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. e du/thir dc ir c uit_1998/179Filed 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

2PETER 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 ow ners 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 Ord inances Nos. 1658 and 1661 (the "Ordinances"), declared inv alid under the United States and New Jersey constitution s, the New Jersey Law Against Discrimination, N.J. Stat. A nn. 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 an d the State of New Jersey.1

The FHAA declares that it is unlawful "to discrimin ate against any person in the terms, conditions, or pri vileges of

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

3sale or rental of a dwelling, or in the provision o f services

or facilities in connection with such dwelling, bec ause of a handicap of -- (A) that person; . . . or (C) any pe rson 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 accommo dations may be necessary to afford such person equal opport unity 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 politic al subdivision, or other such jurisdiction that purpor ts to require or permit any action that would be a discri minatory housing practice under this subchapter shall to tha t 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 o n several of the plaintiffs' claims and invalidated portions of the Act and Ordinances, specifically provisions that impose d onerous inspection, licensing, bonding, and zoning requirements. Defendants have not appealed from tho se aspects of the district court's order. The court de nied relief on the plaintiffs' other claims because it determin ed that they lacked standing in view of certain grandfather ing provisions in the Act. Plaintiffs seek here to over turn the

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2. Plaintiffs assert, and the district court appare ntly found, that a significant percentage of the residents of the R&B houses and a number of the individual plaintiffs are handicapped indivi duals, many of whom
have been deinstitutionalized from state mental hos pitals. New Jersey contends that the FHAA does not apply because only a very small percentage of handicapped persons live in R&B house s. It supports this contention with statistics from certain government reports. New Jersey's assertion is controverted, however. In Finding of F act ("FOF") 14, the district court found that a disproportionately high number of people in R&B houses have disabilities. See New Jersey Coalit ion of Rooming and Boarding House Owners v. Mayor and Council of the C ity of Asbury Park, Civ. No. 94-5134, at *5 (D.N.J. Jul. 8, 1997). Simi larly 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 testif ied that most of their
residents were disabled or otherwise unable to care for themselves. See id. The district court's finding that the FHAA appl ies here is thus supported in the record.

4district court's standing determination so that the court

may reach the merits of the remaining provisions, especially the "distance and density" provisions, w hich limit
the number of new R&B houses that can be licensed i n a municipality and cap the total number of R&B house residents to one-half of one percent of the total p opulation of each municipality in New Jersey. For reasons tha t 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 r emand for further factual development and a new determina tion by the district court regarding plaintiffs' standing.

To fully review this case, we must also address a n umber of dispositive rulings on various aspects of plaint iffs' 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 constitution al claims that may require further consideration by the distr ict court. In the end, we will reverse the district court's de termination that it need not award compensatory damages once ac tual damages have been shown; we will affirm on the puni tive damages issue because the district court's factualf inding that Neptune did not act outrageously or with reckl ess disregard for plaintiffs' federal rights is not cle arly erroneous; and we will vacate and remand on the cou nsel
fees issue for de novo consideration because of con fusion surrounding certain procedural issues.

I.

The Act and Ordinances complained of here are the progeny of the Rooming and Boarding House Act of 19 79, 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 b oarding
houses in the State. . . ." N.J. Stat. Ann. S 55:13 B-2. Specifically, the legislature found that because R& B house residents were predominately elderly, disabled, and poor, they required protection from building and safety h azards, as well as from unscrupulous and predatory neighbor s and

