For Immediate Release - December 23, 2014

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

AG Argues Disparate Impact Claims are a Critical Enforcement Tool; Amicus Brief Highlights Actions Against Mortgage Companies to Combat Discriminatory Lending Practices

BOSTON – Arguing that individuals and businesses involved in the renting or selling of homes must be held accountable for the discriminatory effects of their policies and practices, Attorney General Martha Coakley has filed an amicus brief in the U.S. Supreme Court urging it to recognize disparate impact claims under the federal Fair Housing Act (FHA).

The brief, which was prepared in collaboration with New York Attorney General Eric Schneiderman’s office, was joined by 15 other states including Arizona, California, Connecticut, Hawaii, Illinois, Minnesota, Missouri, New Hampshire, New Mexico, North Carolina, Oregon, Utah, Vermont, Virginia, and Washington.

“Disparate impact claims are an important tool used to eliminate discrimination in the housing market,” 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 Fair Housing Act.”

The brief was submitted in the case of Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., which is scheduled for argument on Jan. 21.

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, whose subprime home mortgage loans disproportionately harmed minority borrowers, according to the cases that were filed.

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 argues that, “Residential segregation persists across the country, and along with it, unequal educational opportunities, employment prospects, neighborhood amenities and infrastructure, and health care, among other disparities. This inequality is reinforced and perpetuated by discrimination that is often hidden or masked—precisely the type of discrimination disparate impact claims were designed to defeat.” 

In January 2012 and October 2013, AG Coakley filed similar briefs with the Supreme Court in the cases of Magner v. Gallagher and Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc., both of which were 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 anti-discrimination laws.   

Assistant Attorney General Genevieve Nadeau, of AG Coakley’s Civil Rights Division, and Jonathan Miller, Chief of the Civil Rights Division, assisted in the drafting of the brief.  

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