Feb 13, 2012

St. Paul Withdraws From US Supreme Court Case Potentially Pivotal To Fair Housing Actions

Last November, we reported on Gallagher v. Magner, 619 F.3d 823, 829 (8th Cir. 2010), and its potentially lethal effect on a cornerstone of Fair Housing actions: disparate impact and the application of the McDonnell-Douglas “burden-shifting” analysis.

However, on Friday, February 10, 2012, the parties withdrew the case from the US Supreme Court just a few weeks before the scheduled argument of February 29. The US Supreme Court granted the withdrawal.

The parties in the case were the City of St. Paul, Minnesota (namely, the Department of Neighborhood Housing and Property Improvement [DNHPI]), and property owners who allege that their homes were targeted by housing code enforcement personnel and their draconian treatment of so-called violations of the housing code. The Plaintiffs brought suit against the City of St. Paul and the DNHPI alleging that the city’s enforcement of its housing code had a disparate impact on minority home and property owners, “whose customers were mainly individuals or families with low incomes, with a large share of them — perhaps 60 to 70 percent — African-American tenants.”

As a cause of action, disparate impact and the McDonnell-Douglas “burden shifting” analysis were indispensible tools in the fight against housing discrimination. During the infancy of the Fair Housing Act, (passed in 1968) Arlington Heights v. Metropolitan Housing Development Corporation decided that the four part “burden shifting” test, first used in McDonnell-Douglas Corp. v. Green and Texas Dept. of Community Affairs v. Burdine, both cases dealing with discrimination in the workplace, could be applied to housing discrimination cases. In the housing context, the Arlington Heights disparate impact claim turned on four factors: 1) A showing of discriminatory effect/impact, 2) Some showing of discriminatory intent, 3) The defendant’s justification, and 4) The relief requested by the plaintiff.

However, the court in Arlington Heights ruled that “official action will not be held unconstitutional solely because it results in a racially disproportionate impact … [such] impact is not irrelevant, but it is not the sole touchstone of an invidious racial discrimination." Arlington Heights, citing Washington v. Davis, 426 U.S. 229, 242. “A racially discriminatory intent, as evidenced by such factors as disproportionate impact, the historical background of the challenged decision, the specific antecedent events, departures from normal procedures, and contemporary statements of the decision makers, must be shown.”

Proving this discriminatory intent was what made disparate impact cases an invaluable weapon in the fight against housing discrimination. Arlington Heights held that proving discriminatory intent turned on three factors: 1) the impact of a discriminatory law or action by state authorities, 2) if the impact of such law or action is not determinative, other factors, such as legislative or administrative history, and 3) the shifting of the burden of proof to the state to prove it would have adopted the law or regulation at issue without discriminatory motives.

Gallagher v. Magner turned on whether these types of claims could still be brought under the Fair Housing Act. While some believe that such claims have serious issues pertaining to equal protection, the consensus in the fair housing community was that the court would have confirmed that disparate impact claim was a valid theory, but were not sure as to the what test the court would have chosen. Disparate impact continues to live to fight housing discrimination another day.