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The oral arguments made in the Supreme Court of the United States in Fair Housing Case

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    OfficialSubjecttoFinalReview

    1 INTHESUPREMECOURTOFTHEUNITEDSTATES

    2 x

    3 TEXASDEPARTMENTOF :

    4 HOUSINGANDCOMMUNITY :

    5 AFFAIRS,ETAL., :

    6 Petitioners : No.131371

    7 v. :

    8 THEINCLUSIVECOMMUNITIES :

    9 PROJECT,INC. :

    10 x

    11 Washington,D.C.

    12 Wednesday,January21,2015

    13

    14 Theaboveentitledmattercameonfororal

    15 argumentbeforetheSupremeCourtoftheUnitedStates

    16 at10:21a.m.

    17 APPEARANCES:

    18 SCOTTA.KELLER,ESQ.,SolicitorGeneralofTexas,

    19 Austin,Tex.;onbehalfofPetitioners.

    20 MICHAELM.DANIEL,ESQ.,Dallas,Tex.;onbehalfof

    21 Respondent.

    22 GEN.DONALDB.VERRILLI,JR.,SolicitorGeneral,

    23 DepartmentofJustice,Washington,D.C.;forUnited

    24 States,asamicuscuriae,onbehalfofRespondent.

    25

    AldersonReportingCompany

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    1 CONTENTS

    2 ORALARGUMENTOF PAGE

    3 SCOTTA.KELLER,ESQ.

    4 3OnbehalfofthePetitioners

    5 ORALARGUMENTOF

    6 MICHAELM.DANIEL,ESQ.

    7 OnbehalfoftheRespondent 25

    8 ORALARGUMENTOF

    9 GEN.DONALDB.VERRILLI,JR.,ESQ.

    10 OnbehalfofUnitedStates,asamicuscuriae,

    11 supportingRespondent 37

    12 REBUTTALARGUMENTOF

    13 SCOTTA.KELLER,ESQ.,

    14 OnbehalfofthePetitioners 53

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

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    1 PROCEEDINGS

    2 (10:21a.m.)

    3 CHIEFJUSTICEROBERTS: We'llhearargument

    4 firstthismorninginCase131371,theTexasDepartment

    5 ofHousingandCommunityAffairsv.TheInclusive

    6 CommunitiesProject.

    7 Mr.Keller.

    8 ORALARGUMENTOFSCOTTA.KELLER

    9 ONBEHALFOFTHEPETITIONERS

    10 MR.KELLER: Thankyou,Mr.ChiefJustice,

    11 andmayitpleasetheCourt:

    12 TheFairHousingActdoesnotrecognize

    13 disparateimpactclaims,first,becauseitsplaintext

    14 doesn'tuseeffectsorresultsbasedlanguage,andwhen

    15 astatuteprohibitsactionstakenbecauseofraceandit

    16 lackseffectsbasedlanguage,thestatuteislimitedto

    17 intentionaldiscrimination. And,second,thecanonof

    18 constitutionalavoidancecompelsthisinterpretation.

    19 Mostimportantly,theActdoesn'tusethephrase

    20 "adverselyaffect." Smithv.CityofJackson,

    21 recognizedthatthiseffectsbasedphrase

    22 JUSTICESOTOMAYOR: AtthetimeofSmithand

    23 Griggs,neithertheTitleVIInortheADEAusedthe

    24 words"disparateimpact,"andyetwerecognizethey

    25 applydisparateimpact.

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    1 MR.KELLER: Atthetime,disparatethe

    2 words"disparateimpact"werenotused;however,the

    3 words"adverselyaffect"wereused. AndWatson

    4 subsequentlyinterpretedGriggsasfindingthetextual

    5 hookfordisparateimpactliabilitywasbasedonthe

    6 phrase"adverselyaffect."

    7 JUSTICESOTOMAYOR: Youhaveaproblem,

    8 becauseitsays"torefusetosellorrent,"etcetera,

    9 "orotherwisemakeunavailable,"andtheagencycharged

    10 withinterpretingthatlanguagehasdeterminedthatit

    11 needsdisparateimpact.

    12 MR.KELLER: JusticeSotomayor,thethe

    13 phrase"makeunavailable"isanactprohibitedbythe

    14 FairHousingAct. Itisanact

    15 JUSTICESOTOMAYOR: Consequence. Ithappens

    16 tobebecausethat'swhatyoudowithhousing,butit's

    17 aconsequence.

    18 MR.KELLER: Theactofmakingunavailablea

    19 dwellingtoapersonistheactprohibitedbytheFair

    20 HousingAct. Thisisn'tlikeSection4(a)(2)ofthe

    21 ADEA,whereSmithsaiddisparateimpactlied. Thisis

    22 likeSection4(a)(1)oftheADEA,becauseofthe

    23 804(a)prohibitstherefusaltosellorrent,the

    24 refusaltonegotiate,otherwisemakingunavailable,or

    25 denying. Allofthoseareactiveverbs,andthey'reall

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    1 actsprohibited. Theworkthatisbeingdoneby

    2 "otherwisemakeunavailable"istocoveradditional

    3 acts,suchaszoningdecisionsorlanduserestrictions

    4 thatarenotoutrightrefusalsoroutrightdenials. And

    5 that'swhythelanguageoftheFairHousingActfocuses

    6 onactions,noton

    7 JUSTICESCALIA: Ofcourse,youcouldsay

    8 thesamethingabout"adverselyaffect." Imean,that

    9 alsoisanactiveverb,right? Anditalsoyouhad

    10 toadverselyaffectbydiscriminating.

    11 JUSTICEGINSBURG: Onthebasisof

    12 JUSTICESCALIA: So,youknow,Ithe

    13 pointsyoumakearearetrueenough,buttheywere

    14 alsotruewithwithrespecttoTitleVII,weren't

    15 they?

    16 MR.KELLER: JusticeScalia,Idon'tbelieve

    17 so. BecauseSection4(a)(2)andSection703(a)(2)ban

    18 theactoflimiting,segregating,andclassifying. And

    19 thentheycheckforacertainresult,somethingwhich

    20 woulddeprive,tendtodeprive,oradverselyaffect.

    21 Anditwasthatresultsoreffectscheckinglanguage

    22 thatgaverisetodisparateimpactliability.

    23 JUSTICEGINSBURG: Butafterthatlanguage

    24 isthephrase"onthebasisof,"race,sex,whatever.

    25 Soit'sadverselyaffectonthebasisofthewhatever

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    1 thecategory.

