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Justice Scalia keeps both sides guessing in Fair Housing Act case: In Plain English

Yesterday the Supreme Court did something that it didn’t get to do in two other recent cases involving the Fair Housing Act: it heard oral arguments. As I noted in my preview of Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, the previous two cases had settled before the oral argument. The reason? Civil rights groups were worried that the conservative Justices on the Roberts Court would rule that the Fair Housing Act does not allow lawsuits based on “disparate impact” – that is, an allegation that a law or policy has a discriminatory effect, even though the discrimination was not on purpose. The ability to bring such claims is important, they believe, because these days lawmakers and landlords rarely tell people that they intend to discriminate; discrimination is much more subtle, and it’s easier to prove that an action has a discriminatory effect. Many businesses, landlords, and lawmakers want the Court to rule that disparate-impact claims are not allowed under the FHA for much the same reason: why should we face lawsuits, they ask, if we have good intentions and didn’t mean to discriminate but our actions just so happen to disproportionately affect minorities?

Going into yesterday’s oral argument, we would have expected a close case. After all, the nine Justices on the Roberts Court often divide five to four in high-profile cases like these. What most people would not have anticipated, however, was that the case could turn out to be a real nail-biter, with Justice Antonin Scalia suggesting at times (but not at others) that he might be inclined to vote to allow disparate-impact claims. Let’s talk about the argument in Plain English.

Arguing on behalf of the Texas Department of Housing and Community Affairs, a state agency charged with distributing federal tax credits for low-income housing in a way that disproportionately affected minorities, Texas Solicitor General Scott Keller urged the Supreme Court to look no further than the text of the FHA. Because the FHA never uses language suggesting that lawsuits can be brought based solely on an action’s effects, Congress clearly did not intend to allow lawsuits based on disparate impact.

The Court’s four more liberal Justices saw things differently, though. Justice Ruth Bader Ginsburg asked Keller whether, when it interprets the FHA, the Court should take into account Congress’s “grand goal” of reversing generations of discrimination. Wouldn’t that purpose, she suggested, indicate that Congress would want lawsuits based on disparate impact to be available? Both Justice Elena Kagan and Justice Sonia Sotomayor added that until 1988, when Congress had amended the Act, the law “was very clear”: the federal courts of appeals had uniformly agreed that lawsuits could be brought based on disparate impact. Because the 1988 amendments created three exceptions to disparate-impact liability, while leaving the rest of the law unchanged, they insisted, there is no reason to believe that Congress – without specifically saying so – intended to reverse those lower-court decisions. And Justice Stephen Breyer raised practical concerns about what Keller was asking the Court to do. If there are good arguments on both sides, if allowing lawsuits based on disparate impact has been “helpful to many people,” and, “as far as I can tell, the world hasn’t come to an end” in the thirty-plus years since courts first allowed lawsuits based on disparate impact to proceed, he queried, why should the Court come along and reverse course now?

But it was Justice Antonin Scalia who was perhaps Keller’s chief antagonist. First, he asked Keller to explain why Congress’s changes to the FHA in 1988 wouldn’t “kill your case.” Later, in words that are likely to be quoted back at him next month, when the Court interprets the Affordable Care Act, Scalia emphasized that judges should look at the “whole law” and figure out “what makes sense”; when you do that, he concluded, it was hard to read the law in any way except to provide a disparate-impact cause of action.

But if Scalia was tough on Keller, he also didn’t pull any punches with attorney Michael Daniel, who appeared on behalf of the Inclusive Communities Project, a non-profit that works to promote integration in and around Dallas. Scalia stressed that the language of the FHA creates liability when housing is not available for a reason related to race. The Project’s interpretation, on the other hand, could create liability when the housing isn’t available for a reason that isn’t related to race, if the result is a disparity based on race. Scalia told Daniel that racial disparity is not the same as racial discrimination, which requires someone to “intentionally exclude” someone else based on her race. Most players in the National Football League, he observed, are black, but that’s not discrimination. You are arguing, Scalia said to Daniel with obvious disapproval, that a racial disparity is enough to make a policy unlawful.

Chief Justice John Roberts, who has famously said that the “way to stop discriminating on the basis of race is to stop discriminating on the basis of race,” focused on what he saw as another flaw that the state had identified: whether “there is a way to avoid a disparate impact consequence without taking race into account.” Put another way, if the argument is that “there aren’t a sufficient number of minorities in a particular project,” the Chief Justice said, that would require the developer or government agency to “look at . . . race until” there are enough minorities. Daniel countered that the problem can be easily fixed by stopping the practice that is causing the disparity, without having to consider race. But the Chief Justice seemed unconvinced.

The Justices’ questions for Daniel slowed to a trickle, and he appeared to sit down without using all of his allotted time. They had plenty of questions, though, for U.S. Solicitor General Don Verrilli, appearing on behalf of the United States to support the Project. Verrilli began by emphasizing that the 1988 amendments to the FHA would be meaningless unless Congress believed that you could bring a lawsuit based on disparate impact: after all, why would you need an exemption from something that doesn’t exist?

The Chief Justice expressed concerns about the difficulties of dealing with disparate-impact claims. How, he pressed Verrilli to explain, are decision-makers supposed to know whether a policy has a “good” impact – and therefore it should be allowed – or a “bad” one? For example, as between a “proposal to build new housing in a low income area,” which would “primarily benefit” minorities, and a proposal to “build housing in an affluent area,” which would “promote integration – also a good thing,” which provision would be the one that would have a disparate impact? “You’ve got to know what you’re shooting at,” the Chief Justice observed, “before you can tell if you’ve missed.” Verrilli tried to reassure the Chief Justice that most cases involving disparate impact aren’t difficult ones – they involve, for example, zoning or occupancy restrictions.

Verrilli also argued that, at the very least, it isn’t clear from the language of the Fair Housing Act whether Congress intended to allow claims based on disparate impact. And because that’s the case, he urged the Court to give significant weight to the regulations issued in recent years by the federal Department of Housing and Urban Development, which has interpreted the FHA to allow such claims. But Justice Samuel Alito, at least, was dubious about whether the Court should do so. Instead, Alito seemed to suggest that the federal government had only issued the regulations to game the system: although the FHA was passed in 1968, HUD didn’t issue the regulations until over forty years later, seven days after the Court had first agreed (in another case) to decide the disparate-impact question itself. That led to a humorous moment, in which Verrilli told Alito that he “didn’t mean to be flip about it, but I do think it overestimates the efficiency of the government to think that” it could issue regulations in just seven days.

A decision in the case is expected by late June or early July. Due in no small part to Justice Scalia, both sides are likely to be on tenterhooks until then.

Recommended Citation: Amy Howe, Justice Scalia keeps both sides guessing in Fair Housing Act case: In Plain English, SCOTUSblog (Jan. 22, 2015, 12:18 PM),