Court rejects housing discrimination rule that relied on statistical analysis
A federal judge has struck down a rule designed to make it easier for plaintiffs to file housing discrimination claims.
U.S. District Judge Richard Leon in a decision Monday called the rule “yet another example of an administrative agency trying desperately to write into law that which Congress never intended to sanction,” the Wall Street Journal (sub. req.) reports.
The rule, issued last year by the U.S. Department of Housing and Urban Development, was intended to make it easier to enforce a 45-year-old law aimed at combating alleged discrimination by lenders, insurers, landlords and municipalities.
The rule allowed plaintiffs to use a statistical analysis to demonstrate that lenders or municipalities promoted policies that had a disproportionately adverse impact on minorities. Under the rule, plaintiffs could claim that lenders or cities violated fair-housing laws without proving that they intended to discriminate.
The judge sided with two insurance industry groups—the American Insurance Association and the National Association of Mutual Insurance Companies—that had sued the agency last year to overturn the rule.
The insurance industry had argued that the rule would harm companies that sell homeowners insurance by requiring them to “provide and price insurance in a manner that is wholly inconsistent with well-established principles of actuarial practice and applicable state insurance law.”
One month ago, the U.S. Supreme Court agreed to hear a case that considers whether discrimination claims brought under the Fair Housing Act can be based on proof of disparate impact rather than intentional discrimination.
