By: Tracy M. Evans, Esq., Associate, Saxon Gilmore & Carraway, P.A.

Tevans2-cropped-sOn June 25, 2015, the Supreme Court of the United States issued its opinion in the case of Texas Department of Housing and Community Affairs, et. al. v. The Inclusive Communities Project, Inc., Case No. 13-1371, holding that disparate-impact claims are cognizable claims under the Fair Housing Act (“FHA”). Our firm has been monitoring the outcome of this case since we first reported on it in December of last year. For a review of the facts underlying the case, please see our previous article available here.

Disparate-impact claims challenge policies which appear on their face to be neutral, but in practice have an unjustified, disproportionately adverse effect on minorities. In determining whether disparate-impact claims are viable under the FHA, the Supreme Court looked at two other antidiscrimination statutes where the Supreme Court had previously determined that the disparate-impact claims were viable: Title VII of the Civil Rights Act of 1964 and The Age Discrimination Employment Act of 1968. The Supreme Court found that all three statutes contain similar, catchall phrases that look to the consequences of policies, not the intent behind the policies. The Supreme Court determined that the similar language in the FHA was sufficient to show the legislative intent to impose disparate-impact liability under the FHA.

The Supreme Court considered the fact that prior to the 1988 Amendments to the FHA, nine different federal courts of appeal had previously held that disparate-impact liability applied under the FHA. In examining the legislative intent behind the FHA, the Supreme Court noted that Congress made sure to retain the relevant statutory language that the nine courts of appeal had relied upon in determining the existence of disparate-impact liability under the FHA. Further evidence of the Congressional intent to include disparate-impact liability under the FHA was apparent in the Congressional rejection of a proposed amendment to eliminate disparate-impact liability in certain instances, and the inclusion of amendments assuming the existence of disparate-impact liability under the FHA.

The Supreme Court recognized the importance of properly limiting disparate-impact liability and cautioned courts against using expansive interpretations of disparate-impact liability. As a means of limiting liability, the Supreme Court emphasized the importance of ensuring that housing authorities and private developers are given the opportunity to explain the valid interest served by their policies. Conversely, the Supreme Court pointed out that a disparate-impact claim that relies solely on statistical disparity must fail unless the plaintiff can attribute the disparity to an existing policy.

The Supreme Court also warned that if disparate-impact litigation becomes too prevalent, private developers may become discouraged from constructing or renovating housing units for low-income individuals. Such a result would undermine the purpose of the FHA, to eliminate discriminatory practices within the housing industry, and also would undermine the free market system.


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