Supreme Court Weighs Fair-Housing Lawsuit Practices

22 Jan 2015 | Author: | No comments yet »

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WASHINGTON (AP) — The Supreme Court appeared sharply divided Wednesday in a debate over a decades-old strategy for fighting discrimination in housing. WASHINGTON—The Supreme Court divided into ideological camps Wednesday as it considered whether fair-housing lawsuits can proceed against practices that allegedly promote racial segregation even without proof of intentional discrimination.Re: “Time to play fair in housing — Supreme Court’s decision in Dallas racial discrimination case could be landmark, says Craig Flournoy,” Tuesday Viewpoints.The US supreme court on Wednesday appeared torn as it weighed a major civil rights case that could narrow the scope of discrimination claims made under the landmark Fair Housing Act.WASHINGTON — Could Justice Antonin Scalia — the arch conservative who famously called the Voting Rights Act a “racial entitlement” — now ride to the rescue of a different landmark civil rights law?

AUSTIN – With less than three weeks on the job, Texas’ new solicitor general already has been thrust in the national spotlight, arguing a major case involving federal housing laws and discrimination claims before the U.S. Chief Justice John Roberts expressed serious doubts during a one-hour argument that the 1968 Fair Housing Act can be used to ban housing or lending practices without any proof of intent to discriminate.

Every day our members work to eliminate housing discrimination and make their residences available to all, without regard to race, color, national origin, religion, sex, family status or disability. Based on the one-hour oral argument, it is not clear whether there is a conservative majority on the nine-justice court that will cut back on what kind of conduct can lead to housing discrimination litigation. The court’s four liberals, in contrast, appeared convinced disparate-impact suits, a feature of fair-housing enforcement for decades, were justified by legal precedent and practical realities of the housing market.

Exposing housing providers to expensive and unnecessary litigation due to disparate-impact claims hinders our industry’s ability to provide quality, safe housing. At issue in the case is whether the FHA bars acts that have a discriminatory effect — what’s known as “disparate impact” — or only acts that are intentionally discriminatory. On Wednesday, Solicitor General Scott Keller argued the state Department of Housing and Community Affairs did not perpetuate racial segregation in lower-income areas of Dallas when it disproportionately awarded federal tax credits to developers in those communities. The court’s four liberal justices defended the use of so-called “disparate impact” lawsuits that allege even race-neutral policies can have a harmful effect on minority groups. Attorneys for the Dallas-based nonprofit Inclusive Communities Project, who sued the state in 2008, disagreed, saying the state agency’s policy had an adverse impact on minority communities, even if those effects were unintentional.

Civil rights organizations have speculated that the court took up the case to knock out such lawsuits, which have long been criticized by banks, mortgage companies and conservative groups. His questioning could mean he would vote to affirm its continued use in fair-housing litigation—or that he would hold the practice unconstitutional, a logic that could also end disparate-impact suits in employment discrimination, education and other areas. The outcome, the group said, was to concentrate lower-income, African-American communities in limited areas, ensuring they would not move into white, middle-class neighborhoods.

The case involves an appeal from officials accused of awarding federal housing tax credits in a way that steered low-income housing into mostly poor, black neighborhoods in Dallas and generally kept the units out of wealthier white enclaves. He noted that, in 1988, Congress amended the law to narrow the range of disparate impact claims it covers, something it would hardly have done if it didn’t intend for disparate impact to be covered under the law at all. The group alleged that agency policies were keeping Dallas neighborhoods segregated and denying blacks a chance to move into safer neighborhoods with better schools. The 1988 amendments “make no sense unless there is such a thing as disparate impact,” Scalia told Scott Keller, a lawyer for Texas. “If there is no such thing, they’re prohibiting something that doesn’t exist.” The justice returned to the point again and again, later saying the wording of the amendments “seems to be an acknowledgement that there is such a thing as disparate impact.” “We were happy to hear Justice Scalia very clearly articulate, using the text of the 1968 statute and the 1988 amendments, an understanding of how, together, they make clear Congress’s understanding that disparate impact is an available standard under the act,” Ifill told msnbc. Two similar cases out of Minnesota and New Jersey reached the court in recent years, but those were settled in 2012 and 2013 just weeks before oral argument — in one case at the behest of the Obama administration.

Failure to bar disparate-impact claims would impose severe consequences — unintended by Congress — to the detriment of property owners and residents. In one exchange with the US solicitor general, Donald Verrilli, who argued for a broad interpretation of the law, Kennedy seemed to support Texas’s argument. Justice Stephen Breyer said that even if it’s ambiguous as to whether Congress meant to include effects, there was little reason for the justices to overturn the way it’s been interpreted for four decades, with few problems. Under the test that’s been in place for nearly 40 years, once a disparity is shown, a court must decide whether one race-neutral policy could be replaced with another race-neutral policy.

Scott Keller, the Texas Solicitor General, said there was no clear language authorizing discriminatory impact lawsuits when the housing law was passed in 1968. In the past three years, two other cases that raised the same issue were taken up by the high court but settled before the justices could issue a ruling. Civil rights advocates say narrowing the FHA to exclude disparate impact would make it far less effective as a tool for fighting modern-day discrimination, which is rarely explicit enough to be proved intentional. Instead, it often takes the form of policies that don’t explicitly touch on race, but have the effect of perpetuating or worsening the impact of past discrimination. “I have not yet found a bank that has an email that I can discover that says, ‘how can we make fewer loans in this African-American neighborhood?’” said Shanna Smith, a lawyer with the National Housing Alliance who has been bringing housing discrimination cases since the 1970s. “You can’t show intent like they did when I started this work.” But, Smith said, banks will often develop allegedly neutral policies that nonetheless have the effect of harming the victims of past discrimination, and thereby prolonging that discrimination. Scalia told Keller that looking at the “grand goals” of Congress in 1968 to eliminate segregated housing, it seemed possible that lawmakers thought disparate impact cases were acceptable.

Verrilli said such cases were outliers and said typical cases “in the heartland” such as zoning restrictions or occupancy rules are more straightforward. Texas has won support from business groups, including the Mortgage Bankers Association, the American Financial Services Association and others arguing that federal housing law should punish only intentional acts of discrimination. But fair housing advocates say eliminating such claims means courts will recognize only the crudest forms of intentional discrimination and not more subtle forms of bias that persist today.

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