Parties may have reached a tentative settlement agreement in Mount Holly v. Mt. Holly Gardens Citizens in Action. The settlement, if approved, would be the second time in two years that the Supreme Court has been denied the opportunity to determine if the federal Fair Housing Act encompasses discrimination claims under a disparate impact theory. The settlement is not yet confirmed.
Two years ago the Court granted certiorari in Magner v. Gallagher to decide the same question. But just before oral argument the parties agreed to a settlement and the case was dismissed. It appears that the settlement in Magner was the result of pressure by the Obama administration. The oral argument in Mount Holly is scheduled for December 4, 2013.
In Magner, and Mount Holly, plaintiffs argued that the Fair Housing Act prohibits not only intentional discrimination based on race, but also race-neutral practices that have some disproportionate adverse impact on minorities – even though there was no intent to do so. Whether the Fair Housing Act allows claims for disparate impact is a question that must be addressed by the Supreme Court, because the Act applies to every aspect of home real estate transactions, from sales and rentals, to mortgage loans. To avoid disparate impact liability, governments and businesses must be ever aware of the racial consequences of their policies and practices. This leads to race-conscious decisionmaking, which is unconstitutional. PLF made those arguments in its Supreme Court brief.