Jonathan Ernst/Reuters

The court will soon settle a question about housing discrimination that has been with us since the ‘68 riots and white flight.

The Supreme Court of the United States always saves the best for last. As its term winds down this month, the court will announce opinions in cases that will set the future of healthcare and even marriage. There are several hot cases before the court, but these two decisions (King v. Burwell and Obergefell v. Hodges, respectively) are the most eagerly anticipated of them all.

One more case may shape life in America just as profoundly. The Supreme Court’s opinion in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, could settle who gets to live in which neighborhoods, and moreover, who does not.

Recently in McKinney, Texas, a white woman cut right to the heart of this case when she reportedly told a black teenager to “go back to your Section 8 home.” The Supreme Court might as well have broken up that pool-party fight in McKinney. The woman’s callous taunt is utterly germane to the serious constitutional question before the court.

At issue in Inclusive Communities is a theoretical reading of the Fair Housing Act of 1968, which makes discrimination illegal in housing and lending. Specifically, the Fair Housing Act prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status . . . and disability.

What the Fair Housing Act does not do is describe the spectrum of discrimination that it prohibits. Explicit discrimination, at one end of the spectrum, is out for sure. When it was passed in 1968, the Fair Housing Act immediately redressed some fairly heinous housing practices (that was the goal, anyway). But what about implicit discrimination?

The Supreme Court will decide whether people can bring a lawsuit forward citing “disparate impact” under the Fair Housing Act. Disparate impact describes a policy or action that has a disproportionate negative effect on a minority group, even in the absence of a stated intent to discriminate.

So when that white woman in McKinney told a black girl to get back to her public housing, she was inadvertently describing disparate impact: McKinney’s Section 8 housing is concentrated on the east side, where the majority of the city’s minorities live.

Texas Department of Housing and Community Affairs v. The Inclusive Communities Project has garnered dozens of amici curiae briefs and generated scores of legal symposia. Here are a few excerpts that help to explain the scope of the case—and why it matters as much as the other Supreme Court cases grabbing headlines.

The brass tacks in the Inclusive Communities case

Amy Howe at SCOTUSblog has written a helpful tutorial on the issues facing the court in this case. Here’s Howe’s description of what’s happening in Texas:

The Inclusive Communities Project is a Texas non-profit whose mission includes promoting racial and socioeconomic integration in and around Dallas. As part of this mission, the Project tries to help lower-income African-American families find affordable housing, for which they receive subsidies in the form of a voucher, in the mostly white suburbs of Dallas. To do so, those families have to find a landlord who will accept the voucher; most private landlords decline to do so, but landlords who receive federal tax credits for lower-income housing are required to do so. Those tax credits are distributed by state government agencies, such as the Texas Department of Housing and Community Affairs. Because the state agencies determine where to allocate the tax credits, they can affect the housing options available to lower-income families like the Project’s clients.

The state of Texas maintains that the Fair Housing Act prohibits only purposeful discrimination. Allocating all the public housing on the wrong side of the tracks in McKinney (and other Dallas suburbs) doesn’t rise to this standard, the state argues, since no one in Texas set out with the stated goal of keeping low-income housing out of white neighborhoods.

The Inclusive Communities Project argues, on the other hand, that Congress created the Fair Housing Act to “correct the consequences of both intentional racial segregation by the government and practices by the housing industry that had the effect of continuing racial segregation.”

Now, almost 50 years after the fact, it’s up to the Supreme Court to decide what the Fair Housing Act really means.

Disparate impact involves housing and neighborhoods—and also banks and mortgages

A public symposium on Inclusive Communities held by the Urban Institute grounds the question of disparate impact in those housing practices that very much did further racial segregation. Exclusionary zoning, redlining, blockbusting, predatory lending, and other discriminatory practices have drawn a bright line between black and white communities. And between black and white borrowers.

The goal of the Fair Housing Act is to produce outcomes that are colorblind. But colorblind lending standards don’t serve minorities or banks very well, as Laurie Goodman, director of the Housing Finance Policy Center, explains:

You can only hold a business responsible for what they can control. For example, if a lender applies uniform underwriting standards to all applicants, it will likely result in more mortgage denials for black and Hispanic applicants than for white applicants, because there is a difference in income, wealth and credit experience between the groups. Businesses certainly have a responsibility to support, and at the minimum, not to stand in the way of government programs that push for greater equality of opportunity. But that is different than the disparate impact doctrine, which could hold the private sector guilty of discrimination if their policies resulted in a differential impact on different racial and ethnic groups, despite the fact that these groups have differences in income, wealth and credit experience.

Even the government’s own policies for providing mortgages under federally guaranteed programs can affect different communities in different ways, notes David Stevens, president and CEO of the Mortgage Bankers Association, in the symposium. These are the wages of decades—no, centuries—of institutional racism. A rules change won’t undo white supremacy.

The colorblind conundrum doesn’t mean that a disparate-impact reading of the Fair Housing Act must have a negative effect on banks and businesses. The availability of the disparate-impact reading does not require the kind of “colorblind” approach to lending that would reinforce existing disparities.

“Rather, it requires lenders to offer evidence that a practice that has a demonstrated and statistically significant discriminatory effect serves an important business objective,” writes Solomon Greene, a senior fellow at the Urban Institute. “The standard is aimed solely at weeding out lending policies that serve no purpose other than to perpetuate inequality and exclusion from housing and credit markets.”

Does the case involve any good textual originalism?

It sure does.

