
       Suite 7
       Randolph,   NJ 07869

       Attorney for Appellants,
       New Jersey Coalition of Rooming and
       Boarding House Owners; Louis Cook;
       John E. Brown; Leonard Levy;
       Carol Wise; Brenda Copeland;
       Michael Byrne; Beverly Deming;
       Eugene Hodas

       GLENN C. MOTYCZKA, ESQUIRE
        (ARGUED)
       JAMES J. HIGGINS, ESQUIRE
       Boyar, Higgins & Suozzo, P.A.
       10 Park Place, Suite 415
       Morristown, NJ 07960

       DONALD L. BEEKMAN, ESQUIRE
       47 Main Avenue
       P.O. Box 395
       Ocean Grove, NJ 07756

       Attorneys for Appellees,
       Mayor and Council of the Township
       of Neptune, and Township of
       Neptune

                                 2
       PETER VERNIERO, ESQUIRE
       Attorney General of New Jersey
       JOSEPH L. YANNOTTI, ESQUIRE
       Assistant Attorney General
       CHERYL R. CLARKE, ESQUIRE
        (ARGUED)
       Deputy Attorney General
       Office of Attorney General General of
        New Jersey
       Richard J. Hughes Justice Complex
       P.O. Box 112
       Trenton, NJ 08625

       Attorneys for Appellee,
       State of New Jersey

OPINION OF THE COURT

BECKER, Chief Circuit Judge.

The New Jersey Coalition of Rooming and Boarding
House Owners (the "Coalition"), which represents owners of
rooming and boarding houses ("R&B houses") in the
Neptune, New Jersey area, together with a number of
individuals who are residents of those R&B houses, sued in
the district court to have the Rooming and Boarding House
Municipal Licensing Law, N.J. Stat. Ann. S 40:52-9 et seq.
(the "Licensing Law" or the "Act"), and Neptune Ordinances
Nos. 1658 and 1661 (the "Ordinances"), declared invalid
under the United States and New Jersey constitutions, the
New Jersey Law Against Discrimination, N.J. Stat. Ann.
S 10:5-1 et seq. ("NJLAD"), and the Fair Housing
Amendments Act of 1988, 42 U.S.C. S 3601 et seq.
("FHAA"). Defendants are the Township of Neptune and the
State of New Jersey.1

The FHAA declares that it is unlawful "to discriminate
against any person in the terms, conditions, or privileges of
_________________________________________________________________

1. Originally, the City of Asbury Park and the Borough of Keansburg
were also named as defendants. Before trial, these defendants settled
with plaintiffs.

                                 3
sale or rental of a dwelling, or in the provision of services
or facilities in connection with such dwelling, because of a
handicap of -- (A) that person; . . . or (C) any person
associated with that person." 42 U.S.C. S 3604(f)(2).2 The
FHAA further provides that discrimination includes "a
refusal to make reasonable accommodations in rules,
policies, practices, or services, when such accommodations
may be necessary to afford such person equal opportunity
to use and enjoy a dwelling." 42 U.S.C. S 3604(f)(3)(B). It
also stipulates that "any law of a State, a political
subdivision, or other such jurisdiction that purports to
require or permit any action that would be a discriminatory
housing practice under this subchapter shall to that extent
be invalid." 42 U.S.C. S 3615.

Plaintiffs challenged a number of provisions in the Act
and Ordinances. The district court granted relief on several
of the plaintiffs' claims and invalidated portions of the Act
and Ordinances, specifically provisions that imposed
onerous inspection, licensing, bonding, and zoning
requirements. Defendants have not appealed from those
aspects of the district court's order. The court denied relief
on the plaintiffs' other claims because it determined that
they lacked standing in view of certain grandfathering
provisions in the Act. Plaintiffs seek here to overturn the
_________________________________________________________________

2. Plaintiffs assert, and the district court apparently found, that a
significant percentage of the residents of the R&B houses and a number
of the individual plaintiffs are handicapped individuals, many of whom
have been deinstitutionalized from state mental hospitals. New Jersey
contends that the FHAA does not apply because only a very small
percentage of handicapped persons live in R&B houses. It supports this
contention with statistics from certain government reports. New Jersey's
assertion is controverted, however. In Finding of Fact ("FOF") 14, the
district court found that a disproportionately high number of people in
R&B houses have disabilities. See New Jersey Coalition of Rooming and
Boarding House Owners v. Mayor and Council of the City of Asbury Park,
Civ. No. 94-5134, at *5 (D.N.J. Jul. 8, 1997). Similarly in FOF 15, the
district court cited legislative findings that R&B houses are occupied
primarily by the elderly, disabled and poor. See id. And in FOF 16, the
district court quoted several R&B owners who testified that most of their
residents were disabled or otherwise unable to care for themselves. See
id. The district court's finding that the FHAA applies here is thus
supported in the record.

