In Texas Department of Housing and Community Affairs v. the Inclusive Communities Project, Inc.,the Supreme Court settled an important question about housing discrimination with a decision, announced Thursday, that means plaintiffs can still bring a lawsuits under the Fair Housing Act by citing "disparate impact."
Disparate impact describes a policy or action that has a disproportionate negative effect on a minority group, even if there was no intent to discriminate.
Because it preserved this heavily relied-upon approach to lawsuits alleging housing discrimination, the Court's decision — a bit of a surprise for legal experts and court watchers — is considered a victory for civil rights.
Plaintiffs using the Fair Housing Act to fight housing discrimination can still use the disparate impact theory
In Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., the state challenged a federal appeals court decision that ruled its actions violated the Fair Housing Act's (FHA) prohibition against discrimination.
The question the Supreme Court considered was this: Can people who complain of housing discrimination continue to win their cases by using statistics showing the effect of the policies — a tactic known as the disparate impact theory, a staple of fair housing law — or will they have to do something much more difficult and prove that defendants intended to discriminate?
In the majority opinion, written by Justice Kennedy and joined by Justices Breyer, Sotomayor, and Kagan, the court decided that the disparate impact claims are still allowed under the Fair Housing Act, explaining, "The FHA contains the phrase 'because of race,' but Title VII and the ADEA also contain that wording and this Court nonetheless held that those statutes impose disparate-impact liability." The decision also said, "Recognition of disparate-impact claims is also consistent with the central purpose of the FHA, which … was enacted to eradicate discriminatory practices within a sector of the Nation's economy."
"The Court acknowledges the Fair Housing Act's continuing role in moving the nation toward a more integrated society," Kennedy wrote.
Justice Alito, joined by Justices Scalia, Thomas, and Roberts filed a dissenting opinion accusing the court of making "a serious mistake." It mostly focused on the definition of the phrase "because of" in Section 804(a) of the FHA, which makes it unlawful "[t]o refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin." Alito argued that "because of" only refers to intentional discrimination, not disparate impact.
In a separate dissent, Thomas brought up the fact that most NBA players are black, writing, "To presume that these and all other measurable disparities are products of racial discrimination is to ignore the complexities of human existence. Yet, if disparate-impact liability is not based on this assumption and is instead simply a way to correct for imbalances that do not result from any unlawful conduct, it is even less justifiable."
The disparate impact theory that was upheld by this decision is essential to fighting housing discrimination
Because the disparate impact theory gives lawyers the ability to win cases by showing evidence of housing policies' unfair effects (regardless of their intent), it's been a cornerstone of the fight against housing discrimination under the Fair Housing Act. The law was designed to address the stark, racist housing discrimination that was pervasive throughout the country in the 1960s, when it was enacted.
Although it looks different now, housing discrimination remains a major problem. The National Fair Housing Alliance estimates that more than 3.7 million Americans each year are victims of housing discrimination. ThinkProgress points to a study by the Department of Housing and Urban Development that found black and Asian potential homebuyers were shown 15 to 19 percent fewer homes than similarly qualified whites. A Center for American Progress/La Raza roundup of the evidence on housing discrimination reports that blacks with good credit scores were 3.5 times as likely as their white counterparts to receive higher interest rate loans, and, as recently as 2009, African Americans were twice as likely to be denied a home loan.
The NAACP, American Civil Liberties Union, and Lawyers Committee for Civil Rights each have divisions dedicated to combating housing discrimination, and there are more than 220 fair housing organizations dedicated to battling this insidious phenomenon. The Department of Justice's Civil Rights Division is even involved, bringing suits on behalf of the United States to enforce the FHA.
But if the Supreme Court had decided to make intent a requirement to win housing discrimination cases, it would have essentially gutted enforcement of the FHA. This would have been a setback for civil rights, the same way the Supreme Court's June 2013 decision in Shelby County v. Holder, which invalidated a key component of another civil rights-era law, the Voting Rights Act, dealt a major blow to the main tool used to combat racial discrimination in voting.
The decision — a victory for civil rights — was not exactly predictable
Civil rights advocates are celebrating the decision, Michele L. Jawando, vice president of legal progress at the Center for American Progress, said in a statement released Thursday, "We are pleased that the Supreme Court recognized decades of long-standing precedent in today's ruling, ensuring the survival of an important tool to combat discrimination in America's housing market. ... Upholding the disparate impact standard respects decades of precedent and marks an important milestone for equality and inclusiveness in America."
Some legal experts thought this case would go the other way: Stacy Seicshnaydre, associate professor of law at Tulane University and former executive director and general counsel of the Greater New Orleans Fair Housing Action Center, told Vox in October that the simple fact that the Court chose to hear this case meant the justices were likely to decide that proof of discriminatory intent is required in housing discrimination cases. That's an outlook that was echoed by court watchers who interpreted the five-justice majority's "eagerness to review an issue on which all lower courts have agreed, and its hostility to the Voting Rights Act, affirmative action, and other means for rooting out racial discrimination" as a sign that they were willing to do away with the disparate impact theory.
But as is often the case on the Court, Justice Kennedy was considered a wild card. While skeptical of race-conscious remedies in general, he had indicated that he believes racial segregation is a problem. Because disparate impact is mostly used in cases involving racial segregation in housing, there was a small chance, Seicshnaydre correctly predicted, that he might have hesitated to eliminate the legal theory best designed to fight it.