It looks as if someone really doesn’t want the Obama administration’s treasured but shaky “housing disparate impact” theory to come under review by the Supreme Court [Josh Blackman on reports of settlement mooting Mount Holly, N.J. case granted certiorari and pending before the Court; earlier on controversial tactics used to moot St. Paul case through settlement]
More: Piscataway v. Taxman also dropped off the Court’s docket via a mootness tactic. And shorter Doug Kendall/Constitutional Accountability Center: how dare PLF, Cato and IJ take the Court’s word on what the issue is in Mt. Holly? [Ilya Shapiro]
Under the “disparate impact” theory of housing discrimination, private business decisions or local government policies not motivated by race are deemed unlawful anyway because they have a differential statistical impact on housing transactions by members of a given racial group. A mortgage lender’s policy of lending only to borrowers with high down payments or sterling credit ratings, for example, might be subject to attack on the grounds that it tended to screen out minority borrowers, even if such was not its intention, and was not justified by business necessity. The U.S. Supreme Court has never ruled on this theory; two years ago, in a case called Magner v. Gallagher, it was widely speculated that the Court would disapprove disparate-impact claims, a prospect the Obama administration (which is deeply invested in the theory) managed to dodge only by arranging to moot the case through settlement.
In the new Supreme Court case of Township of Mount Holly v. Mount Holly Gardens Citizens in Action, Inc., plaintiffs claim that it is illegal for a New Jersey township to slate a tract of development land for detached single-family housing because poorer persons are less likely to be able to afford such housing and minority persons are more likely to be poorer. The Obama administration is backing the claim. [earlier] The Cato Institute, along with the Pacific Legal Foundation and several other groups, has filed an amicus brief defending the township. Writes Ilya Shapiro at Cato at Liberty:
The Gardens’ residents can’t afford the new housing not because of their race but because of their poverty. While it’s a harsh truth that a disproportionate number of minorities live in poverty, claiming that making expensive products is racist and that these “racists” have an obligation to compensate the victims of poverty is absurd. The FHA was intended, in the words of Senator Walter Mondale, “to permit people who have the ability to do so to buy any house offered to the public if they can afford to buy it. It would not overcome the economic problem of those who could not afford to purchase the house of their choice.”
For following the law as it was written and attempting to improve a blighted neighborhood without resorting to eminent domain abuse, Mount Holly was rewarded with a decade’s worth of vexatious litigation — which the Supreme Court should now end once and for all.
More: Hans Bader, Examiner.
I’ve got a new piece at Reason on the long-running dispute between the federal Department of Housing and Urban Development and the government of Westchester County in suburban NYC. Claiming that Westchester has failed to follow through on promises of attracting more minority homeowners, HUD is suing the county and wielding funding cutoffs to get it to step up a large commitment to subsidized housing, override town zoning rules, and enact an ordinance forbidding private landlords from turning away Section 8 tenants. The WSJ editorialized yesterday on the subject. Further background: ironic that county is being penalized after seeking to cooperate [Gerald McKinstry, Newsday; Joanne Wallenstein, Scarsdale 10583]; former Democratic county legislator backs county executive Rob Astorino on so-called “source of income” legislation [Journal-News]; similar law already in effect in Washington, D.C. [Examiner]; earlier coverage here, here, etc., and my 2009 City Journal account.
P.S. Shortly after our piece, a Second Circuit panel ruled the county out of compliance. ProPublica, the foundation-supported reporting-and-opinion outfit, has been doing a series of reporting-and-opinion pieces taking the plaintiffs’ side, including this latest.
Title VI of the Civil Rights Act of 1964, which prohibits discrimination by recipients of federal education spending and other programs, does not currently allow private litigants to sue demanding punitive (as distinct from compensatory) damages, nor do the courts entertain private suits complaining of “disparate impact” under it. Some trial lawyers and advocates of expansive discrimination law have long wanted to change that, and now Hans Bader of the Competitive Enterprise Institute is warning that there are efforts afoot to slip an expansion into law by attaching it to some “must-pass” piece of legislation. An effort by Democratic senators to attach it to the Defense Authorization Act appears to have fallen short, but it may be back as a rider on other bills, with serious courtroom consequences, Bader warns, for schools and colleges and also for doctors and hospitals.
Following extensive rumblings of an impending crackdown, the Equal Employment Opportunity Commission has sued Kaplan, the private education company, over its alleged policy of considering applicants’ credit records in making hiring decisions [Baltimore Sun, George Lenard; earlier here and here]
More from Ted Frank: “Somebody should tell the Transportation Security Administration, which also performs credit checks: they reject job applicants if they have more than $5000 in overdue debt.” And from the same link:
But what’s also driving the push to check credit is fear of lawsuits, [employment attorney Manesh] Rath said, especially in businesses where employees have access to customers’ money or possessions, including the banking, property management, hotel and home health care industries.
…”The employer will have a tough time defending itself,” Rath said, “if it didn’t take the simple measure of doing a background check.”
At City Journal, Heather Mac Donald has an important article on the federal courts’ willingness to second-guess in great detail the hiring practices of the New York City fire department, in search of more hiring of black applicants. It is worth noting that fire departments are pressed to rely (and even perhaps over-rely) on written tests in assessing applicants’ suitability in part because traditional testing of physical skills such as the ability to wield a charged hose, get up a ladder quickly, and carry body-size weights has been extensively and successfully sued against by lawyers representing female applicants.
Notwithstanding Barack Obama’s claim of a spending freeze on discretionary spending, Roger Clegg finds that the Obama Justice Department’s proposed budget calls for 22 new attorneys to bring “disparate-impact” cases—presumably the ones too weak to find a trial lawyer willing to take it on. And we can be quite confident that there won’t be any disparate impact against Federalist Society members when they do that hiring, right?
So asks Charlie Roberts, who ran the testing division for the Chicago Police Department from 1995 to 1999, upon learning that the city is simply going to give up on testing because of the threat of lawsuits. (Fran Spielman and Frank Main, “Police may scrap entrance exam”, Chicago Sun-Times, Jan. 6.) The problem is exacerbated by the EEOC’s Four-Fifths Rule—of dubious constitutionality after Ricci—which holds that any selection process that results in a selection rate for any race, sex, or ethnic group less than four-fifths of the most successful group is “adverse impact” that “constitutes discrimination unless justified.” 41 CFR § 60-3.