                               4
district court's standing determination so that the court
may reach the merits of the remaining provisions,
especially the "distance and density" provisions, which limit
the number of new R&B houses that can be licensed in a
municipality and cap the total number of R&B house
residents to one-half of one percent of the total population
of each municipality in New Jersey. For reasons that will
appear, we conclude that the district court made
insufficient factual findings for us to review its standing
determination. Because there are several plausible theories
upon which standing may exist, we will vacate and remand
for further factual development and a new determination by
the district court regarding plaintiffs' standing.

To fully review this case, we must also address a number
of dispositive rulings on various aspects of plaintiffs' claims
that would be controlling on remand. In particular, we
examine the district court's decisions not to award plaintiffs
compensatory damages, punitive damages, or counsel fees,
and we highlight several statutory and constitutional claims
that may require further consideration by the district court.
In the end, we will reverse the district court's determination
that it need not award compensatory damages once actual
damages have been shown; we will affirm on the punitive
damages issue because the district court's factualfinding
that Neptune did not act outrageously or with reckless
disregard for plaintiffs' federal rights is not clearly
erroneous; and we will vacate and remand on the counsel
fees issue for de novo consideration because of confusion
surrounding certain procedural issues.

I.

The Act and Ordinances complained of here are the
progeny of the Rooming and Boarding House Act of 1979,
N.J. Stat. Ann. S 55:13B-1 et seq. ("RBHA") adopted by the
New Jersey Legislature "to provide for the health, safety and
welfare of all of those who reside in rooming and boarding
houses in the State. . . ." N.J. Stat. Ann. S 55:13B-2.
Specifically, the legislature found that because R&B house
residents were predominately elderly, disabled, and poor,
they required protection from building and safety hazards,
as well as from unscrupulous and predatory neighbors and

                               5
owners. See id. To accomplish this, the RBHA requires any
person who owns or operates an R&B house first to obtain
a license from the Commissioner of the Department of
Community Affairs (the "DCA"). See N.J. Stat. Ann.
S 55:13B-7(a). It also provides standards to ensure that
every R&B house is constructed in a manner that will
protect the health, safety, and welfare of its residents while
at the same time promoting a homelike atmosphere
appropriate to such facilities. See N.J. Stat. Ann. S 55:13B-
6. Those standards include, for example: safety fromfire;
safety from structural, mechanical, plumbing and electrical
deficiencies; adequate light and ventilation; physical
security; protection from harassment, fraud, and eviction
without due cause; clean and reasonably comfortable
surroundings; the adequate rendering of personal and
financial services in boarding houses; disclosure of owner
identification information; and maintenance of orderly and
sufficient financial and occupancy records. See id. To
ensure compliance with these standards, the regulatory
scheme provides for annual inspections by the State of all
licensed R&B houses. See N.J. Stat. Ann.S 55:13B-9.

In December 1993, New Jersey enacted the Licensing
Law, which gave the governing body of each municipality in
New Jersey the option of assuming from the State the
licensing responsibility for R&B houses. See N.J. Stat. Ann.
S 40:52-10. Upon exercising that option, a municipality
becomes responsible for ensuring compliance with State
and local laws and therefore for protecting the health,
safety, and welfare of the residents of those facilities. The
Act requires that municipality to create an authority, in
accordance with N.J. Stat. Ann. S 40:52-18, to assume the
State's former duty of investigating applicants and their
proposed R&B houses to determine, among other things,
whether the facilities in question "are in compliance with all
applicable building, housing, health and safety code
regulations." N.J. Stat. Ann. S 40:52-13(a). Also, the
licensing authority verifies that the applicant has never
been convicted "of a crime involving moral turpitude, or any
crime under any law of the State licensing or regulating a
rooming and boarding house" and has never had its license
revoked under the RBHA. N.J. Stat. Ann. S 40:52-13(b).

                               6
In early 1994, the Neptune Town Council, acting under
the authority vested in it by the Licensing Law, adopted two
Ordinances, Nos. 1658 and 1661, and assumed local
control over R&B licensing in Neptune. Ordinance No. 1661
established a "Site Licensing Board" consisting of three
persons and adopted virtually all of the essential elements
of the Licensing Law. Ordinance No. 1658 required, among
other things, that each R&B house owner secure a
Certificate of Inspection prior to leasing, renting, or
otherwise allowing the occupancy of any unit, room, or
rental dwelling space within its facility.

II.

The district court found that a number of provisions of
the Act and Ordinances violated the FHAA. The invalidated
provisions had required: (1) R&B house owners to get
Certificates of Inspection each time a new tenant occupied
a room in their house; (2) public hearings before the Site
Licensing Board would issue operating licenses to R&B
house owners; (3) R&B house owners to secure bonding to
cover relocation costs in the event that their R&B house
was forced to close; and (4) applicants for site licensing to
obtain zoning approvals for premises that had already been
shown to have been properly zoned. See New Jersey
Coalition of Rooming and Boarding House Owners v. Mayor
and Council of the City of Asbury Park, Civ. No. 94-5134, at
*34 (D.N.J. Jul. 8, 1997) ("District Court Opinion"). The
district court found that these provisions were freighted
with discriminatory intent, were unduly burdensome to
plaintiffs, and that the Township had failed to make
reasonable accommodations to allow handicapped persons
to live in the residences and communities of their choice.
See id. at 26-29. As we have observed, defendants have not
appealed those aspects of the district court's order that
invalidated portions of the Act and Ordinances.

