Supreme Court sharply divided over Dallas housing bias case

The Supreme Court appeared sharply divided Wednesday in a debate over a decades-old strategy for fighting discrimination in housing.

Chief Justice John Roberts expressed serious doubts during a one-hour argument that the 1968 Fair Housing Act can be used to ban housing or lending practices without any proof of intent to discriminate.

But Justice Antonin Scalia, who usually aligns with Roberts and other conservatives, asked tough questions of both sides, making it tough to determine how the court might rule in a case that has steep ideological divisions.

The court's four liberal justices defended the use of so-called "disparate impact" lawsuits that allege even race-neutral policies can have a harmful effect on minority groups.

Civil rights organizations have speculated that the court took up the case to knock out such lawsuits, which have long been criticized by banks, mortgage companies and conservative groups.

The case involves an appeal from officials accused of awarding federal housing tax credits in a way that steered low-income housing into mostly poor, black neighborhoods in Dallas and generally kept the units out of wealthier white enclaves.

A Dallas-based fair housing group, Inclusive Communities Project Inc., sued the Texas Department of Housing and Community Development in 2008. The group alleged that agency policies were keeping Dallas neighborhoods segregated and denying blacks a chance to move into safer neighborhoods with better schools.

The housing advocacy group couldn't prove Texas officials were intentionally biased. But a federal appeals court said the group could use statistics to show the effect of the policies still harmed black residents, in violation of the Fair Housing Act.

"It is very difficult to decide what impact is good and what impact is bad," Roberts said. What if one community wants to build low-income housing to revitalize minority neighborhoods, while another wants to integrate white areas, he asked. "Which is the bad thing to do?"

Solicitor General Donald Verrilli, who was arguing in favor of disparate impact, said both plans may ultimately pass muster. Under the test that's been in place for nearly 40 years, once a disparity is shown, a court must decide whether one race-neutral policy could be replaced with another race-neutral policy.

But Roberts pressed Verrilli with the same question three times, complaining that he wasn't getting an answer.

Justice Anthony Kennedy said it seemed "very odd to me" that disparate impact could work in either case.

Scott Keller, the Texas Solicitor General, said there was no clear language authorizing discriminatory impact lawsuits when the housing law was passed in 1968.

But Justice Ruth Bader Ginsburg called that argument "a little artificial" because the theory was not mainstream until the Supreme Court approved its use for employment discrimination cases in 1971.

Scalia told Keller that looking at the "grand goals" of Congress in 1968 to eliminate segregated housing, it seemed possible that lawmakers thought disparate impact cases were acceptable. But later, Scalia told Michael Daniel, lawyer for the Texas housing group, that "racial disparity is not racial discrimination."

"The fact that the NFL is largely black players is not discrimination," Scalia said.

Justice Stephen Breyer noted that every appeals court to consider the question for the past 40 years has found disparate impact acceptable in the housing context.

"Why when something is so well-established throughout the United States should the court come in and change it?" he asked Keller.

Texas officials say disparate impact claims would essentially force them to make race-conscious decisions to avoid liability. And while disparate impact is allowed under employment discrimination cases, they say it is not explicitly mentioned in the Fair Housing Act.

Texas has won support from business groups, including the Mortgage Bankers Association, the American Financial Services Association and others arguing that federal housing law should punish only intentional acts of discrimination.

But fair housing advocates say eliminating such claims means courts will recognize only the crudest forms of intentional discrimination and not more subtle forms of bias that persist today.

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