Supreme Court Argument Reaffirms the Case for Disparate Impact

Posted by Alan Jenkins on January 29, 2015

The U.S. Supreme Court heard oral arguments last week in a very important fair housing case, and the Justices’ comments from the bench have had court watchers buzzing ever since. Here’s my take on what the legal back-and-forth in the case does and does not mean.

It’s safe to say that the oral argument in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project went very well for supporters of fair housing … and that we have no idea what, if anything, that will mean for the Court’s decision.  The argument did make clear, however, how far this Court will have to stray from its established principles if it wants to weaken the Fair Housing Act in this case.

Predicting the outcome of a Supreme Court case based on an oral argument is a fool’s errand. The Justices frequently ask questions or state hypothetical views in order to work out contrary positions in their own minds, or to send a message to their colleagues. And many arguments get sidetracked on lines of inquiry that end up being tangential or irrelevant to the outcome. 

If you need an example, think of the 2012 challenge to the Affordable Care Act. Court watchers widely predicted the demise of the ACA’s individual mandate, only to see Chief Justice Roberts announce a majority opinion upholding the mandate as a valid exercise of Congress’s taxing authority.

The Inclusive Communities case is about the meaning and reach of the Fair Housing Act. For decades, lower courts and the U.S. Department of Housing and Urban Development (HUD) have agreed that the Act forbids both unjustified policies that exclude or segregate people in practice and decisions motivated by intentional bigotry. The first category, known as unjustified “disparate impact,” has opened the doors of opportunity in scores of communities around the nation, fostering diverse and inclusive neighborhoods and dissolving unnecessary barriers to integration. It has advanced our national interests as well as our national values.

It has required, for example, that arbitrary zoning regulations that exclude families with children be replaced with commonsense rules that offer both safety and inclusion. It has provided that municipalities cannot exclude all affordable housing, nor segregate that housing far from amenities or solely in minority neighborhoods. And it has been one of the few effective mechanisms for holding big banks accountable for the abuses that brought our economy to its knees just a few years ago. Conversely, as Justice Breyer noted at the oral argument, it’s been the law for four decades and, “as far as I can tell, the world hasn't come to an end. ”

Though the prohibition of unjustified disparate impact is longstanding, the Supreme Court has never directly considered it in the housing context. The Court is turning squarely to that question for the first time in the Inclusive Communities case.

Last week’s oral argument focused almost entirely on how the text and structure of the Act reveal Congress’s intention to cover both types of discrimination. When Congress amended the Act in 1988, for example, it stated explicitly that certain policies, such as excluding people for manufacturing illegal drugs, do not violate the Act. But since those policies don’t involve intentional discrimination based on race or other covered characteristics, Congress clearly understood that it was creating exceptions to an Act that generally prohibits disparate impact. 

Under the Court’s longstanding approach to interpreting statutes, that fact alone is a near slam dunk. And, to the surprise of many, it was Justice Scalia—a frequent opponent of robust civil rights enforcement—who asserted this conclusion most forcefully at the oral argument. By contrast, none of the Justices offered a robust counterargument on that point. That’s a rarity in a hotly contested case like this one. 

Also important to several Justices was the fact that HUD has long interpreted the Act to include a disparate impact component, and recently issued regulations to that effect. Under well-settled law, courts typically accept any reasonable interpretation of a federal statute by the agency charged with enforcing that statute. (A principle championed by Justice Scalia in other cases).

While Justice Alito asked whether the recent timing of the HUD regulations could be seen as designed to manipulate the Court’s deliberations, the Solicitor General accurately explained that the rulemaking process began long before the Court’s decision to take up the issue. As the Solicitor General quipped in his response to Justice Alito, “I do think it overestimates the efficiency of the government to think that you could get … a supposed rule-making on an issue like this out within seven days.”

The oral argument, in sum, made clear that Congress intended to prohibit unjustified disparate impact. And, in doing so, it highlighted how extraordinary a contrary decision from the Court would be. Virtually all of the principles that the Court uses to construe legislation point toward preserving the disparate impact approach.

Unfortunately, in my view, there was little discussion of the overarching purpose of the Fair Housing Act, which motivated Congress to provide for broad and pragmatic coverage. As The Opportunity Agenda and thirty other civil rights groups noted in our friend-of-the-court brief in this case, fair housing is a bedrock civil rights protection, crucial to our nation’s core value of equal opportunity for all and to our nation’s success. Congress brought forth the Act in the face of deeply entrenched patterns of residential segregation and exclusion that continue to hamper our society today. A strong and effective Act remains critical to our future.

In fairness, Justice Ginsburg’s questioning did touch on these themes, noting Congress’s “grand purpose” to “undo generations of rank discrimination” and to foster "integrated living patterns." But a fuller discussion could have imbued the argument with a greater sense of purpose.

Also underemphasized at argument was the fact that the Act prohibits only unjustified disparate impact. If a housing practice disproportionately excludes or segregates people based on race, religion, disability, or other covered characteristics, it remains lawful under the Act unless it does not advance any important goal, or that goal can be furthered by less discriminatory means. Indeed, courts frequently uphold policies with discriminatory effects when they are justified in either of those ways.

While the absence of these more substantive points was disappointing, it is further evidence of how strong the case for disparate impact is. When the text and structure of a law are clear, the Court rarely delves into the specifics of the law’s operation.

In the end, those of us who support fair housing should feel buoyed, but also vigilant. We should feel reassured that our position is correct, but prepared to restore any protection that the Court might, nonetheless, erode. And in the weeks leading up to the Court’s decision, it’s important to lift up what was missing at oral argument—why a full and effective Fair Housing Act matters—and to prepare for action in response to the Court’s announcement, whatever it may be.

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Alan Jenkins is the executive director and co-founder of The Opportunity Agenda.

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