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Tex. Dep't of Hous. & Cmty. Affairs v. Inclusive Cmtys. Project, Inc.

Supreme Court of the United States

January 21, 2015, Argued; June 25, 2015, Decided

No. 13-1371

Opinion

 [*2513]  [**527]   Justice Kennedy delivered the opinion of the Court.

The underlying dispute in this case concerns where housing for low-income persons should be constructed in Dallas, Texas—that is, whether the housing should be built in the inner city or in the suburbs. This dispute comes to the Court on a disparate-impact theory of liability. In contrast to a disparate-treatment case, where a “plaintiff must establish that the defendant had a discriminatory intent or motive,” a plaintiff bringing a disparate-impact claim challenges practices that have a “disproportionately [***9]  adverse effect on minorities” and are otherwise unjustified by a legitimate rationale. Ricci v. DeStefano, 557 U. S. 557, 577, 129 S. Ct. 2658, 174 L. Ed. 2d 490 (2009) (internal quotation marks omitted). The question presented for the Court’s determination is whether disparate-impact claims are cognizable under the Fair Housing Act (or FHA), 82 Stat. 81, as amended, 42 U. S. C. §3601 et seq.

Before turning to the question presented, it is necessary to discuss a different federal statute that gives rise to this dispute. The Federal Government provides low-income housing tax credits that are distributed to developers through designated state agencies. 26 U. S. C. §42. Congress has directed States to develop plans identifying selection criteria for distributing the credits. §42(m)(1). Those plans must include certain criteria, such as public housing waiting lists, §42(m)(1)(C), as well as certain preferences, including that low-income housing units “contribut[e] to a concerted community revitalization plan” and be built in census tracts populated predominantly by low-income residents. §§42(m)(1)(B)(ii)(III), 42(d)(5)(ii)(I). Federal law thus favors the distribution of these tax credits for the development of housing units in low-income areas.

In the State of Texas these federal credits are distributed by the Texas Department of Housing and Community Affairs (Department). Under [***10]  Texas law, a developer’s application for the tax credits is scored under a point system that gives priority to statutory criteria, such as the financial feasibility of the development project and the income level of tenants.  [*2514]  Tex. Govt. Code Ann. §§2306.6710(a)-(b) (West 2008). The Texas Attorney General has interpreted state law to permit the consideration of additional criteria, such as whether the housing units will be built in a neighborhood with good schools. Those criteria cannot be awarded more points than statutorily mandated criteria. Tex. Op. Atty. Gen. No. GA-0208, pp. 2-6 (2004), 2004 WL 1434796, *4-*6.

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135 S. Ct. 2507 *; 192 L. Ed. 2d 514 **; 2015 U.S. LEXIS 4249 ***; 83 U.S.L.W. 4555; 25 Fla. L. Weekly Fed. S 441

TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS, et al., Petitioners v. THE INCLUSIVE COMMUNITIES PROJECT, INC., et al.

Notice: The LEXIS pagination of this document is subject to change pending release of the final published version.

Subsequent History: As Corrected July 2, 2015.

On remand at, Remanded by Inclusive Cmtys. Project, Inc. v. Tex. Dep't of Hous. & Cmty. Affairs, 795 F.3d 509, 2015 U.S. App. LEXIS 13779 (5th Cir. Tex., 2015)

Prior History:  [***1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

Inclusive Cmtys. Project, Inc. v. Tex. Dep't of Hous. & Cmty. Affairs, 747 F.3d 275, 2014 U.S. App. LEXIS 5424 (5th Cir. Tex., 2014)

Disposition: 747 F. 3d 275, affirmed and remanded.

CORE TERMS

disparate-impact, housing, disparate impact, title vii, fair housing, color, decisions, religion, provisions, national origin, cases, unavailable, authorize, sex, practices, employees, segregate, adversely affect, suits, words, low-income, prohibits, dwelling, deprive, discriminatory, disparity, plurality, discriminate, courts, entity

Business & Corporate Compliance, Public Health & Welfare Law, Housing & Public Buildings, Fair Housing, Civil Rights Law, Contractual Relations & Housing, Fair Housing Rights, Prohibited Conduct, Labor & Employment Law, Discrimination, Disparate Impact, Scope & Definitions, Tax Law, Federal Income Tax Computation, Credits, General Overview, Enforcement Actions, Evidence, Burdens of Proof, Burden Shifting, Fair Housing Act, Defenses, Business Necessity & Job Relatedness, Constitutional Law, Equal Protection, National Origin & Race, Title VII Discrimination, Scope & Definitions, Age Discrimination, Statutory Application, Prohibited Conduct, Leasing & Sales, Governments, Legislation, Effect & Operation, Amendments, Interpretation, Exemptions, Age Discrimination in Employment Act, Reasonable Factors, Employment Practices, Demotions & Promotions