5owners. See id. To accomplish this, the RBHA requir es any

person who owns or operates an R&B house first to o btain a license from the Commissioner of the Department o f 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 wil l protect the health, safety, and welfare of its resi dents while at the same time promoting a homelike atmosphere appropriate to such facilities. See N.J. Stat. Ann. S 55:13B6. Those standards include, for example: safety fro mfire; safety from structural, mechanical, plumbing and el ectrical deficiencies; adequate light and ventilation; physi cal security; protection from harassment, fraud, and ev iction without due cause; clean and reasonably comfortable surroundings; the adequate rendering of personal an d financial services in boarding houses; disclosure o f owner identification information; and maintenance of orde rly and sufficient financial and occupancy records. See id. To ensure compliance with these standards, the regulat ory 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 municipa lity in New Jersey the option of assuming from the State th e licensing responsibility for R&B houses. See N.J. S tat. Ann. S 40:52-10. Upon exercising that option, a municipa lity becomes responsible for ensuring compliance with St ate and local laws and therefore for protecting the hea lth, safety, and welfare of the residents of those facil ities. The Act requires that municipality to create an authori ty, in accordance with N.J. Stat. Ann. S 40:52-18, to assu me the State's former duty of investigating applicants and their proposed R&B houses to determine, among other thing s, whether the facilities in question "are in complian ce with all applicable building, housing, health and safety cod e 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 turpitud e, or any crime under any law of the State licensing or regul ating a rooming and boarding house" and has never had its l icense revoked under the RBHA. N.J. Stat. Ann. S 40:52-13( b).

6In early 1994, the Neptune Town Council, acting und er

the authority vested in it by the Licensing Law, ad opted 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 provision s of
the Act and Ordinances violated the FHAA. The inval idated provisions had required: (1) R&B house owners to ge t Certificates of Inspection each time a new tenant o ccupied a room in their house; (2) public hearings before t he Site Licensing Board would issue operating licenses to R &B house owners; (3) R&B house owners to secure bondin g to
cover relocation costs in the event that their R&B house was forced to close; and (4) applicants for site li censing to obtain zoning approvals for premises that had alrea dy been shown to have been properly zoned. See New Jersey Coalition of Rooming and Boarding House Owners v. M ayor 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 fre ighted with discriminatory intent, were unduly burdensome to plaintiffs, and that the Township had failed to mak e reasonable accommodations to allow handicapped pers ons to live in the residences and communities of their choice. See id. at 26-29. As we have observed, defendants h ave not appealed those aspects of the district court's orde r that invalidated portions of the Act and Ordinances.

With respect to the balance of their claims, howeve r, the district court ruled against plaintiffs. Most notab ly, on the ground that plaintiffs lacked standing, the court d id not reach their claims challenging the distance and den sity provisions of the Act. The district court also made several other rulings that are perforce before us now. The court

7found 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 o wners (the only plaintiffs for whom the district court fo und any standing) were not members of the protected group o f handicapped individuals. The district court also re jected 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 t hus 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 consi der 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 sta tes that no license shall be issued for any R&B house when a ny part of the boundary line of any other R&B house is within 1,000 feet (in the case of a municipality with a po pulation 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 th at would result in increasing the total number of persons au thorized to be residents in R&B houses within the municipali ty to: (1) more than 100 in a municipality having a popula tion of 20,000 or fewer, or (2) to more than one-half of on e 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 lim it the number of R&B residents and/or homes within their borders. Plaintiffs assert that this scheme is as p atently illegal as would be one that limited the number and /or housing options of members of an ethnic group withi n 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 ex empted all existing R&B homes from application of the dist ance and density provisions. See N.J. Stat. Ann.S 40:52-14(b ) & (c)

8("but nothing in this subsection shall warrant refu sal of a

license or license renewal for premises where a roo ming or boarding house has been in lawful operation prior t o the enactment of this act"). The court reasoned that th ere was, therefore, no way in which plaintiffs, all of whom are owners or residents of existing R&B homes in Neptun e, could be harmed by these provisions. There are, how ever, a number of other possible bases under which plaintif fs could establish standing to challenge the distance and de nsity provisions, but these have either been inadequately fleshed
out in the record or lack sufficient factual findin gs by the
district court to facilitate our review. While ther e is an extensive section of the district court's opinion l abeled "Findings of Fact," in reality, the numbered "findi ngs" are, for the most part, no more than recitations of vari ous witnesses' testimony.

First, plaintiffs maintain that there has been a de cline in the R&B housing stock in Neptune due to the distanc e and density provisions of the Act, and that it will the refore be difficult for disabled individuals to find lodging in the
future. There is evidence in the record to this eff ect. For example, Ms. Andress testified that the Ordinances reduced the number of R&B houses in the community. See Dist rict Court Opinion, at *12. In addition, other evidence indicates that current R&B owners, despite the grandfather cl auses, may have been detrimentally affected by the distanc e 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 ful ly 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 no t only by the Act and Ordinances themselves, but also by t he
hostile manner in which defendants administered the m. See id. at 12-13.

