The U.S. Supreme Court will review a Fair Housing Act case to address whether the Act prohibits facially neutral conduct that has an unintended disparate impact on members of a protected class. In its amicus curiae brief, the Texas Apartment Association (TAA) argues that the text and history of the Fair Housing Act confirm that it does not allow disparate impact claims, but instead authorizes only claims based on intentionally discriminatory conduct. TAA goes on to explain that construing the Fair Housing Act to permit disparate-impact claims would impose severe consequences—unintended by Congress—on routine decision-making by housing providers. Sutherland represents TAA in the matter.
The case, Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., Docket No. 13-1371, is set for oral argument on January 21, 2015. The Court will consider whether the U.S. Court of Appeals for the Fifth Circuit correctly allowed a “disparate impact” claim to proceed under the Fair Housing Act against the Texas Department of Housing and Community Affairs (TDHCA) based on TDHCA’s allocation of tax credits to properties in minority-populated areas. This type of claim requires neither an allegation nor proof that individuals were treated differently because of their race. Instead, plaintiffs need only show that a neutral practice has a disproportionate effect, i.e., a disparate impact, on some protected group.
As the brief explains, construing the Fair Housing Act to permit such disparate-impact claims subjects housing providers to costly, stigmatizing litigation based on conduct lacking any discriminatory motive or intent. As a practical matter, housing providers must develop rules and policies that ensure the safety of their residents and the economic viability of their properties. Some basic policies inherent in a functioning rental property include screening tenants for certain criminal histories, ensuring that prospective tenants will be able to afford rent, and limiting tenants to an appropriate number of individuals for the size of a living space. Under a disparate-impact theory, these policies expose housing providers to litigation under the Fair Housing Act. Having to defend allegations of disparate impact, even when those allegations are proved to be without merit, often results in reputational injury and business disruption.
The brief demonstrates that Congress did not intend the Fair Housing Act to authorize such “disparate impact” lawsuits on housing providers. When prohibiting facially neutral conduct that has a “disparate impact,” Congress uses specific language directed to the “effects” of that conduct. On the other hand, when Congress intends to proscribe intentional discrimination, i.e., disparate treatment, it employs text describing discriminatory acts committed “because of” a person’s protected status. Congress used only disparate-treatment language in the Fair Housing Act, and the legislative history of the Act confirms that Congress intended to prohibit only intentional discrimination. Consistent with its text and history, TAA’s brief urges the Court to hold that the Fair Housing Act does not impose liability based on non-discriminatory conduct that inadvertently has a disparate impact on members of a protected class.
Read the full amicus brief filed by the Texas Apartment Association.