On October 2, the Supreme Court granted cert in a new Fair Housing Act disparate impact case, Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., No. 13-1371.  The case takes aim at the viability of a concept at the heart of recent regulatory efforts in the auto finance space – that discrimination may be proven through statistical analysis of the disparate impact of a policy on groups of minorities.

This is not the first time the use of a disparate impact analysis has been challenged in the Supreme Court; nor is it the first time the Supreme Court has agreed to hear this issue.  Two prior disparate impact cases in which cert had been granted were settled prior to decision – many believe both times at the prompting of the Department of Justice.

We reported on the most recent disparate impact case to make it to the Supreme Court here.  But this could be the one that finally makes it to a final decision.  The Petitioner in the case is the Texas Department of Housing and Community Affairs, and the Texas Attorney General and Solicitor General will prosecute the appeal.

Those in both the housing and auto finance industries will need to keep their fingers crossed that Texas is less willing to resolve this case prior to a decision, thereby providing much-needed answers to questions regarding the limits of disparate impact claims.