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

9establish standing by the R&B owners and/or the res ident

plaintiffs to challenge the distance and density pr ovisions 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 lac k sufficient findings to facilitate our review, we wi ll vacate the judgment of the district court and remand for furth er proceedings at which the plaintiffs will have the o pportunity to attempt to establish standing in the first insta nce. If they succeed, the district court will then reach the mer its.

IV.

A. Compensatory Damages

Although it granted relief on certain claims, the d istrict court declined to award compensatory damages, which are said by plaintiffs to flow from emotional harm resu lting from: (1) the distress to owners and residents caus ed by not knowing whether they would be forced to close or mo ve, and (2) the distress to the residents caused by not being able to live in the housing units which they desire d, 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 suffer ed. These include repeated public meetings in Neptune Township denouncing R&B houses (FOF 43); meetings between Neptune and state officials intended to red uce 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 oner ous and unnecessary provisions designed to discourage R&B h ouse owners from remaining in the community, such as mandating the fingerprinting of R&B house owners an d requiring R&B owners to prove their pre-existing, n onconforming zoning status to retain their licenses ( FOF 45, 38-40; Conclusion of Law 40). See District Court Op inion, at 8-12, 26.

10Apparently, the district court believed that the FH AA

conferred upon it the discretion to decide whether to award compensatory damages. See District Court Opinion, a t *31 ("The plaintiff owners claim that they were harmed due to the distress caused by not knowing whether they wou ld be forced to close. I find that such damages are not appropriate in this case. . . . Damages for emotion al distress in discrimination cases are generally gran ted to the members of the protected group . . . . This rationa le simply does not apply in this case . . . ."). This conclus ion is understandable given the wording of the compensator y damage provision in the FHAA: "In a civil action un der 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") a ppears discretionary, we decline to accept the district co urt's reading, and instead endorse the Ninth Circuit's th oughtful opinion in United States v. Hayward, which conclude d that the compensatory damages provisions of the FHAA are mandatory.3 See United States v. Hayward, 36 F.3d 8 32, 839-40 (9th Cir. 1994). In Hayward, the Ninth Circu it 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 A ct of 1968, 42 U.S.C. S 3610 et seq. ("FHA"), and the leg islative 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 Cu rtis decision. In deciding that a party could demand a j ury trial in a civil action under the FHA, a unanimous Suprem e Court in Curtis had analyzed the formerS 3612, the predecessor damage provision to the one at issue he re, and found that "if a plaintiff proves unlawful discrimi nation and

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

11actual damages, he is entitled to judgment for that

amount." Curtis, 415 U.S. at 197. The court based t his conclusion upon its characterization of the claim a s a legal claim for damages, rather than an equitable claim f or restitution. See id.

As the Ninth Circuit points out, when Congress amen ded the FHA in 1988 and replaced the damage provision a t issue in Curtis with S 3613, it did not substantial ly change any language therein, nor did it indicate any displ easure with the Curtis decision. The former S 3612(c) prov ided: "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 p laintiff 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 re ading:

Section [3613(c)] provides for the types of relief a court may grant. This section is intended to conti nue the types of relief that are provided under curr ent law, but removes the $1,000 limitation on the award o f punitive damages. The Committee believes that the lim it on punitive damages served as a major impedimen t to imposing an effective deterrent on violators and a disincentive for private persons to bring su its under existing law.

H.R.Rep. No. 711, 100th Cong., 2d Sess., 39-40 (198 8), reprinted in, 1988 U.S.C.C.A.N. 2173, 2200-01 (foot notes omitted). On the basis of this language and the una nimous mandate of the Supreme Court, we agree with the Nin th 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 8 39. 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

12event that we were to conclude, as we have, that th e 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, bec ause the owners are not members of a protected group und er the FHAA. We find nothing in the statute, however, that distinguishes between handicapped plaintiffs and th ose who are not. The statute directs that the court "ma y 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 the y are proven, we see no basis in the language or history of the statute to carve out groups of legitimate plaintiff s to which S 3613(c)(1) does not apply (and defendants have no t identified any precedent to the contrary).

