Disparate impact’s day in court

Yesterday, the Supreme Court heard oral argument in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. The issue presented is whether claims of “disparate impact discrimination” can be brought under the Fair Housing Act (FHA).

As I explained here, disparate impact discrimination occurs when a policy disproportionately excludes or injures a particular group and the policy is not shown to be justified by legitimate interests. Under disparate impact theory, the policy is illegal regardless of whether it was intended to discriminate.

The Obama administration has struggled mightily to prevent the Supreme Court from reaching the question of whether disparate impact claims can be brought under the FHA. In two cases, it in essence bought off the opposing parties to thwart review by a Supreme Court it fears will be hostile to the government’s position.

But the government may be feeling better about its chances after oral argument. Why? Because Justice Scalia asked questions that suggested he believes the FHA authorizes disparate impact claims. Although the language of the original legislation, passed in 1968, suggests otherwise, Scalia noted that by the time Congress amended the Act in 1988, courts had already held that disparate impact claims can be brought, and Congress passed amendments that seemed to recognize this. (Roger Clegg takes a different view of the 1988 amendments here).

If the government picks up Scalia’s vote, its chances of prevailing are excellent. The Court’s four liberal stalwarts seem prepared to vote in favor of the Obama administration’s position.

But Team Obama, Elizabeth Warren, and their fellow leftists shouldn’t celebrate yet. In the past, Scalia has expressed concern over whether disparate impact theory can be reconciled with the Constitution. Indeed, in an employment case, Ricci v. DeStefano, Scalia basically invited attorneys in subsequent cases to argue that the disparate impact theory of employment discrimination is unconstitutional.

Yesterday, Scalia seemed to have the same constitutional concerns about disparate impact theory in the housing context. He wondered how courts could decide whether a policy has disparate impact without using the kinds of race-conscious analysis the Court has rejected in the past.

So even if the FHA authorizes disparate impact suits, the authorization may not be constitutional. And if the FHA can plausibly be interpreted as either authorizing or not authorizing disparate impact claims, the later construction could be adopted in order to save the statute from being struck down as unconstitutional.

Although the outcome of this case is in doubt, at least there is likely to be an outcome. Unlike the previous two plaintiffs who were headed to the Supreme Court with this issue, Texas is not a good candidate for being bought off. But if it can be, the government should consider taking a shot, Justice Scalia’s references to the 1988 FHA amendments notwithstanding.


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