Many of the 329 homes in the neighborhood already have been demolished.
"The residents argue that the redevelopers, which include Triad, provided inadequate relocation assistance and allowed residents to be improperly pressured to leave, and that the redevelopment plan essentially pushes minority residents out of Mount Holly," the appeals court wrote in a 27-page decision released Tuesday.
The ruling means the case will be remanded to U.S. District Court Judge Noel L. Hillman for trial. The Camden judge had dismissed the case in January, saying the town had not discriminated against the residents and had a right to proceed with its plans. The residents, however, said they wanted to stay and argued that their homes were being replaced by higher priced homes they could not afford.
"I'm very happy for my clients who have hung in there. We've been litigating this for years and it's gratifying to see the court sees our claims as meritorious," said Olga Pomar, a Legal Services attorney who handled the case.
In 2000, Mount Holly officials began acquiring and demolishing the first of the row-homes in the Gardens section of the Burlington County township in an effort to redevelop the blighted area. Plans call for market-rate town houses and other units to replace the existing homes.
Mount Holly deputy mayor Tom Gibson said officials would be meeting with their attorney to decide whether to appeal.
Contact staff writer Jan Hefler at 856-779-3224 or jhefler@phillynews.com