    2 MR.KELLER: Well,andthatwasthe

    3 interpretationthattheSmithpluralityandconcurrence

    4 cametoonSection4(a)(2). ButinSection4(a)(1),the

    5 phrase"becauseofrace"appears,andyouhaveactive

    6 verbsthere. Youhave"refuse"and"otherwise

    7 discriminate,"andtheCourtwasunanimousinfinding

    8 thatSection4(a)(1)onlyrequiredintentional

    9 discrimination,itdidnot

    10 JUSTICEGINSBURG: Dodowetakeinto

    11 accountatallthatinbothTitleVIIandtheFair

    12 HousingAct,therewasagrandgoalthatCongresshadin

    13 mind? Itmeanttoundogenerationsofrank

    14 discrimination. AndwhatwasthephrasethatthisCourt

    15 usedinTrafficantetodescribetheFairHousingAct?

    16 Thatitsobjectivewastoreplaceghettosbyintegrating

    17 "integratedlivingpatterns,"justasTitleVIIwas

    18 meanttoundoalegacyofrankemployment

    19 discrimination. Sodoesn'tthatpurposegiveaa

    20 cluetowhatCongresswasafter?

    21 MR.KELLER: Well,JusticeGinsburg,the

    22 Courtneedstofocusontheplaintext. Andunlike

    23 TitleVII,whichwaspassedin1964,andunlikethe

    24 ADEA,whichwaspassedin1967,bothofwhichincluded

    25 thephrase"adverselyaffect,"in1968whenCongress

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    7

    1 passedtheFairHousingActitdidn'tusethatlanguage.

    2 Instead,itprohibitedmakingunavailableadwellingto

    3 anypersonbecauseofrace. Inincommonlanguageif

    4 youweretosay,"Adammadeunavailableadwellingto

    5 Bobbecauseofrace,"youask,well,whydidAdamact?

    6 Heactedbecauseofrace,andracewasareasonforthe

    7 action.

    8 JUSTICEKAGAN: ButifIcouldunderstand

    9 yourpoint,GeneralKeller,youagreewithJustice

    10 Scaliathat"makeunavailable,"it'slike"adversely

    11 affects,"they'rethey'rebothverbs. "Make

    12 unavailable"isjustonewaytoadverselyaffect. And

    13 whatyou'repinningyourargumentonistheseextra

    14 addedwordsintheTitleVIIstatute,right? Sothat

    15 it'sintheintheTitleVIIstatute,it's

    16 can'tevenfindthem. YouknowwhatImean.

    17 MR.KELLER: Ido,JusticeKagan.

    18 JUSTICEKAGAN: Okay. SobutIdon't

    19 Idon'tthinkthatthatcouldpossiblyberight,because

    20 thenyouwouldbesayingthatitwouldbeadifferent

    21 statuteif,insteadofjustsayinghereanemployer

    22 can'tmakeunavailable,butinsteaditsaidanemployer

    23 can'tactinawaythatmakesunavailable. Thatwould

    24 makeitcompletelyparalleltotheTitleVIIandthe

    25 ADEAstatutes.

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    1 Andandthosetwothingsjustcan'tmean

    2 thesamething. Imean,allit'sdoingistotakeouta

    3 fewwords,butit'ssayingtheexactsamething,which

    4 iseitherway,anemployercan'tmakeunavailable.

    5 MR.KELLER: JusticeKagan,Idon'tthink

    6 it'ssayingthesamething. Andunderthereasoningof

    7 Smith,itcan'tbesayingthesamething,because

    8 Section4(a)(1),theCourtunanimouslyrecognized,

    9 didn'tgiverisetodisparateimpactliability;andit

    10 didn'thavethephrasethatappearedin4(a)(2)which

    11 wascheckingtosee"inanywaywhichwoulddepriveor

    12 tendtodepriveoradverselyaffect." Withoutthat

    13 resultsbasedlanguage,youcan'thavedisparateimpact

    14 liability. That'swhatRiccisaidandSandoval.

    15 JUSTICEKAGAN: No,butthebutthething

    16 that'sdifferentinthisstatuteisthe"make

    17 unavailable,"whichfocusesonaneffectinthesameway

    18 thatthe"adverselyaffect"languagedoes. Anditjust

    19 doesitalittlebitmoreeconomically,butthe

    20 effectsbasednatureoftheprovisionisstillthesame.

    21 MR.KELLER: Itdoesn'tfocusonthe

    22 effects. WhatSmithsaidwas4(a)(2)prohibitedtheact

    23 oflimiting,segregating,andclassifying. ButSmith

    24 saidthat'snotsimplywhatitwasprohibiting. Itwas

    25 checkingtoseeiftherewasalsoadeprivationor

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    1 somethingthattendedtodepriveorsomethingthat

    2 adverselyaffected,andthatwastheeffectsbased

    3 language. Itwasn'tmerelydroppinginaphrasesuchas

    4 "makeunavailable."

    5 Allactionshaveconsequences,buthere

    6 Congresschoseactiveverbs. AsMeyerv. Holley

    7 recognized,theFairHousingActitselffocuseson

    8 prohibitedacts.

    9 JUSTICESCALIA: Make"makeunavailable"

    10 isnotthesamelanguageas"adverselyaffect."

    11 That'sthat'sallthatI'mwillingtoconcede.

    12 AndIthinkifyouthoughtthatSmithwas

    13 wrong,whichmanypeopledo,Isupposeyoucouldargue

    14 wewillnotexpandSmith. AndSmithhungonparticular

    15 words,"adverselyaffect." Thosewordsdon'texist

    16 here,and,therefore,sincewethinkSmithwaswrong

    17 anyway,we'renotgoingtoextendit. That'sthat's

    18 areasonableargument,butthat'snottheargument

    19 you'remaking.

    20 Whatwhathangsmeupisnotsomuchthat

    21 asitisthefactthatCongressseeminglyacknowledged

    22 theeffectstestinlaterlegislationwhenitsaidthat

    23 certaineffectswillnotqualify. YouknowwhatI'm

    24 referringto?

    25 MR.KELLER: Yes,JusticeScalia.

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    1 JUSTICESCALIA: Well,whydoesn'tthat

    2 whydoesn'tthatkillyourcase? Imean,whenwelook

    3 ataaprovisionoflaw,welookattheentire

    4 provisionoflaw,includinglateramendments. Wetryto

    5 makesenseofthelawasawhole.

    6 Now,youseethisstatutewhichwhichhas

    7 otherwisewhatismakeunavailable,anditalsohas,

    8 however,itwillnotbeaviolationiftheseeffects

    9 areareyoureadthosetogetherandyousay,wow,

    10 thisthislawmustmeanmereeffectsqualify.

