U.S. Supreme Court Holds That Fair Housing Act Authorizes Disparate-Impact Claims
The Supreme Court held today, in Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, that the Fair Housing Act authorizes claims based on a theory of disparate-impact liability. The Fair Housing Act generally makes it unlawful to discriminate on certain prohibited bases in connection with the sale or rental of housing or in connection with residential real-estate related transactions. The issue in the case was whether a disparate-impact theory may support a claim for liability under the Act. “Disparate-impact” means that a practice has a disproportionately adverse effect on a protected class, even if the practice is neutral on its face.
The Court’s decision does not address whether the Equal Credit Opportunity Act (“ECOA”) authorizes disparate-impact liability. There is currently no challenge to disparate-impact liability under ECOA pending before the Court.