Mt. Holly and “Disparate Impact”

Roger Clegg, Center for Equal Opportunity, November 19, 2013

This year the Supreme Court had agreed to resolve a fundamental question about the Fair Housing Act that it has never answered: Can you be found guilty of racial discrimination if you have not engaged in racial discrimination?

Suppose, for example, that the owner of an apartment complex decides that she does not want to rent units to individuals who have been convicted of drug offenses. She makes that decision without regard to race, her policy on its face does not treat people differently because of race, and indeed she enforces it in an evenhanded way, so that it applies equally to all applicants, without regard to race. Should she be liable for racial discrimination under the Fair Housing Act if it turns out that the policy in her neck of the woods has a disproportionate effect on this or that racial or ethnic group?

The Obama administration and the civil-rights establishment say, “Yes,” even though most everyone else would say, “No.” The administration and the civil-rights groups are afraid, in particular, that the Supreme Court will answer the question, “No,” too, and so they want very much to keep the Court from resolving this issue.

As a result, they pressured the City of St. Paul recently into withdrawing its case presenting this important issue, which the Court had already accepted for review–essentially by offering St. Paul a $180 million deal (the administration backed out of an entirely different case in which U.S. taxpayers stood to recover that amount of money, in exchange for the city withdrawing its case from the Court).

As it happened, however, there was another case, presenting this same issue, which the Court then accepted for review this year, which was fully briefed, and which was scheduled for oral argument in just two weeks, on December 4. It involves another town: Mount Holly, New Jersey.

But guess what:  The Mount Holly township council, at the eleventh hour last week, approved a settlement agreement in its case, which again denies the Supreme Court the opportunity to decide this issue, which is of great importance to many cities and towns, not to mention owners of apartment buildings and other real estate, banks and insurance companies that do real-estate-related business, and of course many other Americans, like those living in apartment buildings who would prefer not to share living space with drug dealers.

The settlement negotiations with the Mount Holly township council had been shrouded in secrecy. So here are some questions that the township council and other involved parties should answer for public discussion:
1. Was the Obama administration involved in pressuring the township to settle the case?
2. Likewise, what pressure did the civil-rights establishment brought to bear?
3. How, exactly, did this proposed settlement get put together?
4. To the extent that money is the reason for the settlement, what consideration was given to exploring financial terms from other sources that might not have required the township to scuttle a case most thought it was likely to win?
5. What other quid pro quos were involved here, like promises of future political support – or political revenge?
6. What consideration was given to the fact that leaving this legal issue unresolved favorably to the city may result in future lawsuits against it, like the one in this case?
7. What consideration has been given to the fact that leaving this legal issue unresolved hurts individuals and individuals’ businesses, particularly in Mount Holly but also elsewhere?

It is really very unseemly that these cases keep waking up dead just before the Supreme Court is about to decide them. The public ought to be provided with the details of what’s going on here. Fortunately, the House Committee on Oversight and Government Reform last week opened an investigation.


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