On March 28, 2008, the Inclusive Communities Project, Inc. (ICP) - a Texas non-profit that helps integrate low-income black families into Dallas's predominately white suburban neighborhoods - filed this suit in the U.S. District Court for the Northern District of Texas against the Texas Department of Housing and Community Affairs (TDHCA) under 42 U.S.C. §§ 1982 and 1983, and the Fair Housing Act (FHA), 42 U.S.C. §§ 3604 and 3605.
In its complaint
, ICP, represented by private counsel, sought injunctive relief, alleging that the TDHCA allocated federal tax credits to housing developers in a discriminatory manner, disproportionately granting credits for development in minority neighborhoods and disproportionately denying credits for development in white neighborhoods, thereby perpetuating racially segregated communities by creating a concentration of subsidized low-income housing in minority areas.
ICP offered two theories of discrimination: disparate treatment under § 1982 and the Fourteenth Amendment's Equal Protection Clause, and disparate impact under the FHA. Disparate treatment requires that the plaintiff show discriminatory intent, whereas disparate impact allows a plaintiff to establish illegal discrimination by showing that seemingly race-neutral policies disproportionately harm racial minorities without adequate justification.
In September 2010, the District Court (Judge Sidney A. Fitzwater) denied the TDHCA's motions for summary judgment and judgment on the pleadings, and granted ICP partial summary judgment. The court concluded that ICP had standing to bring the suit and had made a sufficient initial showing of both disparate treatment and disparate impact discrimination. Inclusive Communities Project, Inc. v. Texas Dep't of Hous. & Cmty. Affairs
, 749 F. Supp. 2d 486 (N.D. Tex. 2010).
The case then proceeded to trial. On March 20, 2012, Judge Fitzwater held that ICP failed to establish that the TDHCA had acted with discriminatory intent and thus found for the TDHCA on the disparate treatment claims. However, the court ruled in favor of ICP on its disparate impact claim under the FHA and imposed an injunction on the TDHCA. Inclusive Communities Project, Inc. v. Texas Dep't of Hous. & Cmty. Affairs
, 860 F. Supp. 2d 312 (N.D. Tex. 2012).
Following trial, the court began to craft the injunction. It considered proposals from the parties and ultimately adopted a remedial plan in August 2012, which stipulated changes to the TDHCA's tax credit allocation process and provided for monitoring by the court for at least five years. Inclusive Communities Project, Inc. v. Texas Dep't of Hous. & Cmty. Affairs
, 2012 WL 3201401 (N.D. Tex. Aug. 7, 2012), amended in part
, 2012 WL 5458208 (N.D. Tex. Nov. 8, 2012). In February 2013, the court awarded ICP attorneys' fees and costs totaling $1,893,969.
The TDHCA appealed to the U.S. Court of Appeals for the Fifth Circuit on the issue of whether the District Court correctly found that ICP proved a violation of the FHA based on disparate impact. On March 24, 2014, the Fifth Circuit (Judge James E. Graves, Jr.) held that the District Court applied the wrong legal test for assessing disparate impact claims and remanded the case to the District Court for further proceedings under the correct test. Inclusive Communities Project, Inc. v. Texas Dep't of Hous. & Cmty. Affairs
, 747 F.3d 275 (5th Cir. 2014). The Fifth Circuit's reversal also nullified the remedial plan, and vacated and remanded the award of attorneys' fees.
Following the ruling from the Fifth Circuit, the TDHCA sought Supreme Court review, which the Supreme Court granted on October 2, 2014. The TDHCA had sought review on two questions: whether disparate-impact claims are cognizable under the Fair Housing Act, altogether, and if they are, the appropriate standards. The Court limited its review to the former issue. (The District Court stayed
proceedings until the Supreme Court's resolution.)
On June 25, the Court affirmed the Fifth Circuit. In a majority decision by Justice Kennedy, the Court agreed that the Fair Housing Act encompassed disparate impact liability, but emphasized that liability followed only if the challenged policy or practice actually caused a racial disparity, not merely accompanied one. The Court emphasized, as well, that remedies should not themselves promote unduly racialized decisionmaking. Justice Alito wrote the principal dissent, joined by the Chief Justice and Justices Scalia and Thomas; Justice Thomas also wrote a separate dissent. The Court remanded the case for further proceedings in light of its opinion.Robert Lake - 06/12/2015