With respect to the balance of their claims, however, the
district court ruled against plaintiffs. Most notably, on the
ground that plaintiffs lacked standing, the court did not
reach their claims challenging the distance and density
provisions of the Act. The district court also made several
other rulings that are perforce before us now. The court

                               7
found that it had discretion to award compensatory
damages but decided that this was an inappropriate case in
which to exercise that discretion because the R&B owners
(the only plaintiffs for whom the district court found any
standing) were not members of the protected group of
handicapped individuals. The district court also rejected
plaintiffs' claims for punitive damages in view of its
determination that defendants did not act with the requisite
outrageousness and reckless disregard of plaintiffs' federal
rights. Finally, the court failed to mention (and thus
effectively denied) plaintiffs' request for counsel fees and
costs as a prevailing party under the FHAA.

III.

As noted above, the district court refused to consider
plaintiffs' challenges to the distance and density provisions
of the Licensing Law on the grounds that plaintiffs lacked
standing to assert them. The distance provision states that
no license shall be issued for any R&B house when any
part of the boundary line of any other R&B house is within
1,000 feet (in the case of a municipality with a population
greater than 100,000, the standard may be increased to
2,000 feet). See N.J. Stat. Ann. S 40:52-14(c). The density
section provides that no license shall be issued that would
result in increasing the total number of persons authorized
to be residents in R&B houses within the municipality to:
(1) more than 100 in a municipality having a population of
20,000 or fewer, or (2) to more than one-half of one percent
of the population in any other municipality. See N.J. Stat.
Ann. S 40:52-14(b). Clearly, the evident purpose of both of
these provisions is to permit municipalities to limit the
number of R&B residents and/or homes within their
borders. Plaintiffs assert that this scheme is as patently
illegal as would be one that limited the number and/or
housing options of members of an ethnic group within a
particular municipality.

The ground upon which the district court found that
plaintiffs lacked standing was that the Act and the
Ordinances contained a "grandfather" clause that exempted
all existing R&B homes from application of the distance and
density provisions. See N.J. Stat. Ann.S 40:52-14(b) & (c)

                               8
("but nothing in this subsection shall warrant refusal of a
license or license renewal for premises where a rooming or
boarding house has been in lawful operation prior to the
enactment of this act"). The court reasoned that there was,
therefore, no way in which plaintiffs, all of whom are
owners or residents of existing R&B homes in Neptune,
could be harmed by these provisions. There are, however, a
number of other possible bases under which plaintiffs could
establish standing to challenge the distance and density
provisions, but these have either been inadequatelyfleshed
out in the record or lack sufficient factual findings by the
district court to facilitate our review. While there is an
extensive section of the district court's opinion labeled
"Findings of Fact," in reality, the numbered "findings" are,
for the most part, no more than recitations of various
witnesses' testimony.

First, plaintiffs maintain that there has been a decline in
the R&B housing stock in Neptune due to the distance and
density provisions of the Act, and that it will therefore be
difficult for disabled individuals to find lodging in the
future. There is evidence in the record to this effect. For
example, Ms. Andress testified that the Ordinances reduced
the number of R&B houses in the community. See District
Court Opinion, at *12. In addition, other evidence indicates
that current R&B owners, despite the grandfather clauses,
may have been detrimentally affected by the distance and
density provisions. Notably, Mr. Mumford testified that his
business volume and the financial rewards he could obtain
decreased because of the Act, see id. at 11, and Ms.
Andress opined that, although her R&B house was fully
rented, the Act and Ordinances hurt her because the value
of her property declined and consequently she could no
longer sell her property and retire as planned. See id. at 13.
Similarly, the Act and Ordinances preclude current owners
from expanding their facilities into adjacent lots because
only existing R&B houses are grandfathered. Finally,
plaintiffs adduced evidence that they are harmed not only
by the Act and Ordinances themselves, but also by the
hostile manner in which defendants administered them.
See id. at 12-13.

Although further factual development is necessary, the
evidence and theories just described might be sufficient to

                               9
establish standing by the R&B owners and/or the resident
plaintiffs to challenge the distance and density provisions of
the Act. However, because these possible bases for standing
may well be factually challenged and, at all events, have
been inadequately fleshed out in the record and lack
sufficient findings to facilitate our review, we will vacate the
judgment of the district court and remand for further
proceedings at which the plaintiffs will have the opportunity
to attempt to establish standing in the first instance. If they
succeed, the district court will then reach the merits.

IV.

