{"id":11325,"date":"2018-11-01T15:57:02","date_gmt":"2018-11-01T19:57:02","guid":{"rendered":"http:\/\/journals.law.harvard.edu\/crcl\/?p=11325"},"modified":"2018-11-04T11:53:26","modified_gmt":"2018-11-04T16:53:26","slug":"the-fate-of-private-disparate-impact-housing-claims-in-the-trump-era","status":"publish","type":"post","link":"https:\/\/journals.law.harvard.edu\/crcl\/the-fate-of-private-disparate-impact-housing-claims-in-the-trump-era\/","title":{"rendered":"The Fate of Private Disparate Impact Housing Claims in the Trump Era"},"content":{"rendered":"

In 2015, The Supreme Court handed down a 5-4 decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project<\/em><\/a> that seemed to finally confirm the Court\u2019s recognition of a private right to bring \u201cdisparate impact\u201d claims of discrimination in housing cases. The case was brought by the non-profit Inclusive Communities Project<\/a> against the Texas Department of Housing and Community Affairs for \u201ccaus[ing] continued segregated housing patterns by its disproportionate allocation of the tax credits, granting too many credits for housing in predominantly black inner-city areas and too few in pre-dominantly white suburban neighborhoods.\u201d While the Texas department argued that the tax credits were simply awarded to developments in neighborhoods labeled \u201chigh opportunity,\u201d Inclusive Communities claimed that instead they merely exacerbated<\/a> existing racial and socio-economic isolation and they had empirics to prove it.<\/p>\n

In turn, the Court held that the non-profit could properly prove their case simply by showing evidence (empirical and otherwise) that the allocation of tax credit had discriminatory effects even if this was not the intent of the policy.\u00a0 Such a \u201cdisparate impact\u201d standard, reasoned Justice Kennedy in writing for the majority, was proper under the Fair Housing Act<\/a> (FHA) (Title VII of the Civil Rights Act of 1968) as a means to combat \u201cracial isolation\u201d underpinned by \u201cunlawful practices\u201d such as exclusionary zoning laws and other housing restrictions.<\/p>\n

Only three years later, this past summer, the Trump Administration\u2019s Department of Housing and Urban Development (HUD), under the leadership of Ben Carson, issued a memo<\/a> that calls for \u201creconsideration\u201d of the agency\u2019s implementation of disparate impact as the operative standard in discriminatory housing cases. This proclamation \u2014 along with the nomination of Brett Kavanaugh<\/a>, shortly thereafter \u2014 has threatened the Court\u2019s narrow adoption of the disparate impact standard, with Kennedy\u2019s key swing vote no longer present.<\/p>\n

In fact, the sentiments behind the memo are bolstered by a strong conservative coalition that believes the Inclusive Communities<\/em> case is founded on a fundamental misreading and distortion of the law<\/a>. While the case was heralded as a victory<\/a> for civil rights groups, the dissent, penned by Alito argued that the majority had wholly perverted the objective of the FHA, which was only aimed at intentional discrimination. The majority, he argued, had misconstrued the relevant language of 42 U.S.C. \u00a7804<\/a> of the Act in that it only prohibited denying a person access to housing \u201cbecause of race, color, religion, sex, familial status, or national origin<\/em>.\u201d (emphasis in original). In particular, Alito said that this language evinced a clear mandate to only bar conduct aimed directly at \u201ca protected characteristic.\u201d \u00a0In turn, such language discredited the argument, put forth by the majority: that Congress had \u201cimplicitly authorized\u201d the use of the disparate impact standard by expanding the list of protected characteristics under the FHA with the Fair Housing Amendments Act of 1988. Alito also highlighted that the majority wholly ignored Alexander v. Sandoval<\/em><\/a> in which the Court had explicitly rejected private claims of disparate impact under a predecessor to the Fair Housing Act, Title VI of the Civil Rights Act of 1964<\/a>.<\/p>\n

Riding on this judicial history, civil rights and housing activists fear that the Supreme Court, with the current administration at its back, has the potential to effectively end one of the few legal tools available to achieve housing integration. Sadly, such fears are not new. \u00a0Commentary<\/a> in the aftermath saw the 2015 Inclusive Communities <\/em>decision as a natural culmination of the fact that \u201call federal appellate courts had [already] recognized FHA claims for disparate impact.\u201d Such a history glosses over the fact that the disparate impact claim was far<\/em> from solidified as a legal remedy for protected classes harmed by systematic housing discrimination. Though the various ill-effects of housing discrimination were\u00a0very well documented<\/a> in the years leading up to the decision, it was not until 2013 that HUD first passed a regulation<\/a> that clearly defined steps that municipal governments had to take to ensure they were in compliance with the FHA\u2019s non-discriminatory housing policies so as to receive funding. Unsure of the future of disparate impact as legal tool, some awaiting the outcome of Inclusive Communities<\/em> did not see the case as a vehicle for fully cementing the standard but a potential death knell for it<\/a>. In fact, some law review articles expressed outright shock at its outcome<\/a>.<\/p>\n

As an article published by our Journal<\/a> in 2014 pointed out, after the Sandoval<\/em>, \u201cdisparate impact\u2019s grounding seems shaky.\u201d In light of this precarious precedent, the article turned to HUD and other agencies to \u201cclarify, formalize, and ultimately stabilize disparate impact law.\u201d While such faith may have been well-founded in the Obama era, it poorly reflects the political landscape today. In fact, just this past August a federal judge dismissed a lawsuit<\/a> brought against HUD and Secretary Ben Carson over its delays and changes to the Obama-era funding requirements regarding \u201csegregated housing patterns.\u201d<\/p>\n

While the last few months have proven strangely quiet on this issue, a top real estate law firm recently pointed<\/a> out that the Consumer Financial Protection Bureau (CFPB) has hinted in its 2018 Rulemaking Agenda that it may revisit the disparate impact doctrine as it applies to lending under the Equal Credit Opportunity Act (ECOA). In particular, the preamble to this agenda<\/a> states in its subsection on future planning:<\/p>\n

“The Bureau is considering future activity with regard to specific areas of consumer financial law of significant public interest.\u00a0 For example, the Bureau announced in May 2018 that it is reexamining the requirements of the Equal Credit Opportunity Act (ECOA) concerning the disparate impact doctrine in light of recent Supreme Court case law and the Congressional disapproval of a prior Bureau bulletin concerning indirect auto lender compliance with ECOA and its implementing regulations.”<\/p>\n

Though speculating, the article points out that such a \u201creexamining\u201d could define the elements of a disparate impact claim to relegate them to \u201cwell-settled situations,\u201d add additional required proofs beyond statistical analysis for such claims or even remove such a theory of liability under the ECOA altogether. What route this agency and the Court take in the coming months and years, however, is highly uncertain. That being said, what is certain is that the disparate impact standard, as a tool for achieving housing desegregation, is once again on \u201cshaky\u201d ground.<\/p>\n","protected":false},"excerpt":{"rendered":"

In 2015, The Supreme Court handed down a 5-4 decision in Texas Department of Housing and Community Affairs v. Inclusive 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