Indeed, it raises concerns that Justice Kennedy has expressed before: a fear that it couldresult in the use of racial quotas. See Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 652(1989) (“The only practicable option for many employers would be to adopt racial quotas . . .[which] is a result that Congress expressly rejected in drafting Title VII.”); Ricci v. DeStefano,557 U.S. 557, 581 (2009) (concluding that allowing employers to violate the prohibition ofdisparate-treatment based on the “slightest hint” of disparate impact could amount to a “de factoquota system” where employers are focused on statistics and may “‘adopt inappropriateprophylactic measures’” to prevent liability (citations omitted)).
AIA’s suit was stayed pending the outcome of Inclusive Communities.[4]Id. at 2523 (“[A] disparate-impact claim that relies on a statistical disparity must fail if the plaintiff cannot point to a defendant’s policy or policies causing that disparity. A robust causality requirement ensures that “[r]acial imbalance … does not, without more, establish a prima facie case of disparate impact.”) (quoting Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989)).[5] 15 U.S.C. §§ 1011, et seq.[6] 490 U.S. 642 (1989).
SeeAuto Finance and Disparate Impact: Substantive Lessons Learned from Class Certification Decisions, Cons. Fin. Services L. Rep. (May 1, 2015) (Vol. 18, Issue 21) (discussing seminal class certification decisions that identified significant flaws in the underlying theory of liability with respect to disparate impact claims based upon an asserted “policy” of “allowing” discretionary decision-making).This “robust causality requirement” ensures that a mere racial imbalance, standing alone, does not establish a prima facie case of disparate impact, thereby protecting defendants “from being held liable for racial disparities they did not create.” (citing Wards Cove Packing Co. v. Atonio, 490 U. S. 642, 653 (1989), superseded by statute on other grounds, 42 U. S. C. § 2000e–2(k).)Without adequate causality safeguards at the prima facie stage, race might be used and considered “in a pervasive way and ‘would almost inexorably lead’ governmental or private entities to use ‘numerical quotas,’ and serious constitutional questions then could arise.” (citing Wards Cove Packing Co., 490 U.S. at 653.)
SeeAuto Finance and Disparate Impact: Substantive Lessons Learned from Class Certification Decisions, Cons. Fin. Services L. Rep. (May 1, 2015) (Vol. 18, Issue 21) (discussing seminal class certification decisions that identified significant flaws in the underlying theory of liability with respect to disparate impact claims based upon an asserted “policy” of “allowing” discretionary decision-making).This “robust causality requirement” ensures that a mere racial imbalance, standing alone, does not establish a prima facie case of disparate impact, thereby protecting defendants “from being held liable for racial disparities they did not create.” (citing Wards Cove Packing Co. v. Atonio, 490 U. S. 642, 653 (1989), superseded by statute on other grounds, 42 U. S. C. § 2000e–2(k).)Without adequate causality safeguards at the prima facie stage, race might be used and considered “in a pervasive way and ‘would almost inexorably lead’ governmental or private entities to use ‘numerical quotas,’ and serious constitutional questions then could arise.” (citing Wards Cove Packing Co., 490 U.S. at 653.)
The Sixth Circuit found particularly troubling that Plaintiffs constructed an applicant pool consisting of the entire MWS workforce, “apparently assuming that custodians, equipment operators, painters, secretaries, and customer service representatives are qualified to work as engineers, biologists, and chemists.” Id. at 9 (citing Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 651 (1989), superseded by statute on other grounds, Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071, 42 U.S.C. § 2000e-2(k)).The Sixth Circuit also found that the district court erred in its determination that each segment of MWS’s workforce should mirror the overall racial demographic of MWS, since that would amount “to an impermissible quota system.”
Id. at 1183.“Disparate impact discrimination” does not require proof of a discriminatory motive on the part of the alleged discriminator; rather, “disparate impact discrimination” claims challenge a specific and particular and facially neutral policy or practice that has a disproportionate effect on a Protected Group. Wards Cove Packing Company, Inc., et al. v. Frank Atonio et al., 490 U.S. 642 (1989). “Disparate impact discrimination” in Title VI cases arise where federal financial assistance recipients have policies or practices that result in the provision of fewer services or benefits to members of a protected group.
[6] Letter from John C. Dugan, Comptroller of the Currency, Off. of the Comptroller of the Currency: Adm’r of Nat’l Banks, to Orice Williams Brown, Dir., Fin. Mkts. and Cmty. Inv., U.S. Gov’t Accountability Off. (July 10, 2009). [7] Texas Dep’t of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. at 2507, 2523 (2015) (quoting Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 653 (1989)). The Fair Housing Act prohibits discrimination in lending and, along with the Equal Credit Opportunity Act, is the primary source of federal fair lending requirements.
at *7.[5]Id. [6]Id. at *4 (quoting Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 653 (1989)).[7]Id. at *1.
2015 proved to be an exciting year for fair lending, with a major Supreme Court decision, lawsuits and complaints raising new theories of discrimination, and creative enforcement by the CFPB, HUD and DOJ.We look forward to following, and keeping you informed about, fair lending developments during 2016.Notes:[1] 135 S. Ct. 2507 (2015).[2] 490 U.S. 642 (1989).[3]See Stip. to Dismiss Writ of Certiorari, Magner v. Gallagher (Feb. 14, 2012) (No. 10-1032).
Id. In describing the requisite pleadings-stage safeguards, the Court relied upon Wards Cove v. Atonio, 490 U. S. 642 (1989), in which it held that to sustain a disparate-impact case, a plaintiff must identify a specific policy of the defendant and adequately plead that such policy is the cause of the disparity.To distinguish meritless from meritorious claims, the Court directed lower courts to “avoid interpreting disparate-impact liability to be so expansive as to inject racial considerations” into every FHA decision.