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Tuesday, November 11, 2014

HUD's Disparate Impact Rule Vacated

Recently, a federal district court vacated HUD's "disparate impact" rule under the Fair Housing Act. American Insurance Ass'n v. U.S. Department of Housing and Urban Dev't (Nov. 4, 2014). 

HUD's disparate impact rule provides that "Liability may be established under the Fair Housing Act based on a practice's discriminatory effect...even if the practice was not motivated by a discriminatory intent."  24 CFR 100.500.  In reviewing the text of the FHA, however, the court noted that the FHA lacks the "effects-based" language used in other anti-discrimination statutes to support disparate impact claims. The U.S. Supreme Court's holding in Smith v. City of Jackson made it clear that "the availability of disparate-impact liability turns on the presence, or absence, of effects-based language." Because of the absence of the effects-based language, the court concluded that the FHA only prohibits intentional discrimination.  

Post Authored by Julie Tappendorf


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