Solicitor General Urges Supreme Court to Reject Mt. Holly Case; Argues No Review Is Needed as to Whether the Fair Housing Act Recognizes Disparate Impact Claims

May 22 2013

In an increasingly complex battle among the branches of the federal government, the Solicitor General recently urged the Supreme Court to deny certiorari in the appeal titled Township of Mount Holly, New Jersey v. Mt. Holly Gardens Citizens in Action, Inc., et al., No. 11-1507. The Mt. Holly matter seeks review of whether the Fair Housing Act recognizes a disparate impact theory of discrimination and if so, how courts are to analyze such claims. A disparate impact theory imposes liability on defendants for actions that are undertaken without discriminatory intent but that nonetheless have a disproportionately harmful effect on particular groups of individuals. The Supreme Court had previously granted certiorari to review these same questions in the appeal titled Magner v. Gallagher, No. 10-1032, which appeal the defendants subsequently withdrew under circumstances garnering review by Congress.

The Solicitor General waited to submit its brief in the Mt. Holly matter until after the issuance of a rule from the Department of Housing and Urban Development (HUD) addressing these issues. The HUD rule permits disparate impact claims under the Fair Housing Act and establishes the standard and burden of proof for those claims, which includes the requirement that a corporate defendant prove the challenged action is necessary to its business operations. In its Mt. Holly brief, the Solicitor General argued that to the extent there is any ambiguity as to whether the Fair Housing Act allows disparate impact claims, the HUD rule answers the question in the affirmative and is entitled to deference under the Supreme Court’s decision in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

The Solicitor General also relied upon the existence of a consensus amongst the federal courts of appeals that disparate impact claims are viable under the Fair Housing Act. The brief asserts that any differences in how various courts of appeals review such claims does not warrant the Supreme Court’s attention, because no court of appeals has yet applied the standard set forth in the new HUD rule, and the rule is likely to make the analysis uniform across all circuits.

The Supreme Court will likely consider whether to grant certiorari in the Mt. Holly matter at the Court’s June 13, 2013 conference, shortly before the end of the Court’s current term. If it grants certiorari, the Court would not hear argument on the matter until next term.