Supreme Court Grants Cert on Disparate Impact Test

by Jeff Sovern

The Supreme Court today granted cert in Mount Holly v. Mount Holly Gardens Citizens in Action, which raises the issue of whether courts can use the disparate impact test in federal Fair Housing Act (FHA) cases. Because the language of the FHA is similar to that of the Equal Credit Opportunity Act (ECOA), the Court's decision is also likely to have an impact on whether the disparate impact test can be used in ECOA cases.  ECOA bars discrimination in lending to consumers.  Under the disparate impact test, courts can find discrimination when the discrimination is unintentional, as long as the conduct has a discriminatory effect, though under some circumstances, lenders can continue to engage in even discriminatory conduct.  You can read more about the case in the SCOTUS blog, Bloomberg, the LA Times, the Associated Press, and the Ballard Spahr web site. I had previously explained why I think it is desirable for courts to use the disparate impact test here

One thing that is strking about the case is that the circuit courts are not split on this issue. The Courts of Appeals to address the issue and the relevant administrative agency all bless the use of the disparate impact test.  It is difficult to see why four justices would have voted to take the case under those circumstances unless they harbored significant doubt about the validity of the test. 

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