In an unusually contemptuous opinion, a federal judge in Washington, DC held that federal law does not contain an important shield against racial and other forms of discrimination in housing. Moreover, while Judge Richard Leon’s opinion places him at odds with the overwhelming majority of courts to consider this issue, it is likely that his views will ultimately prevail when the conservative members of the Supreme Court consider a very similar case next year.
According to nearly every single federal appeals court in the country, the federal Fair Housing Act prohibits two forms of discrimination: “disparate treatment,” which can be proved by showing that a realtor, landlord or lender engaged in intentional discrimination, and “disparate impact,” which can be proved when a business’ policy leads to disproportionately adverse outcomes for racial minorities or for another protected class of people. As Judge Leon’s opinion acknowledges, 11 of the 12 federal appeals courts that have jurisdiction over fair housing claims have held that the law authorizes both disparate treatment and disparate impact lawsuits. The twelfth appeals court, the United States Court of Appeals for the District of Columbia Circuit, has not considered whether disparate impact lawsuits are permitted under federal fair housing law.
Without disparate impact suits, discrimination cases become extraordinarily difficult to win. Fair housing plaintiffs and their lawyers are rarely gifted with the ability to read minds, and few defendants are foolish enough to put in writing the fact that they chose not to rent or sell a house to someone because they are black. So disparate treatment lawsuits often fail for a lack of evidence that a particular defendant had a racist intent (or some other impermissible intent) when they decided not to do business with the plaintiff.
But the fact that racist intent is difficult to prove does not mean that discrimination does not exist. According to a study conducted on behalf of the U.S. Department of Housing and Urban Development, African Americans and Asians who are looking for a new home are shown or informed of 15 to 19 percent fewer listings than white homebuyers with similar credit and housing interests. Similarly, African Americans with good credit were 3.5 times as likely as whites with similar credit to receive higher-interest-rate loans during the subprime lending boom. Latinos were 3.1 more likely than whites to receive the same loans. The Federal Reserve determined in 2009 that African Americans were twice as likely to be denied a loan as similarly situated whites.
So housing discrimination is widespread, even if it is difficult to prove without disparate impact litigation. Nevertheless, Judge Leon’s opinion does not simply reject the idea that eleven federal appeals courts were correct when they held that disparate impact lawsuits are authorized by federal fair housing law (to reach this result, he reads a 2005 Supreme Court opinion aggressively to limit disparate impact litigation); Leon also practically sneers at the Obama Administration for promulgating a regulation consistent with eleven appeals courts’ decisions. At one point, he accuses the Department of Housing and Urban Development of “calculatingly” creating this regulation in an attempt to influence a Supreme Court case seeking to undermine disparate impact lawsuits. At another point, he cites a Republican investigation accusing then-Assistant Attorney General Tom Perez of “manipulat[ing] justice and ignor[ing] the rule of law.” This is an actual passage from Leon’s decision:
Finally, defendants contend that previous holdings of other Federal Circuit Courts that recognized disparate-impact liability under the [Fair Housing Act] preclude this Court from finding that the FHA unambiguously prohibits disparate treatment only. Please!
Yet, despite Judge Leon’s sanctimony in the face of an overwhelming judicial consensus against his position, it is likely that his views will ultimately be vindicated — at least to the extent that a 5–4 decision by a politically polarized Supreme Court is vindication. In October, the Supreme Court agreed to hear a case which could make Judge Leon’s rule the law of the land, and this is the third time that the justices have tried to decide this issue — the last two cases they agreed to hear settled before the justices could reach a decision. Given the Court’s repeated attempts to consider this issue in spite of the consensus among federal appeals courts, it is likely that the justices took this case because they intend to change longstanding law in exactly the way Leon suggests.