Today in a 5-4 decision in
Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., (Sup. Ct., June 25, 2015), the U.S. Supreme Court held that disparate-impact claims, not just intentional discrimination claims, are cognizable under the federal Fair Housing Act. In an opinion by Justice Kennedy, joined by Justices Ginsberg, Breyer, Sotomayor and Kagan, the court held that while the statute which bars discrimination in the sale or rental of housing because of race, color, religion, sex, handicap, familial status, or national origin supports challenges to policies that cause racial or other disparities, there are significant limitations on such claims, saying:
If the specter of disparate-impact litigation causes private developers to no longer construct or renovate housing units for low-income individuals, then the FHA would have undermined its own purpose as well as the free-market system.
Justice Kennedy went on for 5 pages discussing the required safeguards against inappropriate disparate-impact claims, saying in part:
An important and appropriate means of ensuring that disparate-impact liability is properly limited is to give housing authorities and private developers leeway to state and explain the valid interest served by their policies. This step of the analysis is analogous to the business necessity standard under Title VII and provides a defense against disparate-impact liability....
It would be paradoxical to construe the FHA to impose onerous costs on actors who encourage revitalizing dilapidated housing in our Nation’s cities merely because some other priority might seem preferable. Entrepreneurs must be given latitude to consider market factors. Zoning officials, moreover, must often make decisions based on a mix of factors.... The FHA does not decree a particular vision of urban development; and it does not put housing authorities and private developers in a double bind of liability, subject to suit whether they choose to rejuvenate a city core or to promote new low-income housing in suburban communities.
Justice Alito wrote a dissenting opinon joined by Chief Justice Roberts and Justices Scalia and Thomas. Justice Thomas also filed a separate dissent.
