Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc.

Case Updates

The U.S. Supreme Court held that disparate impact claims are allowed under the Federal Housing Act (FHA). While it recognized disparate impact liability under the FHA, the Court emphasized some important limits on that theory. Specifically, a plaintiff must establish that any statistical disparity is caused by the defendant’s policy, must show that there is an alternative and non-discriminatory means of furthering the defendant’s legitimate reason for the policy, and cannot seek remedies that themselves require decision making based on a protected trait.

The Chamber, joined by a coalition of trade organizations, asked the Supreme Court to reverse the judgement of the Fifth Circuit and rule that disparate-impact claims are not allowed under the Fair Housing Act (FHA). The brief argues that disparate-impact claims under the FHA are barred under the Court's private-right-of-action jurisprudence and points out that there is no clear, affirmative evidence that Congress intended to allow actions for disparate impact under the FHA. The brief also asserts that the FHA's legislative history does not demonstrate Congress's intent to authorize disparate-impact claims.

Lisa S. Blatt, Nancy L.Perkins, Anthony J. Franze, and Daniel Friedman of Arnold & Porter LLP represented the Chamber as co-counsel to the U.S. Chamber Litigation Center.

The Chamber, joined by a coalition of trade associations, urged the Supreme Court to grant review and address whether the Fair Housing Act (FHA) allows disparate-impact claims. The Chamber argued that this question has never been settled and different branches of the federal government provide conflicting answers to that question. The Chamber pointed out that the risk of disparate-impact lawsuits, without guidance from the Court, pressures the residential mortgage lending to arrive at particular outcomes and end numbers to avoid such lawsuits. The Chamber noted; however, that those same incentives run counter to the purpose of the FHA.

The Chamber filed the brief jointly with the American Bankers Association, the American Financial Services Association, the Consumer Bankers Association, the Consumer Mortgage Coalition, the Financial Services Roundtable, the Housing Policy Council, the Independent Community Bankers of America, and the Mortgage Bankers Association.

Andrew C. Glass and Paul F. Hancock of K & L Gates represented the U.S. Chamber of Commerce as co-counsel to the National Chamber Litigation Center.