Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc.
135 S.Ct. 2507 (2015)
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Rule of Law:
The Fair Housing Act prohibits facially neutral policies and practices that have a discriminatory effect on a protected class, regardless of whether there was discriminatory intent.
Facts:
- The Texas Department of Housing and Community Affairs (the Department) is the state agency designated to distribute federal low-income housing tax credits to private developers.
- The Inclusive Communities Project, Inc. (ICP), a nonprofit organization, assists low-income families in obtaining affordable housing in the Dallas area.
- ICP alleged that the Department's policies for allocating tax credits disproportionately directed the development of low-income housing to predominantly minority, inner-city neighborhoods.
- Conversely, ICP contended that the Department allocated too few tax credits to developments in predominantly white, suburban neighborhoods.
- ICP claimed that this allocation practice had the effect of perpetuating racial segregation in housing patterns.
Procedural Posture:
- Inclusive Communities Project, Inc. (ICP) sued the Texas Department of Housing and Community Affairs (Department) in the U.S. District Court for the Northern District of Texas.
- The District Court found that ICP established a prima facie case of disparate impact based on statistical evidence.
- Following a trial on the merits, the District Court ruled for ICP, holding that the Department failed to meet its burden to prove that no less discriminatory alternatives existed.
- The Department, as appellant, appealed the decision to the U.S. Court of Appeals for the Fifth Circuit, with ICP as appellee.
- The Fifth Circuit affirmed that disparate-impact claims are cognizable under the FHA but reversed and remanded on the merits, finding the District Court improperly allocated the burden of proof regarding less discriminatory alternatives.
- The Department petitioned the U.S. Supreme Court for a writ of certiorari on the sole question of whether disparate-impact claims are cognizable under the FHA, which the Court granted.
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Issue:
Does the Fair Housing Act prohibit housing practices that have a discriminatory effect upon a protected class, even if not motivated by discriminatory intent?
Opinions:
Majority - Justice Kennedy
Yes, the Fair Housing Act (FHA) recognizes disparate-impact claims. The FHA’s text, specifically the phrase 'otherwise make unavailable,' is a results-oriented catchall that focuses on the consequences of an action, not just the actor's intent. This interpretation is consistent with the Court's prior construction of similar language in Title VII in Griggs v. Duke Power Co. and the ADEA in Smith v. City of Jackson. Further, when Congress amended the FHA in 1988, it was aware of the unanimous consensus among nine Courts of Appeals that the FHA allowed disparate-impact claims; by retaining the operative language, Congress implicitly ratified this interpretation. The 1988 amendments also added specific exemptions that would be superfluous if the Act only prohibited intentional discrimination. However, such claims are subject to important limitations: a plaintiff must prove a robust causal link between a defendant's specific policy and the disparate impact, after which the defendant may justify the policy by showing it is necessary to achieve a legitimate, non-discriminatory interest.
Dissenting - Justice Thomas
No, the FHA does not authorize disparate-impact claims. The entire doctrine of disparate impact is built on the flawed foundation of Griggs v. Duke Power Co., which was a departure from the statutory text of Title VII. The text of Title VII and the FHA prohibits actions taken 'because of' race, which plainly requires discriminatory intent. Extending the 'error' of Griggs to the FHA amplifies a judicial misinterpretation of statutory law. Disparate-impact liability wrongly assumes that racial disparities are necessarily the product of discrimination, ignoring complex societal realities and forcing entities to engage in unconstitutional racial balancing to avoid litigation.
Dissenting - Justice Alito
No, the FHA does not create disparate-impact liability. The plain meaning of the statutory phrase 'because of' requires proof of discriminatory motive. The FHA's operative language is analogous to the provision of the ADEA that the Court in Smith v. City of Jackson unanimously held does not authorize disparate-impact claims. The majority’s reliance on the 1988 congressional amendments is misplaced; there was no settled consensus for Congress to ratify, as the U.S. government itself argued against disparate-impact liability at the time. Recognizing disparate-impact liability under the FHA will have severe negative consequences, placing housing authorities and private developers in a double bind where any decision—whether to develop in inner cities or suburbs—could lead to a lawsuit, thereby encouraging the use of racial quotas to avoid litigation.
Analysis:
This landmark decision resolved a circuit split by formally recognizing that disparate-impact claims are cognizable under the Fair Housing Act, solidifying a critical tool for challenging systemic housing discrimination. By allowing challenges to facially neutral policies like zoning laws or lending criteria that perpetuate segregation, the ruling empowers plaintiffs to address discrimination that lacks overt intent. However, the Court also established significant safeguards, including a 'robust causality' requirement and a strong justification defense for defendants, which may limit the doctrine's reach and protect housing authorities and developers from liability based on mere statistical imbalances.
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