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Consider the following scenario: An individual contracts to purchase a house in a single-family neighborhood, intending to use the property as a group home for mentally handicapped teenagers. Local residents are concerned about the impact these newcomers will have on their neighborhood. The residents file a lawsuit in state court, seeking to enjoin the operation of the group home on the grounds that its intended occupants fail to satisfy the local zoning ordinance's definition of "family." The group home operator answers that such an application of the zoning ordinance would be discriminatory and therefore invalid under the Fair Housing Act ("FHA").' The FHA prohibits discrimination in housing on the basis of handicap, and expressly preempts state and local laws that conflict with it.2 Eventually the neighbors drop the case, but the group home operator claims that she and the handicapped teenagers have suffered significant damages as a result of the lawsuit, in the form of adverse publicity, emotional distress, delay, substitute housing costs, and legal fees. Consequently, she sues the neighbors in federal court, arguing that the filing and prosecution of the state court lawsuit constituted discrimination in violation of the FHA.3 The neighbors respond that their litigation activity was protected by the First Amendment.4

Civil Rights vs. Civil Liberties? The Legality of State Court Lawsuits under the Fair Housing Act