Disparate-impact claims survive challenge: In Plain English
on Jun 25, 2015 at 12:21 pm
Civil rights groups are breathing a little easier today, after the Court’s ruling in an important housing discrimination case. The question before the Court was whether claims brought under the Fair Housing Act, which prohibits housing discrimination “because of” race, can be based on an allegation that a law or practice has a “disparate impact” – that is, it has a discriminatory effect, even if it wasn’t motivated by an intent to discriminate. The distinction matters because it’s rare for a lawmaker, landlord, or developer to admit that a law or practice is intended to be discriminatory; civil rights groups believe that disparate-impact claims are an important tool to ferret out more subtle examples of housing discrimination.
The Court had agreed to review this question on two earlier occasions, but those cases settled before the Justices could weigh in. Today, however, the Court did rule on the question, and it agreed with the federal government and civil rights groups that the Fair Housing Act does allow disparate-impact claims – subject, however, to some potentially important restrictions. Let’s talk about the decision in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project in Plain English.
Justice Anthony Kennedy wrote today’s opinion for the Court, which was joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan. The Court drew parallels between the Fair Housing Act and two other antidiscrimination statutes, Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act. It reasoned that it had interpreted both of those laws as allowing causes of action based on disparate impact when the text of the laws refers “to the consequences of actions” – that is, their effect – and such an interpretation would be consistent with the purpose of the law. And even if Congress didn’t use the exact same words in the FHA that it used in Title VII and the ADEA, the Court explained, the FHA nonetheless meets both of those criteria. Moreover, just like Title VII and the ADEA, interpreting the FHA to allow disparate-impact claims is also consistent with its purpose: eliminating discriminatory housing practices.
Further evidence that Congress intended to make disparate-impact claims available under the FHA can also be found, the Court emphasized, in Congress’s 1988 amendments to the FHA. With all nine courts of appeals that had considered the question at that point having agreed that disparate-impact claims are available under the FHA, Congress’s failure to make any changes to bar disparate-impact claims effectively amounts to an endorsement of the courts’ interpretation. Indeed, the amendments that Congress did make carved out exemptions from disparate-impact liability – exemptions that would not be necessary if Congress believed that the FHA did not allow disparate-impact claims.
Although the federal government, civil rights groups, and housing advocates will certainly regard today’s decision as a victory, it was by no means an unqualified one. While firmly upholding the concept of disparate-impact claims, the Court appeared to place new limits on when and how they can be brought. It made clear, for example, that disparate-impact claims cannot be based solely on statistical disparities; a plaintiff would have to show that a defendant’s policy actually caused that disparity. And housing authorities and private developers, the Court added, cannot be liable under a disparate-impact theory if they can show that a policy is necessary to achieve a valid goal.
These caveats mean that, even if civil rights groups may have largely won the disparate-impact war, they may still lose this particular battle. The Court sent the case back to the lower court for it to review the case in light of these new restrictions. And the Court’s observation that this case “involves a novel theory of liability,” combined with its warning that the FHA “does not put housing authorities and private developers in a double bind of liability, subject to suit whether they choose to rejuvenate a city core or to promote new low-income housing in suburban communities,” can give at least the Texas Department of Housing and Community Affairs, the defendant in this case, some hope that it can prevail in the end.