High-Profile Fair Housing Case Settled

Officials in a New Jersey township have voted to approve a settlement in a controversial fair housing case, only weeks before the U.S. Supreme Court was due to hear arguments in the case, according to news reports.

At issue is whether the Fair Housing Act (FHA) bans discrimination based on disparate impact—that is, practices that have a discriminatory effect on protected classes, even if there’s no intent to discriminate.

The law clearly bans intentional discrimination, but there’s an ongoing debate over whether the FHA also bans policies, which are not intentionally discriminatory, but have an unfair negative effect on racial minorities or other protected classes. Although courts across the country have recognized such claims, the high court had never ruled on the issue.

The developments in the New Jersey case mark the second time in as many years that a dispute involving the issue was resolved just as the Supreme Court was poised to consider the appeal. Last year, the parties to a Minnesota case agreed to withdraw an appeal only weeks before the Supreme Court was scheduled to hear oral arguments. In the New Jersey case, the settlement comes less than a month before oral arguments, scheduled for Dec. 4.

Until the Supreme Court ultimately resolves the issue, housing providers and other entities subject to the FHA must abide by HUD’s discriminatory effects regulations issued earlier this year. HUD says the new rule doesn’t create new law, noting that it has long interpreted the FHA to prohibit seemingly neutral housing practices with an unjustified discriminatory effect based on race, color, religion, sex, handicap, familial status, or national origin.

For more information, see the July 2013 Special Issue of Fair Housing Coach, “HUD’s New Discriminatory Effects Regulations—What Are They and How Will They Affect My Community?”, available to subscribers here.