Group Homes, Retirees Win in Separate Court Decisions


Two recent U.S. Supreme Court cases, though each dealing with a limited population, may have an effect on clients. In one, the Court dealt with group homes and boarding homes; in the other, the Court addressed long-standing state tax inequities.

Group Home Regulation

Oxford House, a Washington drug and alcohol treatment program, tried to open a group home in the city of Edmonds. Local planners objected, citing a city ordinance which prohibited more than five unrelated individuals from living together.

Oxford House appealed the denial through the federal court system, losing in the District Court but winning in the Ninth Circuit Court of Appeals. Now the Supreme Court has agreed that Edmonds’ rule is too restrictive.

The American Association of Retired People (AARP) joined Oxford House in opposing the rule. Though the proposed use in this case was a drug and alcohol rehabilitation program, AARP noted that it would restrict the ability of boarding homes, foster homes and similar facilities to care for elderly clients in residential areas. The Supreme Court agreed.

The Oxford House decision relies on the federal Fair Housing Amendments Act of 1988, which prohibits zoning ordinances restricting occupancy limits unless they are reasonable. The Supreme Court noted that the Edmonds ordinance did not restrict the number of family members who could live in one residence, so deduced that the limitation was based on something other than a desire to control the size of households. Since the limit was different for unrelated housemates, it was inherently unreasonable. Edmonds v. Oxford House, 115 S. Ct. 1776 (1995).

[Note: Tucson had a similar zoning provision until the mid-1980s]

Taxes on Federal Retirees

In the 1980s, Georgia (along with Arizona) was one of about 20 states that tried to impose state income taxes on federal pensions while exempting state pension income. Those tax efforts were struck down after only a few years of collections.

Georgia (like Arizona) initially argued that refunds for the illegally collected tax should be limited to those taxpayers who protested the tax at the time of payment. Since few had protested, this rule would have saved Georgia an estimated $100 million in refunds to 50,000 retirees. The Supreme Court, in its 1994 term, ruled Georgia’s proposal unacceptable, and ordered the state to adopt “meaningful backward-looking relief” for taxpayers who were illegally taxed. Reich v. Collins, 115 S.Ct. 547 (1994).

[Note: Arizona has grappled with the same problem, and has now adopted legislation to permit taxes to be recovered. Many of the taxpayers have now died, and the claims for repayment must be pursued by heirs.]

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