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Supreme Court Hears Texas Case over Alleged Housing Discrimination


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gavel and scales

The first test for new Texas Attorney General Ken Paxton post-inauguration goes before the U.S. Supreme Court January 21st as two sides argue whether civil rights discrimination claims can be applied to the Fair Housing Act.

The nexus of this case is in Dallas, where a 1990 consent decree, Walker v HUD, stood for 11 years to ensure the Dallas Housing Authority distributed federal housing funds fairly across neighborhoods, instead of creating disadvantages by concentrating subsidized projects in racially segregated neighborhoods.

Inclusive Communities Project, the group that sprant out of the Walker consent decree, has challenged the Texas Department of Housing and Community Affairs, claiming the state agency bypassed federal grant applications for projects built in moderate-income neighborhoods and favored those projects in racially segregated neighborhoods, putting residents at an economic disadvantage,

Texas’ new Solicitor General, Scott Keller, was to argue for the state.  Most recently, Keller was chief counsel for U.S. Senator Ted Cruz, and he was previously an attorney at Yetter Coleman LLP in Austin.

“The Texas Department of Housing and Community Affairs has, in good faith, followed the preference under federal statutes for awarding tax credits to housing developments in lower-income Texas communities,” Paxton said in a statement issued January 21st.  “For that, the Department was hauled into court and sued under the Fair Housing Act.  The Fair Housing Act rightfully prohibits intentional acts of discrimination, and the district court found that the Department didn’t commit intentional discrimination.  We believe we have strong arguments in this case and that the law is clear.”

This is the third time the high court has taken up this topic since 2012, a sign the justices have a distinct interest in the issue.

The long list of briefs in the case, including one by former HUD Secretary turned Dallas developer, Henry Cisneros, signals the high level of interest from developers, banks and housing officials.

The legal challenge of this case is referred to as disparate impact claims – defined as a practice that may look racially neutral on its face but results in significant disadvantages to the minority community.  Such claims were defined and established under President Lyndon B. Johnson’s 1964 Civil Rights Act.  The question now is whether such claims can be extended to the Fair Housing Act.

The state will argue that applying civil rights claims to the Fair Housing Act is overreach.  Attorney Michael Daniel of Dallas law firm Daniel and Beshara PC, on behalf of Inclusive Communities, will argue it’s not.  He will share his time with U.S. Solicitor General Donald Verrilli, Jr., who has filed an amicus brief in support of the challenge.

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