SCOTUS allows Lawsuits challenging discriminatory Housing Practices/Policies under the Fair Housing Act, 1968

On Thursday, a sharply divided Supreme Court of the United States of America (SCOTUS) (5:4) ruled in Texas Department of Housing and Community Affairs v The Inclusive Communities Project (US Supreme Court, No. 13-1371) that housing policies and practices with discriminatory effects can be challenged under the Fair Housing Act even if the discrimination was non-intentional. The majority opined that plaintiffs can base their suits on statistical evidence to show that a policy has a ‘disparate impact’ on a minority section of the society. 

In this case, a disparate impact claim based on racial discrimination grounds was filed by the Inclusive Communities Project which is a non-profit organisation that promotes racially and economically diverse communities. They alleged that between 1995 and 2009 the Texas Department of Housing and Community Affairs had been allocating almost all affordable-housing tax credits to developments in poorer minority neighbourhoods, while denying credits to those in wealthier white neighbourhoods. They accused the officials of the Texas Department of hindering societal integration by allocating a disproportionate number of federal low-income housing tax credits to minority sections.

The Opinion of the court was authored by Justice Anthony Kennedy who wrote that, “Recognition of disparate impact claims is consistent with FHA’s central purpose...The law was enacted to eradicate discriminatory practices within a sector of our nation’s economy.” 

According to the majority Opinion, in which Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan joined, “Recognition of disparate impact liability under the FHA also plays a role in uncovering discriminatory intent: It permits plaintiffs to counteract unconscious prejudices and disguised animus that escape easy classification as disparate treatment”. 

Justice Kennedy made an important observation in the Opinion that was directed towards the holistic progress of the American society - “In striving to achieve our historic commitment to creating an integrated society, we must remain wary of policies that reduce homeowners to nothing more than their race”.

However, as a caution, the majority held that, “An important and appropriate means of ensuring that disparate-impact liability is properly limited is to give housing authorities and private developers’ leeway to state and explain the valid interest served by their policies”.

Progressive groups hailed this ruling as a key step toward combating housing segregation. This decision must be recognised as an important milestone for equality and inclusiveness in America. On the other side, critics with business interests may argue that this decision will allow a wide ambit of housing business decisions to be challenged on the ground of civil rights.

The peculiarity of the case is that Justice Anthony Kennedy who is a conservative has in this case delivered the majority opinion for the liberal bloc of the US Supreme Court. This change in trend in may create anxiety among the American citizens who are awaiting the country’s top constitutional court’s decision on same-sex marriages within a few days!

Read the judgment here.