On January 21, the U.S. Supreme Court heard oral arguments in the case of Texas Department of Housing and Community Affairs vs. The Inclusive Communities Project. NLIHC signed one of 22 amici curiae supporting the disparate impact standard in housing discrimination cases (see Memo, 1/12). The Inclusive Communities Project (ICP) sued the Texas Department of Housing and Community Development over the siting of most Low Income Housing Tax Credit properties in predominately black communities in Texas and won in the lower court. Texas appealed to the U.S. Supreme Court.
NLHIC participated in a rally in support of the disparate impact standard outside the Supreme Court. During the three-hour rally, speeches were made by civil rights and fair housing leaders, plaintiffs in several Fair Housing cases, and NLIHC President and CEO Sheila Crowley.
At issue is whether the Fair Housing Act of 1968 bars not only intentional discrimination, but also policies and practices that have a disparate impact – that do not have a stated intent to discriminate but that have the effect of discriminating against the Fair Housing Act’s protected classes – race, color, national origin, religion, sex, familial status, or disability.
Section 804(a) of the Fair Housing Act makes it unlawful “[t]o refuse to sell or rent…, or otherwise make unavailable or deny, any dwelling to any person because of race, color, national origin, religion, sex, familial status, or handicap.” (emphasis added)
Shortly after passage of Title VIII of the Civil Rights Act of 1968, which is the Fair Housing Act, federal circuit courts unanimously upheld that violations of the Fair Housing Act can be established through a disparate impact standard of proof. By 1988 when the Fair Housing Act was amended to expand its scope, nine circuit courts of appeal had found the disparate impact standard necessary to enforce the law. Under the disparate impact standard, courts assess discriminatory effect and whether an action perpetuates segregation, whether the discrimination is justified, and whether less discriminatory alternatives exist for the challenged practice.
The Solicitor General of the State of Texas, Scott Keller, opened the oral arguments asserting that the Fair Housing Act does not recognize disparate impact claims for two reasons:
- The plain text of the Fair Housing Act does not use effects- or results-based language, and therefore is limited to intentional discrimination, and
- The canon of constitutional avoidance compels this interpretation. Mr. Keller is referring to the 14th Amendment to the U.S. Constitution, which calls for equal protection of the laws.
Most of the Justices’ questioning of Mr. Keller focused on his first point. Justice Sonya Sotomayor noted that in other statutes, such as Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination, also did not use the words ‘disparate impact’ early on, yet the Supreme Court recognized that it applies the disparate impact standard. Mr. Keller responded by stating that the Court needed to focus on the plain text of the Fair Housing Act, arguing that “make unavailable” was not an active verb, compared to the verb “adversely affect” used in Title VII, which has an established disparate impact standard.
Referring to the 1988 amendments to the Fair Housing Act that provided three exemptions from liability under the disparate impact standard, Justice Antonin Scalia commented, “What hangs me up…is the fact that Congress seemingly acknowledged the effects test later in legislation when it said that certain effects will not qualify…Why doesn’t that kill your case? When we look at a provision of law, we look at the entire provision of law, including later amendments.”
Picking up the thread of the 1988 amendments, Justice Elena Kagan reminded Mr. Keller that when Congress considered those amendments they were aware that ten circuit courts of appeals had said that disparate impact was a valid action under the Fair Housing Act and did not negate those decisions. In addition, Congress explicitly articulated the three circumstances in which disparate impact would not apply. Whereupon Justice Scalia commented, “That’s a very strange thing for Congress to do, to believe that those court of appeals’ opinions are wrong and yet enact these exemptions. So even though those opinions are wrong, they will not apply to these things. That’s very strange.”
Justice Stephen Breyer weighed in saying:
“The law has been against you…And it’s universally against you. And as far as I can tell, the world hasn’t come to an end….this has been the law of the United States uniformly throughout the United States for 35 years…and all the horribles that are painted don’t seem to have happened or at least we have survived them. So, why should this Court suddenly come in and reverse an important law which seems to have worked out in a way that is helpful to many people, has not produced disaster…?”
In response to oral arguments offered U.S. Solicitor General Donald B. Verrilli as a friend of the court in support of ICP, Chief Justice John Roberts questioned what he perceived to be the difficulty of deciding what impact is good and bad. He posited two proposals both with good impacts: one to build new housing in a low income area that would primarily benefit minorities, another to build new housing in a more affluent area, thus promoting integration. Mr. Verrilli responded that HUD or the courts must look at which is having a disparate impact and apply the test that the courts and HUD have used for many years, that is, analyze the justification for a policy or practice and determine whether there is a race-neutral alternative that has less harmful effects.
Mr. Verrilli addressed the issue of constitutional avoidance, stating that in the context of Title VII, Mr. Keller had argued that the only way to avoid disparate impact liability is to engage in race-based remedies. Mr. Verrilli asserted that in other Fair Housing cases adjudicated by eleven circuit courts, the remedy was substituting one race-neutral rule for another race-neutral rule.
The issue of constitutional avoidance was given greater discussion in Justice Scalia’s questioning of Michael M. Daniel, attorney for ICP. Mr. Daniel said, “It’s clear from the Congressional Record Congress was worried and concerned about making units only available in low income, minority areas that it called ‘ghettos.’” Justice Scalia quickly interjected that the word “unavailable” was not the problem; the problem was unavailable on the basis of race. “Let’s not equate racial disparity with discrimination…what you are arguing here is that racial disparity is enough to make whatever policy adopted unlawful.”
Much of the discussion with Mr. Daniel reiterated how the disparate impact tests has been applied for many years, that is, the justification for a policy or practice is analyzed, and the party challenged must show that there are no alternative policies or practices that do not have a disparate effect.
An expanded summary of the oral arguments prepared by NLIHC is at http://nlihc.org/sites/default/files/SCOTUS-Memo_Expanded-Version_0115.pdf.
The transcript of the oral arguments is at
The audio of the oral arguments is at