The U.S. Supreme Court held today that disparate impact claims are cognizable under the Fair Housing Act (FHA), in a 5-4 opinion authored by Justice Kennedy. He was joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan. Justice Alito wrote a dissenting opinion, joined by Chief Justice Roberts and Justices Scalia and Thomas. Justice Thomas also dissented separately. For our prior summaries on the proceedings below, click here and here. The Supreme Court’s opinion in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. can be found here.

In recognizing disparate impact under the FHA, the Court acknowledged that the FHA plays an integral role to remove “artificial, arbitrary, and unnecessary barriers” and “mov[e] the nation toward a more integrated society.” The majority emphasized, however, that a number of barriers should exist to pleading and proving such claims under the FHA. Specifically, the Court cautioned against imposing “onerous costs on actors who encourage revitalizing dilapidated housing in our Nation’s cities merely because some other priority might seem preferable.”

The Court said that that a party bringing a disparate impact claim must establish “robust” causation by providing statistical or other evidence that a policy directly caused a disparate impact. Justice Kennedy found that such a “robust causality requirement” ensures that racial imbalance, without more, does not establish a disparate impact and protects defendants from being held liable for racial disparities they did not create. Requiring a complaint to include such bases, according to the Court, is an adequate safeguard against using or considering race in a pervasive way. Indeed, the Court also stated that a mere one-time decision that may cause a disparate impact does not constitute a “policy,” and stressed that while the courts may take race into account in determining disparate impact liability, race can never be a controlling factor.

Justice Kennedy also suggested several factors that could be considered in response to a disparate impact claim. The Court provided some examples that demonstrate workable limits on liability including costs, traffic patterns, preservation of historic architecture, and quality of life. The Court said all of which could serve to show that the housing decision at issue did not erect “artificial, arbitrary, or unnecessary” barriers.

It will now take further judicial interpretation and application of these various factors to fully determine whether these factors will provide workable limits on disparate impact liability under the FHA. Inclusive Communities has provided the framework under the FHA for evaluating both prima facie claims of disparate impact and the litigation of those claims. Also of interest will be whether the U.S. Department of Housing and Urban Development modifies its disparate impact rule to address the concerns raised by the Supreme Court’s opinion.

Note: Michael W. Skojec and Bryan J. Harrison authored an amicus curiae brief to the U.S. Supreme Court on behalf of the Houston Housing Authority, a copy of which can be found here. In dissent, Justice Thomas cited to HHA’s amicus curiae brief, recognizing that “the threat of disparate-impact suits... has hindered HHA’s efforts to provide affordable housing” and such dire consequences are “cold comfort for those who actually need a home.”