Justices Finally Hear Elusive Housing Case; Discrimination Theory Not Doomed After All?

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By Kimberly Robinson

Jan. 21 — The fate of disparate impact liability to combat racial discrimination under the Fair Housing Act surprisingly appeared to be safe—or at least still up in the air—after oral arguments at the U.S. Supreme Court Jan. 21.

The court's eagerness to hear the issue in the face of unanimous and long-standing recognition of disparate impact claims by the federal courts of appeal and the executive branch suggested that the theory was in jeopardy, and that the government would soon have to rely solely on the more rigourous intentional discrimination theory.

In particular, this is the third time in the past four years that the high court has agreed to hear this issue—with two previous cases being settled at the eleventh hour.

But an early defense of the disparate impact liability by Justice Antonin Scalia indicated that while opponents of the theory may have had the four votes required to keep the issue coming back to the court—it takes only four of the nine justices to agree to hear a case—they don't have the critical fifth vote to win there.

Impossible Argument

Arguing against the disparate impact theory, Texas Solicitor General Scott A. Keller began by taking on what was one of the strongest arguments against his case: that the Supreme Court has previously allowed disparate impact claims under both Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act even though those statutes don't explicitly provide for such claims.

In both Griggs v. Duke Power, 401 U.S. 424 (1971), and Smith v. City of Jackson, 544 U.S. 228 (2005), the court relied on the statutes' “effects-based language” to infer the availability of a disparate impact claim, Keller said.

Those statutes specifically prohibit actions that “adversely affect” minorities. It is that “effects-based language” that can be read to allow a disparate impact claim challenging a seemingly neutral law that disproportionately affects minorities, Keller argued.

But there is no such language in the Fair Housing Act, he said.

Well, the Fair Housing Act says that people can't refuse to sell, rent “or otherwise make unavailable” housing based on race, Justice Sonia Sotomayor pointed out.

Isn't the phrase “make unavailable” just another way of saying “adversely affect,” Justice Elena Kagan wanted to know.

No, Keller responded. “Make unavailable” focuses on “actions,” not “effects,” and therefore prohibits only intentionally discriminatory actions.

Some justices seemed skeptical of that argument.

That's “a little crazy,” Sotomayor said, and Kagan added, “I don't think that that could possibly be right.”

Being Realistic

But Scalia said he was “willing to concede” that “ ‘make unavailable' is not the same language as ‘adversely affect.' ”

But, “what hangs me up,” he said, is that Congress seemingly acknowledged the availability of disparate impact claims in subsequent amendments to the Fair Housing Act. Doesn't that “kill your case?” he asked Keller.

Justice Samuel A. Alito Jr. jumped to Keller's defense, saying that the court should be looking at what Congress meant when it passed the Fair Housing Act in 1968—not what it meant when it amended the act in 1988. The amendments “surely didn't expand the scope” of the FHA as initially enacted.

“If we're going to be realistic about this,” Justice Ruth Bader Ginsburg interjected, “nobody knew anything about disparate impact” when the Fair Housing Act was originally enacted. That's because this court first introduced the idea of a disparate impact claim in 1971—three years after Congress enacted the Fair Housing Act, Ginsburg said.

“So to try to look back and say, oh, did they mean disparate impact” in 1968 when disparate impact “wasn't on the books till '71, it's a little artificial, don't you think?” Ginsburg asked rhetorically.

But, she pointed out, the “grand goal” of the Fair Housing Act was “to undo generations of rank discrimination.” Shouldn't that broad purpose give “a clue to what Congress was after?”

No, Keller responded, we should look only to the law's plain meaning.

“We look at the law. And the law includes the '68 act and the '88 amendment,” Scalia said. “I find it hard to read those two together in any other way than there is such a thing as disparate impact.”

Government Inefficiency

U.S. Solicitor General Donald B. Verrilli Jr. picked up on that in arguing for the disparate impact theory on behalf of the federal government as amicus curiae.

The 1988 amendment “presupposes” disparate impact liability, Verrilli said. That shows that the Department of Housing and Urban Development's acknowledgment of disparate impact liability isn't unreasonable, he said.

“And remember, we're in Chevron territory here,” Verrilli said, referring to the deference that courts typically give agency interpretations under Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). “So the question is whether the statutory text unambiguously forecloses HUD's interpretation.”

“Should we be concerned here about the use of Chevron to manipulate the decisions of this court?” Alito asked.

He explained that “the Fair Housing Act was enacted in 1968. For 40 years plus, there were no HUD regulations. Then we granted cert in the Gallagher case, and it was only after that and within, I think, days after that that the HUD regulations were issued.”

Should “we be troubled by this chronology?” he asked Verilli.

Verrilli responded that not only has HUD been pursuing disparate impact claims since the early 1990s, but the idea of the federal government responding to this court's cert grant in a mere matter of days “overestimates the efficiency of the government.”

That's “very persuasive,” Scalia joked.

NFL Discrimination

But while Scalia mostly appeared to support the availability of disparate impact claims under the Fair Housing Act as it stands now, he did provide one glimmer of hope to the theory's opponents.

The Fair Housing Act says that people can't discriminate “on the basis of race,” Scalia said to Michael M. Daniel, of Daniel & Beshara, P.C., Dallas, the attorney arguing in support of disparate impact liability. “And you're saying, no, it doesn't have to be;” there could be discrimination based on “some other nonracial reason, which is stupid, right?” 

When Daniel attempted to respond that it is discrimination if racial disparity is a “foreseeable consequence” of using a nonracial factor, Scalia interrupted.

“No, no, no, no. Racial disparity is not racial discrimination,” he said. “The fact that the [National Football League] is — is largely black players is not discrimination. Discrimination requires intentionally excluding people of a certain race.”

To contact the reporter on this story: Kimberly Robinson in Washington at krobinson@bna.com

To contact the editor responsible for this story: Pamela Atkins at patkins@bna.com

A transcript of the argument is online at http://pub.bna.com/lw/131371.pdf.