A. Compensatory Damages

Although it granted relief on certain claims, the district
court declined to award compensatory damages, which are
said by plaintiffs to flow from emotional harm resulting
from: (1) the distress to owners and residents caused by not
knowing whether they would be forced to close or move,
and (2) the distress to the residents caused by not being
able to live in the housing units which they desired, and/or
fearing they would have to leave a place that could
accommodate their needs and in which they felt safe.
Specifically, plaintiffs point to several findings of fact and
conclusions by the district court that they claim
demonstrate the intangible damages that they suffered.
These include repeated public meetings in Neptune
Township denouncing R&B houses (FOF 43); meetings
between Neptune and state officials intended to reduce the
number of deinstitutionalized in Neptune (FOF 28); the
appointment of biased members to the Site Licensing Board
(FOF 31), which caused owners and residents to live in fear
of having their R&B houses closed by a "corrupted" local
licensing system (FOF 35); and the adoption of onerous and
unnecessary provisions designed to discourage R&B house
owners from remaining in the community, such as
mandating the fingerprinting of R&B house owners and
requiring R&B owners to prove their pre-existing, non-
conforming zoning status to retain their licenses (FOF 45,
38-40; Conclusion of Law 40). See District Court Opinion,
at 8-12, 26.

                               10
Apparently, the district court believed that the FHAA
conferred upon it the discretion to decide whether to award
compensatory damages. See District Court Opinion, at *31
("The plaintiff owners claim that they were harmed due to
the distress caused by not knowing whether they would be
forced to close. I find that such damages are not
appropriate in this case. . . . Damages for emotional
distress in discrimination cases are generally granted to the
members of the protected group . . . . This rationale simply
does not apply in this case . . . ."). This conclusion is
understandable given the wording of the compensatory
damage provision in the FHAA: "In a civil action under
subsection (a) of this section, if the court finds that a
discriminatory housing practice has occurred or is about to
occur, the court may award to the plaintiff actual and
punitive damages," 42 U.S.C. S 3613(c)(1) (emphasis added),
and the surprisingly sparse case law in this area.

While at first glance this language ("may award") appears
discretionary, we decline to accept the district court's
reading, and instead endorse the Ninth Circuit's thoughtful
opinion in United States v. Hayward, which concluded that
the compensatory damages provisions of the FHAA are
mandatory.3 See United States v. Hayward, 36 F.3d 832,
839-40 (9th Cir. 1994). In Hayward, the Ninth Circuit
relied on the Supreme Court's reasoning in Curtis v.
Loether, 415 U.S. 189, 197 (1974), which found no
discretion with respect to actual damages under a
predecessor damages provision of the Fair Housing Act of
1968, 42 U.S.C. S 3610 et seq. ("FHA"), and the legislative
history of the FHAA, which parroted the language of the old
damage provision when it amended the FHA without
making any substantial changes or mentioning the Curtis
decision. In deciding that a party could demand a jury trial
in a civil action under the FHA, a unanimous Supreme
Court in Curtis had analyzed the formerS 3612, the
predecessor damage provision to the one at issue here, and
found that "if a plaintiff proves unlawful discrimination and
_________________________________________________________________

3. Our discussion with respect to counsel fees, see infra S IV.C, is
another example where statutory language that appears discretionary on
its face has been construed in a such way as to restrict trial courts'
judgment.

                               11
actual damages, he is entitled to judgment for that
amount." Curtis, 415 U.S. at 197. The court based this
conclusion upon its characterization of the claim as a legal
claim for damages, rather than an equitable claim for
restitution. See id.

As the Ninth Circuit points out, when Congress amended
the FHA in 1988 and replaced the damage provision at
issue in Curtis with S 3613, it did not substantially change
any language therein, nor did it indicate any displeasure
with the Curtis decision. The former S 3612(c) provided:
"The court . . . may award to the plaintiff actual damages
and not more that $1,000 punitive damages . . . ." The new
S 3613(c) provides: "[T]he court may award to the plaintiff
actual and punitive damages . . . ." The wording in the
amended damage provision is virtually identical to old
language except that Congress eliminated the $1,000 cap
on punitive damages. The legislative history of the new
enforcement provisions in the FHAA confirms this reading:

       Section [3613(c)] provides for the types of relief a court
       may grant. This section is intended to continue the
       types of relief that are provided under current law, but
       removes the $1,000 limitation on the award of punitive
       damages. The Committee believes that the limit on
       punitive damages served as a major impediment to
       imposing an effective deterrent on violators and a
       disincentive for private persons to bring suits under
       existing law.

H.R.Rep. No. 711, 100th Cong., 2d Sess., 39-40 (1988),
reprinted in, 1988 U.S.C.C.A.N. 2173, 2200-01 (footnotes
omitted). On the basis of this language and the unanimous
mandate of the Supreme Court, we agree with the Ninth
Circuit that "Congress did not intend the courts to have
discretion to award actual compensatory damages if a party
has actual damages," for if it did, "it would have changed
the language of the new damages provisions when it
enacted the 1988 Amendments." Hayward, 36 F.3d at 839.
Thus, "if a party proves actual damages, a district court's
award of compensatory damages is mandatory, not
discretionary." Id.

