Late last week the Mount Holly (NJ) Township Council voted to approve a settlement agreement that will leave for another day U.S. Supreme Court review of whether disparate impact claims are viable under the Fair Housing Act (FHA). Following the announced settlement, the Supreme Court dismissed the disparate impact case.
Earlier this year, of course, the Supreme Court agreed to decide if indeed disparate impact claims are cognizable under the FHA. As currently construed by HUD and various courts, a disparate impact theory allows the government (and/or a private plaintiff) to attempt to prove discrimination without any intent on the part of the defendant – in other words to establish discrimination based solely on the results of an otherwise neutral policy which is claimed to impact a protected class.
Fair Housing Defense Blog readers may recall that this is the second time in a couple of years that a disparate impact case settled just prior to the Supreme Court hearing the issue. Last year, a case from Minnesota similarly settled and mooted the Supreme Court appeal before the Court had an opportunity to decide the case. That decision to settle and terminate the anticipated Supreme Court decision was followed by numerous congressional inquiries into whether federal authorities intervened to assist the parties in reaching a settlement in order to avoid Supreme Court review of a legal theory perceived to be important. It seems likely that Congress will also ask the same questions concerning the Mount Holly Gardens settlement.
A survey of the federal circuit courts of appeals reveals that eleven federal circuits have upheld the use of disparate impact claims under the FHA. They have done so based on their analysis of the Supreme Court jurisprudence regarding employment discrimination (which is referred to as Title VII of the Civil Rights Act) – which the appellate courts interpreted as permitting disparate impact claims – and a conclusion that disparate impact claims are consistent with the purposes of the FHA (which is referred to as Title VIII of the Civil Rights Act).
Does the Mount Holly Gardens resolution end the matter once and for all? Not necessarily. There is another case pending in the U.S. District Court for the District of Columbia which is currently stayed pending the conclusion of the Supreme Court appeal in Mount Holly Gardens. In that case, a group of insurance trade associations challenged a rule issued by HUD concerning the use of disparate impact analysis under the FHA. Although it may take a little time, it remains likely that the losing party in this new case will again request Supreme Court review. For now, however, disparate impact claims under the FHA survive. And management must continue to be prepared to ensure our policies do not so discriminate.
Just A Thought.