At the height of the Great Society in 1968, Congress passed the Fair Housing Act (“FHA”), a piece of legislation aimed at ending housing discrimination. For the past thirty-seven years, every federal appellate court has interpreted discrimination under the FHA as providing both for claims of intentional discrimination and disparate impact. Yet in a few weeks, the Supreme Court will decide in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project whether the Fair Housing Act actually authorizes claims of disparate impact. In the case, a non-profit organization known as the Inclusive Communities Project (“ICP”) sued the Texas Department of Housing and Community Affairs (“TDHCA”) for allocating tax credits for lower-income housing in a segregated fashion. Inclusive Communities alleged that TDHCA’s policy violated the FHA because it produced a disparate impact on minorities. TDHCA, in turn, countered that the FHA, properly construed, does not provide for claims of disparate impact discrimination.
Inclusive Communities is the latest iteration of a threat to the FHA that has manifested itself several times over the past five years. Yet such controversy over the scope of the FHA is fairly recent. Since 1968, eleven Courts of Appeals have ruled that the FHA allows disparate impact claims.[1] In 1988, Congress, in amending the FHA, tacitly recognized the application of the FHA to such claims.[2] Litigation over disparate impact claims under the FHA, while somewhat common throughout its history, have only recently posed a real threat to the Act. Despite the unanimity in the appellate courts, many have surmised that the Roberts Court, which has been reluctant to construe civil rights legislation as permitting claims of disparate impact in the past,[3] will be less charitable to the scope of the FHA than its predecessors. The Court has certainly taken a greater interest in deciding the question recently. It granted certiorari in cases concerning disparate impact under the FHA twice over the past three years. Both times, last minute agreements brokered by nervous civil rights groups settled the cases before they were argued.[4] Now, however, the disparate impact claim hangs in the balance. The Supreme Court should construe the Act as Congress intended in 1968, to provide “for fair housing throughout the United States,”[5] by allowing both intentional and disparate impact discrimination claims.
The history and context of the act demonstrates Congress’s intent for the FHA to cover claims of disparate impact discrimination. First, as the government notes in its amicus brief on the case, the FHA’s language focuses on effect rather than methodology. The Act “makes it unlawful to ‘refuse to sell or rent’ or ‘otherwise make unavailable or deny’ housing to a person” on account of a “protected characteristic.”[6] Considering that one can prove that a policy makes housing unavailable to a protected group without proving intent, the FHA is not limited to intentional discrimination. It is the consequences of the policy as opposed to the intent that matters. This interpretation also makes more sense regarding Congress’s purpose. Congress passed the FHA to root out discrimination in housing. Such discrimination is often subtle and nearly impossible to demonstrate as intentional. Additionally, the high evidentiary bars for surviving dismissal before discovery ensure that many claims of intentional discrimination never see the light of day.[7] Finally, the congressional and judicial acquiescence to disparate impact claims under the FHA demonstrate that the Act was intended to provide for them. Eleven appellate courts have construed the legislative history and context of the FHA as providing for disparate impact claims. Critically, Congress even tacitly recognized the validity of such claims in 1988 when, in amending the Act, it provided for several exemptions to disparate impact claims but declined to restrict the Act to intentional discrimination. Clearly, Congress was aware that claims of disparate impact discrimination were being brought under the FHA and knew how to restrict the Act if it so wished. Despite its awareness, Congress refused to narrow the scope of the Act to intentional discrimination.
Additionally, even if the context of the FHA is not enough to demonstrate that it can encompass disparate impact claims, the U.S. Department of Housing and Urban Development (“HUD”) recently implemented a rule interpreting the FHA as providing for claims of disparate impact.[8] Even if the FHA does not unambiguously allow for claims of disparate impact, it certainly does not unambiguously prohibit it. As such, under Chevron v. National Resource Defense Council, the Supreme Court should defer to the agency’s interpretation of the FHA.
