Without fanfare, divided SCOTUS creates law out of thin air

Thomas stated, ‘Making the same mistake in different areas of the law furthers neither certainty nor judicial economy. It furthers error.’

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WASHINGTON – There was a lot of fanfare and media attention given to the Affordable Care Act (Obamacare) ruling, with U.S. Supreme Court (SCOTUS) Chief Justice John Roberts, bailing out Obamacare for the second time now, delivering the opinion of the 6-3 court by claiming the wording that plainly states health care exchanges “established by the state” is ambiguous and really means established by the state or federal government.

Justice Antonin Scalia, in a blistering dissent, concluded the law should now be called SCOTUScare.

In another highly publicized 5-4 opinion, this time delivered by Justice Anthony Kennedy, the court declared gay marriage a Constitutional right in all 50 states.

Immediately prior to those rulings, SCOTUS issued an opinion, receiving little or no media attention, in Texas Department of Housing and Community Affairs (Department) v. Inclusive Communities Project, Inc. (ICP), in favor of ICP.

Kennedy delivered the opinion of the court, with Justice Samuel Alito, joined by Roberts, Scalia and Justice Clarence Thomas, issuing a dissenting opinion.

Thomas went on to issue a separate dissenting opinion.

The case stems from a disparate-impact claim brought by ICP, a Texas-based nonprofit organization that assists low-income families in obtaining affordable housing, alleging the Department and its officers caused continued segregated housing patterns by allocating too many tax credits to housing in predominantly black inner-city areas and too few in predominantly white suburban neighborhoods, alleging it acted in violation of the Fair Housing Act (FHA), which was adopted shortly after the assassination of Dr. Martin Luther King, Jr.

The FHA was passed to address the denial of housing opportunities based on “race, color, religion, or national origin” and made it unlawful to “refuse to sell or rent … or otherwise make unavailable or deny, a dwelling to a person because of race” or other protected characteristic, or “to discriminate against any person in” making certain real estate transactions “because of race” or other protected characteristic.

The majority of the justices determined, based on the logic drawn from previous cases (Griggs v. Duke Power Co. and Smith v. City of Jackson), there was strong support to conclude that the FHA encompasses disparate-impact in addition to disparate-treatment claims, despite the FHA not stating such.

The federal government provides low-income housing tax credits that are distributed to developers through designated state agencies based on criteria established by Congress.

The state agencies must include certain criteria, including that the low-income housing units “contribute to a concerted community revitalization plan” and be “built in census tracts populated predominantly by low-income residents.”

In other words, federal law favors the distribution of such tax credits for the development of housing units in low-income areas.

In Texas, the Department utilizes a point system to score a developer’s application for the tax credits, which gives priority to statutory criteria, such as the financial feasibility of the development project and the income level of tenants.

While the Texas Attorney General has interpreted state law to permit considering other criteria, such as whether the housing units will be built in a neighborhood with good schools, those conditions cannot be awarded more points than statutorily mandated criteria.

The ICP alleged the Department has caused continued segregated housing patterns by disproportionately allocating too many tax credits for housing in predominantly black inner-city areas and too few in predominantly white suburban neighborhoods.

The ICP’s goal is to have the Department modify its selection criteria to encourage low-income housing construction in suburban communities.

The U.S. District Court held the Department must prove “that there are no other less discriminatory alternatives to advancing their proffered interests,” and because the court decided the Department failed to prove there were no less discriminatory alternatives, the District Court ruled in favor of the ICP.

The District Court’s remedial order required the Department to add new selection criteria for the tax credits by awarding points for units built in neighborhoods with good schools and by disqualifying sites located adjacent to or near hazardous conditions, such as high crime areas or landfills.

While the Fifth Circuit Court of Appeals held disparate-impact claims are cognizable under the FHA, it reversed and remanded the case on the merits, holding it was improper for the District Court to have placed the burden on the Department to prove there were no less discriminatory alternatives.

In a concurring opinion, Fifth Circuit Judge Edith Jones stated, on remand, the District Court should reexamine whether the ICP had made a prima facie case of disparate impact.

Jones also suggested the court incorrectly relied on bare statistical evidence without analyzing causation and observed if the federal law providing for the distribution of low-income housing tax credits ties the Department’s hands to such an extent it lacks a meaningful choice, then there is no disparate-impact liability.

The Department filed its petition to the Supreme Court to ask whether disparate-impact claims are cognizable under the FHA.

SCOTUS determined recognition of disparate-impact claims is consistent with the FHA’s central purpose, rather than what is written in the law itself.

Alito opened his dissent by stating, “No one wants to live in a rat’s nest,” and cited a case reviewed by SCOTUS several terms ago in which the Eighth Circuit held the FHA could be used to attack St. Paul, Minnesota’s efforts to combat “rodent infestation” and other violations of the city’s housing code.

