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The justices ruled 5-4 that federal housing laws prohibit seemingly neutral practices that harm minorities, even without proof of intentional discrimination.
Justice Anthony Kennedy, often a swing vote, joined the court's four liberal members in upholding the use of so-called "disparate impact" cases.
The ruling is a win for housing advocates who argued that the housing law allows challenges to race-neutral policies that have a negative impact on minority groups. The Justice Department has used disparate impact lawsuits to win more than $500 million in legal settlements from companies accused of bias against black and Hispanic customers.
In upholding the tactic, the Supreme Court preserved a legal strategy that has been used for more than 40 years to attack discrimination in zoning laws, occupancy rules, mortgage lending practices and insurance underwriting. Every federal appeals court to consider it has upheld the practice, though the Supreme Court had never previously taken it up.
Writing for the majority, Kennedy said that language in the housing law banning discrimination "because of race" includes disparate impact cases. He said such lawsuits allow plaintiffs "to counteract unconscious prejudices and disguised animus that escape easy classification" under traditional legal theories.
"In this way disparate-impact liability may prevent segregated housing patterns that might otherwise result from covert and illicit stereotyping," Kennedy said.
Kennedy was joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.
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