Results Trump Intentions in Supreme Court's Fair Housing Ruling

It was buried by the release of the Supreme Court’s decisionrnupholding a portion of the Affordable Health Care Act, but the Court today also upheldrnan important feature of the Fair Housing Act (FHA).   The Court, in its usual five-four fashion heldrnthat “disparate-impact” is enough to prove discrimination in housing.  </p

The case, Texas Departmentrnof Housing and Community Affairs v. The Inclusive Communities Project, the State of Texas was originallyrnfiled in 2008 by Inclusive Communities (ICP) a fair housing organization inrnDallas.  It sued the state agency (Texas)rnalleging that the state had disproportionally awarded the most importantrnfederal tax credits for low income housing in areas that already had a largernpopulations of both poor and black residents. rnThe plaintiffs claimed that the state’s method of scoring applicationsrnfor those credits and thus the subsequent awards helped keep those residentsrnfrom moving into mostly white areas. </p

This, it was charged, was a violation of the Fair Housing Actrnwhich bars housing discrimination.  Overrnthe last 40 years a number of suits brought to various courts have held thatrnplaintiffs had only to prove that an action had a “disparate-impact” on arnprotected group rather than that the action itself had beenrndiscriminatory.  The State of Texasrnargued that Congress had, since its passage, changed the Fair Housing Act andrnhad they wished to implicitly endorse disparate impact as part of the law theyrncould have done so. </p

The District Court ruled in favor of ICP, concluding thatrnICP had established evidence showing disparate impact and the Texas had failedrnto meet the burden to show there were no less discriminatory alternatives forrnallocating the tax credits.  </p

While Texas’s appeal was pending, the Secretary of Housingrnand Urban Development issued a regulation interpreting the FHA to encompassrndisparate-impact liability and establishing a burden-shifting framework forrnadjudicating claims. The Fifth Circuit Court held that while disparate-impactrnclaims are recognized under FHA the District Court had improperly requiredrnTexas to prove less discriminatory alternatives.</p

Today’s decision, written by Justice Kennedy held that both TitlernVII of the Civil Rights Act of 1964 and the Age Discrimination in EmploymentrnAct of 1967 (ADEA) were relevant to the case as both authorize disparate-impactrnclaims.  Kennedy cited specific languagernfrom the FHA; “it is unlawful to ‘refuse to sell or rent . . . or otherwisernmake unavailable or deny, a dwelling to a person because of race’ or otherrnprotected characteristic, §804(a), or ”to discriminate against any person in’rnmaking certain real-estate transactions “be- cause of race” or other protectedrncharacteristic, §805(a).”   Thernresults-oriented phase “otherwise make unavailable” he said, refers to thernconsequences of an action rather than the actor’s intent and this phrase isrnequivalent in function and purpose to Title VII’s and the ADEA’s “otherwisernadversely affect” language. </p

In all three statutes the operative text focuses on results (as opposed to intentions) andrnplays an identical role: as a catchall phrase, located at the end of a lengthyrnsentence that begins with prohibitions on disparate treatment. The introductoryrnword “otherwise” also signals a shift in emphasis from an actor’s intent to thernconsequences of his actions. This similarity in text and structure is even morerncompelling because Congress passed the FHA only four years after Title VII and fourrnmonths after the ADEA and Congress chose words with the same purpose andrnmeaning but to be consistent with FHA’s structure and objections. </p

Kennedy ruled further against the Congressional intent claimrnsaying the changes made by Congress in 1988 signal its ratification of suchrnliability.  Congress knew that all ninernCourts of Appeals had addressed the disparate-impact claims and concluded thatrnany additional changes by them would have been superfluous. </p

Disparate-impact is also consistent with the law’s centralrnpurpose, to eradicate discriminatory practices within the housing sector. “Suitsrntargeting unlawful zoning laws and other housing restrictions that unfairlyrnexclude minorities from certain neighborhoods without sufficient justificationrnare at the heartland of disparate-impact liability.”  It permits plaintiffs to counteract unconsciousrnprejudices and disguised animus that escape easy classification as disparate treatment.</p

Kennedy said however that disparate-impact liability hasrnalways been properly limited in key respects to avoid serious constitutionalrnquestions that might arise such as imposing liability solely on a showing of arnstatistical disparity. In this case, however the underlying dispute involves a novelrntheory of liability that is simply an attempt to second-guess which of two reasonablernapproaches a housing authority should follow in allocating tax credits forrnlow-income housing. This puts an onerous burden on actors who encourage revitalizingrndilapidated housing merely because some other priority might seem preferable.  A claim must also point to a defendant’srnpolicy as a robust causality requirement. rn”Policies, whether governmental or private, are not contrary to therndisparate-impact requirement unless they are “artificial, arbitrary, andrnunnecessary barriers.”  Interpretationsrnof disparate-impact liability should not be so expansive as to inject racialrnconsiderations into every housing decision; limitations are necessary tornprotect defendants against abusive claims.</p

Courts, when finding liability under disparate-impact, mustrnissue remedial orders that are constitutionally consistent, concentrating onrnthe elimination of the offending practice. rnCourts must also strive to design race-neutral remedies, avoiding ordersrnthat impose racial targets or quotas. </p

Kennedy concluded that the automatic or pervasive injectionrnof race into public and private transactions covered by the FHA has special dangersrnbut race may be considered in certain circumstances and in a proper fashion. Localrnhousing authorities may choose to foster diversity and combat racial isolation withrnrace-neutral tools.  Mere awareness ofrnrace in attempting to solve the problems facing inner cities does not doom thatrnendeavor at the outset.”  </p

Justice Kennedy was joined in the decision by JusticesrnGinsburg, Breyer, Sotomayor, and Kagan. rnJustice Thomas filed a dissenting opinion as did Justice Alito.  Chief Justice Roberts and Justice Scalia joinedrnin the Alito dissent.

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