Introduction
As previously reported on this blog, the U.S. Supreme Court’s decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507 (2015) adopted a burden-shifting approach to assessing claims that housing policies cause disparate impact on minority populations in violation of the Fair Housing Act (“FHA”) (42 U.S.C. § 3601).[1] By adopting that approach, the Court confirmed the availability of this form of lawsuit against government entities that implement housing policies.
In the months since Inclusive Communities, the U.S. Courts of Appeals have applied that landmark ruling in several cases. Those cases confirm the far-reaching consequences of the Supreme Court’s decision. This article presents a survey of those cases.
Survey of Decisions by the Courts of Appeals
D.C. Circuit:
In 2014, the U.S. District Court for the District of Columbia vacated a final rule promulgated by the U.S. Department of Housing and Urban Development (“HUD”) to impose disparate impact liability under the FHA. American Insurance Association v. U.S. Department of Housing and Urban Development, 74 F. Supp.3d 30 (D.D.C. 2014). Citing the legislative text of the FHA and statutory scheme, the district court held that Congress did not intend to provide for disparate impact liability. Although the district court noted the fact that the U.S. Supreme Court was about to decide this issue in Inclusive Communities, the district court decided to vacate HUD’s final rule on the grounds that it was inconsistent with legislative authority. On appeal, the D.C. Circuit summarily vacated and remanded the case, ordering the district court to reconsider its decision in light of the U.S. Supreme Court decision. American Insurance Association, No. 14-5321, 2015 U.S. App. LEXIS 16894 (Sept. 23, 2015).
First Circuit:
In a case brought by former employees of the Federal Emergency Management Administration (“FEMA”) who worked at FEMA’s facilities in Puerto Rico, the employees alleged disparate impact discrimination by FEMA in violation of Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e). Abril-Rivera v. Johnson, 806 F.3d 599 (1st Cir. 2015). The employees alleged that FEMA’s decisions to reduce the employees’ work hours and the agency’s decision to close its Puerto Rico facilities were discriminatory on the basis of the employee’s Puerto Rican origin, and also retaliatory because they had complained about being paid less than FEMA employees on the mainland. The district court granted summary judgment to FEMA, finding that the agency had legitimate, nondiscriminatory reasons for the decisions.
On appeal, the First Circuit affirmed the summary judgment in favor of FEMA. The court focused on the Supreme Court’s admonition that “disparate-impact liability must be limited so employers and other regulated entities are able to make the practical business choices and profit-related decisions that sustain a vibrant and dynamic free-enterprise system,” and the Court’s warning against broad application of disparate impact theory to government agency decision-making. The First Circuit held that once an employer presents a legitimate business rationale for the policies, Inclusive...
