The U.S. Supreme Court has agreed to hear a case that will determine whether disparate impact claims are allowed under the Fair Housing Act. Disparate impact claims involve policies that are neutral on their face but have a discriminatory effect. The specific case involves a city housing code policy that is alleged to have disproportionately affected African Americans. A ruling in favor of allowing disparate impact claims could significantly impact housing, insurance, and lending industries. Briefing will begin in late December with a decision expected by June.

1. November 15, 2011 Supreme Court Grants Cert to Determine Whether Disparate
Impact Claims are Cognizable Under the Fair Housing Act
Client Alert
On November 7, 2011, the U.S. Supreme Court voted to hear a key issue under the Fair
This Alert provides only Housing Act regarding whether this civil rights act recognizes claims of discrimination
general information and based on the disparate impact theory. The Court has also been presented with the issue
of how such claims should be analyzed if they are recognized.
should not be relied upon as
legal advice. This Alert may Under the disparate impact theory, discrimination (on the basis of race, color, relegation,
be considered attorney sex, familial status or national origin) may be proven without evidence of intent to
advertising under court and discriminate. The evidence primarily relied upon is statistical - comparisons of the impact
bar rules in certain
of a facially neutral policy on a group or a geographic area to see whether it is having a
discriminatory effect. For example, in the case to be heard by the Court, the issue is
jurisdictions.
whether “aggressive” enforcement of the housing code policy of the City of St. Paul,
Minnesota had a disproportionate adverse effect on the African-American population of
For more information, contact that city.
your Patton Boggs LLP
attorney or the authors listed
The Court’s action in Magner v. Gallagher suggests a hard look at whether disparate
impact cases should continue under the Fair Housing Act. This issue is before the Court
below.
due to the Eighth Circuit’s holding that the district court should not have dismissed the
disparate impact claim. Since the status quo after the Eighth Circuit’s decision is that
John Oberdorfer disparate impact cases are cognizable under the Fair Housing Act, it is fair to conclude
joberdorfer@pattonboggs.com that the four votes needed for Supreme Court review came from Justices considering
reversing the Eighth Circuit’s ruling.
Samantha Petrich
spetrich@pattonboggs.com
Because the Fair Housing Act has been held to apply to housing and related industries –
for example, property insurers and mortgage bankers – the case is significant for a broad
WWW.PATTONBOGGS.COM
range of businesses. In prior cases, courts have held that the Fair Housing Act prohibits
discriminatory redlining by insurance companies and mortgage lenders, as well as
reverse redlining and other discriminatory lending practices by mortgage lenders. See,
e.g., NAACP v. Am. Family Mut. Ins. Co., 978 F.2d 287, 290 (7th Cir. 1992) (provisions of
the Fair Housing Act were held to apply to insurance redlining); Dunn v. Midwestern
Indem. Mid-Am. Fire & Cas. Co., 472 F. Supp. 1106, 1109 (S.D. Ohio 1979) (court held
that the Fair Housing Act is applicable to property insurers, and “although insurance
redlining is not expressly proscribed by the Act, it is encompassed by both the broad
language of § 3604(a) and the legislative design of the [Fair Housing] Act which seeks to
eliminate discrimination within the housing field”); Hargraves v. Capital City Mortg. Corp.,
140 F. Supp. 2d 7 (D.D.C. 1999) (court held that a claim of reverse redlining is
cognizable under the Fair Housing Act); Old West End Ass’n v. Buckeye Fed. Sav. &
Loan, 675 F. Supp. 1100 (N.D. Ohio 1987) (Fair Housing Act prohibits racial redlining by
mortgage company).

2. Initial briefing will begin in late December and conclude in February. Amicus briefs
supporting the challenge to disparate impact claims under the Fair Housing Act will be
due at the end of December. An argument date has not yet been set, but can be
expected in April, with a decision before the summer recess in June.
Please direct any questions or requests for further information to either John Oberdorfer
or Samantha Petrich.
This Alert provides only general information and should not be relied upon as legal advice. This Alert may
also be considered attorney advertising under court and bar rules in certain jurisdictions.
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