Massachusetts Case Reveals Impact of Supreme Court’s Disparate Impact Decision

A recent ruling by Massachusetts’ highest state court relied on an analysis of the June 2015 U.S. Supreme Court decision in Texas Department of Housing & Community Affairs v. The Inclusive Communities Project, Inc. (ICP). In that case, the U.S. Supreme Court held that a state’s “Qualified Allocation Plan” (QAP) implemented by an allocating agency violates the Fair Housing Act if it “disparately impacts” a protected minority even though the allocating agency did not intend to discriminate.

In the ICP opinion, the Supreme Court held that a case of disparate impact liability under the Fair Housing Act (FHA) requires plaintiffs to demonstrate, using statistics, that the defendant’s policy or practice actually causes a discriminatory disparity. The Court stated that this “robust causality requirement” was to protect “defendants from being held liable for racial disparities they did not create.” Under this standard, a policy or practice must constitute “artificial, arbitrary, and unnecessary barriers” to give rise to a disparate impact liability.

Like many of the courts to analyze disparate impact claims under the FHA since ICP, the Massachusetts Supreme Judicial Court ruled that the plaintiffs failed to meet their burden of showing enough evidence for liability. In Burbank Apartments Tenant Association v. Kargman, current and prospective tenants sued the owners for not renewing a Section 8 housing assistance payment contract with HUD. The plaintiffs argued this would result in less affordable housing, which, because of the relationship between race and poverty, would have a negative and disproportionate impact on people of color and other protected classes. The owners countered that both state and federal law permitted them to not renew the expiring contract, as did the contract, thus precluding liability. A Massachusetts housing court judge granted the owner’s motion to dismiss, and the Massachusetts Supreme Judicial Court affirmed.

The Massachusetts Court considered the U.S. Supreme Court’s guidance that disparate impact liability should be imposed only if a defendant’s policy causes discriminatory effects or perpetuates segregation as shown though a statistical discrepancy. The plaintiffs failed to make that showing because they did not demonstrate any harm to indicate discriminatory treatment, the Court ruled. After ending the contract with HUD, the Burbank Apartments allowed all tenants that had been receiving Section 8 assistance to remain in their units using alternative “enhanced vouchers,” which also allowed tenants to use the voucher at a different property.

The Court further criticized the plaintiffs over claims regarding prospective tenants, stating that there was no guarantee, even absent the owner’s decision, that prospective tenants would have received and moved into a Burbank apartment using a Section 8 project-based voucher. Therefore, the “robust causality requirement” was not met in showing that the owner’s policy resulted in a statistical disparity for protected classes.