    11 MR.KELLER: JusticeScalia,the1988

    12 amendments,inenactingthreeexceptionsfromliability,

    13 thoseprovisionsmerelyrestrictedliability,andthe

    14 Courtrejectedavirtuallyidenticalargumenttowhat

    15 theRespondentandtheSolicitorGeneralaremakingin

    16 O'Gilviev.UnitedStates. It'sacasethatappearsat

    17 519U.S.79.

    18 JUSTICESCALIA: Isthisinyourbrief?

    19 MR.KELLER: Thecasewasnotcitedinour

    20 brief.

    21 JUSTICESCALIA: Oh,I'msorry.

    22 MR.KELLER: AtPage89ofthatdecision

    23 JUSTICESCALIA: Yeah.

    24 MR.KELLER: theCourtnotedthat

    25 Congressmightsimplyhavewantedtoclarifythematter

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    1 inrespecttothenarrowexemption,butitwantedto

    2 leavethelawwhereitfounditinrespecttothe

    3 broaderissue.

    4 JUSTICEKAGAN: Butthelawwhereitfound

    5 itherewasveryclear,becausetencircuitshadgone

    6 theotherwayandhadsaidthatdisparateimpactwasa

    7 validactionundertheFHA. Soleavingthelawwhere

    8 youfoundit,andwepresumethatCongressknowsthe

    9 law,especiallywhenthelawisthatclearandthat

    10 uniform,means,yes,therewillbedisparateimpact

    11 actionsexceptinthesethreecircumstanceswhichwe're

    12 goingtolayoutforyouveryclearlyandvery

    13 precisely.

    14 MR.KELLER: JusticeKagan,in1988the

    15 stateofthelawwasinflux. TheSolicitorGeneral

    16 filedabriefinthisCourtsayingthattheFairHousing

    17 Actonlyprohibitedactsofintentionaldiscrimination.

    18 Andtwomonthsbeforetheamendments,thisCourtdecided

    19 inWatsonandemphasizedthatthephrase"adversely

    20 affect"wasthelanguagethatgaveriseto

    21 disparateimpactliability. AndifCongresswouldhave

    22 takeifCongresswasassumedtohaveknownthatthis

    23 Court'sprecedentswereinplace,then

    24 JUSTICESOTOMAYOR: Howdoyouput

    25 "adverselyaffect"? Didtheyhavetowriteit"or

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    12

    1 otherwiseadverselyaffectsomeonebymakingthehousing

    2 unavailable"?

    3 MR.KELLER: Otherwise

    4 JUSTICESOTOMAYOR: Imean,it'salittle

    5 crazy,don'tyouthink,becauseotherwiseadversely

    6 affectingsomeonebymakingitunavailable. Ithink

    7 it'sotherwisemakeunavailable

    8 MR.KELLER: Well,otherwiseitcould

    9 have

    10 JUSTICESOTOMAYOR: istheshortformof

    11 that.

    12 MR.KELLER: Orotherwiselimithousing

    13 opportunitiesinawaythatwouldadverselyaffect.

    14 Congresscouldhaveusedthesamelanguagethatappeared

    15 inTitleVII.

    16 JUSTICESOTOMAYOR: Butinsteadwhatitdid,

    17 ittookabodyoflaw,someofwhichhadheldsome

    18 practicesasdisparatelyimproperlydisparately

    19 impacting,likedrugaddictionandothersandtwo

    20 others,andsaid,no,thosetwowon'tcount,thosethree

    21 won'tcount. Yourreadingofthosethreeexemptionsis

    22 theywereunnecessary.

    23 MR.KELLER: Well,theywereabsolutely

    24 doingworkin1988,andCongresscouldtakeaccountof

    25 thefacttheCourt

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    1 JUSTICESOTOMAYOR: Well,whatdoyoumake

    2 ofin1988wheresomeonewantedtodoawaywith

    3 disparateimpactandCongressdidn'ttakeupthat

    4 invitation?

    5 MR.KELLER: JusticeSotomayor,Ibelieve

    6 you'rereferringtoRepresentativeSwindall'samendment.

    7 AndthemerefactthatCongressdidn'tenacta

    8 provision,thisCourthasnotlookedtoinreviewinga

    9 statute.

    10 JUSTICESCALIA: Butwhatyou're

    11 you'retellingusthattheseamendmentswhichsaidthat

    12 certaintypesofeffectswillnotqualify,thatthe

    13 purposeofthatamendmentwastopreventerroneouscourt

    14 ofappeals'decisionsfromaffectingthoseparticular

    15 areas?

    16 MR.KELLER: JusticeScalia,that'spartof

    17 theworkthatthey'redoing.

    18 JUSTICESCALIA: That'saverystrangething

    19 forCongresstodo,tobelievethatthosecourtof

    20 opinionscourtofappeals'opinionsarewrongandyet

    21 totoenacttheseexemptions. Soeventhoughthose

    22 opinionsarewrong,theywillnotapplytothesethings.

    23 Ithat'sverystrange.

    24 MR.KELLER: Well,in1988,whenCongress

    25 waslegislating,itagreedononething,andthatwasin

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    1 thesethreenarrowcircumstances,liabilitywouldbe

    2 restrictedundertheFairHousingAct. Itwouldbe

    3 extremelyoddtoreadintoarestrictionofliabilitya

    4 recognitionofamassiveexpansionofFairHousingAct

    5 liability,andCongressdoesnothideelephantsinmouse

    6 holes.

    7 JUSTICESOTOMAYOR: Exactly. Andten

    8 circuitshadalreadysaidtherewasdisparateimpact.

    9 Iftheydidn'tlikethedisparateimpactanalysis,they

    10 wouldhavetakenupthecongressman'sproposal. But

    11 theydidn't.

    12 MR.KELLER: InthebriefthattheSolicitor

    13 Generalfiledin1988,itmadethepoint,whichis

    14 absolutelythesametoday,whichisCongressknowshow

    15 toenactaneffecttest.

    16 JUSTICESOTOMAYOR: Itchangedwhenno,

    17 no,no. When1988happened,theSolicitorGeneral

    18 changeditsposition,andithasbeenconsistentsince

    19 then,thatwhenCongressadoptedthethreeexemptions,

    20 ititrecognizeddisparateimpactasapplyingtothe

    21 FairHousingAct. Thatintentionalbriefwasnotin

    22 1988andnotinitwasafterthatwasbefore1988,

    23 the1988amendments.

