Court Rules Disparate Impact Claims Cannot Be Made Under Fair Housing Act

Lynn Calkins and Rafe Petersen are Partners and Christine Walz is an Associate in Holland & Knight's Washington D.C. office

Earlier this week, a federal district court judge struck down a regulation issued by the U.S. Department of Housing and Urban Development (HUD), which would have allowed for claims of housing discrimination to be based on neutral practices that have a discriminatory impact or effect. 

The regulation was challenged by two groups, the American Insurance Association and the National Association of Mutual Insurance Companies, who argued that the plain text of the Fair Housing Act prohibits only discriminatory treatment, not discriminatory effects, and, therefore, the agency had exceeded its authority under the Administrative Procedure Act.