On certification to the Superior Court, Appellate Division, whose opinion is reported at 222 N.J. Super. 131 (1987).
The opinion of the Court was delivered by Handler, J. Justices Clifford, Pollock, O'Hern, Garibaldi and Stein join in this opinion. Chief Justice Wilentz did not participate.
[115 NJ Page 538] Plaintiffs, representing persons in need of affordable housing, contend that they are entitled to attorney's fees as successful civil rights litigants. The litigation in which they prevailed
was brought on a complaint against numerous municipal defendants charging that their local zoning ordinances were invalid because of their exclusionary impact on persons of low and moderate incomes in need of affordable housing. The complaint was based on the Mount Laurel doctrine, which implicates state statutory and constitutional standards, and also on the Federal Fair Housing Act. 42 U.S.C. § 3601 to 3619 (Title VIII). As prevailing parties, plaintiffs contend, they should be able to recover attorney's fees under section 3612(c) of Title VIII. The difficulty with this position is that throughout this prolonged litigation there was no adjudication of the alleged violation of Title VIII. Further, although this litigation was initiated approximately fifteen years ago and their substantive rights were adjudicated more than six years ago, plaintiffs had never sought or claimed attorney's fees until this application.
The plaintiffs, Urban League of Greater New Brunswick and individuals Fannie Botts, Lydia Cruz, and Jean White, brought suit in 1974 against twenty-three of the twenty-five municipalities in Middlesex County, alleging that their respective zoning ordinances violated various State and federal statutes, as well as the New Jersey and United States Constitutions. One of plaintiffs' claims was based on the provisions of Title VIII, the Federal Fair Housing Act.
In May 1976, the Superior Court, Chancery Division, ruled that the zoning ordinances of eleven of the defendant municipalities were exclusionary under the standards of Southern Burlington County NAACP v. Township of Mount Laurel, 67 N.J. 151, cert. den., 423 U.S. 808, 96 S. Ct. 18, 46 L. Ed. 2d 28 (1975) (Mount Laurel I). However, plaintiffs' claims under Title VIII, as well as under the thirteenth and fourteenth amendments to the United States Constitution, were dismissed. While the dismissal of the individual plaintiffs was based on a
lack of standing, the claims of the corporate plaintiffs were dismissed because "no credible evidence of deliberate or systematic exclusion of minorities was before the Court.' Urban League of New Brunswick v. Mayor and Council of Borough of Carteret, 142 N.J. Super. 11, 19 (Ch.Div.1976), certif. den., 74 N.J. 262 (1977). The defendants appealed and the plaintiffs cross-appealed.
The Appellate Division reversed the trial court. On the merits, it ruled that Middlesex County was not a proper housing region and that some of the zoning ordinances were not exclusionary. Urban League of New Brunswick v. Mayor of Carteret, 170 N.J. Super. 461, 475 (1979). It also ruled that the individual plaintiffs had standing to argue violations of Title VIII, and, further, that the corporate plaintiffs did not have to prove discriminatory intent under Title VIII. Id. at 468-69. Nevertheless, the court concluded that plaintiffs had failed to sustain the burden of proof that the defendants' zoning ordinances violated Mount Laurel I, id. at 477 and refused to disturb the dismissal of the thirteenth and fourteenth amendment claims.
This Court granted certification of the case, 82 N.J. 283 (1980), and considered it with five other cases involving the validity of local zoning ordinances with respect to their exclusionary impact. Southern Burlington County NAACP v. Mount Laurel Township, 92 N.J. 158 (1983) (Mount Laurel II). However, only seven of the defendants in this case participated in the Mount Laurel II appeal: Cranbury, East Brunswick, Monroe, Piscataway, Plainsboro, South Brunswick, and South Plainfield. The Court thereafter reversed the Appellate Division and reinstated the trial court's determination that the zoning ordinances were exclusionary and violated the police-power, due-process, and equal-protection provisions of the State Constitution. Mt. Laurel II, 92 N.J. at 349. The plaintiffs' thirteenth and fourteenth amendment claims were not addressed; the Court stated that "it [did] not appear that [these claims were] being pressed before this Court.' Id. at 341.
Furthermore, the Court did not expressly address the plaintiffs' Title VIII claim.
Thereafter, the Legislature enacted the New Jersey Fair Housing Act, L. 1985, c. 222, N.J.S.A. 52:27D-301 to -329, which created the Council on Affordable Housing (COAH). N.J.S.A. 52:27D-305. The effect of the state Fair Housing Act was to transfer jurisdiction over Mount Laurel cases from the courts to COAH. The function of COAH under the statute was to mediate and review claims challenging the exclusionary impact of local zoning ordinances. N.J.S.A. 52:27D-315. It also was authorized to determine appropriate housing regions and each municipality's obligation to provide affordable housing. N.J.S.A. 52:27D-307. The validity of this legislation was challenged in court. In February 1986, this Court sustained the constitutionality of the Fair Housing Act and, in accordance with its provisions, ordered pending Mount Laurel II cases transferred to COAH. Hills Dev. Co. v. Bernards Township, 103 N.J. 1 (1986).
In August 1986, plaintiffs made applications for attorney's fees, expert fees, and costs. They argued that they were successful litigants under Mount Laurel II and that they were entitled to fees pursuant to Rule 4:42-9(a)(8) and 42 U.S.C. section 3612(c), the attorney's fees provision of Title VIII.
The issue framed in the attorney's fee motion was whether the economic discrimination established under Mount Laurel II also established a violation of Title VIII. The trial court ruled that the same operative facts necessary to show discrimination under Mount Laurel II were not the same facts necessary to show discrimination under Title VIII, namely, discrimination based on race, color, religion, sex, or national origin in the sale, rental, financing, or brokerage of housing. As recapitualized by the Appellate Division, the trial court expressed the view that "[w]hile it may be that the impact was most greatly felt by nonwhites, minorities, no court has found low or moderate income to be equivalent to race.' 222 N.J. Super. 131, 137
(App.Div.1988). The trial court also believed, according to the Appellate Division, that the evidence presented by the plaintiffs in 1976 "attempted to show the impact that excluding [through zoning] has on minorities,' but nevertheless concluded that the showing had not been made and ruled against the plaintiffs. Id. at 136.
The Appellate Division, id. at 131, reversed and remanded for a trial de novo that would be limited to the original trial record of 1976, to determine whether there was sufficient evidence of discrimination to establish substantive violations of Title VIII, entitling plaintiffs to an award of attorney's fees under section 3612(c). We granted certification. 110 N.J. 310 (1988).
Title VIII was passed as a congressional attempt to combat discrimination in housing. Sections 3604, 3605, and 3606 are substantive provisions that define some of the activities prohibited by Title VIII. Section 3612(c) allows a prevailing plaintiff under Title VIII to receive attorney's fees. A precondition to the award of such fees is that the plaintiff is financially unable to assume the burden of such fees. Section 3612(c) is otherwise unspecific about the standards that should be applied in determining entitlement to fees by a prevailing party.
Some evidence of the congressional intendment in the application of this fee provision can be found in a similar congressional enactment, the Civil Rights Attorney's Fee Act of 1976, 42 U.S.C. § 1988 (section 1988). Congress passed section 1988 in order to remedy "anomalous gaps' created in the award of attorney's fees by the case of Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 95 S. Ct. 1612, 44 L. Ed. 2d 141 (1975). S.Rep. No. 1011, 94th Cong., 2d Sess. 1, reprinted in 1976 U.S.Code Cong. & Ad.News 5908, 5911.
Prior to Alyeska, lower federal courts had adopted a policy of awarding attorney's fees to successful ...