Supreme Court hears Texas case that tests extent of civil rights doctrine

The Supreme Court on Wednesday appeared divided over a challenge to the Fair Housing Act that liberal critics say could gut the civil rights provision.

A sharply divided US Supreme Court on Wednesday took up a challenge to the Fair Housing Act (FHA) in an action that liberal critics say could gut the major civil rights provision.

At issue in a case from Dallas, Texas, is whether the housing law authorizes lawsuits over racially neutral measures that nonetheless disproportionately impact minority residents. 

Liberals support the so-called disparate impact theory of civil rights enforcement, while conservatives warn that such an approach could lead to racial quotas in housing and other areas. 

The case has attracted significant attention, with friend-of-the-court briefs filed by various civil rights groups, 17 states, and 20 cities and counties. On the other side, briefs have been filed by a number of conservative groups and business associations, including insurance companies, banks, finance companies, and home builders. 

The FHA prohibits anyone from refusing to sell, rent, or otherwise make unavailable a house or apartment to a person because of their race, religion, or national origin. There is no dispute about this aspect of the law.

After the FHA was enacted in 1968, federal courts and agencies began embracing a broader interpretation of the law’s scope, concluding that, in addition to barring intentional discrimination, the statute also authorizes lawsuits when housing decisions disproportionately harm minority groups.

The case before the high court involves a lawsuit challenging decisions by the Texas Department of Housing and Community Affairs in awarding tax credits for low-income housing in Dallas. The Housing Department sought to provide new affordable housing in areas where existing housing was blighted or nonexistent. It sought to do so under race-neutral criteria.

Despite that goal, not everyone was satisfied with the agency’s performance. A Dallas-based group seeking to foster racial integration, the Inclusive Communities Project, sued the Housing Department because it said the agency had failed to provide adequate opportunities for low-income housing in Dallas’ more affluent suburbs.

The suit cited a statistical analysis that showed the agency approved disproportionately more applications for housing in minority neighborhoods than in more affluent white suburbs.

This selection and allocation of low-income housing units in the Dallas area was the functional equivalent of intentional racial segregation, the group charged. Regardless of whether the housing decisions were based on race-neutral criteria, the end result was a perpetuation of racial segregation, the ICP said. 

The question at the Supreme Court is whether the Fair Housing Act authorizes such lawsuits based on disparate impacts, or whether the FHA requires litigants to prove there was an intentional effort to engage in illegal discrimination.

The hour-long case was presented after an unusual outburst in the courtroom at the start of the high court session on Wednesday. At least five protesters shouted out various slogans, including, "One person, one vote" and "We are the 99 percent." Court security officers restrained them and quickly ushered them out of the courtroom.

The protests were apparently timed to coincide with the fifth anniversary of the high court's January 2010 decision in the Citizens United case. In that case, the court ruled 5 to 4 that corporations and labor unions have a First Amendment right to spend money on issue advertisements during election season.

The justices’ questions during oral argument in the Texas case suggest that the court’s more liberal members favor the broader interpretation of the FHA, including allowing disparate impact liability, while the court’s more conservative members are troubled by the implications of allowing disparate impact claims.

At one point Chief Justice John Roberts asked US Solicitor General Donald Verrilli which of the actions of a housing authority would be considered good or bad in terms of a disparate impact on minorities: revitalizing housing in a low-income area or making low-income housing available to help integrate more affluent neighborhoods?

Mr. Verrilli acknowledged that there might be difficult questions in such cases. And he conceded several times that the underlying allegation in the Texas case might not be a valid disparate-impact claim.

“But which [one] counts [when] you are trying to see if there’s a disparate impact on minorities?” the chief justice asked. One benefits integration, he said, while the other benefits housing opportunities in low-income areas.

Verrilli said it is not enough to show a statistical disparity. He said the plaintiff must also demonstrate that a particular practice is resulting in a disproportionate impact on minorities.

Chief Justice Roberts persisted. “You say you look at which provision is having the disparate impact, but I still don’t understand which is the disparate impact.” 

Verrilli replied that there must an analysis of whether there is a valid justification for the disputed practice.

“You’re saying you need the justification, but for what?” Roberts asked. “Which is the bad thing to do: not promote better housing in the low-income area or not promote housing integration?” 

Verrilli said that either justification might be an acceptable reason to dismiss a lawsuit.

But that response prompted a question from Justice Anthony Kennedy: “Are you saying that in each case that the chief justice puts, there is initially a disparate impact?”

“That may be right,” Verrilli told Justice Kennedy.

“That seems very odd to me,” Kennedy said.

Several justices on the liberal side of the court offered a vigorous defense of the disparate impact approach.

“This has been the law of the United States uniformly … for 35 years,” Justice Stephen Breyer said. “So why should this court suddenly come in and reverse an important law which seems to have worked out in a way that is helpful to many people?”

Texas Solicitor General Scott Keller said that the measure raised stark equal protection issues that could lead to the functional equivalent of a quota system in public housing.

In response to the chief justice’s questions, Mr. Keller said a state housing agency could be held liable for disparate impacts under both scenarios.

“Here the department could have faced disparate impact liability if it was going to take tax credits and send them to lower-income neighborhoods or more affluent neighborhoods,” he said.

Justice Sonia Sotomayor offered perhaps the most persistent and aggressive defense of the disparate impact approach.

She disputed suggestions by the Texas solicitor general that enforcement of such claims would inhibit development in blighted areas.

“If I’m right about the theory of disparate impact, and I can tell you I’ve studied it very carefully, its intent is to ensure that everyone who is renting or selling property or making it unavailable is doing so not on the basis of artificial, arbitrary, or unnecessary hurdles,” she said.

The case is Texas Department of Housing and Community Affairs v. The Inclusive Communities Project (13-1371).

A decision is expected by late June.