On October 22, 2020 Cohen Milstein Sellers & Toll PLLC, the American Civil Liberties Union, ACLU Foundation of Connecticut, Lawyers’ Committee for Civil Rights Under Law and Poverty & Race Research Action Council filed a lawsuit in the United States District Court for the District of Connecticut against the U.S. Department of Housing and Urban Development (“HUD”)  to challenge its rollback of critical protections under the Fair Housing Act. The lawsuit seeks to invalidate a new HUD regulation that guts the long-established legal framework for “disparate impact” claims, which have helped dismantle systemic barriers to fair housing for decades. The suit was filed on behalf of the Open Communities Alliance and SouthCoast Fair Housing, and organizations advancing fair housing in Connecticut, Massachusetts, and Rhode Island.

Case Background

This suit challenges the U.S. Department of Housing and Urban Development’s “HUD’s Implementation of the Fair Housing Act’s Disparate Impact Standard,” (“2020 Final Rule”), which would immediately render it virtually impossible for most victims of discrimination to prevail in HUD’s administrative enforcement process when alleging that they have been injured by a policy or practice with an unjustified discriminatory effect. 85 Fed. Reg. 60,288 (Sep. 24, 2020), thereby eviscerating the federal Fair Housing Act’s (“FHA”) discriminatory effects standard and thereby set the clock back a half century in the fight for fair housing in the United States.

If given deference by the judiciary, it would also close the courthouse doors to victims of discrimination.

Among other things, Plaintiffs allege that the 2020 Final Rule violates HUD’s statutory duty to affirmatively further fair housing by eliminating perpetuation of segregation claims under the FHA, and by eliminating the ability of plaintiffs to pursue most other disparate impact claims.

Further, Plaintiffs allege that the 2020 Final Rule also violates the APA because it is arbitrary and capricious. 5 U.S.C. § 706(2)(A). With respect to all of the changes mentioned supra and others, Plaintiffs claim that HUD consistently failed to provide a reasoned basis for its decisions.

In addition, some of the changes adopted by HUD in the 2020 Final Rule were promulgated without proper procedure because they were not adequately described in the proposed regulation, thereby depriving the public of the opportunity to comment, and because they exceed HUD’s statutory authority.

Furthermore, Plaintiffs claim that the evisceration of the discriminatory effects standard and the elimination of any real risk of liability is already starting to affect the behavior of the types of entities, such as local governments and property management companies, that are frequently defendants or respondents in FHA lawsuits and administrative complaints. Again, this reduction in the real and perceived likelihood of consequences for discriminatory conduct is making Plaintiffs’ direct services, education, and outreach less effective and more difficult, thereby requiring the diversion of resources to counteract the effects of the 2020 Final Rule.

Plaintiffs seek permanent injunctive relief vacating the 2020 Final Rule and barring HUD from implementing and applying the Rule, including to Plaintiffs’ pending administrative complaints. Such an order would have the effect of restoring the 2013 Final Rule as the standard governing HUD’s administrative enforcement practices, ensuring a fair and workable framework for complaints alleging that policies or practices have a disparate impact on members of a protected group or perpetuate the segregation of a protected group.

The case is: Open Communities Alliance, et al. v. United States Department of Housing and Urban Development, et al., Case No. 3:20-cv-01587, United States District Court for the District of Connecticut