The Fair Housing Act, Disparate Impact Claims, and Magner v. Gallagher

The authors discuss the text of the Fair Housing Act, its legislative history, and the past federal appellate court decisions holding that the FHA permits disparate impact claims. They argue that recent Supreme Court decisions cast doubt on the past federal appellate court decisions, and show that the statutory text of the FHA, unlike the text of some other civil rights laws, does not permit disparate impact claims. They also discuss the case currently pending before the Court in which the Court may address for the first time whether the FHA permits disparate impact claims.

This term, the Supreme Court will hear an appeal involving the question of whether the Fair Housing Act (“FHA”) permits claims based on a disparate impact theory of liability.¹ Eleven of the 12 federal courts of appeal and a number of federal district courts have assumed that it does, notwithstanding the fact that there is no support for this position in the text of the statute.² Ignoring the text of the FHA—which many of these courts acknowledge is troublesome for their conclusion—these courts analogize to Title VII jurisprudence, relying on what they characterized as the broad purpose of the FHA to find a disparate impact right of action.³ This nebulous purpose led these courts to find a disparate impact right of action while expressly acknowledging that such a right of action conflicts with the plain language of the statute.⁴ Too often, the statutory text was considered to be of secondary importance. This expanded view of the type of behavior that the FHA was designed to punish, however, is unjustified. Indeed, what evi¬dence is available from the legislative history of the FHA makes plain that the drafters never intended—indeed, attempted to avoid—allowing for disparate impact claims under the FHA.

The Supreme Court has never decided whether the FHA permits plaintiffs to bring claims under a disparate impact theory. However, in recent years the Supreme Court has reconfirmed the primacy of the statutory text in anti-discrimination statutes. For example, in Smith v. City of Jackson⁵ the Supreme Court clarified its Title VII jurisprudence and explained that disparate impact claims are firmly rooted in the text of Title VII. In clarifying the statutory basis of disparate impact claims under Title VII, the Supreme Court undermined the foundations of those decisions that permitted disparate impact claims under the FHA through analogy to Title VII. City of Jackson makes clear that the anti-discrimination provisions of the FHA do not permit disparate impact claims. No federal court of appeal has yet addressed whether the FHA permits disparate impact claims after City of Jackson.⁶