We find support for this conclusion in United State s v. Scott, 809 F. Supp. 1404, 1406-07 (D. Kan. 1992), w here the court permitted the seller of a home intended t o 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 ne xt (as well as on the distance and density provisions if t hey can establish standing), the district court will be req uired to calculate damages.

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

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4. 42 U.S.C. S 3604(f)(2) declares that it is unlaw ful "to discriminate against any person in the terms, conditions, or pri vileges of sale or

rental of a dwelling, or in the provision of services or f acilities 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-handicap ped individuals.

13Homeowners Association) to justify compensation.

Defendants also urge that, because plaintiffs ultim ately received their licenses and zoning approvals, they could not possibly have suffered emotional distress due to de fendants' discriminatory practices which only threatened thei r livelihoods. Finally, defendants contend that, beca use the Department of Community Affairs could have closed d own the R&B houses for legitimate violations prior to t he passage of the Act and Ordinances, any argument by plaintiffs that they suffered emotional distress ba sed upon the threat of closure by the Site Licensing Board a fter passage of the Act and Ordinances is unavailing. Th ese arguments may in fact prevail, and plaintiffs' dama ge claims may prove ephemeral. However, given the dist rict
court's erroneous conclusion that it had discretion under S 3613(c)(1) to decide whether to award damages, th ese arguments should be considered by the district cour t on
remand.

B. Punitive Damages

The district court also declined to award punitive damages. In so doing, the court concluded that defe ndants were not motivated by "evil motive or intent" and d id 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 *3 2. As factual findings, we review these conclusions to de termine if they are clearly erroneous. See Anderson v. Bess emer City, 470 U.S. 564, 573 (1985). Under this narrow r eview,
we cannot disturb the district court's determinatio n. Furthermore, it is not clear that punitive damages can ever be awarded against a municipal defendant. See Newpo rt v. Fact Concerts, Inc., 453 U.S. 247, 267 n.29 (1981) ("It is perhaps possible to imagine an extreme situation wh ere taxpayers are directly responsible for perpetrating an outrageous abuse of constitutional rights."). We ag ree with the district court that, if they can be, they are n ot 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 Hom es of

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

Cir. 1982).

C. Counsel Fees

The district court failed to address plaintiffs' mo tion for counsel fees and costs to which, as the prevailing party, they were entitled under 42 U.S.C. S 3613(c)(2).5 A s 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 r easonable attorney's fee and costs" -- actually is not. 42 U. S.C. S 3613(c)(2) (emphasis supplied). In fact, a distri ct court's discretion not to grant attorney's fees and costs i n civil rights cases is tightly cabined. See Newman v. Pigg ie Park Enters., Inc., 390 U.S. 400, 402 (1968) ("It follow s 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 (19 89);

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5. Section 3602(o) provides that " `Prevailing Part y' has the same meaning
as such term has in section 1988 of this title." De fendants contend that plaintiffs were not a "prevailing party" for the pu rposes of the FHAA. They argue that, although plaintiffs have won, they have obtained only de minimis relief in comparison with what they soug ht. For example, defendants argue that while plaintiffs have gotten certain parts of the

Act and Ordinances enjoined, they sought a permanent in junction barring
enforcement of the Act and Ordinances in their enti rety. Thus, with respect to "their real goal," defendants contend th at plaintiffs suffered "total defeat." We find no merit to this argument. Plaintiffs have easily satisfied the "prevailing party" standards set fort h in Metropolitan Pittsburgh Crusade for Voters v. Pittsburgh, 964 F. 2d 244, 250 (3d Cir. 1992). Namely, plaintiffs " `achieved some of the b enefit sought by the party bringing the suit' " and the " `litigation co nstituted a material contributing factor in bringing about the events th at 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 rema nd, 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 pla intiffs' counsel fee request should be reduced because plaintiffs only a chieved partial

success.

