Settlement May Avert Housing Discrimination Loss Before Supreme Court

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One of the most significant cases scheduled to go before the U.S. Supreme Court this term threatens to obliterate the standard for alleging racial discrimination in housing. But as many expected, the parties have announced a tentative settlement, which would avert for the second time a potential adverse ruling by the conservative Roberts Court.

The case involved a plan to demolish a largely minority neighborhood in Mount Holly, N.J., to build newer, more expensive housing in its place. As in countless other housing discrimination cases, plaintiffs sought to prove that this discriminates against minorities through evidence known as “disparate impact” — statistical evidence that shows a policy yields a disproportionate adverse outcome for minorities, without requiring plaintiffs to meet the exceedingly high bar of proving discriminatory intent.

This approach has been approved by all nine federal appeals courts to consider the question, and HUD even issued a regulation in January interpreting the Fair Housing Act as allowing claims of disparate racial impact. But many expected that the Roberts Court would be inclined to roll all this progress back, given its hostility to the Voting Rights Act, affirmative action, and other means for rooting out racial discrimination.

The plaintiffs were thus aiming for settlement, and the Wall Street Journal is now reporting that they’ve reached a tentative deal that would award displaced homeowners new duplexes without a new mortgage. If the deal were officially approved by the plaintiffs and the town council, the settlement would mean the U.S. Supreme Court once again won’t get the chance to erode the potency of the Fair Housing Act as a tool for rooting out discrimination. And it would be the second such settlement. In 2011, future Secretary of Labor Tom Perez averted a Supreme Court ruling on this same issue by asking the city of St. Paul, Minn. drop its appeal and preserve existing precedent.