Rental Housing Journal Utah
June 2015 - Vol. 7 Issue 6
3. Ask The Attorney: Do’s and Don'ts of Abandonment 4. Board Chair's Message: Three Prestigious Awards
5. Director's Message: UAA Premier Sponsors Worth Taking a Look At
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Events Golf Tournament.......................................July 15th Economic Forecast................September 15th
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Supreme Court Rules on Disparate Impact
he United States Supreme Court ruled, in June, supporting disparate impact liability under the Fair Housing Act, a legal theory that prohibits neutrally-applied practices with a disproportionate impact on minority groups protected by the law, even without proving an intent to discriminate. The 5-4 decision in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc. also emphasized limitations on the policy, stating that neutrally-applied practices should not fail on disparate impact grounds unn 1995 Western Reporting be- less they are “artificial, arbitrary and gan as a full service background unnecessary.” screening company for small apartment owners and independent rental owners. Today, the company provides over 150 services including Credit & Criminal Background Screening, Drug Testing, Social Security Number Verifications, Employment Verifications, Tenant Scorecards, Business Verifications and more. Western Reporting has evolved through the years to become one of the largest and most respected background screening companies in the country. Importantly, the majority opinion continued on page 2 highlighted limitations on disparate impact liability to allow “practical business choices and profit-related decisions that sustain the free-enterprise system.” Leeway must be given to housing providers to explain the validity of their policies. Further, a disparate impact claim is not demonstrated by statistical disparity alone. A claim must show that a challenged practice actually caused a disparate impact on a protected group, and the availability of an “alternative practice that has less disparate impact” to serve legitimate business needs. According to Ballard Spahr, a law firm specializing in Fair Housing litigation, “the court said that a party bringing a disparate impact claim
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must establish “robust” causation by providing statistical or other evidence that a policy directly caused a disparate impact. Justice Kennedy found that such a “robust causality requirement” ensures that racial imbalance…and protects defendants from being held liable for racial disparities they did not create. Indeed the court also stated that a mere one time decision that may cause a disparate impact does not constitute a “policy”, and stressed that while courts may take race into account in determining disparate impact, race can never be a controlling update.” The National Apartment Association and Utah Apartment Association have been watching these disparate impact cases closely. The big fear was that fair housing advocates have started making claims that if criminal background criteria have a “disparate impact” or disproportionately negative impact on minorities, that we may no longer be allowed to use prior criminal history as a rental criteria. The ruling, while allowing disparate impact in some cases, is pretty clear that landlords can make “busi-
ness and profit related choices that sustain the free enterprise system. “I’m going to tell all my clients and members of the Utah Apartment Association to not change anything,” says Kirk Cullimore, landlord attorney. He points to language in the decision “A disparate-impact claim relying on a statistical disparity must fail if the plaintiff cannot point to a defendant’s policy or policies causing that disparity. Policies, whether governmental or private, are not contrary to the disparate-impact requirement unless they are “artificial, arbitrary, and unnecessary barriers. Courts should avoid interpreting disparate-impact liability to be so expansive as to inject racial considerations into every housing decision. These limitations are also necessary to protect defendants against abusive disparate-impact claims. If a statistical discrepancy is caused by factors other than the defendant’s policy, a plaintiff cannot establish a prima facie case, and there is no liability.”
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