William Consovoy, a partner at Consovoy McCarthy and counsel for the Project on Fair Representation—a legal defense fund that opposes affirmative action and other race-based preference systems—thinks this isn’t a question for the Supreme Court to decide. The text of the law is plain, Consovoy writes, in his contribution to a SCOTUSblog symposium on Inclusive Communities.

Somebody should resolve the thorny constitutional issues in this case, Consovoy concedes. That somebody is Congress.

It is doubtful that the Fair Housing Act, or any law for that matter, exposing some racial groups to disparate treatment because a non-discriminatory policy negatively affects other racial groups can be squared with the guarantee of equal protection. So far, the Supreme Court has avoided addressing the issue. At some point, however, the “evil day” to which Justice [Antonin] Scalia alluded will arrive and the Court will need to confront the question.

But it does not need to be today. … Congress knows what language to use in order to permit disparate-impact claims. It did not include that “adversely affects” language in the FHA. And Congress did not amend the FHA to add that language despite making many other changes to the law over the years. This is not a hard case.

So Consovoy wants the Supreme Court to punt this decision to Congress. The legislature could add a “clear statement” enshrining disparate impact in the Fair Housing Act. Of course, punting to Congress is no different from the court deciding there is no disparate impact, since Congress won’t pass any landmark legislation any time soon. (An outcome that might suit Consovoy’s purposes just fine.)

Agree with his “clear-statement rule” test or not, it’s the sort of argument that might win over conservative Justices who don’t like the notion of disparate impact to begin with. Sure enough, here’s Texas Solicitor General Scott Keller during oral arguments:

The Fair Housing Act does not recognize disparate-­impact claims, first, because its plain text doesn't use effects­- or results-­based language, and when a statute prohibits actions taken because of race and it lacks effects­-based language, the statute is limited to intentional discrimination.

It was the very first sentence out of his mouth. (Unless you count “Thank you, Mr. Chief Justice, and may it please the Court.”)

What about judicial activism? Does this case have any?

It sure does!

Contra the argument outlined by Consovoy (and Keller), others claimants in the debate say that of course Congress intended a disparate-impact reading of the Fair Housing Act. Here’s the introduction from an amicus curiae brief prepared by Deepak Gupta, the founding principal of Gupta Beck and a specialist in Supreme Court and appellate litigation.

For nearly half a century, it has been well settled that disparate-impact claims are cognizable under § 804(a) of the Fair Housing Act. That is what the Act’s sponsors and Members of Congress intended when the law was enacted in 1968 and when it was amended in 1988. It is what all eleven federal circuits to consider the question have held. And it is how the Department of Housing and Urban Development (HUD) and the Department of Justice (DOJ) have consistently enforced the law. . . For Texas to prevail on the question presented, all of these authorities would have to be wrong. And not just wrong, but unreasonable.

Congress enacted the Fair Housing Act one week after the assassination of Dr. Martin Luther King, Jr., during the riots following his death. Even before the assassination, residential segregation and conditions in urban ghettos—brought about by widespread housing discrimination—had sparked a series of race riots from 1965 to 1967. Fair-housing legislation was necessary to combat these conditions, and Congress recognized that it would have to go further than banning intentional discrimination to be effective.

Full disclosure: Gupta is a friend of mine. (That’s why I read his brief.) Other amici curiae briefs make a similar argument. See the one prepared by the Howard University School of Law Fair Housing Clinic and Civil Rights Clinic, for example. Howard University describes the Fair Housing Act as:

a response not just to the sort of routine and petty racial discrimination that denied families and individuals the right to live where they chose, but also and more significantly the sort of racial ghettoization that denied entire communities their fair share of life choices and opportunities.

Those who sympathize with the Inclusive Communities Project say that a ruling in favor of the state of Texas would constitute a radical re-reading of the Fair Housing Act.

So how will the Supreme Court decide?

It all comes down to Scalia.

Here’s something that Texas didn’t expect: Over the course of oral arguments, it appeared that Justice Antonin Scalia was persuaded by the argument that Congress meant for the Fair Housing Act to take into account disparate impact. Twice, in fact.

“It has to construe the plain text of the law, and the law consists not just of what Congress did in 1968, but also what it did in ‘88,” Justice Scalia said during oral arguments. “And you look at the whole law and you say, ‘What makes sense?’ And if you read those two provisions together, it seems to be an acknowledgement that there is such a thing as disparate impact.” Scalia added, “I find it hard to read those two together in any other way than there is such a thing as disparate impact.”

That right there is the whole dang enchilada. In arguments, the court’s liberal Justices plainly pulled for the full reading of the law. (Justice Ruth Bader Ginsburg: “Do we take into account at all that in both Title VII and the Fair Housing Act, there was a grand goal that Congress had in mind? It meant to undo generations of rank discrimination.”) Chief Justice John Roberts concern-trolled about neighborhood-by-neighborhood racial quotas. (“It seems to me that if the objection is that there aren’t a sufficient number of minorities in a particular project, you have to look at the race until you get whatever you regard as the right target.”) Meanwhile, Justice Clarence Thomas said: “[ . . . ].”

This time, Scalia swung with the libs.

If the same Scalia shows up in opinions, then disparate impact will win the day. But as Lyle Denniston notes, Scalia may have been playing a longer game during oral arguments. He could concede that Congress intended for the Fair Housing Act to consider disparate impact—only to conclude that such a power vastly exceeds the authority given to Congress.

Whichever Scalia we get, the decision will be the most important milestone in the quest for housing equality in America since 1968. One way or another.

This post will be updated as news unfolds.

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