    24 MR.KELLER: Ititwasbeforethe1988

    25 amendments,that'sright. ButthisCourtwas

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    1 consideringtheissueinTownofHuntingtonandafter

    2 theamendment. SowhileCongresswaspassingthe1988

    3 amendments,thisCourthasacasewheretheissuewas

    4 raisedanditwasactivelyconsideringit.

    5 AndCongress

    6 JUSTICEALITO: Well,General,Ithought

    7 yourargumentonthe1988amendmentswasasfollows:

    8 EitherthetheFairHousingActcontemplated

    9 disparateimpactanalysiswhenitwasadoptedin,when

    10 wasit,1968oritdidn't. Andthe1988amendments,

    11 whichmadeitclearthattherecouldnotbe

    12 disparateimpactanalysiswithrespecttocertain

    13 matterssurelydidn'texpandthescopeofthe19of

    14 whatwasinitiallyenacted. Sotheissueiswhatdid

    15 Congressintend,whatwhatisthemeaningoftheAct

    16 asoriginallyenacted. Ithoughtthatwasyour

    17 argument.

    18 MR.KELLER: Precisely,JusticeAlito. The

    19 1968Act

    20 JUSTICEGINSBURG: ButIfwe'regoingtobe

    21 realisticaboutthis,in1964,whentheCivilRightsAct

    22 passed,andin1968,whentheFairHousingActpassed,

    23 nobodyknewanythingaboutdisparateimpact. That

    24 didn'tcomeuptilltheGriggsdecision,anditwasthis

    25 CourtthatgavethatinterpretationtoTitleVIIin

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    1 lightofthepurposeofthestatute.

    2 Sototrytolookbackandsay,oh,didthey

    3 meandisparateimpactin'64,whenGriggswasn'tonthe

    4 bookstill'71,it'salittleartificial,don'tyou

    5 think?

    6 MR.KELLER: TheCourthastoconstruethe

    7 plaintextofthestatutethatCongressenacted,andthe

    8 textin1964didnotuseeffects

    9 JUSTICESCALIA: Ithasto

    10 MR.KELLER: Sorry.

    11 JUSTICESCALIA: Ithastoconstruethe

    12 plaintextofthelaw,andthelawconsistsnotjustof

    13 whatCongressdidin1968,butalsowhatitdidin'88.

    14 Andyoulookatthewholelawandyousay,whatmakes

    15 sense? Andifyoureadthosethosetwoprovisions

    16 together,itseemstobeanacknowledgmentthatthereis

    17 suchathingasdisparateimpact. However,itwillnot

    18 applyintheseareasthatthe1988amendmentsays. We

    19 don'tjustlookateachlittlepiecewhenitwas

    20 seriallyenactedandsaywhatdidCongressthinkin

    21 in'68? Whatdiditthinkin'72? Welookatthelaw.

    22 Andthelawincludesthe'68actandthe'88amendments.

    23 AndIIfindithardtoreadthosetwotogetherin

    24 anyotherwaythanthereissuchathingasdisparate

    25 impact.

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    17

    1 MR.KELLER: The1988amendmentsdon'trefer

    2 todisparateimpact. ThisisnotliketheTitleVII

    3 1991amendmentthatexplicitlyusedthewords"disparate

    4 impact."

    5 JUSTICEKAGAN: Ofcoursenot,but

    6 JUSTICESCALIA: Buttheymakenosense

    7 unlessthereissuchathingasdisparateimpact.

    8 It'stheyareprohibitingsomethingthatdoesn't

    9 exist,right? Imean,you'resayingthattheyprohibit

    10 somethingthatdoesn'texist.

    11 MR.KELLER: Theycoulddomorework. They

    12 doworkindisparatetreatmentcases. Takethe

    13 occupancyexemption. TheFairHousingActalso

    14 prohibitsthefailuretomakeaccommodationsbasedon

    15 disability. Theoccupancyexemptionisgoingtodowork

    16 inthatcase. ThisiswhyinCityofEdmonds,the

    17 Courtnotedthatthesewereexemptionswerecomplete

    18 exemptionsfromFHAscrutiny. Congressdidn'tsaythat

    19 itwaslimitingthesetodisparateimpact. Itsaidwe

    20 don'twanttheseclaimstogoforward.

    21 JUSTICEBREYER: Soyouhaveanargument,

    22 andsodoestheothersidehaveanargument. ButI

    23 don'twantyounottohavethechancetoanswerwhatto

    24 meisaprettyimportantquestion. Saytherearegood

    25 argumentsonbothsides. Thelawhasbeenagainstyou.

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    18

    1 There'sbeendisparateimpactfor40years. Now,letme

    2 befair. Maybeit'sonly35. Andit'suniversally

    3 againstyou. AndasfarasIcantell,theworldhasn't

    4 cometoanend.

    5 Imean,theformofthequestionI'mputting

    6 iswell,maybeMarburyv.Madisonwaswrong. Idon't

    7 thinkitwas. Butnonetheless,nonetheless,thishas

    8 beenthelawoftheUnitedStatesuniformlythroughout

    9 theUnitedStatesfor35years,itisimportant,andall

    10 thehorriblesthatarepainteddon'tseemtohave

    11 happenedoratleastwehavesurvivedthem.

    12 SowhyshouldthisCourtsuddenlycomein

    13 andreverseanimportantlawwhichseemstohaveworked

    14 outinawaythatishelpfultomanypeople,hasnot

    15 produceddisaster,onthebasisofgoingbackandmaking

    16 afinelyspunargumentonthebasisofatextthatwas

    17 passedmanyyearsagoandisambiguousatbest?

    18 MR.KELLER: Ifyouweretobelievethe

    19 statute'sambiguous

    20 JUSTICEBREYER: Oh,well,Idon'tthink.

    21 Mygoodness,ifitisn'tambiguous,itwouldbe

    22 surprisingbecausetencircuitcourtsofappealshave

    23 allinterpreteditthewayoppositeyouandItakeit

    24 youdon'tmeanit'sunambiguousontheirside.

    25 (Laughter.)

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    1 MR.KELLER: In1988,theamendmentsdidn't

    2 touchthetextofthe1968FairHousingAct

    3 JUSTICEBREYER: No,no. Idon'twantyou

    4 toifyou'lldomethefavorofansweringmy

    5 question.

    6 MR.KELLER: Sure.

    7 JUSTICEBREYER: Whichisthequestionthat

    8 it'sbeenthelawfor40yearsofjustalittlebit

    9 less,disasterhasnotoccurred,andwhywhensomething

    10 issowellestablishedthroughouttheUnitedStates

    11 shouldthisCourtcomeinandchangeit.

