US Supreme Court upholds broad discrimination claims under housing law

WASHINGTON - A divided U.S. Supreme Court on Thursday embraced a broad interpretation of the type of civil rights allegations that can be made under the landmark Fair Housing Act by ruling that the law allows for discrimination claims based on seemingly neutral practices that may have a discriminatory effect.

 

On a 5-4 vote in a major civil rights case, the court handed a victory to civil rights groups and the administration of President Barack Obama, which had backed Inclusive Communities Project Inc, a nonprofit in Texas that claimed the state violated the law by disproportionately awarding low-income housing tax credits to developers who own properties in poor, minority-dominated neighborhoods.

 

Although a broad win for civil rights advocates on the legal theory, Justice Anthony Kennedy indicated in the ruling that the Texas plaintiffs could ultimately lose when the case returns to lower courts.

 

Kennedy, a conservative who often casts the deciding vote in close cases, joined the court's four liberals in the majority.

 

The court was considering whether the 1968 law allows for so-called disparate impact claims in which plaintiffs only need to show the discriminatory effect of a particular practice and not evidence of discriminatory intent. There is no dispute over the law's prohibition on openly discriminatory acts in the sale and rental of housing.

 

Kennedy wrote that Congress indicated in 1988 when it amended the law that it intended disparate impact claims to be available.

 

"It permits plaintiffs to counteract unconscious prejudices and disguised animus that escape easy classification," Kennedy added.

 

Kennedy also made clear there are limits to the types of claims that can be brought, saying that "statistical disparity" alone is not enough. Plaintiffs must "point to a defendant's policy or policies causing that disparity," Kennedy added.

 

Justice Samuel Alito wrote in a dissenting opinion that the ruling will "have unfortunately consequences for local government, private enterprise, and those living in poverty."

 

Alito cited an earlier case in which what he called a city's good faith attempt to fix "deplorable housing conditions" for renters was subjected to a legal challenge under the theory.

 

The case was closely watched by lenders and insurance companies, which say they are unfairly targeted. Industry groups say that companies use neutral criteria when assessing risk. The existing law allows challenges to legitimate business practices, they argue.

 

National civil rights groups had tried to keep the issue away from the conservative-leaning high court. In the past three years, two other cases that raised the same question about the scope of fair-housing law were taken up by the high court but settled with the help of the rights groups before the justices could rule.

 

DISPARATE IMPACT THEORY

 

For decades, disparate impact claims have been a way for lawyers representing blacks and other minorities to target policies that do not directly discriminate yet have the effect of putting certain groups at a disadvantage.

 

The disparate impact theory is opposed by business interests because it allows for a broad range of business decisions related to housing to be subject to civil rights litigation.

 

The case concerned whether Texas violated the Fair Housing Act by disproportionately awarding low-income housing tax credits to developers who own properties in poor, minority-dominated neighborhoods.

 

The Texas nonprofit works to place low-income tenants in the more wealthy, majority white suburbs of Dallas, sued the state of Texas.

 

The group’s lawyers said the state broke the law through its process for allocating the credits made available under the federal Low Income Housing Tax Credit Program. The program gives credits to developers who provide housing for people with low incomes.

 

Under Chief Justice John Roberts’ leadership, a five-justice conservative majority previously had curtailed remedies for race discrimination over a series of actions.

 

In a 2007 case, the majority rejected integration plans designed to balance out whites and blacks throughout a school district and offset segregated housing. "The way to stop discrimination on the basis of race is to stop discriminating on the basis of race," Roberts wrote.

 

Two years later, the same five-justice conservative majority sided with a group of white firefighters from New Haven, Connecticut who challenged the city's decision to throw out the results of tests to be used for promotions because minorities scored poorly. The decision narrowed the chances for minorities to challenge practices that disproportionately affect them.

 

In 2013, the court curtailed the scope of federal voting rights law by striking down the formula for a provision that targeted mostly southern states with a history of discrimination.

 

The case is Texas Department of Housing and Community Affairs v. Inclusive Communities Project, U.S. Supreme Court, No. 13-1371.  — Reuters