Take the Mt. Holly Case

The Supreme Court is scheduled to consider at conference next Thursday whether to grant review in Township of Mt. Holly v. Mt. Holly Gardens Citizens in Action, a case presenting the question whether “disparate impact” causes of action may be brought under the Fair Housing Act. The Court has recognized but never decided this important issue; indeed, the Court had granted review in another case presenting it just last term, so the odds are good that review will be granted here, too.

The only thing that has changed since last term is that HUD has issued formal regulations endorsing the disparate-impact approach, but there are a number of reasons why those regulations are entitled to little deference. First and foremost, the meaning of the statute is clear that only actual discrimination — “disparate treatment” — is banned (see our discussion in this earlier brief, here). Further, the Fair Housing Act has been on the books for 45 years, and during that time the Executive Branch has sometimes used the disparate-impact approach and sometimes not. For example, President Reagan explicitly rejected the approach in signing major amendments to the Act, and his Justice Department argued against it in a brief to the Supreme Court; the Bushes didn’t think much of it, either. The Obama administration, on the other hand, is attempting to game the system here; it orchestrated a rather shady deal with the City of St. Paul to get it to withdraw last term’s cert petition, and meanwhile has worked on promulgating those new regulations. “We were afraid we might lose disparate impact in the Supreme Court because there wasn’t a regulation,” said Sara Pratt, an official in the Department of Housing and Urban Development.

In any event, the principle of deference ought to be trumped in this case by the “constitutional-doubt canon,” as Justice Scalia calls this long-honored principle in his book Reading Law: The Interpretation of Legal Texts. Justice Scalia has also noted, in his concurrence in Ricci v. DeStefano (the New Haven firefighters case), that a statute mandating the disparate-impact approach — and the race-conscious decision-making it inevitably requires — raises serious constitutional issues. The approach raises further constitutional problems here by altering the state-federal balance in far-reaching ways, by rendering race-neutral rules — like rules for preserving order in public-housing projects — suspect. As the Court said in United States v. Bass, “Unless Congress conveys its purpose clearly, it will not be deemed to have significantly changed the federal-state balance.” Cases such as Edward J. DeBartolo Corp. v. Florida Gulf Coast Building & Constr. Trades Council show that, even when an agency would otherwise receive great deference in interpreting a statute, it will not receive that deference when its interpretation would raise potential constitutional problems. As the Court noted in Miller v. Johnson, “We have rejected agency interpretations to which we would otherwise defer where they raise serious constitutional questions.” Finally, note that the racial classifications that the approach would require in the Fair Housing Act are more constitutionally problematic than, say, the age classifications that the Court has accepted under the Age Discrimination in Employment Act.

The Court should take the Mt. Holly case.

— Roger Clegg is president and general counsel of the Center for Equal Opportunity, and Ralph W. Kasarda is an attorney with Pacific Legal Foundation; CEO has joined an amicus brief filed by PLF urging the Court to grant review in the Mt. Holly case.

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