17 State AGs Advise HUD Not to Change Disparate Impact Rule

In a comment letter submitted in response to HUD’s recent Notice of Proposed Rulemaking regarding its 2013 Disparate Impact Rule, the attorneys general of 16 states and the District of Columbia argued that the Rule requires no changes and is consistent with the 2015 U.S. Supreme Court ruling in Texas Department of Housing and Community Affairs vs. Inclusive Communities Project, Inc.

In its Notice of Proposed Rulemaking, HUD sought public comment on whether the Disparate Impact Rule should be revised for law or policy reasons.

After noting their experience with housing and lending discrimination cases, the attorneys general argued that the existing Rule is “fully consistent” with Inclusive Communities because the Rule “adopted a clear and appropriate burden-shifting framework” and, in their view, already requires certain elements addressed in Inclusive Communities, such as “robust causality” and the limitation of liability to “artificial, arbitrary, and unnecessary barriers.”

The letter went on to state that Inclusive Communities did not suggest the need for additional defenses or safe harbors.  Along these lines, the attorneys general warned HUD that the adoption of any such defenses or limitations “would be unlawful usurpation of judicial power by the Executive Branch” because the Supreme Court had “clearly established that FHA disparate impact claims are to be evaluated based on the type of burden-shifting framework used to evaluate Title VII disparate impact claims,” and, therefore, HUD “cannot amend the Rule to introduce concepts that are foreign to the Title VII framework.”

The comment letter can be found here.