July 2, 2015

More on disparate impact and the Fair Housing Act

By More on disparate impact and the Fair Housing Act

The Washington Examiner published my opinion-editorial yesterday on the Supreme Court’s disappointing decision in Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc.  Last week, the Court held that the Fair Housing Act (FHA), Title VIII of the Civil Rights Act of 1968, encompasses claims for disparate impact.

The FHA prohibits discrimination in all aspects of housing and residential real estate-related transactions. Disparate impact is the legal doctrine that someone is liable for discrimination even when they had no intent to discriminate or cause harm.  So what’s the problem?

The theory, which the Supreme Court now officially sanctions for enforcing the FHA, raises serious equal protection concerns by leading to race-conscious decision making and even outright discrimination. To avoid being sued under a theory of disparate impact, public and private entities must ensure that the results of any decision have a predetermined racial outcome. If projections show a possible disproportionate effect, local governments and businesses are pressured to rig the outcome in ways that violate the Fourteenth Amendment’s guarantee of equality under the law.

Attorneys for PLF filed a brief in this case, with Center for Equal Opportunity, Competitive Enterprise Institute, Cato Institute, Individual Rights Foundation, Reason Foundation, and Project 21.  PLF’s brief argued against the expansion of disparate impact theory.  Although the Court ruled that the Fair Housing Act encompasses claims for disparate impact, the decision does stress important safeguards for lower courts to limit the theory.

First, when housing authorities and private developers are sued under a disparate impact claim, they should be allowed “leeway to state and explain the valid interest served by their policies.” In other words, defendants do not violate the FHA by implementing policies and practices that further the objectives of the FHA, even if policies and practices disproportionately affect a protected class.

Second, Justice Kennedy stresses proof of causation. Plaintiffs suing under a disparate impact theory must identify the specific practice or policy implemented by the defendant that causes a discriminatory effect. If disparate impact claims are difficult to prove, public and private entities will feel less pressure to make decisions based on racial outcomes. Fnally, Justice Kennedy writes that lower courts should not order remedies requiring racial targets or quotas.

If lower courts follow the commands of the Supreme Court, then plaintiffs may have a difficult time prevailing on their disparate-impact claims.  You can read the entire article here.

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