Defendants advance several alternative arguments in the

                               12
event that we were to conclude, as we have, that the award
of damages under S 3613(c)(1) is mandatory. First, they
contend, and the district court held, that damages for
emotional distress should only be available to the
deinstitutionalized, and not to the R&B owners, because
the owners are not members of a protected group under the
FHAA. We find nothing in the statute, however, that
distinguishes between handicapped plaintiffs and those
who are not. The statute directs that the court "may award
to the plaintiff actual and punitive damages."4 42 U.S.C.
S 3613(c)(1) (emphasis supplied). Given thatS 3613(c)(1)
requires the district court to award damages if they are
proven, we see no basis in the language or history of the
statute to carve out groups of legitimate plaintiffs to which
S 3613(c)(1) does not apply (and defendants have not
identified any precedent to the contrary).

We find support for this conclusion in United States v.
Scott, 809 F. Supp. 1404, 1406-07 (D. Kan. 1992), where
the court permitted the seller of a home intended to be
used as a group home for physically and mentally
handicapped adults to sue as an "aggrieved person" under
the FHAA and to recover actual compensatory damages for
emotional distress based upon specific instances of "cool
treatment and social shunning" by the defendants.
Therefore, should plaintiffs ultimately prevail on remand
over defendants' alternative positions discussed next (as
well as on the distance and density provisions if they can
establish standing), the district court will be required to
calculate damages.

Defendants also make several fact-based arguments why
compensatory damages are not warranted here. For
example, defendants claim that there is not enough
evidence of emotional distress related to actions taken by
Neptune officials (as opposed to the Ocean Grove
_________________________________________________________________

4. 42 U.S.C. S 3604(f)(2) declares that it is unlawful "to discriminate
against any person in the terms, conditions, or privileges of sale or
rental
of a dwelling, or in the provision of services or facilities in connection
with such dwelling, because of a handicap of -- (A) that person; . . . or
(C) any person associated with that person." Thus, under the FHAA,
plaintiffs can be both handicapped and non-handicapped individuals.

                               13
Homeowners Association) to justify compensation.
Defendants also urge that, because plaintiffs ultimately
received their licenses and zoning approvals, they could not
possibly have suffered emotional distress due to defendants'
discriminatory practices which only threatened their
livelihoods. Finally, defendants contend that, because the
Department of Community Affairs could have closed down
the R&B houses for legitimate violations prior to the
passage of the Act and Ordinances, any argument by
plaintiffs that they suffered emotional distress based upon
the threat of closure by the Site Licensing Board after
passage of the Act and Ordinances is unavailing. These
arguments may in fact prevail, and plaintiffs' damage
claims may prove ephemeral. However, given the district
court's erroneous conclusion that it had discretion under
S 3613(c)(1) to decide whether to award damages, these
arguments should be considered by the district court on
remand.

B. Punitive Damages

The district court also declined to award punitive
damages. In so doing, the court concluded that defendants
were not motivated by "evil motive or intent" and did not
act with the requisite outrageousness and reckless
disregard of plaintiffs' federal rights to justify an award of
punitive damages. See District Court Opinion, at *32. As
factual findings, we review these conclusions to determine
if they are clearly erroneous. See Anderson v. Bessemer
City, 470 U.S. 564, 573 (1985). Under this narrow review,
we cannot disturb the district court's determination.
Furthermore, it is not clear that punitive damages can ever
be awarded against a municipal defendant. See Newport v.
Fact Concerts, Inc., 453 U.S. 247, 267 n.29 (1981) ("It is
perhaps possible to imagine an extreme situation where
taxpayers are directly responsible for perpetrating an
outrageous abuse of constitutional rights."). We agree with
the district court that, if they can be, they are not
warranted here. That is because plaintiffs have not adduced
evidence of the "widespread and knowledgeable
participation by the taxpayers" sufficient to meet the
Supreme Court's Newport exception. See Heritage Homes of

                               14
Attleboro, Inc. v. Seekonk Water Dist., 670 F.2d 1, 2 (1st
Cir. 1982).

C. Counsel Fees

The district court failed to address plaintiffs' motion for
counsel fees and costs to which, as the prevailing party,
they were entitled under 42 U.S.C. S 3613(c)(2).5 As with
S 3613(c)(1), this provision, which sounds fully
discretionary -- "the court, in its discretion, may allow the
prevailing party, other than the United States, a reasonable
attorney's fee and costs" -- actually is not. 42 U.S.C.
S 3613(c)(2) (emphasis supplied). In fact, a district court's
discretion not to grant attorney's fees and costs in civil
rights cases is tightly cabined. See Newman v. Piggie Park
Enters., Inc., 390 U.S. 400, 402 (1968) ("It follows that one
who succeeds in obtaining an injunction under that Title
should ordinarily recover an attorney's fee unless special
circumstances would render such an award unjust."); see
also Blanchard v. Bergeron, 489 U.S. 87, 89 n.1 (1989);
_________________________________________________________________