While the court agreed there was no basis to “infer discriminatory intent” on the part of St. Paul, Alito said it still concluded the city’s “aggressive enforcement of the Housing Code” was actionable because making landlords respond to ‘rodent infestation, missing deadbolt locks, inadequate sanitation facilities, inadequate heat, inoperable smoke detectors, broken or missing doors,” and the like, increased the price of rent. Since minorities were statistically more likely to fall into “the bottom bracket for household adjusted median family income,” they were disproportionately affected by those rent increases, i.e., there was a “disparate impact.”

“The upshot was that even St. Paul’s good-faith attempt to ensure minimally acceptable housing for its poorest residents could not ward off a disparate-impact lawsuit,” wrote Alito.

Alito stated, “Everyone agrees that the FHA punishes intentional discrimination. Treating someone ‘less favorably than others because of a protected trait’ is ‘the most easily understood type of discrimination.’”

He wrote, “Indeed, this classic form of discrimination—called disparate treatment—is the only one prohibited by the Constitution itself,” and stated it is obvious Congress intended the FHA to cover disparate treatment.

However, Alito pointed out the question presented in this case was whether the FHA also punishes “practices that are not intended to discriminate but in fact have a disproportionately adverse effect on minorities.”

He stated, “The answer is equally clear. The FHA does not authorize disparate-impact claims. No such liability was created when the law was enacted in 1968. And nothing has happened since then to change the law’s meaning.”

Alito provided examples, beginning with, “Suppose that Congress increases the minimum wage. Some economists believe that such legislation reduces the number of jobs available for ‘unskilled workers’ … and minorities tend to be disproportionately represented in this group … Assuming for the sake of argument that these economists are correct, would it be fair to say that Congress made jobs unavailable to African-Americans or Latinos ‘because of’ their race or ethnicity?”

Alito then referenced the 32 college players selected by NFL teams in the first round of the 2015 draft, in which it appeared the overwhelming majority were members of racial minorities.

He said, “Teams presumably chose the players they think are most likely to help them win games. Would anyone say the NFL teams made draft slots unavailable to white players ‘because of’ their race?”

For a third example, Alito wrote, “During the present Court Term, of the 21 attorneys from the Solicitor General’s Office who argued cases in this Court, it appears that all but five (76 percent) were under the age of 45. Would the Solicitor General say he made argument opportunities unavailable to older attorneys ‘because of’ their age?”

Alito stated, “The text of the FHA simply cannot be twisted to authorize disparate-impact claims. It is hard to imagine how Congress could have more clearly stated that the FHA prohibits only intentional discrimination than by forbidding acts done ‘because of race, color, religion, sex, familial status, or national origin.’”

Alito emphasized the circumstances in which the FHA was enacted only confirm what the text says, and, citing Smith v. City of Jackson, wrote, “In 1968, ‘the predominant focus on antidiscrimination law was on intentional discrimination.’”

He wrote, “The FHA is not ambiguous. The FHA prohibits only disparate treatment, not disparate impact.”

Alito said he would interpret the FHA as written and would have reversed the judgment of the Court of Appeals.

While Thomas agreed with Alito’s dissent in full, he wanted to separately “point out that the foundation on which the Court builds its latest disparate-impact regime (Griggs) … is made of sand.”

Thomas asked whether the use of the phrase “because of” in one section of the statute means something different under another section.

He wrote, “The answer to that question should be obvious. We ordinarily presume that ‘identical words used in different parts of the same act are intended to have the same meaning,’” and statute “contains nothing to warrant a departure from that presumption.”

Thomas went on to say, “Griggs’ disparate-impact doctrine defies not only the statutory text, but reality itself.”

He noted just because a practice has a disparate impact it is not conclusive evidence that the practice is discriminatory.

After making it clear he found the decision in Griggs to be an error, Thomas stated, “The decision in Griggs was bad enough, but this Court’s subsequent decisions have allowed it to move to other areas of the law.”

Thomas stated, “Making the same mistake in different areas of the law furthers neither certainty nor judicial economy. It furthers error.

“That error will take its toll.”

Thomas pointed to recent experiences of the Houston Housing Authority (HHA), which provides affordable housing developments to low-income residents of Houston and has over 43,000 families on its waiting list.

He stated the overwhelming majority of those families are black. Because Houston is a majority minority city with minority concentrations in all but the more affluent areas, he said any HHA developments built outside those areas will increase the concentration of racial minorities.

And, “unsurprisingly,” he stated the threat of disparate-impact suits based on those concentrations has hindered HHA’s efforts to provide affordable housing and state and federal housing agencies have refused to approve all but two of HHA’s eight proposed development projects out of fear of disparate-impact liability.

Thomas wrote, “That the majority believes that these are not ‘dire consequences’ … is cold comfort for those who actually need a home.”

Thomas said repeating the error of Griggs is “divorced from text and reality,” is “driven by an agency with its own policy preferences” and “bears little relationship to the statutory interpretation we should expect from a court of law.”

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