August 22, 2014

Understanding the difference between disparate treatment and disparate impact

By Joshua P. Thompson Senior Attorney

There are two types of discrimination recognized by our various civil rights laws: disparate treatment and disparate impact. The former is conscious, intentional discrimination.  The latter is unintentional, and is demonstrated through statistical disparities.  Here on the Liberty Blog we have often posted on various absurd applications of disparate impact theory.  We have also noted how the Obama Administration is trying to inject disparate impact into nearly every facet of American life.  Disparate impact is a pernicious doctrine that forces racial balancing, hurts business, and violates the Equal Protection Clause.

But not all of our civil rights statutes allow for disparate impact claims. Title VI, which prohibits discrimination by anyone or anything receiving federal funds (think public universities or highway construction), only prohibits disparate treatment — i.e. intentional discrimination. Title VII, which covers discrimination in employment, prohibits both disparate treatment and disparate impact.   To make matters even more confusing, Title VIII, otherwise known as the Fair Housing Act, only prohibits disparate treatment, but the various courts of appeals have all read disparate impact into it.

With regards to the Fair Housing Act, back in June, PLF filed a brief asking the Supreme Court — for the third time — to take up the issue of whether the Act cognizes claims of disparate impact. You may recall that the Supreme Court has twice granted certiorari on that issue, but that the parties settled on the even of oral argument.  In at least one of those cases it later came out that the Obama Administration engaged in some suspect actions to prevent the case from being heard by the Supreme Court.  PLF hopes that the Supreme Court takes that issue up again, and finally has the chance to rule on whether the Fair Housing Act allows disparate impact claims.

But there is another case that PLF filed a brief in this week concerning the intersection of disparate impact and disparate treatment under the Fair Housing Act.  In Pacific Shores Properties v. City of Newport Beach, the plaintiffs are trying to bring a disparate treatment (intentional discrimination) claim, without having to show that any individual or entity was treated differently under the law.  The plaintiffs argue that they can succeed on their disparate treatment claim merely by demonstrating that the law was motivated by a discriminatory purpose — even if the law contains no suspect classifications, and even if nobody was treated unequally after it was adopted.

At issue is a housing ordinance in Newport Beach that limited the types of homes that could be located in residential neighborhoods.  Plaintiffs run “group homes” that provide a sober-living environment for recovering addicts.  By virtue of the new ordinance changing what qualifies as a “single housekeeping unit,” group homes were no longer permitted to be located in residential areas without a special permit.  Group homes weren’t the only type of home that was caught by the ordinance.  In fact, “group living arrangements” — where two or more people who do not live together share a residence — were flatly prohibited.

But back to the plaintiffs claim.  It isn’t exactly a disparate impact claim, because they make no allegations that the law disproportionately affected recovering addicts.  And it certainly isn’t a typical disparate treatment claim, because they are not arguing that recovering addicts were treated differently under the law.  So what is it?  Ordinarily, I would say it’s nothing.  A discriminatory motive is an unfortunate fact that has no legal significance absent some showing that individuals were treated differently.  The Ninth Circuit, on the other hand, took this opportunity to create a whole new type of claim — which it labeled “disparate treatment.”  After the Ninth Circuit’s decision in Pacific Shores, a plaintiff need no longer show different treatment to prevail on an intentional discrimination claim.  A discriminatory motive suffices. This is a whole new theory of discrimination, and it that threatens to radically expand liability for neutral actions.

Pacific Legal Foundation filed a brief this week asking the Supreme Court to take up the case, and there are a number of reasons why it should.  First, the Ninth Circuit’s decision creates a stark circuit split with every jurisdiction that has ever ruled on disparate treatment claims.  Our research uncovered no case allowing a plaintiff to proceed on a disparate treatment claim without having to show that the plaintiff was in fact treated differently.

Second, the case could have profound ramifications for discrimination law. Normally, disparate impact claims challenge neutral policies that have a disproportionate effects.  And there are many reasons why that doctrine is flawed.  But under the Ninth Circuit ruling plaintiffs could challenge neutral policies that do not even have disproportionate effects.  Instead plaintiffs will be scouring legislative records, finding testimony from some random city inhabitant, and impugning neutral laws under the theory that it was “motivated” by a discriminatory purpose.  If you thought disparate impact created perverse incentives to engage in racial balancing, just wait until the Ninth Circuit’s discrimination theory gains a foothold.

Relatedly, if the Supreme Court rules that the Fair Housing Act does not encompass disparate impact claims — as we expect it will — it would be quite a shame if the Ninth Circuit’s holding in Pacific Shores remains unchanged.  Plaintiffs could simply repackage their disparate impact claim as a disparate treatment claim, find someone to say racist or derogatory things into the legislative record, and then challenge the law under this new theory, with the added incentive that they won’t have to show disproportionate effects.

For all these reason we hope that the Supreme Court takes up both of these Fair Housing Act cases next term.  Congress only wrote disparate treatment into the Act, and courts should not be able to create new bases of liability out of whole cloth.

 

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