5. Section 3602(o) provides that " `Prevailing Party' has the same meaning
as such term has in section 1988 of this title." Defendants contend that
plaintiffs were not a "prevailing party" for the purposes of the FHAA.
They argue that, although plaintiffs have won, they have obtained only
de minimis relief in comparison with what they sought. For example,
defendants argue that while plaintiffs have gotten certain parts of the
Act
and Ordinances enjoined, they sought a permanent injunction barring
enforcement of the Act and Ordinances in their entirety. Thus, with
respect to "their real goal," defendants contend that plaintiffs suffered
"total defeat." We find no merit to this argument. Plaintiffs have easily
satisfied the "prevailing party" standards set forth in Metropolitan
Pittsburgh Crusade for Voters v. Pittsburgh, 964 F.2d 244, 250 (3d Cir.
1992). Namely, plaintiffs " `achieved some of the benefit sought by the
party bringing the suit' " and the " `litigation constituted a material
contributing factor in bringing about the events that resulted in
obtaining the desired relief.' " Id. (quoting Dunn v. United States, 842
F.2d 1420, 1433 (3d Cir. 1988)). Indeed, the relief realized by plaintiffs
to this point is far from de minimis, and upon remand, they may be
successful in invalidating even more of the Act and Ordinances. Of
course, the district court will have to determine, consistent with Hensley
v. Eckerhart, 461 U.S. 424, 436 (1983), whether plaintiffs' counsel fee
request should be reduced because plaintiffs only achieved partial
success.

                                15
Hatfield v. Hayes, 877 F.2d 717, 719 (8th Cir. 1989);
DiFilippo v. Morizio, 759 F.2d. 231, 234 (2d Cir. 1985);
Leeds v. Watson, 630 F.2d 674, 677 (9th Cir. 1980); David
v. Travisono, 621 F.2d 464, 468 (1st Cir. 1980); Robinson v.
Kimbrough, 620 F.2d 468, 474 (5th Cir. 1980); Bonnes v.
Long, 599 F.2d 1316, 1318 (4th Cir. 1979).6 The district
court did not find any "special circumstances" justifying its
decision not to award attorney's fees and costs (in fact, it
offered no explanation whatever), and we find none.

That being said, we cannot direct an award of counsel
fees because the procedural history surrounding this aspect
of the case is murky. Plaintiffs included a request for
counsel fees and costs in the prayer for relief of their
complaint. On July 8, 1997, the district court entered a
judgment in favor of plaintiffs on several issues, against
them on others, that simply did not mention plaintiffs'
request for attorneys fees and taxed costs. On July 22,
1997, plaintiffs filed a timely Notice of Appeal appealing
from "the final judgment entered in this action on the 8th
day of July, 1997." App. at iii. On July 29, 1997, twenty-
one days after the judgment was entered, plaintiffs filed a
timely "Motion for Relief From Judgment or Order,
_________________________________________________________________

6. In Piggie Park, the Supreme Court was interpreting the fee-shifting
language contained in S 204(b) of the Civil Rights Act of 1964, 42 U.S.C.
S 2000a-3(b). In the other cases cited above, the courts were interpreting
similar language found in 42 U.S.C. S 1988. The language in both
S 204(b) and S 1988 is almost identical to the language at issue here, and
under Independent Fed'n of Flight Attendants v. Zipes, 491 U.S. 754,
758-59 & n.2 (1989) (citation omitted), we are directed that "fee-shifting
statutes' similar language is `a strong indication' that they are to be
interpreted alike." See also Bell v. United Princeton Properties, Inc.,
884
F.2d 713, 719 (3d Cir. 1989) (applying the same standards for sua
sponte reductions in attorneys' fees requests in ERISA cases as apply in
civil rights cases); Delaware Valley Citizens' Council for Clean Air v.
Pennsylvania, 762 F.2d 272, 275 (3d Cir. 1985) (applying same
standards for setting "reasonable" attorney's fees under the Clean Air Act
as apply under S 1988), modified on other grounds, 478 U.S. 546 (1986),
rev'd on other grounds, 483 U.S. 711 (1987). Therefore, we believe that
the standard enunciated in Piggie Park and Blanchard regarding the
extent of the district court's discretion to award a prevailing party
counsel fees is the proper one to apply to cases brought under the
FHAA.

                               16
Pursuant to [Fed. R. Civ.] Rule 60, and Motion to Tax
Costs, Including Attorney Fees, Pursuant to [N.J. Civ.]
Local Rule 54.1." In paragraphs 10 through 12 of his
certification accompanying these motions, plaintiffs'
counsel stated (underscoring in original):

       I called the Clerk to discuss the taxing of costs under
       these circumstances. I inquired as to the manner of
       filing the motion to reform the judgment and obtain
       attorney fees in light of the 3 day return in [N.J. Civ.]
       Rule 54.1. Obviously the Clerk would not be entitled to
       reform a judgment or to assess attorney fees.

       I was instructed to submit a Bill of Taxed Costs on the
       presumption that if the judgment was silent, it was
       intended that costs should be awarded to the
       prevailing party, and make the motion for the
       remainder of the relief to the Court.

       I have proceeded in this fashion, therefore, filing this
       motion pursuant to [Fed. R. Civ.] Rule 60 and Rule
       54.1 of the local rules, for costs, including attorney
       fees, which I believe to be appropriate pursuant to 42
       U.S.C. S 3613(c)(2), to be read in conjunction with 42
       U.S.C. S 1988.

