Executive Order (EO) “Restoring Equality of Opportunity and Meritocracy” was posted on the Office of Management and Budget (OMB)/White House website on April 23. The EO intends to eliminate the use of disparate impact liability. An advance version with EO number 14281 was published in the Federal Register’s “Tomorrow’s Documents Today.” A Fact Sheet boils down the legalese of the EO. Among other provisions, the EO instructs the Attorney General to repeal or amend all regulations for all federal agencies (such as HUD) that derive from Title VI of the Civil Rights Act of 1964 that contemplate disparate-impact liability. The EO directs all federal agencies to deprioritize enforcement of statutes (such as Title VIII of the Civil Rights Act of 1968, the Fair Housing Act) and regulations that include disparate impact liability. The EO requires the Attorney General and federal agencies heads to determine whether any federal authorities preempt state laws, regulations, or practices that impose disparate impact liability or whether they have “constitutional infirmities that warrant federal action.” In simple terms, “disparate impact” refers to a method of proving housing discrimination without having to show that discrimination is intentional (see Background below). This EO will be formally published in the Federal Register on Monday, April 28.
The EO makes outrageous claims, such as:
- A “pernicious movement” seeks a divisive pursuit of “results in preordained by irrelevant immutable characteristics…”
- “Disparate-impact liability, which holds that a near insurmountable presumption (emphasis added) of unlawful discrimination exists where there are any differences in outcomes in certain circumstances among different races, sexes, or similar groups, even if there is no facially discriminatory policy or practice or discriminatory intent involved.” (See the three-step “burden-shifting standard” from HUD’s 2013 regulation, below, which demonstrates that there is no “insurmountable presumption.”)
- “Disparate-impact liability all but requires (emphasis added) individuals and businesses to consider race and engage in racial balancing to avoid potentially crippling legal liability.” (The 2013 regulation’s burden-shifting standard does not require such a consideration.)
- Disparate impact theory violates the Constitution’s guarantee of equal protection.
- Disparate impact liability is wholly inconsistent with the Constitution and threatens the commitment to merit and equality of opportunity…”
- “Disparate impact liability imperils the effectiveness of civil rights laws by mandating rather than proscribing, discrimination.”
- The Fact Sheet accompanying the EO embellishes by adding that disparate impact “requires” race-oriented policies and practices to rebalance outcomes along racial lines. The Fact Sheet adds, “Disparate-impact liability undermines civil-rights laws by mandating discrimination to achieve predetermined, race-oriented outcomes, contradicting the Constitution’s guarantee of equal protection and treatment.”
Background
Title VIII of the “Civil Rights Act of 1968,” also known as the “Fair Housing Act,” prohibits discrimination on the basis of race, color, sex, disability, national origin, familial status, or religion (the “protected classes”) in the sale, rental, or financing of dwellings and in other housing-related activities. 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).
The Fair Housing Act not only prohibits intentional discrimination, it also prohibits policies that have an unjustified “discriminatory effect” on the protected classes. The discriminatory effects doctrine (which includes “disparate impact and perpetuation of segregation”) is a tool for addressing policies that unnecessarily cause systemic inequality in housing, regardless of whether the policies intended to discriminate
In simple terms, “disparate impact” refers to a method of proving housing discrimination without having to show that discrimination is intentional. There are a number of common examples of disparate impact, including: nuisance ordinances that endanger women experiencing domestic violence; policies that restrict access to housing for people who have arrest records or criminal convictions; restrictive zoning laws and building codes that prevent the development of affordable housing, disproportionately harming people of color and perpetuating segregation; and policies and practices that harm those relying on vouchers who are disproportionately people of color.
On June 25, 2015, Justice Anthony Kennedy announced the 5-4 decision of the Supreme Court of the United States upholding the disparate impact theory in housing discrimination cases, a theory that was challenge by the State of Texas in Texas Department of Housing and Community Affairs (TDHCA) v The Inclusive Communities Project. At issue was whether the Fair Housing Act of 1968 bars not only intentional discrimination, but also policies and practices that have a disparate impact – policies and practices that do not have a stated intent to discriminate but that have the effect of discriminating against the Fair Housing Act’s protected classes. The Supreme Court cited the 2013 HUD Disparate Impact rule and did not suggest in any way that the 2013 rule required modification.
HUD’s 2013 Disparate Impact rule codified 45 years of HUD practice and the decisions of 11 U.S. Courts of Appeals by establishing a uniform standard for determining when a housing policy or practice with a discriminatory effect violates the Fair Housing Act. The rule formalized a three-step “burden shifting standard:”
- The plaintiff (the party alleging disparate impact) has the burden of proving that a policy or practice caused or predictably will cause a discriminatory effect.
If the plaintiff makes a convincing argument (satisfies that burden of proof), then the burden of proof shifts to the defendant (the housing provider, business, government, or other entity) to show that the challenged policy or practice is necessary to achieve one or more of the defendant’s substantial, legitimate, nondiscriminatory interests.
If the defendant satisfies the above burden of proof, then the burden of proof shifts again to the plaintiff to demonstrate that the defendant’s substantial, legitimate, nondiscriminatory interests could be served by another policy or practice that has a less discriminatory effect.
Read the advance version of EO 14281at: https://tinyurl.com/55b5spfs
Read the Fact Sheet at: https://tinyurl.com/ykvdwhvr
More information about disparate impact is on page 8-9 of NLIHC’s 2024 Advocates’ Guide.