    12 MR.KELLER: Thereisaseriousequal

    13 protectionquestionlurkinghere. Andastowhyyou

    14 wouldchangeit,disparateimpactliabilityandwhereit

    15 leadsisbeingappliedinacaselikethisinMagnerv.

    16 Gallagher. Texasherewastryingtogiveadditional

    17 JUSTICEBREYER: Youdon'tlikethewayit

    18 wasapplied,andIcanunderstandthat. Butthereare

    19 manyremediesthatyouhave. OneisyougotoHUDand

    20 yousay,lookatwhatishappening;thisishappeningto

    21 havetheoppositeeffectthatyouwant. That'soneof

    22 yourarguments. Well,trytoconvincethem.

    23 Andifnotthere,yougotoacourtandsay:

    24 Court,thisisadisparateimpactcase,andwehavea

    25 justificationandthejustificationisstrongenough

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    1 thatitsurvivestheempiricaleffect,andyouseeif

    2 youcangetthemtoagree. Youmaywin;youmaylose.

    3 Butwhatnottodoistooverturnthewhole

    4 lawthathasbeenineffect,I'llrepeatforthe

    5 nineteenththtime,for40yearswithbasicallyhelpful

    6 effect. Now,that'saquestion. Itdidn'tsoundlike

    7 one,butitwasone.

    8 (Laughter.)

    9 JUSTICEBREYER: SoI'dliketohearwhat

    10 yousay.

    11 MR.KELLER: Sure. Theequalprotection

    12 concernsherearestark. First,thegovernmenthasnot

    13 explainedifit'sgoingtoenforcetheHUDregulationto

    14 protectonlyminorities. Ifitdoes,that'slikely

    15 unconstitutionalunderAdderandandifitdoesn't,

    16 that'sgoingtointerferewithFederalandState

    17 programsthathelplowerincomeneighborhoods.

    18 JUSTICESCALIA: MaybeI'mmissingsomething

    19 here.

    20 JUSTICESOTOMAYOR: How

    21 JUSTICESCALIA: Didn'tthisCourtdecide

    22 Marburyv.Madison?

    23 MR.KELLER: Absolutely,JusticeScalia.

    24 JUSTICEBREYER: Myquestionwasnotreally

    25 aboutMarbury.

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    1 JUSTICESCALIA: Imean,isn'tthatabig

    2 difference,Imean,betweenthesituationhere? This

    3 Courthasneverdecidedthisissue. It'sjustthelower

    4 courtshavehavedecideditinauniformfashion.

    5 Haveweeverbeforereverseduniformholdingsofof

    6 courtsofappeals,eventhosethathavelasted30years?

    7 Theanswerisyes.

    8 MR.KELLER: Youhaverejectedthe

    9 overwhelmingconsensusofthecourtsofappeals.

    10 JUSTICEBREYER: That'swhyIaskedthe

    11 question. Isaidwhy. Why? I'mnotsayingyou

    12 couldn'tdoit. I'msimplysayingwhy. AndIdon't

    13 wanttorepeatmyquestionforthefourthtime,andyou

    14 begantogiveananswerandtheansweryoubegantogive

    15 wasbasedonaconstitutionalproblemthathasarisen.

    16 AndI'vetakenthatinandreadit,anddoyouhave

    17 otheranswersornot? Iwantyoufullytoanswerthe

    18 question.

    19 MR.KELLER: Sure. Theplaintextofthe

    20 statuteisclear. Constitutionalavoidancecompelsthat

    21 interpretation,andthepurposesoftheFairHousingAct

    22 wouldbeunderminedbyextendingdisparateimpact

    23 liabilitytothisdegree.

    24 JUSTICESOTOMAYOR: Well,you'renowtalking

    25 aboutapplication. Andlet'sgobackto,youmadea

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    1 statementearlierthatthisisgoingtoinhibit

    2 developmentofblightedareas. Thathastodowiththe

    3 applicationinthiscase. IfI'mrightaboutthetheory

    4 ofdisparateimpact,andIcantellyouI'vestudiedit

    5 verycarefully,itsintentistoensurethatanyonewho

    6 isrentingorsellingpropertyormakingitunavailable

    7 isdoingsonotonthebasisofartificial,arbitraryor

    8 unnecessaryhurdles,policiesorpractices,andit'sthe

    9 Petitionerwhohastoidentifywhichtheyare,andto

    10 explainwhyalternativeswouldn'twork.

    11 Ifsomeone'sdevelopingablightedareaor

    12 anareasubjecttocrimeorsomethingelse,that's

    13 somethingtheycandoandthat'sacriteria,apolicy

    14 thatcan'tbesubstitutedforsomethingelse. SoI

    15 don'tknowwhyyoukeepsayingthisisgoingtoaffect

    16 privatedevelopment.

    17 MR.KELLER: JusticeSotomayor,inin

    18 Ricci,theCourtreservedthequestionwhether

    19 disparateimpactliabilityinrequiringracebased

    20 decisionmakingwouldviolatetheequalprotection

    21 clause,andthereisa

    22 JUSTICESOTOMAYOR: Butthisisnot

    23 racebaseddecisionmaking. Areyousayingthatthe10

    24 percentplaninincollegesisracebasedifit'san

    25 absolutelyneutralpolicythathappenstoaddressa

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    1 need,whichistointegrateschools?

    2 MR.KELLER: Butthe

    3 JUSTICESOTOMAYOR: Sowhyisitwrongto

    4 haveaneutralpolicy? Becausenoneofthepolicies

    5 thatwereimposedhereandinmostinallothercases

    6 areracebased. They'repoliciesthatareraceneutral,

    7 buthappentohaveabetterimpactintermsof

    8 integration.

    9 MR.KELLER: JusticeSotomayor,Iwould

    10 disagreethatit'scompletelyraceneutral,becauseat

    11 theoutset,statisticaldisparitiesbasedonrace,

    12 racialclassifications,areusedandthishasthe

    13 potentialtosubordinatetraditional

    14 JUSTICESOTOMAYOR: Well,that

    15 JUSTICESCALIA: Whichisnotthecasefor

    16 the10percentplanthatTexasuses.

    17 MR.KELLER: Absolutely,JusticeScalia.

    18 JUSTICESCALIA: There'snoracialthingin

    19 that. Ifyou'reinthetop10percentofyourhigh

    20 schoolclass,yougototheStateuniversity.

