WSJ Uses Fair Housing Case To Further Attack On Labor Nominee Perez, Civil Rights

The Wall Street Journal is using the Supreme Court's decision to hear a Fair Housing Act case as a springboard to resume its attacks on Assistant Attorney General for Civil Rights Thomas Perez, who has been nominated to be Secretary of Labor. 

On June 17, the Supreme Court agreed to hear Mt. Holly v. Mt. Holly Gardens Citizens in Action, Inc., a Fair Housing Act (FHA) challenge to a town's redevelopment plan, which would eliminate houses occupied by low-income, predominantly African-American residents.  The U.S. Court of Appeals for the 3rd Circuit ruled, consistently with every federal court of appeal that has considered the issue, “The FHA can be violated by either intentional discrimination or if a practice has a disparate impact on a protected class.”

Nonetheless, in a June 18  editorial, the WSJ used the Court's accepting the case to revive an unfounded and oft-repeated right-wing attack on Perez--that he acted unethically in handling a prior Fair Housing disparate impact case--and resume its campaign to undermine effective enforcement of civil rights laws through disparate impact litigation.

Specifically, WSJ repeated the unfounded right-wing accusation that Perez struck an unethical “quid pro quo” deal with the plaintiff in Magner v. Gallagher, another FHA disparate impact case. From the editorial:

On Monday, the Justices agreed to hear a case that bears directly on the legal theory that the Justice Department's civil-rights chief has used to allege discrimination in housing. This is good news for businesses that need the law clarified, though perhaps not for Mr. Perez, who has stretched the ethical boundaries of his office to prevent such a ruling.


But Mr. Perez maneuvered to have the case withdrawn by striking a quid pro quo with the plaintiff in the case, the city of St. Paul, Minnesota.


The Administration may now also lean on Mt. Holly officials to drop the case the way Mr. Perez leaned on St. Paul. But at least the Justices are signalling that they'll make up their own mind rather than let an Administration official mess with their docket for his own political purposes.

This accusation of unethical conduct, which the WSJ has repeatedly brought, has been roundly debunked.  As the Twin Cities Pioneer Press reported:

On its opinion pages, the Wall Street Journal has been hammering St. Paul's decision to withdraw Magner vs. Gallagher from the Supreme Court as a costly way to extend a lawsuit at taxpayer expense. It has pointed to phone calls reportedly made by Assistant Attorney General Thomas Perez, who works in the Justice Department's civil rights division, to Coleman and Grewing.

The Justice Department wasn't acting alone. Many groups that typically advocate for minorities and the poor argued in written briefs that St. Paul was going down a path that could inadvertently gut the Fair Housing Act. Among them were more than a dozen state attorneys general. The Leadership Conference on Civil and Human Rights, a coalition of 200 civil rights groups, has applauded St. Paul's decision.

The WSJ also renewed its attack on disparate impact litigation, an effective tool for enforcing civil rights laws.  

The case will focus on so-called disparate-impact theory, which uses statistics to allege discrimination. Mr. Perez has used the theory to shake down banks for not lending enough to minorities, despite having no evidence of discriminatory purpose.

In a video interview posted on June 17, WSJ editorial page editor Paul Gigot referred to disparate impact as “his [Perez's] theory,” and asserted that the drafters of the civil rights laws “didn't want quotas, which is where we lead with this kind of things, you say, 'a-ha, we must have x percent of people get a loan.  That's not the way the civil rights statutes were written.”  The WSJ has associated disparate impact litigation with quotas before

Magner was the Supreme Court's first chance to rule on whether “disparate-impact analysis,” which uses statistics to prove discrimination and sometimes impose racial quotas, can be used under the 1968 Fair Housing Act.

This is patently false.  Disparate impact litigation enables plaintiffs to challenge apparently neutral policies that disproportionately affect one group: “For example, an employer's policy requiring all employees have the ability to lift 50 pounds could disproportionately affect women.” 

Both the editorial and Gigot's interview ignore the fact that disparate impact litigation is a well-established tool for enforcing civil rights laws.   

Nonetheless, right-wing media have been attacking its use in the fair housing context and have shown particular hostility to disparate impact cases brought against banks engaging in discriminatory lending practices.  

The June 18 editorial claims that “Perez has used the theory to shake down banks for not lending enough to minorities.”  In fact, the Department Of Justice secured settlements against lenders, including Wells Fargo and Countrywide, who had charged minority borrowers higher fees and rates.

Finally, the WSJ alleges that "[t] he Department of Housing and Urban Development then rubber-stamped Mr. Perez's power play by issuing a regulation sanctioning disparate impact in housing enforcement."  

In fact, as the Solicitor General explained in its brief opposing Supreme Court review in Mt. Holly,

HUD's recent rule reaffirmed its longstanding interpretation of the FHA, as embodies in formal adjudications of FHA complaints.  See 42 U.S.C. 3610 and 3612 (Granting HUD broad authority to conduct formal adjudication of FHA complaints. 

HUD...has interpreted the FHA--including section 804(a)--to encompass disparate-impact claims in every adjudication to address the issue.