Can enforcement of a rule, regulation, practice or procedure that is completely neutral on its face create liability for discrimination? The U.S. Supreme Court said “yes” today in the case of Texas Dep’t of Housing and Community Affairs v. The Inclusive Communities Project.
The Inclusive Communities Project (ICP) claimed that awarding the bulk of low-income housing tax credits in predominantly black inner-city areas as opposed to predominantly white suburban areas continued segregation in housing patterns. The trial court found that ICP met its initial burden to prove there was a disparate impact and then expected the Texas Dep’t of Housing and Community Affairs (Texas) to prove there were no less discriminatory alternatives that would meet goals established by the program. Texas claimed that shifting the burden of proof violated the law. That issue, whether discrimination can be based upon a disparate impact, was fought all the way up to the U.S. Supreme Court and a decision was rendered today.
In 2013, HUD adopted federal regulations recognizing disparate impact claims. Under the rules, once a plaintiff was able to show that a practice or rule had a disparate impact on a protected class, the defendant had to show that the rule or practice was necessary to achieve legitimate non-discriminatory purposes that could not be achieved by other means. Various parties challenged the enforceability of those regulations.
A portion of that Rule (§100.5000) establishes the burden of proof in discriminatory effect cases. It says:
(1) The charging party, with respect to a claim brought under 42 U.S.C. 3612, or the plaintiff, with respect to a claim brought under 42 U.S.C. 3613 or 3614, has the burden of proving that a challenged practice caused or predictably will cause a discriminatory effect.
(2) Once the charging party or plaintiff satisfies the burden of proof set forth in paragraph (c)(1) of this section, the respondent or defendant has the burden of proving that the challenged practice is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests of the respondent or defendant.
(3) If the respondent or defendant satisfies the burden of proof set forth in paragraph (c)(2) of this section, the charging party or plaintiff may still prevail upon proving that the substantial, legitimate, nondiscriminatory interests supporting the challenged practice could be served by another practice that has a less discriminatory effect.
(d) Relationship to discriminatory intent. A demonstration that a practice is supported by a legally sufficient justification, as defined in paragraph (b) of this section, may not be used as a defense against a claim of intentional discrimination.
What does disparate impact mean? Well if rules, conditions, or practices in connection with the sale or rental of a dwelling, or services or facilities in connection with that dwelling, have a disproportionate adverse impact against persons in protected classes, the rule or practice may be deemed illegal discrimination, regardless of intent.
How does this apply to condominium, cooperative and homeowners’ associations?
You may run afoul of familial status (families with children) protection for one.
The term “familial status” is defined as having an individual or individuals under the age of eighteen living with their parent(s) or legal guardian(s). This includes adopted children, foster children, and stepchildren, as well as any person who is pregnant or in the process of obtaining custody or guardianship of a child under eighteen.
Take a close look at your governing documents, especially the rules and regulations. Are there rules prohibiting children from engaging in certain activities? Do the rules prohibit children from using any of the amenities? Do you have an old provision in the declaration prohibiting children from under a certain age from becoming permanent residents? If so, speak with legal counsel right away.
Courts have held community associations liable for discrimination by prohibiting “unaccompanied” minors from using the community pool or recreational facilities, for imposing limitations on the number of persons that may reside in a particular dwelling, for establishing “adult only” hours of use of facilities, for rules prohibiting children from “running or playing” on the common elements and the like. With this ruling, it is now more important than ever to review your existing rules, practices and those old out-dated governing documents.
Here is a link to the actual Opinion itself: http://www.supremecourt.gov/opinions/14pdf/13-1371_m64o.pdf