    21 JUSTICEGINSBURG: Whatwasthereason

    22 for

    23 JUSTICESCALIA: Noraceaboutit.

    24 JUSTICEGINSBURG: Whatwasthereasonfor

    25 it? Youcansayit'saneutral,10percentisneutral;

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    1 butit'sjustglaringinthefacethatthelegislature

    2 thatpassedthiswasverymuchraceconscious. Itwas

    3 thewaythattheysawofgettingaminoritypopulation

    4 intocolleges.

    5 Idon'tthinkthere'sreallyadoubtthat

    6 factuallythat'swhatpromptedthe10percentplan.

    7 WhentheUniversityofTexaswastolditsaffirmative

    8 actionplanwasnogood,thenthelegislaturecameback

    9 withthe10percentplan.

    10 MR.KELLER: Butthere'sadifference

    11 betweenthatraceconsciousdecisionmakingand,here,a

    12 situationwhereliabilityistriggeredbasedon

    13 statisticaldisparities.

    14 That'swhytheWatsonplurality,Justice

    15 JUSTICESOTOMAYOR: It'snotliabilityis

    16 notwell,"triggered"isagoodword;butit'snot

    17 imposedbecauseofthat. It'simposedbecausethelower

    18 courtfound,rightlyorwronglyIdon'twanttoget

    19 intothemeritsofthatthatsomeofthecriteria

    20 beingusedwaswereunnecessaryandthatwasand

    21 therewasnolegitimatebusinessreasonforit.

    22 Icould,asJusticeBreyersaid,quarrel

    23 withthatconclusion;butthat'sinapplication. That's

    24 notinthestandardthatdisparateimpactimposes.

    25 MR.KELLER: Butwhatobjectivestandardis

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    1 theretomeasurewhethersomethingisasubstantial

    2 interestinthehousingcontext? Andthat'swhy

    3 disparateimpactliabilitycanleadtothefunctional

    4 equivalentofaquotasystem. That'swhattheWatson

    5 pluralitysaid,WardsCove,andJusticeScalia's

    6 concurrenceinRicci.

    7 Mr.ChiefJustice,ifIcouldreservethe

    8 remainderofmytimeforrebuttal.

    9 CHIEFJUSTICEROBERTS: Thankyou,counsel.

    10 Mr.Daniel.

    11 ORALARGUMENTOFMICHAELM.DANIEL

    12 ONBEHALFOFTHERESPONDENT

    13 MR.DANIEL: Mr.ChiefJustice,andmayit

    14 pleasetheCourt:

    15 Theremedyinthiscaseisperfectly

    16 consistentwiththeinterestinrevitalizinglowincome,

    17 minorityareas. Theremedyinthiscaseshowsthat

    18 thereisnothingabouttheFairHousingAct

    19 JUSTICESOTOMAYOR: We'renottalkingabout

    20 thiscase.

    21 MR.DANIEL: No. I'mjustusingitasan

    22 example.

    23 JUSTICESOTOMAYOR: Allright. Whydon't

    24 yougettothelegalissue,ifyoucould.

    25 MR.DANIEL: Thelegalissueis

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    1 "unavailable." Unavailableisaresultoriented

    2 measure. Youlooktoseehowmanyunitsareavailable

    3 inanarea. Youcountthem. Thatistheresult. How

    4 manyunitsareavailableinanotherarea? Youcount

    5 them. That'saresult.

    6 It'sclearfromtheCongressionalRecord

    7 Congresswasworriedandconcernedaboutmakingunits

    8 onlyavailableinlowincome,minorityareasthatit

    9 called"ghettos." Theremedythatitwanted

    10 JUSTICESCALIA: Itisn'tthe"unavailable"

    11 wordthat'stheproblem. Theproblemisunavailableon

    12 thebasisofrace. Youcansay"unavailable"amillion

    13 times,butthestatuterequiresthatitbemade

    14 unavailableforracialreasons.

    15 Andyou'resaying,no,itdoesn'thaveto

    16 be;itcouldbeunavailablesimplybecauseyouusesome

    17 othernonracialreason,whichisstupid,right? That's,

    18 that'syourargument. Ifitproducesaresultthat

    19 isisnotwhat,Idon'tknowthattheraces

    20 havetobeinthesameproportionastheyareinthe

    21 generalpopulation. Right? Imean,that'swhatyou're

    22 arguing.

    23 MR.DANIEL: Theargumentisthatif,in

    24 fact,racialdiscriminationisaforeseeableconsequence

    25 ofwhatsomeoneisdoing

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    1 JUSTICESCALIA: No,no,no,no. Racial

    2 disparityisnotracialdiscrimination. Thefactthat

    3 theNFLisislargelyblackplayersisnot

    4 discrimination. Discriminationrequiresintentionally

    5 excludingpeopleofacertainrace.

    6 MR.DANIEL: Itcertainlyincludesthat,

    7 Justice

    8 JUSTICESCALIA: Solet'snotlet'snot

    9 equateracialdisparitywithdiscrimination. Thetwo

    10 arequitedifferent,andwhatyou'rearguinghereis

    11 thatracialdisparityisenoughtomaketomake

    12 whateverthepolicyadoptedunlawful,right?

    13 MR.DANIEL: No,JusticeScalia. That'snot

    14 whattheargumentis;andthat'snotwhat'sinthe

    15 argument,it'snotwhat'sintheregulations.

    16 Theargumentis,isthatifI'mgoingto

    17 makeadisparatetreatmentcasethatthereis

    18 intentionaldiscrimination,I'mgoingtostartwiththe

    19 effects,justthesameplaceIstartwithadisparate

    20 impact. Istartwiththeeffects: Hastherebeenan

    21 effectthatisconsistentwithdiscrimination?

    22 Indisparateimpact,Ithengoontothe

    23 nextstep: Isthereaninterestthatjustifiesthe

    24 discriminatoryeffect? Itcouldbethesame

    25 discriminatoryeffectthatiscausedbyintentional

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    1 discrimination.

    2 JUSTICEKAGAN: Mr.Daniel,Ihadthought

    3 thatJusticeScalia'squestionwaswhetherthe"because

    4 of"languageprecludesadisparateimpacttheory;in

    5 otherwords,whetherthe"becauseof"languagesignals

    6 thatithastohaveacertainkindofintentwhichis

    7 notpartofadisparatetreatment,adisparateimpact

    8 theory.

