Policy: Labor

More on Thomas Perez, disparate impact and the Supreme Court

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Politics,Beltway Confidential,Sean Higgins,Supreme Court,Labor,Thomas Perez,Law,Disparate Impact

Terry Eastland focuses on Assistant Attorney General Thomas Perez’s unusual quid pro quo with the city of St. Paul in the latest edition of the Weekly Standard, a story we have devoted more than a few pixels to here. Perez’s deal involved getting the city to drop a case bound for the Supreme Court that could have resulted in the justices limiting the use of the legal theory of disparate impact in civil rights cases. This was in exchange for the Justice Department dropping out of a whistleblower case that could have cost the city $200 million, effectively undermining that case.

Eastland’s story is a good recap of the controversy. It is particularly good in describing the legal issues before the Supreme Court — and why Perez, a major advocate of disparate impact, was worried about what may happen. (All boldfacing below is mine:)

The case had its origins more than a decade ago. In 2002, St. Paul, Minn., decided to step up enforcement of its housing code for rental properties. In 2004 and 2005, several property owners sued St. Paul in federal district court, alleging that the enhanced enforcement effort violated the prohibition of racial discrimination in the Fair Housing Act (FHA).

The district court threw out the case, finding that the plaintiffs hadn’t made a strong enough claim for a trial. But on appeal, the U.S. Court of Appeals for the Eighth Circuit decided they had done so and reinstated their claim of “disparate impact.” The city then appealed that ruling to the Supreme Court. In taking the case, the Court asked the parties to address a question it had never resolved but which was certainly ripe: whether disparate impact claims are “cognizable under the FHA”—meaning, whether in St. Paul or anywhere else, they may be brought before a court.

Disparate impact is not to be confused with “disparate treatment,” the different treatment of someone because of his race or some other forbidden category, such as national origin, sex or religion. Disparate impact targets companies and other entities for policies that are neutral and nondiscriminatory in their intent but have a disproportionate impact on people of a particular race, ethnicity, sex or religion. For example, in a 1971 Supreme Court case, a power company was accused of discrimination because it required applicants to have a high school diploma. The policy adversely affected those lacking diplomas—vastly more blacks than whites.

Disparate impact has been duly legislated in employment and some other areas, but not in housing. It is not provided for in the Fair Housing Act.

Eleven appeals courts, however, have concluded that disparate impact claims may be brought under the FHA. Parties have used the theory to challenge race-neutral actions by landlords, businesses and local governments that affect groups differently. In Magner, the plaintiffs contended that St. Paul’s aggressive code enforcement burdened their rental businesses and decreased the amount of affordable housing in the city—developments, they said, that had a disparate impact on African Americans, who made up 60 to 70 percent of the city’s low-income renters.

Had Magner remained on the Court’s docket, and had the Supreme Court decided that disparate impact claims are not cognizable under the FHA, St. Paul would have won its case. But such a ruling would have denied Perez the chief tool he had been using to bring housing discrimination cases—a major initiative of his tenure at the Civil Rights Division. It also might have constrained his use of disparate impact in other areas, such as employment. And it could have complicated efforts elsewhere in the administration to apply disparate impact in new provinces, among them criminal background checks and school discipline.

Russlynn Ali, then the assistant secretary of education for civil rights, said during a press conference in March 2010 that “disparate impact is woven throughout civil rights enforcement in [the Obama] administration.” To continue the metaphor, the chief weaver of this thread is Perez, who holds the most important civil rights office in the government. Perez has called disparate impact “the linchpin” of civil rights enforcement.

Disparate impact theory, however, is controversial, and the reasons are evident. Disparate impact can impose liability for policies or practices that are entirely race-neutral, were adopted without discriminatory intent, and are applied fairly. The results of a policy, delineated by race, are what matter most. And if the numbers are “wrong,” then it falls to the defendant to prove that the policy or practice is necessary and that no other policy or practice with less-disparate impact can serve the defendant’s needs. Of course, those seeking to avoid being sued in the first place have alternatives. They can preemptively weaken a race-neutral policy to the point where it ceases to produce disparate outcomes. Or they can maintain the policy or practice but adjust the results to get the numbers “right”—in effect, adopt a racial double standard.

Read the whole thing here.

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