The Consumer Financial Protection Bureau (CFPB)’s campaign against disparate impact in car loans is raising costs for some borrowers. Thanks, Sen. Warren! “The results highlight the sometimes unpredictable consequences of attempts to regulate lending practices…. Efforts by the CFPB to police the fairness of auto loans have accelerated in recent years under Director Richard Cordray.” [Morningstar/Dow Jones, W$J]
- Please just don’t: “Should Happy Hour be banned?” [New York Times “Room for Debate”]
- “This furniture must be affixed to the wall with the enclosed wall fastener.” Ikea liable for tip-over hazard anyway? [Nick Farr, Abnormal Use, Pennsylvania]
- Oh, great: making writers declare as taxable income the (face?) value of review-copy books they’re sent [Ira Stoll, Future of Capitalism]
- “Every state county or municipality…should think long and hard before taking a dime in HUD money.” [Richard Epstein, Hoover “Defining Ideas”, “The Folly of ‘Fair’ Housing”] “Confusion and uncertainty” in housing sector as to what disparate impact liability actually will mean, after Supreme Court ruling [Hans Bader, CEI; earlier]
- And he’ll take the low road: “Donald Trump sued Scotland” [Lowering the Bar, earlier]
- Garlock database shows “staggering” amount of money changing hands in asbestos litigation [Madison County Record]
- Harm reduction and its enemies: “Two Surveys Find That Almost All Regular Vapers Are Smokers” [Jacob Sullum, earlier]
…There’s nothing fair about it. I’ve got a post at Cato about yesterday’s important Supreme Court victory for the Left in which Justice Anthony Kennedy joined the four liberals to hold that current federal law allows housing suits based on “disparate impact” theories. I explain why pundits are being silly when they claim that the Court “saved” the Fair Housing Act or that a contrary ruling would have “gutted” it, and why Samuel Alito and Clarence Thomas were right in their dissents to spotlight the shaky basis of the theory in the statutory text, going back to the original disparate-impact case, Griggs v. Duke Power.
True, Kennedy did throw a sop or two about how courts applying disparate impact need to avoid pressuring actors toward the potentially unconstitutional result of quotas. Although some consider these bits of wording significant, I suspect that will mean about as much as similar sops that the Court has thrown over the years about avoiding quotas in employment and education, i.e., not much. Others, such as Cory Andrews of WLF, point to Kennedy language suggesting (on what statutory basis is not entirely clear) that disparate impact scrutiny might be limited to “artificial, arbitrary, and unnecessary” practices, a narrowness of approach not seen in other disparate-impact contexts. How administrable such a standard might prove, or how much litigation will be needed before it is clarified, is anyone’s guess.
Some further background on Texas Department of Housing and Community Affairs v. Inclusive Communities Project: SCOTUSBlog, Cato’s brief in the case and earlier coverage by Ilya Shapiro and company here and here, and my podcast.
With three decision days remaining — today, tomorrow, and next Monday — Ilya Shapiro outlines the remaining seven cases and their importance, including Texas Dept. of Housing v. Inclusive Communities Project (are defendants liable under “disparate impact” theories in housing discrimination law?) and King v. Burwell (interpreting Congress’s language on Obamacare subsidies).
Update: Both of those cases were decided this morning. In King v. Burwell, the Court broke 6-3 for the administration to uphold the IRS’s rewrite of ObamaCare subsidies. The Court keeps on hand a supply of what one observer called Get Out Of Bad Drafting Free cards, but as Justice Scalia noted in his “SCOTUScare” dissent, awards them only for certain laws. And the housing case was a big win for the left as Justice Anthony Kennedy joined the four liberals to uphold housing suits based on “disparate impact” theories. His opinion throws a sop or two about how disparate impact shouldn’t imply quotas, which I suspect will mean about as much as similar sops the Court has thrown over the years in employment and education, i.e., not much. (P.S. As one reader rightly objects, the problem in Burwell wasn’t so much bad drafting as drafting that failed of its intended coercive effect and therefore needed to be revised if there was to be a Plan B. More on King v. Burwell: Roger Pilon and Ilya Shapiro at Cato)
- In a new Cato podcast, I talk with Caleb Brown about the Court’s pending case on “disparate impact” liability in housing and finance, Texas Dept. of Housing vs. The Inclusive Communities Project [earlier, more]
- Amicus briefs urge Court to recognize regulatory taking in raisin marketing order requisition case Horne v. Department of Agriculture [Trevor Burrus, Ilya Somin, earlier]
- Organized campaign to disrupt Supreme Court sittings is sure to raise the concern of groups devoted to backing judicial independence. Right? [Orin Kerr, Legal Times, earlier on selective vision of some of the latter groups here, here, etc.]
