What's HUD Got to Do with It?: How HUD's Disparate Impact Rule May Save the Fair Housing Act's Disparate Impact Standard

Since 2011, the U.S. Supreme Court has granted certiorari three times on the question of whether disparate impact liability is cognizable under the Fair Housing Act (FHA). The first two times, the parties settled. The question is before the Court once again in Texas Department of Housing & Community Affairs v. Inclusive Communities Project, Inc., and this time the parties seem unlikely to settle. Disparate impact liability in the civil rights context entails liability for actions that have a discriminatory effect, regardless of an actor’s motive. Under the FHA, this can translate into liability for actions that make housing disproportionately unavailable for persons of a protected class or actions that tend to increase or maintain segregated housing patterns. All eleven federal circuit courts that have addressed the question agree that disparate impact claims are cognizable under the FHA. In addition, in the spring of 2013, the U.S. Department of Housing and Urban Development (HUD) promulgated a rule that standardizes the burdens of proof for disparate impact claims under the FHA and specifically states for the first time in a formal administrative rule that disparate impact claims are cognizable under the FHA. The promulgation of HUD’s disparate impact rule means that this time around the Supreme Court must give heightened deference to an interpretation of the FHA that authorizes disparate impact claims. This Note argues that despite the near-unanimity of the circuit courts’ interpretation of the FHA, the fate of disparate impact claims under the FHA was anything but certain prior to the promulgation of the HUD rule. The HUD rule makes it much more likely that the FHA disparate impact standard will survive, and this Note argues that it should.