    9 AndIwouldhavethoughtthatyourmain

    10 argumentaboutthatis,well,actually,theCourthas

    11 heldnumeroustimes,intheTitleVIIcontext,inthe

    12 ADEAcontext,intheRehabilitationActcontext,inthe

    13 EmergencySchoolAidActcontext,thatthat"becauseof"

    14 languagecanbereadtoincludedisparateimpactclaims,

    15 andthatit'satleastambiguousastowhetheritshould

    16 bereadsointhiscaseastothisparticularstatute.

    17 MR.DANIEL: Yes,JusticeKagan.

    18 JUSTICEKAGAN: Imean,isthatyour

    19 argument,orisyourargumentsomethingelse?

    20 MR.DANIEL: Thatisthebasicargumenton

    21 "becauseof,"thatithasbeeninterpretedbothways;

    22 andinTitleVIIandinSmith,itdidnotrequireproof

    23 ofintent. Inthiscase

    24 CHIEFJUSTICEROBERTS: How

    25 JUSTICESOTOMAYOR: Couldyou

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    1 CHIEFJUSTICEROBERTS: I'msorry. Ifyou

    2 wantto,youcancompleteyouranswertoJusticeKagan.

    3 Itwasnotahardquestion.

    4 MR.DANIEL: No,ChiefJustice.

    5 CHIEFJUSTICEROBERTS: Howisahousing

    6 authoritysupposedtoifyouhaveaclaimof

    7 disparateimpact,howisahousingauthoritysupposedto

    8 curetheallegedproblem?

    9 MR.DANIEL: Assumingthatyougothrough

    10 thestepsandthatthereis,infact,aneedtocurethe

    11 problem

    12 JUSTICESOTOMAYOR: Couldyou

    13 CHIEFJUSTICEROBERTS: Well,I'msorry,I'm

    14 sorry. Youhavemadeashowingofdisparateimpact,

    15 thattheimpactandadverseconsequencesfora

    16 particularrace.

    17 Whatisthehousingauthoritysupposedtodo

    18 atthatpoint?

    19 MR.DANIEL: Atthatpoint,thehousing

    20 authorityistosay,thisiswhatinterestwehavethat

    21 isservedbythediscriminatorypracticecausingthe

    22 racialsegregation. That'swhatandtheysay,it

    23 whateverthatinterestisandtheysayit,thatthis

    24 isthisinterestjustifiesourpracticethatwe're

    25 doing.

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    30

    1 Atthatpointintime,wecomebackandsay:

    2 Butthereareotherwaystodoitthatareless

    3 discriminatory.

    4 CHIEFJUSTICEROBERTS: Isthere

    5 MR.DANIEL: And

    6 CHIEFJUSTICEROBERTS: Isthereawayto

    7 avoidadisparateimpactconsequencewithouttakingrace

    8 intoaccountincarryingoutthegovernmentalactivity?

    9 Itseemstomethatiftheobjectionisthat

    10 therearen'tasufficientnumberofminoritiesina

    11 particularproject,youhavetolookattheraceuntil

    12 yougetwhateveryouregardastherighttarget.

    13 MR.DANIEL: Youdon'thavetolookatthe

    14 raceatall. Youlookatthepracticecausingit;and

    15 youstopthepractice,likeinthiscaseorlikeinthe

    16 zoningcase.

    17 JUSTICEGINSBURG: Well,whatwas,infact,

    18 theremedy? Imean,thiswasacasewheretherewas

    19 litigation,youprevailed,andtherewasaremedy. So

    20 therewasdisparateimpact.

    21 AndwhatdidtheCourtsayhadtobedoneto

    22 cureit,tocurewhatitsawastheoffensetotheFair

    23 HousingAct?

    24 MR.DANIEL: Itsaidithadtostopthe

    25 discriminatoryhousingpracticeandthenithadto

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    1 thenitorderedinplacetheremedysuggestedbythe

    2 Statethatwas,infact,thelessdiscriminatory

    3 alternative,toalargeextent,towhattheyhadbeen

    4 doing.

    5 There'snoracialgoalsinit,there'sno

    6 raceconsciousinit,there'snoracialcriteriainit.

    7 Itisathereisanditistheremedythatthe

    8 Statesayswillworktostopthediscriminatory

    9 practice.

    10 JUSTICESOTOMAYOR: Couldwegoback?

    11 MR.DANIEL: Infact

    12 JUSTICESOTOMAYOR: Couldwegoback? I

    13 thinkyou'vebeeninterrupted.

    14 Thestepsare: Firstyoushowthat

    15 there'sthatthenumbersareoff. Thentheother

    16 sidetellsyouwhatthereasonisforwhythenumbers

    17 areoff.

    18 You,then,haveanopportunityoran

    19 obligationtocomeandsuggestalternativemethodsof

    20 takingcareofthelegitimatebusinessneed. Correct?

    21 MR.DANIEL: Yes,JusticeSotomayor.

    22 JUSTICESOTOMAYOR: Soyouthosearethe

    23 threesteps?

    24 MR.DANIEL: Yes.

    25 JUSTICESOTOMAYOR: Ifyoucanproposeways

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    1 thatareraceneutral,practicesthat`areraceneutral

    2 thatwillhavetakecareoftheirneeds,meaningthe

    3 otherside'sneeds,thenyougetrelief.

    4 MR.DANIEL: And,forexample,oneofthe

    5 waysproposedwas: Donotcontinueputtingprojects

    6 nexttolandfillsandhazardousindustrialuses. That

    7 was

    8 JUSTICEGINSBURG: Don'tyouhaveatension

    9 betweentwostatuteshere? Imean,youhavetheFair

    10 HousingAct;andthenthereisthelawthatsetsupthis

    11 taxcredit,right? Anddoesn'tthatlawsaythatthere

    12 shouldbeapriorityforrevitalizingdecaying

    13 communities?

    14 MR.DANIEL: Thelawspecificallysaysthat

    15 thereshouldbeapreferenceamongalltheprojectsthat

    16 aregoingtobeawardedforapplicationsthatcontribute

    17 toaconcertedcommunityrevitalizationplan. That

    18 preferenceishonoredintheremedyanditisinthe

    19 remedy. Ifyouareifanapplicationis

    20 concertingiscontributingtoaconcertedcommunity

    21 revitalizationplanjustlikeintheIRScode,thenit

    22 getsthesamepointsasaaprojectthatisgoingto

    23 beinahigherincome,lowpovertyareawithgood

    24 schools.

    25 JUSTICEGINSBURG: Whyshouldn'titgetmore

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    1 ifthetaxlawexpressesthatpreferenceforthe

    2 revitalization?