15Hatfield v. Hayes, 877 F.2d 717, 719 (8th Cir. 1989 );

DiFilippo v. Morizio, 759 F.2d. 231, 234 (2d Cir. 1 985); Leeds v. Watson, 630 F.2d 674, 677 (9th Cir. 1980); David v. Travisono, 621 F.2d 464, 468 (1st Cir. 1980); Ro binson v. Kimbrough, 620 F.2d 468, 474 (5th Cir. 1980); Bonne s v. Long, 599 F.2d 1316, 1318 (4th Cir. 1979).6 The dis trict court did not find any "special circumstances" just ifying 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 couns el fees because the procedural history surrounding thi s 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 ente red a judgment in favor of plaintiffs on several issues, against them on others, that simply did not mention plainti ffs' request for attorneys fees and taxed costs. On July 22, 1997, plaintiffs filed a timely Notice of Appeal ap pealing from "the final judgment entered in this action on the 8th day of July, 1997." App. at iii. On July 29, 1997, twentyone days after the judgment was entered, plaintiffs filed a timely "Motion for Relief From Judgment or Order,

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6. In Piggie Park, the Supreme Court was interpreti ng 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 c ourts were interpreting similar language found in 42 U.S.C. S 1988. The lan guage in both S 204(b) and S 1988 is almost identical to the lang uage at issue here, and under Independent Fed'n of Flight Attendants v. Zip es, 491 U.S. 754, 758-59 & n.2 (1989) (citation omitted), we are dire cted that "fee-shifting statutes' similar language is `a strong indication' that they are to be interpreted alike." See also Bell v. United Princet on Properties, Inc.,

884 F.2d 713, 719 (3d Cir. 1989) (applying the same sta ndards for sua sponte reductions in attorneys' fees requests in ER ISA cases as apply in civil rights cases); Delaware Valley Citizens' Coun cil for Clean Air v. Pennsylvania, 762 F.2d 272, 275 (3d Cir. 1985) (app lying 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). Theref ore, we believe that the standard enunciated in Piggie Park and Blanchar d regarding the
extent of the district court's discretion to award a prevailing party counsel fees is the proper one to apply to cases br ought under the

FHAA.

16Pursuant to [Fed. R. Civ.] Rule 60, and Motion to T ax

Costs, Including Attorney Fees, Pursuant to [N.J. C iv.] Local Rule 54.1." In paragraphs 10 through 12 of hi s certification accompanying these motions, plaintiff s' counsel stated (underscoring in original):

I called the Clerk to discuss the taxing of costs under these circumstances. I inquired as to the ma nner of filing the motion to reform the judgment and obtain attorney fees in light of the 3 day return i n [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 C osts 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 th e remainder of the relief to the Court.

I have proceeded in this fashion, therefore, filing this motion pursuant to [Fed. R. Civ.] Rule 60 a nd Rule 54.1 of the local rules, for costs, includin g attorney fees, which I believe to be appropriate purs uant to 42 U.S.C. S 3613(c)(2), to be read in conjuncti on 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 (an d 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 assig ned following the death of Judge Fisher, the only issue that was apparently presented to him was the question whethe r Judge Fisher had intentionally or inadvertently lef t counsel fees and costs out of the judgment. Judge Brown con cluded that the omission was deliberate, and he consequent ly

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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 f rom the face of the motion what plaintiffs were seeking, so to the exte nt that they may have mislabelled their motion, any mistake is of no mome nt.

17denied plaintiffs relief under Rule 60. In his judg ment,

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 a nd conclusions are clear, except to the very li mited extent set forth therein; the plaintiff's request f or relief was denied and judgment was entered for the defe nse.

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

future.

Given the foregoing circumstances, we think that th e 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 p laintiffs' fee request was included in their complaint and was preserved in their Notice of Appeal filed on July 2 2, 1997.

D. Statutory and Constitutional Claims

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

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

18take up the statutory claims first and may not have to

reach the constitutional issues. As noted above, pl aintiffs contend that the distance and density provisions we re motivated by discriminatory animus and are unduly
burdensome on the deinstitutionalized who wish to l ive in
the residences and communities of their choice. The y further submit that the Township has not attempted to reasonably accommodate them as required under the F HAA and has offered no rational basis or legitimate gov ernment

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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 protectio n. We therefore reject plaintiffs' argument that the Act and Ordina nces must be rejected in toto because they were the product of discrimina tory intent.

