Spin Cycle

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 New York’s highest court dismissed a reverse-discrimination lawsuit Thursday filed by the town of Oyster Bay over two special housing zones.

  In a 7-0 ruling, the Court of Appeals said Oyster Bay officials first had to pursue the case administratively, through the state Division of Human Rights, before it could file suit.

   The ruling puts an odd twist on the case: Now, Oyster Bay must bring its reverse-discrimination claim to an administrative law judge within the very agency that accused the town of discrimination when it created the new housing districts.

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   At issue are zoning categories created by Oyster Bay. One, dubbed Next Generation, was created in 2004 to offer below-market housing for first-time buyers -- with a preference for town residents and their children. A second, the Golden Age District, which was created a decade earlier, gives similar advantages to senior residents of the town.

 Supporters say the zoning designations encourage residents to remain in Oyster Bay. The Golden Age District now covers 1,476 housing units; Next Generation covers 58, according to town officials.

  But the Division of Human Rights saw big problems in the initiatives. According to court documents, the agency said that "because of already existing racial segregation" in the town, the Next Generation and Golden Age District programs would further discriminate against minority buyers.

   In 2009, the agency charged Oyster Bay with unlawful discriminatory practices in housing, a violation of the state's human rights law.

  The town filed a countersuit, claiming the agency overstepped its authority.

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  Thursday, the Court of Appeals said the matter should be heard by an administrative law judge within the Division of Human Rights.

  Both the discrimination claim and the reverse-discrimination claim “require the resolution of factual issues at the administrative level before they can be passed upon by a court,” the seven-judge panel wrote.

   “In particular, a factual record of the adverse impact of the town's preferences on home-buyers from minority communities, and the effect that removing the preferences would have, has yet to be developed.  Notably, after such factual review, an administrative law judge could provide the relief ultimately sought by the town by finding that the preferences do not amount to discrimination …”