Does our federal Fair Housing Act (FHA) include disparate impact discrimination claims? Should it?  Disparate impact is not listed as one of our seven protected classes. The Supreme Court, however, had accepted a case and was likely going to decide whether these claims are actionable under the FHA. Interestingly, the disparate impact case was removed from the high court’s docket a few weeks before the February 2012 date it was scheduled for oral argument.

Think that might be the end of it? Think again. Another petition for certiorari (legalese for a request that the Supreme Court accept and decide a case) was filed which raises the same legal issue. 

The new case involves a New Jersey township’s plan to redevelop a distressed residential community in which a large percentage of low and moderate income minority households reside. Some of the current residents sued to stop the redevelopment. The lawsuit involves allegations that the redevelopment plan has a disparate impact on minorities and, as such, violates the FHA.

The federal district court dismissed the case and concluded the plaintiffs failed to establish a disparate impact claim. The U.S. Court of Appeals for the Third Circuit reversed and held the plaintiffs had indeed established a prima facie case under the FHA. 

While, as noted above, disparate impact is not in the plain language of the statute, the appellate court allowed the case to go forward. The federal government (including both the Department of Justice [DOJ] and the Department of Housing and Urban Development [HUD]) has taken the position that the FHA covers disparate impact claims. Indeed, some commentators suggest that HUD is attempting to draft regulations which would fold disparate impact claims into the FHA.

Many in the apartment management arena are following this issue closely and hope the Supreme Court will indeed step in and decide the issue.  Stay tuned.

Just A Thought.