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Magner v. Gallagher: The Sunset for the Disparate Impact Claim?

Adam Rust's picture

Posted January 18, 2012

The Supreme Court intends to hear a case whose effect could dramatically undercut most attempts to prove discrimination under the Fair Housing Act.

In Magner v. Gallagher, plaintiffs are petitioning the Supreme Court to reverse a judgment made by a lower appeals court that  nullified (are you following the triple-negative legalese?) a

ruling which rejected an argument of disparate impact. Let's try again: plaintiffs ask for a disparate impact claim...court rejects....higher court overturns...plaintiffs successfully get the Supreme Court to hear their argument for disparate impact.

There are two basic questions:

  • Can a lawsuit be brought under the Fair Housing Act for a practice that does not have a discriminatory intent or purpose, but does have a discriminatory effect?
  • How should a Court decide when a policy has a discriminatory effect to a degree that merits legal redress?

If the Supreme Court decides for the City of St. Paul, it could undermine the pursuit of violations of the Fair Housing Act.

Plaintiffs in this case are a group of landlords in St. Paul, Minnesota that allege that a get-tough minimum housing code inspection program unfairly limits housing choice for their tenants and that since most of those tenants are African-American, the get-tough rule is discriminatory.

The opinion represents the next step in a progression of decisions that will change how lawsuits alleging discriminatory bias will be treated. In 2009, the Court said that evidence that whites performed disproportionately better on a test than a protected class does not merit a disparate impact claim. That case (Ricci v. DeStefano) may have undermined the 80 percent rule used to apply the Equal Employment Opportunity Act. In Ricci v. DeStefano, a group of white and Latino New Haven fire fighters protested a decision to invalidate a test used from department promotions. The city's Civil Service Board refused to accept the recommended promotions after no African-American candidates passed the test, in spite of the fact that approximately thirty percent of the department staff were African-American. Justice Kennedy, in the majority, said that statistics are not an adequate basis for a claim of discrimination if there is no prima facie evidence.

For some time, prima facie evidence has been but one of the standards for a discriminatory claim. Prima facie bias is itself somewhat rare. Such an instance is so flagrant - a sign that says "no blacks allowed," for instance, that few institutions fail to check such bias.

Disparate impact claims based themselves on empirical evidence: if the ultimate result is that protected classes fare far worse than non-protected groups and it can be shown that there is an alternative standard that is equally workable but not disproportionately impactful, then a claim can be made to require change.

The Equal Credit Opportunity Act would also appear to be at risk as well.

St. Paul's code enforcement division must wonder if winning this battle is worth the potential harm. St. Paul probably initiated its approach with an aim of helping poor people and it may have had little doubt that many of those poor people would also be minorities. Now, though, they are ready to bring about a case where victory would subsequently undermine the legal standing of many of those people they were trying to protect.