At issue is the Fair Housing Act of 1968, passed a week after Dr.
In the decades since
The Obama administration, for example, has aggressively used the law to sue banks and force large settlements for lending practices that left minorities paying higher rates or fees.
But the court's conservatives have been skeptical of these so-called "disparate impact" claims. Twice before they have taken up challenges to bias claims that rely on such statistics, only to have the cases settled by civil rights advocates before a ruling.
After arguments Wednesday, the fate of this part of the Fair Housing Act looked to be in doubt.
Lawyers for a Texas government agency are contesting a claim from a Dallas fair housing group that accused the state of subsidizing low-income housing units in mostly black neighborhoods. This had the effect of "perpetuating racial segregation," the suit alleged. The state should have subsidized housing units in mostly white neighborhoods, too, according to the suit.
During Wednesday's argument, the justices made clear they did not want to decide the Texas suit, but instead would focus only on whether this type of claim was valid under the law.
The Texas lawyers said the state had not violated the Fair Housing Act because it had not singled out blacks or Latinos, or denied them housing.
The law is "limited to intentional discrimination," argued Scott Keller, the Texas solicitor general.
U.S. Solicitor Gen. Donald Verrilli also defended the broad view of the law, arguing it was needed to combat discriminatory policies, some of them subtle, that preserve segregated housing.
Two years ago, the court's conservatives, in 5-4 decision, cut back on the
Lawyers have disagreed on whether a ruling knocking out some housing bias claims would have a wide impact.
The outcome was also less certain because of Justice
Scalia said these carve-outs strongly suggest Congress thought discriminatory "impact" claims were otherwise valid. "We try to make sense of the law as a whole," he told Keller.
But elsewhere during the hourlong argument, Scalia voiced his usual skepticism toward racial-bias claims.
The case heard Wednesday may be this term's most important civil rights dispute, but it has also drawn wide interest in corporate America.
Lawyers for the banking and insurance industries warned the court that corporations could face huge legal claims if lenders or insurers can be held liable for using credit ratings or risk factors that have a harsher impact on blacks and Latinos compared to whites. They said companies had little choice but to settle claims brought by the government that trumpet statistical evidence of discrimination.