Moreover, since the FHAA provides for the severabil ity of statutes, see 42 U.S.C. S 3615 ("[A]ny law of a State. . . that p urports to require or permit any action that would be a discriminatory ho using 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 ther e were any statutory violations. Likewise, a review of New Jer sey 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 secti on of the Revised
Statutes, or any provision thereof, shall be declared to be u nconstitutional,
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. Depar tment 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 con stitutional defect or engraft a needed meaning.' ") (citation omitted), r ev'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 o f an ordinance are severable, the invalidity of the severable parts do es not render the
entire ordinance invalid). Therefore, contrary to plaintif fs' contention, the Act and Ordinances do not rise or fall together -- the district court properly analyzed each section separately.

19interest served by "declustering" the deinstitution alized.

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 ca se has already made with respect to the portions of the Ac t and Ordinances on which it found that plaintiffs had st anding. See e.g., ARC of New Jersey, Inc. v. New Jersey, 95 0 F. Supp. 637 (D.N.J. 1996); Association for Advancemen t 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 Ordinanc es, we

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9. In Horizon House, the court determined that a to wnship ordinance that imposed a distance requirement of 1,000 feet b etween group homes for mentally retarded people was facially invalid u nder the FHAA regardless of the motive of the drafters, and even if it incidentally affected some unrelated groups of non-disabled indi viduals such as juveniles and ex-criminal offenders. See Horizon Ho use, 804 F. Supp. at 694. The court rejected the Township's rationale th at "declustering" promoted integration into the community and was thu s benign. See id. at 695. In addition, the Horizon House court found discriminatory intent on the part of the Township based upon animus simil ar to that found by the district court in this case. See id. at 696 (de termining that the ordinance was passed in "response to community oppo sition and to outmoded fears about people with mental retardation ").

The Horizon House court also concluded that the cha llenged ordinance had a discriminatory effect which would have been g rounds for invalidation even if it were not facially invalid o r the product of discriminatory intent. See id. at 697. The discrimi natory 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 e ssential community resources, and thwarted efforts to treat people wit h handicaps equally in the community thereby negatively affecting their se lf-esteem. See id.

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

20consider them to be unexceptional, and find that th ey were

properly upheld by the district court, including se ctions that: (1) permit municipalities to license R&B hous es 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 suppo rting documentation so the licensing authority can conduc t an investigation of the applicant, see N.J. Stat. Ann. S 40:52- 12; (3) provide for the inspection of R&B house pre mises for health and safety violations, and prohibit ownershi p of R&B houses by persons convicted of crimes of moral turp itude, 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) p rovide when licenses may be revoked, see N.J. Stat. Ann. S 40:52- 16, (6) provide for appeals to the Department of Co mmunity Affairs and Appellate Division of the New Jersey co urts in the event of a revocation of a license, see N.J. St at. 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 prov isions is unduly burdensome on plaintiffs, and they do not violate the FHAA. Their essential impact is to shift the ov ersight

and enforcement of R&B houses from the state to loc al level. Similar provisions for licensing, inspection s, revocation, et cetera, existed under the state-admi nistered 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 -- eve n if there was discriminatory animus behind the legislat ion -- without some evidence that the provisions were undu ly burdensome. In addition, the provisions are rationa lly related to the government's legitimate purpose of p rotecting the mentally ill and aged who live in R&B houses, a nd 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 respon sibility to assure appropriate relocation of the residents of t he rooming or boarding house to suitable facilities in the event

21that the license is subsequently revoked or its ren ewal

denied," also seems problematic under the FHAA and possibly the United States and New Jersey constitut ions. As with the bonding provision in Neptune Ordinance 166 1, this was inadequately briefed and explained to both the district court and to us; we simply highlight it fo r scrutiny

on remand.

For the foregoing reasons we will affirm in part, r everse in part, and remand for further proceedings consist ent 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