NEW YORK (JTA) – A lawsuit alleging that an upstate New York town discriminated against Hasidic Jews may proceed, a federal judge ruled.

The lawsuit upheld this week by U.S. District Judge Katherine Forrest alleges that the 400-person Village of Bloomingburg and the 12,000-resident Town of Mamakating, in which Bloomingburg is located, violated federal civil rights and fair housing laws by trying to stop the development of 396 townhouses that cater to Hasidic Jews and by rejecting the conversion of a nearby house into a mikvah ritual bath.

Bloomingburg is located in Sullivan County, about 75 miles north of Manhattan. The development, called Chestnut Ridge, is currently under construction and as yet has no inhabitants. It is being built by Shalom Lamm, a real estate developer who is the son of longtime Yeshiva University leader Rabbi Norman Lamm, and it has been marketed to Hasidic Jews.

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The lawsuit was brought by the Bloomingburg Jewish Education Center, a private Hasidic religious school that plans to open in Bloomingburg and is being backed by Lamm. The plaintiffs are seeking $25 million in addition to other remedies.

The lawsuit is one of several surrounding the development by Lamm, who also has bought numerous other properties in Bloomingburg and rented more than two dozen of them to Hasidic families.

In April, Mamakating and Bloomingburg filed a federal lawsuit against Lamm, accusing him of fraud, bribery, racketeering, voter fraud and corruption of public officials — saying he bribed a former mayor, used a frontman to help mislead the village about his intentions for Chestnut Ridge and engaged in racketeering by promoting an enterprise that was corrupt on multiple levels. Lamm denies the accusations and last week filed a motion to dismiss the civil suit.

The lawsuit alleges that Bloomingburg and Mamakating obstructed the completion of the Chestnut Ridge development, impeded the opening of a Hasidic school, prevented a property in Bloomingburg from being converted into a mikvah and engaged in a “program of harassment and discriminatory building code enforcement aimed at Jewish residents or prospective residents of Bloomingburg.”