In contending that the FHA does not authorize disparate impact claims, TDHCA focuses its case on two main arguments. First, it posits that the FHA’s text unambiguously precludes disparate impact claims because it does not contain the same language as in other instances where the Supreme Court interpreted legislation to provide for such claims. It cites to Smith v. City of Jackson, a case in which the Supreme Court pointed to language such as “effects” or “actions that ‘adversely’ effect others” in construing legislation as providing for disparate impact claims, as evidence that the FHA does not provide for similar claims.[9] Yet this distinction elevates form over substance. To interpret Smith as providing for a magic words requirement would both retroactively penalize pre-Smith congresses for not anticipating the decision and would arbitrarily ignore the myriad other factors that demonstrate congressional intent. Furthermore, the text of the FHA is broad enough on its face to allow disparate impact liability. Even if the Court did interpret the legislation at issue in Smith because of certain language, it does not follow that the presence of that language is a necessary factor to provide for disparate impact claims. Next, TDHCA argues that the Court should employ the constitutional avoidance canon in favor of its preferred interpretation. When the Court chooses between interpretations of a statute like the FHA, it strives to select an interpretation that is constitutional so as to avoid striking down the statute. TDHCA argues that if the FHA provides for disparate impact claims, it requires regulated entities to engage in unconstitutional “race-based decisions” in formulating policy.[10] Yet the Supreme Court unanimously upheld such an approach as constitutional in Griggs v. Duke Power Co.[11] shortly after the passage of the FHA. More recently, it explicitly declined to find such an approach unconstitutional in Ricci. Hence, calling for the constitutional avoidance canon in this instance is misguided.
Ultimately, the Supreme Court should turn away TDHCA’s claim in this case and defer to the weight of legal, legislative, and agency authority supporting the interpretation of the FHA that has prevailed since its inception.[12] To hold otherwise would not only severely undermine the FHA but also threaten Title VII and other important pieces of civil rights legislation with a goal that relies in large part on disparate impact claims. Congress passed the FHA a few days after Martin Luther King Jr.’s assassination with the goal of fulfilling one of his final goals–ending housing discrimination. The Supreme Court should honor Congress’s intent.
[1] http://www.scotusblog.com/2015/01/argument-preview-that-housing-bias-issue-is-back/
[2] http://www.scotusblog.com/2015/01/justice-scalia-keeps-both-sides-guessing-in-fair-housing-act-case-in-plain-english/)
[3] See Giradeau A. Spann, Disparate Impact, 98 Geo. L.J. 1133, 1135 (2010). The Court hinted as recently as 2009, in Ricci v. Distefano, that it might even be willing to strike down the provision for disparate impact claims in Title VII.
[4] http://www.scotusblog.com/2015/01/symposium-the-case-for-disparate-impact-under-the-fair-housing-act/
[5] http://www.justice.gov/crt/about/hce/title8.php
[6] http://sblog.s3.amazonaws.com/wp-content/uploads/sites/10/2015/01/USSG-Amicus-Brief-CLEAN.pdf
[7] Indeed, Inclusive Communities originally included an intentional discrimination claim that was dismissed by a lower court.
[8] See Michael G. Allen, Jamie L. Crook & John P. Relman, Assessing HUD’s Disparate Impact Rule: A Practitioner’s Perspective, 49 HARV. C.R.-C.L. L. REV. 155, 156 (2014)
[9]http://www.americanbar.org/content/dam/aba/publications/supreme_court_preview/BriefsV4/13-1371_pet_reply.authcheckdam.pdf
[10]http://www.americanbar.org/content/dam/aba/publications/supreme_court_preview/BriefsV4/13-1371_pet_reply.authcheckdam.pdf)
[11] Upholding disparate impact claims under Title VII.
[12] While it seems that the Court could be headed towards a 5-4 split, Justice Scalia evinced an unexpected skepticism towards TDHCA’s interpretation, providing hope that he might vote with the four liberal justices in favor of ICP’s interpretation of the Act.
