On August 25, the U.S. Supreme Court received a writ of certiorari from a mortgage lender (the petitioner) challenging a decision by the U.S. Court of Appeals for the 2nd Circuit upholding a jury verdict finding the petitioner liable for disparate impact discrimination under the Fair Housing Act (FHA). The petitioner asked SCOTUS to resolve circuit splits on three key issues: (i) the standard for equitable tolling in discrimination claims; (ii) the proper legal test for disparate impact under the FHA; and (iii) the level of causation required for such claims. With respect to equitable tolling, the petitioner argued the ruling “dramatically” expanded the scope of the FHA disparate impact claims by allowing plaintiffs to prevail without showing they acted diligently in pursuing their claims. With respect to the legal test for disparate impact, the petitioner argued that the appeals court erred in permitting liability when lending practices merely have an “adverse” impact — even where the impact does not have a disproportionate effect on a protected class. With respect to level of causation, the petitioner contended that the appellate court failed to apply the “robust causality” requirement which requires a link between policy and an allegation of disparate impact — a point on which the petitioner contended the courts were divided. The petitioner also cited in support of its position President Trump’s executive order eliminating the used of disparate impact liability “to the maximum degree possible.”

The petitioner emphasized the need for SCOTUS guidance to ensure that the FHA is interpreted and applied consistently nationwide.