- Under the surface, routine decision in Perez indicates Justices’ changing attitudes toward Chevron, Auer, and agency deference in administrative law [Sasha Volokh]
- Vong v. Aune, arising from Arizona cosmetology board ban on Asian “fish pedicure” techniques, could enable Court to examine economic rationality of regulation [Ilya Shapiro]
- “Justices stick to middle of the road in Omnicare securities opinion” [Alison Frankel/Reuters, Bainbridge]
- Sequel to Harris v. Quinn? In Center for Individual Rights’s Friedrichs v. California Teachers Association case Court could revisit Abood question of public sector agency shop [On Labor, Larry Sand/City Journal]
Daniel Fisher recounts oral argument in the case of Texas Dept. of Housing vs. The Inclusive Communities Project. Roger Clegg (more) and Terry Eastland comment on a “to exclude one is implicitly to include all others” argument made by some on the liberal side.
Interviewed at HousingWire, Mike Skojec of Ballard Spahr predicts major consequences from the case (including, paradoxically or otherwise, higher costs for the building of “affordable” housing should the liberal side win) and has this to say about how disparate-impact advocates have overplayed their hand:
In some disparate impact cases, the theory has worked effectively to lessen racial discrimination and the perpetuation of illegal segregation. However, the substantial increase in the use of the theory by advocacy groups and HUD for many kinds of claims for which it should not be used, such as how risk is evaluated in selling property insurance or how management companies screen the risk of criminal conduct and other bad acts by possible tenants, has caused the theory to be attacked and probably struck down.
Why “probably” struck down? Well, there are many signals of the Court’s intention:
The Court has wanted to examine this issue, as evidenced by accepting cert three times. It has repeatedly said that it only wanted to look at whether disparate impact applies under the Fair Housing Act and not what standard would apply if it does exist, even though there are many circuit court decisions using disparate impact, and they have used conflicting standards. Typically, the Court would want to decide an issue that is in conflict between the circuits, especially here, where HUD has already tried to resolve the conflicts with a rule. The Court’s refusal to consider a standard suggests that the majority of the justices already know disparate impact will no longer apply under the Fair Housing Act.
- Perez v. Mortgage Bankers: can agency escape notice-and-comment requirements for new rulemaking by couching edict as other than a rule? [The Hill]
- Contrary to imaginings in some quarters, anti-business side doesn’t lack for access to front-rank Supreme Court advocates [Tom Goldstein, SCOTUSBlog]
- Speaking of which, Alison Frankel’s profile of Prof. Samuel Issacharoff’s work on behalf of class actions illuminates little-seen world of cert practice [Reuters]
- After two near misses, it’s time for Justices to turn thumbs down on housing disparate impact theory [Ilya Shapiro and Gabriel Latner, Cato]
- Integrity Staffing v. Busk: Court unanimously rules Fair Labor Standards Act does not require overtime pay for security screening after work [SCOTUSBlog, Michael Fox, On Labor, Daniel Fisher, Dan Schwartz]
- “Religious Liberties for Corporations? Hobby Lobby, the Affordable Care Act, and the Constitution” [Cato panel discussion with Roger Pilon, Ilya Shapiro, Randy Barnett, David Gans]
- Some local governments presume to license local tour guides, which amounts to requiring a license to speak [Shapiro and Latner, Cato]
- More: 1997 flap over sculpture of Muhammad in Supreme Court building mostly subsided after Islamic scholar interpreted it as gesture of goodwill [Jacob Gershman, WSJ Law Blog]
I was a guest on Ray Dunaway’s program on Hartford-based WTIC discussing (audio) the new Minneapolis plan for race-conscious school discipline, which is likely to be replicated around the country as more cities and states fall into line with the new Department of Justice policy. Earlier here, and a somewhat different view from Coyote, who writes: “By the way, in today’s legal environment, any private employer who says they don’t put extra scrutiny on terminations of folks in protected classes, or don’t increase the warnings and documentation required internally before firing someone in a protected class, is probably a liar.”
The Obama Administration has repeatedly dodged cases in fear of judicial review of its controversial application of the disparate impact theory to mortgage lending and other aspects of the housing market, but its position has now met with a stiff rebuke from district court judge Richard Leon [Insurance Journal]:
“This is yet another example of an administrative agency trying desperately to write into law that which Congress never intended to sanction,” Leon wrote.
He called the rule “nothing less than an artful misinterpretation of Congress’s intent that is, frankly, too clever by half.”