Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc.
135 S. Ct. 2507
| SCOTUS | 2015Background
- The Inclusive Communities Project (ICP), a Texas nonprofit, sued the Texas Department of Housing and Community Affairs alleging its allocation of federal low-income housing tax credits perpetuated racially segregated housing by concentrating projects in majority‑black inner‑city tracts rather than majority‑white suburbs.
- ICP brought disparate‑impact claims under Sections 804(a) and 805(a) of the Fair Housing Act (FHA). The District Court found a prima facie disparate impact based on statistical disparities and placed the burden on the Department to prove there were no less‑discriminatory alternatives; the court ordered changes to selection criteria (race‑neutral in form).
- While the case was on appeal, HUD issued a regulation recognizing disparate‑impact liability under the FHA and prescribing a burden‑shifting framework: plaintiff shows disparate effect; defendant proves the practice is necessary to achieve substantial, legitimate, nondiscriminatory interests; plaintiff may then show an alternative with less disparate effect.
- The Fifth Circuit held disparate‑impact claims are cognizable under the FHA but reversed the District Court on the merits, applying HUD’s regulatory burden‑shifting framework and questioning whether causation had been adequately shown.
- The Supreme Court granted certiorari to decide whether the FHA authorizes disparate‑impact claims and, if so, what limitations apply; it affirmed the Fifth Circuit and remanded for further proceedings consistent with the Court’s guidance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FHA authorizes disparate‑impact claims | FHA’s "otherwise make unavailable" and similar language targets consequences, so disparate‑impact claims are cognizable | "Because of" language requires action motivated by protected characteristic; FHA prohibits only intentional discrimination | The FHA does encompass disparate‑impact claims (majority) but subject to important limits |
| Prima facie showing / causation standard | Statistical disparities are probative and can establish prima facie disparate impact | Plaintiff must show defendant’s specific policy caused the disparity; if federal law or constraints limit discretion, no liability | Plaintiff must show a causal connection between a challenged policy and the disparate effect; courts must rigorously test causation at the prima facie stage |
| Burden allocation and defenses (less‑discriminatory alternatives / business‑necessity analog) | After prima facie showing, defendant must justify practice and show no feasible less‑discriminatory alternative | District Court wrongly required Department to disprove all less‑discriminatory alternatives; HUD regulation supplies proper burden‑shifting | HUD framework (plaintiff shows effect; defendant shows practice is necessary to achieve substantial, legitimate, nondiscriminatory interests; plaintiff can then show reasonable alternative) is appropriate guidance; courts should give housing authorities leeway to articulate valid interests |
| Scope of remedies and constitutional limits | Remedies should eliminate offending practices and may use race‑conscious measures carefully | Broad disparate‑impact liability risks imposing race‑based quotas and constitutional problems | Disparate‑impact liability must be cabined: remedies should focus on eliminating unlawful practices and prefer race‑neutral measures; courts must avoid ordering racial quotas or pervasive race‑based decisionmaking |
Key Cases Cited
- Griggs v. Duke Power Co., 401 U.S. 424 (1971) (recognized disparate‑impact liability under Title VII and articulated business‑necessity limitation)
- Smith v. City of Jackson, 544 U.S. 228 (2005) (applied Griggs reasoning to ADEA language and discussed statutory text/purpose in disparate‑impact analysis)
- Ricci v. DeStefano, 557 U.S. 557 (2009) (explained necessity of showing available less‑discriminatory alternative before rejecting a business justification)
- Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989) (explained that statistical imbalance alone does not establish disparate impact and emphasized causation)
- Board of Education v. Harris, 444 U.S. 130 (1979) (construed statute to encompass disparate‑impact analysis in context of school staffing provisions)
- United States v. Giles, 300 U.S. 41 (1937) (construed "make" and supported reading of results‑oriented statutory language)
- Richmond v. J.A. Croson Co., 488 U.S. 469 (1989) (discussed constitutional limits on race‑conscious remedial orders)
- Parents Involved in Community Schools v. Seattle School Dist. No. 1, 551 U.S. 701 (2007) (addressed limits on race‑based governmental action and affirmed caution about racial balancing)