HUD Sued for Records of Obama Administration Involvement in “Disparate Impact” Discrimination Cases
(Washington, DC) – Judicial Watch announced today that On September 24, 2013, it filed a Freedom of Information (FOIA) lawsuit (Judicial Watch, Inc. v. United States Department of Housing and Urban Development ((No. 1:13-cv-01451)) against the U.S. Department of Housing and Urban Development (HUD) for all records of communications regarding two controversial “disparate impact” housing discrimination cases, the first (Magner v. Gallagher) dismissed by the Supreme Court in February 2012, and the second (Township of Mt. Holly v. Mt. Holly Gardens Citizens Association) now scheduled for December 4 adjudication before the Court.
Specifically, Judicial Watch seeks the following records pursuant to a July 22, 2013, FOIA request:
- Any and all records regarding the case pending in the Supreme Court as of the date of this request of Township of Mt. Holly v. Mt. Holly Gardens Citizens in Action, Inc., including but not limited to communications regarding the possibility of settlement between the parties. This request applies to records regarding this case during any state of its proceedings.
- Any and all records regarding the case dismissed from the Supreme Court on February 14, 2012, of Magner v. Gallagher, including but not limited to communications regarding the dismissal of the case.
Under the theory of “disparate impact,” a defendant can be held liable for discrimination for a race-neutral policy that statistically disadvantages a specific minority group even if that negative “impact” was neither foreseen nor intended. In such cases, defendants can be forced to pay for harm caused not by their own actions, but by economic and statistical realities, even if beyond their control.
The Magner v. Gallagher disparate impact case arose from a lawsuit by a St. Paul minority contractor claiming that the city’s targeted enforcement of the city’s housing code against rental units reduced the availability of low-income rentals, with a disparate impact upon African-Americans. The Eighth Circuit found in the contractor’s favor, after which the city appealed to the Supreme Court. The Obama Department of Justice (DOJ) then intervened, apparently persuading St. Paul to take the extraordinary step of withdrawing its cert petition from the Supreme Court docket.
On February 13, 2012, the Wall Street Journal reported that various federal officials had asked the City of St. Paul to withdraw its petition for certiorari. The Obama administration’s concern, explained the article, was that a legal theory known as “disparate impact” might either: 1) harden into law as used by the landlords who had won at the state level or 2) be eviscerated entirely. Apparently, several federal agencies that rely on that legal theory to secure out-of-court settlements in the consumer lending and family housing arena were reluctant to risk a change in the legal landscape. The next day, the parties to Magner v. Gallagher withdrew their case by mutual consent.
Judicial Watch separately obtained documentsunder the Minnesota Data Practices Act, showing that St. Paul City Attorney Sara Grewing arranged a meeting between the then-chief of DOJ’s Civil Rights Division, current Secretary of Labor Tom Perez, and Mayor Chris Coleman a week before the city’s withdrawal from the case, captioned Magner v. Gallagher. Following Perez’s visit, the city withdrew its case and thanked DOJ and officials at HUD for their involvement.
The Township of Mt. Holly v. Mt. Holly Gardens Citizens in Action disparate impact case involves a redevelopment plan for Mount Holly Gardens, a 30-acre New Jersey neighborhood of run-down housing and high crime. The plan would have transformed the Gardens into mid-range single-family dwellings. Current and former residents of the Gardens banded together as Citizens in Action to sue, claiming that the plan violated the FHA because a majority of them, predominantly African-Americans and Hispanics would not be able to afford the new homes.
The district court dismissed the argument, ruling that the redevelopment plan affected Gardens residents equally, without regard to race, and was tied only to economic considerations. The Court of Appeals for the Third Circuit reversed that ruling, holding that left wing group suing the township had established a case of discrimination under the theory of disparate impact because a majority of the affected residents were non-white. On June 17, 2013, the Supreme Court agreed to the township’s request to take on the issue.
On September 3, 2013, Judicial Watch filed a brief of amicus curiae with the Supreme Court on behalf of the township of Mt. Holly. In its brief, Judicial Watch argued, “Section 804(a) of the FHA prohibits only disparate treatment, not disparate impact as the Third Circuit has ruled. An analysis of the legislative history only confirms the clear language of the text.”
“We have evidence the Obama administration, through current Labor Secretary Tom Perez, improperly intervened to try to prevent the Supreme Court from shooting down is radical racial legal theories,” said Judicial Watch President Tom Fitton. “The Obama administration and its liberal activist allies are desperate to preserve the discredited theory of ‘disparate impact’ to bludgeon its opponents as racists and violate equal protection under the law.”