The U.S. Supreme Court considered the Fair Housing Act (FHA) earlier today when it held oral argument in a Texas case to answer the question if “disparate impact” claims are cognizable under the FHA.   Essentially “disparate impact” is a way to find liability under the FHA even if the defendant did not have a discriminatory intent – if a policy or policies have a “disparate impact” against a protected class, then there can be liability under the law.

While the statute itself is silent as to the practice, case law over the intervening decades has approved of the disparate impact theory.  Today marked the first time the Supreme Court heard argument on the issue, notwithstanding that two prior disparate impact cases had reached its docket.  The prior two cases (one from Minnesota and one from New Jersey), however, both settled before argument at the Supreme Court, thus ending the chance for the Supreme Court to rule.

As happens often these days, the Court’s perceived liberal justices appeared to support the disparate impact theory while the conservative justices raised concerns over the use of the practice.  That being said, Justice Scalia asked some questions and made some comments that have Supreme Court watchers thinking his vote may not be so easy to predict here.

The lawyer for those challenging the law argued that developers, landlords, and housing agencies may grow so fearful of a disparate impact suit that they will do too much to help minorities, creating what he called a functional equivalent of an unlawful quota system.  Defending the statute, the Administration contended that that disparate impact suits discourage practices that harm minorities without justification, such as apartment-occupancy limits that disproportionately affect ethnic groups with large families.  Additionally, the parties battled over if it was possible that 11 appellate courts had misread the intent of the FHA for the past 40 years.

What should happen?  What will happen?  Well, the Court should issue a decision before July.  From my seat as management’s lawyer, I know our preference is to know what the rules of the road are.  Once the issue is decided, so be it.  But uncertainty is not good for anyone.  Do I have a prediction?  Yes.  And I will keep it in an envelope in my desk.  I will open it for you when the decision is issued.

Just a Thought.