Fair Housing Defense Blog readers may recall that the issue of whether claims of “disparate impact” are cognizable under our Fair Housing Act (FHA) have twice recently come before the U.S. Supreme Court.  And both times the appeals settled prior to the high court hearing the cases.   In my last entry on this point, I noted that other “disparate impact” cases were going to wind their way through the federal courts.  And indeed, just last week, the Supreme Court granted certiorari (legalese for taking the case) with respect to a case from Texas in which the court will again test the viability of “disparate impact” under the FHA.

In The Inclusive Communities Project Inc. v. Texas Department of Housing and Community Affairs et al., No. 12-11211 (5th Cir., Mar. 24, 2014), the Fifth Circuit identified what it believed to be the correct legal standard in FHA disparate impact cases.  The facts involve a challenge to the formula under which the Texas Department of Housing and Community Affairs allocates low-income housing tax credits and if that formula violates the FHA (as well as the Constitution and another federal statute).  The facts of the case revolve around if the Texas agency disproportionately approved tax credits in largely minority neighborhoods and rejected tax credits in predominantly white communities.   The claim, essentially, was that the this formula  skewed the process and resulted in almost no low-income housing tax credit units in nonminority areas.

Following a bench trial, the district court concluded that there was a “disparate impact” claim under the FHA.  During appellate review, after acknowledging that it has previously recognized the “disparate impact” theory under the FHA in 1996 and again in 2009, Fifth Circuit panel declined to revisit the issue that had twice been to the Supreme Court (but which the court ultimately did not decide).  In an effort to get this issue decided once and for all, the Texas agency requested that the U.S. Supreme Court directly address the viability of “disparate impact” under the FHA.  And the court agreed to hear the appeal.

Although there have been two prior false starts over the past couple of years, by granting the request to take the case, the Supreme Court has signaled its determination to resolve this question.  One side will contend that “disparate impact” has been a recognized part of our FHA (and civil rights) jurisprudence for more than 40 years.  The other side will claim that “disparate impact” is nowhere in the text of the FHA and it is up to Congress to amend the law if those claim are to survive.  I suspect we will get a decision this time.

Just A Thought.