The district court denied these motions on October 6, 1997.

It appears to us that plaintiffs filed a viable (and timely)
petition for counsel fees pursuant to N.J. Civ. R. 54.1
within 30 days of the judgment.7 However, when the matter
came before Judge Brown, to whom the case was assigned
following the death of Judge Fisher, the only issue that was
apparently presented to him was the question whether
Judge Fisher had intentionally or inadvertently left counsel
fees and costs out of the judgment. Judge Brown concluded
that the omission was deliberate, and he consequently
_________________________________________________________________

7. It is not clear to us whether plaintiffs should have moved for counsel
fees under Local Rule 54.1, "Costs", or Local Rule 54.2, "Compensation
for Services Rendered and Reimbursement of Expenses," and the issue
has not been briefed. At all events, it was clear from the face of the
motion what plaintiffs were seeking, so to the extent that they may have
mislabelled their motion, any mistake is of no moment.

                               17
denied plaintiffs relief under Rule 60. In his judgment,
delivered from the bench, Judge Brown concluded:

       It seems to me that a Rule 60 motion clearly does not
       lie here. There is no evidence whatsoever of any clerical
       mistake, rather the order and the findings and
       conclusions are clear, except to the very limited extent
       set forth therein; the plaintiff's request for relief was
       denied and judgment was entered for the defense.

From these statements, it appears that Judge Brown only
considered the Rule 60 motion, and not the Local Rule 54.1
motion, which was timely filed and properly before the
court. Moreover, it is possible that plaintiffs will prevail on
additional claims in light of our discussion with regard to
their standing to challenge the distance and density
provisions, and hence the district court may have to
consider counsel fees and costs on those issues in the
future.

Given the foregoing circumstances, we think that the best
approach is to send back this entire matter for
reconsideration of the Local Rule 54.1 motion. This
disposition will not prejudice defendants because plaintiffs'
fee request was included in their complaint and was
preserved in their Notice of Appeal filed on July 22, 1997.

D. Statutory and Constitutional Claims

Assuming plaintiffs can establish standing upon remand,
the district court will have to consider several troubling
aspects of the Act and Ordinances, most notably the
distance and density provisions contained in N.J. Stat.
Ann. S 40:52-14. If standing is established, the district
court will have to determine whether these provisions
violate the FHAA, the United States and New Jersey
constitutions, and the NJLAD.8 Of course, the court will
_________________________________________________________________

8. While plaintiffs contend that the Licensing Act and Ordinances were
the result of a malicious, five year effort by defendants to reduce the
number of mentally handicapped in Neptune to an "acceptable" number
and therefore served no cognizable interest under the FHAA or the
United States and New Jersey constitutions, we are satisfied that the

                               18
take up the statutory claims first and may not have to
reach the constitutional issues. As noted above, plaintiffs
contend that the distance and density provisions were
motivated by discriminatory animus and are unduly
burdensome on the deinstitutionalized who wish to live in
the residences and communities of their choice. They
further submit that the Township has not attempted to
reasonably accommodate them as required under the FHAA
and has offered no rational basis or legitimate government
_________________________________________________________________

state and local defendants have established a valid justification for the
overall regulatory scheme -- namely, to promote the health and safety of
R&B residents, many of whom require state protection. We therefore
reject plaintiffs' argument that the Act and Ordinances must be rejected
in toto because they were the product of discriminatory intent.

Moreover, since the FHAA provides for the severability of statutes, see
42 U.S.C. S 3615 ("[A]ny law of a State. . . that purports to require or
permit any action that would be a discriminatory housing practice under
this subchapter shall to that extent be invalid.") (emphasis supplied),
the
district court properly examined each provision of the Act and
Ordinances separately when determining whether there were any
statutory violations. Likewise, a review of New Jersey law indicates that
ordinances and statutes should be preserved against constitutional or
other attack to the greatest extent possible. See N.J. Stat. Ann. S 1:1-10
("If any title, subtitle, chapter, article or section of the Revised
Statutes,
or any provision thereof, shall be declared to be unconstitutional,
invalid
or inoperative, in whole or in part, by a court of competent jurisdiction,
such title, subtitle, chapter, article, section or provision shall, to the
extent that it is not unconstitutional, invalid or inoperative, be
enforced
and effectuated, and no such determination shall be deemed to
invalidate or make ineffectual the remaining titles, subtitles, chapters,
articles, sections or provisions"); Barone v. Department of Human
Services, 526 A.2d 1055, 1063 (N.J. 1987) (power to declare statutes
void must "be delicately exercised"); see also New Jersey v. Patton, 607
A.2d 191, 194 (N.J. Super. Ct. App. Div. 1992) (if necessary, a court
" `may engage in a judicial surgery to excise a constitutional defect or
engraft a needed meaning.' ") (citation omitted), rev'd on other grounds,
627 A.2d 1112 (N.J. 1993); Gilman v. Newark, 180 A.2d 365, 386-87
(N.J. Super. Ct. Law. Div. 1962) (when provisions of an ordinance are
severable, the invalidity of the severable parts does not render the
entire
ordinance invalid). Therefore, contrary to plaintiffs' contention, the Act
and Ordinances do not rise or fall together -- the district court properly
analyzed each section separately.

