Judge Tosses HUD “Disparate Impact” Rule

Judge Richard Leon of the D.C. District Court issued a ruling on Monday that will be of particular interest to housing providers. From the article in The Hill:

Judge Richard Leon of the D.C. Circuit Court ruled Monday that the Department of Housing and Urban Development’s “disparate impact” rules were not justified by existing law, and ordered the rules vacated.

The ruling marks the latest in an ongoing debate about the controversial regulatory principle, which is used to build discrimination cases based on statistical models, rather than overt examples of unequal treatment…

Civil rights groups have hailed the initiative, saying it will help expose and punish institutional discrimination that may not be easily observed.

But many industry groups have cried foul at its use, arguing that the law does not permit the government to charge discrimination when there are no clear examples of it, but rather just data that shows some groups may be treated differently.

The judge dismissed the government’s argument that existing laws permitted the government to apply the method to fair housing laws by calling it “wishful thinking on steroids.”

Rather, Leon wrote in his decision that the language of the Fair Housing Act, which provides the legal basis for challenges in housing discrimination, only permits claims based on intentional discrimination.