The U.S. Supreme Court today ruled in a 5-4 vote that the federal Fair Housing Act may allow plaintiffs and regulators to seek redress for housing discrimination that is based on a demonstration of disparate impact.
The Civil Rights Act of 1964 allowed plaintiffs to sue employers if they can show that the employer's employment policies, while not directly discriminatory, nonetheless have a disparate impact on individuals on the basis of their race, color, gender, religion or national origin.
Over the years, disparate impact has begun to migrate into other areas aside from employment, and the Supreme Court has agreed it can be used to evaluate discrimination cases in housing.
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Writing for the majority, Justice Anthony Kennedy (along with Justices Ginsburg, Breyer, Sotomayor and Kagan) held that plaintiffs could use disparate impact in housing discrimination cases because "recognition of disparate-impact claims is consistent with the FHA's central purpose of ending discriminatory practices in housing."
He added, "These unlawful practices include zoning laws and other housing restrictions that function unfairly to exclude minorities from certain neighborhoods without any sufficient justification."
But the dissenting justices (Justice Thomas alone and Justices Roberts and Scalia together) argued today's ruling creates a legal liability that wasn't intended in the original 1968 law.
Reaction to the ruling has been somewhat predictable: Chair of the House Committee on Financial Services Jeb Hensarling (R-Texas) decried the decision as follows:
"The Supreme Court's extension of disparate impact theory to the Fair Housing Act will hurt precisely those minority groups that our federal civil rights statutes set out to protect. In fact, disparate impact will have predictable, negative consequences for all Americans who will experience a less competitive and more expensive market for housing and credit — all without providing any meaningful support for the fight against actual discrimination."
Neither CUNA nor NAFCU have yet commented on the decision.
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