                               19
interest served by "declustering" the deinstitutionalized.
Although the merits are not properly before us, we note
that provisions similar to these have already been struck
down under the FHAA based upon many of the same
factual findings that the district court in this case has
already made with respect to the portions of the Act and
Ordinances on which it found that plaintiffs had standing.
See e.g., ARC of New Jersey, Inc. v. New Jersey, 950 F.
Supp. 637 (D.N.J. 1996); Association for Advancement of
the Mentally Handicapped, Inc. v. Elizabeth, 876 F. Supp.
614 (D.N.J. 1994); Horizon House Developmental Serv's, Inc.
v. Township of Upper Southampton, 804 F. Supp. 683, 693-
95 (E.D. Pa. 1992).9

Insofar as the plaintiffs continue to challenge the
remainder of the provisions of the Act and Ordinances, we
_________________________________________________________________

9. In Horizon House, the court determined that a township ordinance
that imposed a distance requirement of 1,000 feet between group homes
for mentally retarded people was facially invalid under the FHAA
regardless of the motive of the drafters, and even if it incidentally
affected some unrelated groups of non-disabled individuals such as
juveniles and ex-criminal offenders. See Horizon House, 804 F. Supp. at
694. The court rejected the Township's rationale that "declustering"
promoted integration into the community and was thus benign. See id.
at 695. In addition, the Horizon House court found discriminatory intent
on the part of the Township based upon animus similar to that found by
the district court in this case. See id. at 696 (determining that the
ordinance was passed in "response to community opposition and to
outmoded fears about people with mental retardation").

The Horizon House court also concluded that the challenged ordinance
had a discriminatory effect which would have been grounds for
invalidation even if it were not facially invalid or the product of
discriminatory intent. See id. at 697. The discriminatory effects found by
the court were that the spacing requirement limited the number of
people with disabilities who could live within the Township, limited their
choices on where to live, limited their access to essential community
resources, and thwarted efforts to treat people with handicaps equally in
the community thereby negatively affecting their self-esteem. See id.

Finally, the court in Horizon House determined that the spacing
requirement failed to provide persons with disabilities with a reasonable
accommodation because it was a blanket and categorical rule under
which the process of obtaining variances was lengthy, costly, and
burdensome. See id. at 700.

                               20
consider them to be unexceptional, and find that they were
properly upheld by the district court, including sections
that: (1) permit municipalities to license R&B houses locally
in the place of the Department of Community Affairs, see
N.J. Stat. Ann. S 40:52-10; (2) require a licensing fee and
provide for the submission of information and supporting
documentation so the licensing authority can conduct an
investigation of the applicant, see N.J. Stat. Ann. S 40:52-
12; (3) provide for the inspection of R&B house premises for
health and safety violations, and prohibit ownership of R&B
houses by persons convicted of crimes of moral turpitude,
see N.J. Stat. Ann. S 40:52-13; (4) provide for the term of
the licenses, see N.J. Stat. Ann. S 40:52-15; (5) provide
when licenses may be revoked, see N.J. Stat. Ann. S 40:52-
16, (6) provide for appeals to the Department of Community
Affairs and Appellate Division of the New Jersey courts in
the event of a revocation of a license, see N.J. Stat. Ann.
S 40:52-17; and (7) establish the requirements for
municipal licensing authorities, see N.J. Stat. Ann. S 40:52-
18.

As the district court concluded, none of these provisions
is unduly burdensome on plaintiffs, and they do not violate
the FHAA. Their essential impact is to shift the oversight
and enforcement of R&B houses from the state to local
level. Similar provisions for licensing, inspections,
revocation, et cetera, existed under the state-administered
regime, and we will not invalidate provisions of a statute
whose only effect is to authorize local communities to
assume an enforcement role at their election -- even if
there was discriminatory animus behind the legislation --
without some evidence that the provisions were unduly
burdensome. In addition, the provisions are rationally
related to the government's legitimate purpose of protecting
the mentally ill and aged who live in R&B houses, and thus
they do not violate either the United States or the New
Jersey constitutions.

Finally, we note that N.J. Stat. Ann. S 40:52-13(d), which
requires each owner of a R&B house to establish a
"sufficient guarantee of financial and other responsibility to
assure appropriate relocation of the residents of the
rooming or boarding house to suitable facilities in the event

                               21
that the license is subsequently revoked or its renewal
denied," also seems problematic under the FHAA and
possibly the United States and New Jersey constitutions. As
with the bonding provision in Neptune Ordinance 1661,
this was inadequately briefed and explained to both the
district court and to us; we simply highlight it for scrutiny
on remand.

For the foregoing reasons we will affirm in part, reverse
in part, and remand for further proceedings consistent with
this opinion. Parties to bear their own costs.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                               22
