For Immediate Release - October 28, 2013

AG Coakley Urges Supreme Court to Recognize Disparate Impact Claims Under Fair Housing Act

AG Highlights Enforcement Actions Against Mortgage Companies to Combat Discriminatory Lending Practices

BOSTON – Arguing that individuals and businesses involved in the renting or selling of homes and other real-estate transactions must be held accountable for the discriminatory effects of their policies and practices, Attorney General Martha Coakley has filed a brief in the U.S. Supreme Court urging it to recognize disparate impact claims under the federal Fair Housing Act (FHA). The brief was joined by 11 states including California, Connecticut, Delaware, Hawaii, Illinois, New Mexico, New York, Oregon, Utah, Vermont, and Washington.

“Disparate impact claims are an important tool used to eliminate discrimination in the housing market, one of the primary principles of the Fair Housing Act,” AG Coakley said. “The Court has already recognized disparate impact claims under many civil rights statutes, and we urge the Court to do the same with the FHA.”

The brief pdf format of 11-1507 BSAC MA
was submitted in the case of Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc., which is scheduled for argument on December 4, 2013.

The brief highlights the experience of Massachusetts and other states in pursuing disparate impact claims against banks and mortgage companies such as Option One, Countrywide, and Wells Fargo that made high-risk subprime home mortgage loans to distressed minority borrowers.

A disparate impact claim may be pursued when a policy that appears to be objective or neutral leads to results that disproportionately affect a protected group. For instance, the cases involving the subprime lenders challenged facially neutral policies that in actuality caused African-American and Hispanic borrowers to pay hundreds, if not thousands, of dollars more for their loans than comparable white borrowers. 

The brief argues that allowing disparate impact claims as an enforcement tool used to root out various forms of discrimination is critical to maintaining equal access to housing.  

The brief also states that “not all adverse housing outcomes, or all causes of residential segregation, can be remedied through litigation. But enforcement actions under the FHA and similar state laws are critical to combating discrimination and its pernicious effects. Disparate impact claims are needed to bridge the gap between the direct forms of discrimination provable through a disparate treatment framework, and more subtle forms of discrimination characterized by concealed or subconscious bias—all of which continue to operate in and shape housing markets.” 

In January 2012, AG Coakley filed a similar brief with the U.S Supreme Court in the case of Magner v. Gallagher, which was ultimately dismissed before being heard. 

The FHA was enacted in 1968, and amended in 1988.  It protects individuals from discrimination in the sale and rental of housing as well as other housing-related transactions on the basis of race, color, gender, national origin, disability, religion, and familial status.  The AG’s Office vigorously prosecutes violations of the FHA as well as the state’s housing discrimination law.   

Assistant Attorneys General Genevieve Nadeau, Melissa Swindel, and Jonathan Miller, all of the Attorney General’s Civil Rights Division, assisted in the drafting of the AG’s Brief. 


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