Arlington Heights v. Metropolitan Housing Corp.

Arlington Heights then appealed to the Supreme Court which accepted the case. Justice Powell, writing for the 5-3 majority, could find no evidence the denial was racially motivated. Instead, Powell, agreeing with the district court's decision, found substantial evidence indicating the zoning decision was primarily prompted by a desire to protect property values and to preserve the zoning plan's integrity.

Arlington Heights argued before the Court that Metropolitan lacked legal standing to pursue their claim because it suffered no economic injury. The city argued that Metropolitan was not the actual property owner of the parcel since its agreement with St. Viator was contingent upon the rezoning. Powell, therefore, first examined the issue of standing. Powell observed that Arlington Heights' action effectively blocked the housing construction. He wrote that if Metropolitan was able to block the denial, which they could only accomplish through this petition, the barrier to low cost housing would be fully removed.

After consideration, Powell rejected Arlington Heights' argument. It seemed likely that Metropolitan would suffer some economic injury from its denial to rezone. Metropolitan, after all, had already invested thousands of dollars in developing plans for the proposed Lincoln Green community and for studies submitted to Arlington Heights supporting the rezoning request. Powell observed that the plans and studies would be worthless without the rezoning. Despite these factors, Powell wrote that Arlington Heights misunderstood the standing requirement. Sustaining an economic injury was not necessary. Metropolitan, a nonprofit corporation committed to providing low cost housing in areas where it was scarce, held a general interest. Therefore, Metropolitan readily satisfied the standing requirement of the Court.

In support of their petition for rezoning, Metropolitan argued that, as established in Euclid v Ambler Realty Co. (1926), it had the right to be free of arbitrary or illogical zoning actions. Metropolitan claimed Arlington Heights' refusal to rezone discriminated against racial minorities and was in violation of the Fourteenth Amendment. Powell found, however, that Metropolitan, being a corporation, had no racial identity and thus could not be discriminated against.

However, a Mr. Ransom, named in the lawsuit along with Metropolitan, was an African American Illinois resident. Working in an Arlington Heights' factory, Ransom lived approximately 20 miles away in a five room Evanston house with his mother and son. Ransom sought and qualified for the housing Metropolitan was to build. He claimed racial discrimination because the housing was blocked.

Powell responded that to prove a violation of the Equal Protection Clause based on racial discrimination, a proof of intent or purpose was necessary. Intent could be determined by examining both circumstantial and direct evidence available. Factors to consider when evaluating racial discrimination included the decision's potential impact, the historical trends and decisions, the sequence of events leading to the decision, and any deviation from normal procedures in making the decision.

In examining Arlington Heights' decision to not rezone, Powell concluded the community had consistently applied its zoning laws following its usual procedures. A buffer zone policy to protect property values existed well before Metropolitan's petition appeared. Powell then applied a recent job discrimination case ruling of the Court in Washington v. Davis (1976). He wrote that, with no convincing evidence offered of discriminatory intent, the mere fact that the denial for rezoning happened to have a racially discriminatory effect was "without independent constitutional significance." The Court upheld the Arlington Heights' denial to rezone by reversing the appeals court's decision, but also sent the case back to the appeals court to consider the alleged violation of the Fair Housing Act.

Justice White, joined by Justice Marshall and Justice Brennan, dissented. White contended that the majority should have adhered to traditional Court principles to not apply a precedent that was set after the appeals court had made its decision. The case should have been sent back to the appeals court for them to apply the precedent set in Davis. The Davis decision had been delivered by the Court after the appeals court had heard the Arlington Heights case.