ACRU

ACRU: Court Erred in Texas Disparate Impact Case

Courts - Justice Statue no blindfold

Law prohibits only “intentional discrimination,” brief says.

WASHINGTON, D.C. (Nov. 24, 2014) —- Lower federal courts wrongly ruled against the Texas state housing agency by applying a “disparate impact” yardstick, the American Civil Rights Union argues in a brief filed today at the U.S. Supreme Court.

In Texas Dept. of Community Affairs, et al vs. The Inclusive Communities Project, Inc., the ACRU’s brief, written by General Counsel Peter Ferrara, states that, “The plain text of the Fair Housing Act prohibits only intentional discrimination, and cannot be construed to provide for disparate impact liability. Indeed, that plain text can only be read to unambiguously preclude disparate impact liability.”

Under disparate impact theory, an employer can be held liable for discrimination based on a policy’s effect, even if the employer did not intend to discriminate.

The Texas Dept. of Housing and Community Affairs distributes federal tax credits throughout Texas to developers who build qualified low-income housing projects. The Inclusive Communities Project (ICP) sued the Department in federal district court in Dallas in 2008 alleging that the Department “disproportionately allocates” tax credits to properties in minority-populated areas. The ICP seeks to locate more poor minorities in well-to-do, predominantly white neighborhoods.

The ACRU brief, asking the Supreme Court to overrule the Fifth U.S. Circuit Court of Appeals, which had upheld the district court’s finding against the Texas housing agency, notes that the “disparate impact construct is nowhere to be found in the statutory language of the Fair Housing Act. The term ‘because of race’ refers to intentional discrimination, not to disparate effects of facially neutral practices.”

Further, “The Department argued that the statistical disparity arose because of federal and state laws requiring the Department to award low-income housing tax credits following statutory criteria some of which are correlated with race. Indeed, federal law requires the Department to give preference to projects built in low-income areas.”