    3 MR.DANIEL: JusticeGinsburg,itcouldif

    4 theStatesetitupthatway. TheStatejusthasn'tset

    5 itupthatway. TheStatecouldsetitupsothat

    6 there'sapoolofunitsthataregoingtobeawarded

    7 projectsandpickoutofthereandgivepreferenceto

    8 thoseconcertedcommunityrevitalizationplans.

    9 ThedistrictcourtfoundthattheStatedid

    10 notdothat. TheStateinsteadgaveatwopointone

    11 ortwopointselectioncriteriabonusforthatkindof

    12 project. That'sthat'sbutthat'saStatechoice.

    13 JUSTICEBREYER: CanyougobacktoJustice

    14 Scalia'squestion,please? BecauseItookbecauseI

    15 justwanttohearyouranswertoit.

    16 AsIunderstoodhisquestion,itwasyou

    17 lookatthewordsandthewordssay,"makeunavailable

    18 becauseofrace." Andwhatyou'resayingisthose

    19 words,"makeunavailablebecauseofrace,"caninclude

    20 thecircumstancewhereyoumakeunavailableforareason

    21 thathasnothingtodowithracewheretheeffectof

    22 thatreasonistocausearacialdisparityof

    23 significanceanditcannotbejustifiedastheleast

    24 restrictivewaytobringaboutit. That'sthepoint.

    25 Butyou'resayingthosewordsareconsistent

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    1 withthelongerphraseIjustsaid. Okay. Isthere

    2 caselaworother,asidefromthisarea,whichbuilds

    3 yourpointandsays,yes,thosewordslinguisticallyand

    4 legallydoincludethedisparateimpactsituation,or

    5 can. Itakeitthat'shisquestionandIwaslooking

    6 MR.DANIEL: ThisCourt

    7 JUSTICEBREYER: forananswersomewhat

    8 along

    9 MR.DANIEL: AndthisCourt

    10 JUSTICEBREYER: thoselinesorany

    11 other

    12 MR.DANIEL: ThisCourt'stwomajoropinions

    13 onthisare,ofcourse,GriggsandSmith. Thesame

    14 issuewaswrestledwithwiththeothercourtswhohave

    15 foundthesamethinginthecourtsofappeals,wrestling

    16 withthisbecauseof,anditisatleastadmitsthat

    17 itisaaitcanit'sapermissiblereading

    18 eitherway.

    19 JUSTICEALITO: InSmith,however,the

    20 Courtthepluralityopinioncitedtwoadditional

    21 things. Itdidn'tjustsay"becauseof"canmean

    22 disparateimpact. Itcitedtheeffectslanguage,which

    23 wasthesubjectofsomequestioningduringGeneral

    24 Keller'sargument,butitalsocitedtheRFOAprovision.

    25 Now,noneofneitherofthoseIthink

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    1 thelatterismoresignificantandthere'snothinglike

    2 thatinTitleVIII,isthere?

    3 MR.DANIEL: Theexemptionsareare

    4 similarinthefactthatwhatthosetheydothe

    5 RFOAinSmithcameinandbasicallysaidevenifyou

    6 havedisparateimpactonthesefactors,ifit'sa

    7 reasonablefactorotherthanage,we'regoingtoexcuse

    8 thedisparateimpact. Okay. Nowthetheexemptions

    9 speaktothedisparateimpactandthere'snonothing

    10 intherethatsaysthatthere'sthatyouusebythe

    11 reasonthatyoucanexcuse,thatthosedon'tcount

    12 JUSTICEALITO: Soisthatcriticaltoyour

    13 argument? Thattheexemptionsarecriticaltoyour

    14 argument?

    15 MR.DANIEL: Wewethinktheexemptions

    16 aretexttosupporttheuseofadisparateimpact

    17 liability. Wethinkthere'salotofotherthings. The

    18 statutoryconstructionusedinthecongressionalrecord,

    19 whattheCongresswantedtodo,3601,whichCongress

    20 passedtosayandhasbeenusedtogiveanexpansive

    21 interpretationinmattersofstandingandenforcement.

    22 Wethinkthoseallthosetoolsofstatutory

    23 constructioncombinetomakeitatleastpermissible

    24 and,therefore,givingduedeferencetotheHUD

    25 regulation.

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    1 JUSTICEALITO: Iftherewasnodisparate

    2 impactundertheActasinitiallyenacted,doyouargue

    3 thattheexemptionsexpandedtheActsothatitthen,as

    4 of1988,includeddisparateimpact?

    5 MR.DANIEL: Well,itiftherewasnone

    6 then,therethereindicatedthe1988Congress

    7 thoughttherewas. Wedon'tthinkyoucanlookatwhat

    8 Congressdidin1968andsaytheydidnotintendto

    9 covereffects. Theysayittimeandtimeagain.

    10 JUSTICEALITO: Well,thatwasn'treallymy

    11 question. WhatCongressthoughttheActmeantin1988

    12 wouldn'thaveanysignificancewouldn'thavemuch

    13 significanceiftheyhadn'tdoneanything,wouldit?

    14 MR.DANIEL: No,Ithinktheyweredoingit

    15 in1988,thatcountsfor1988. Wethinkthatitthey

    16 haddoneitbefore.

    17 JUSTICEALITO: Allright. Sodidwhat

    18 theydidthethingsthattheyactuallydidin1988

    19 expandthecoverageoftheAct?

    20 MR.DANIEL: No,Justice. Wethinkthatthe

    21 coveragewasalreadythereinthe1968Act. Whenyou

    22 lookatallthetoolsofstatutoryconstruction,they

    23 allpointinonedirection,andthatis,tothatbeing

    24 aatleastapermissible,ifnotthebest,

    25 interpretationin1968thatCongressintendedtocover

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    1 effectsofpastsegregationandotherdiscrimination,

    2 whetheritwasintentionalornot. It'sthroughoutthat

    3 record,itisdiscussingthemajorimplementofracial

    4 segregationandhowitwasbroughtabout. Itintended

    5 toendtheeffectsofthat. Itsaiditagainandagain.

    6 Wethinkthe1988,itcertainlyrecognized

    7 thedisparateimpactrule,ittalkedaboutthe

    8 disparateimpactruleinthecourtsofappeals. Itknew

    9 itwasthere. Itwasbeingdoneininthecontextof

    10 thosecourtsofappeals.

    11 Nofurtherquestions?

    12 CHIEFJUSTICEROBERTS: Thankyou,counsel.

    13 GeneralVerrilli.

    14 ORALARGUMENTOFDONALDB.VERRILLI,JR.

    15 ONBEHALFOFUNITEDSTATES,

    16 ASAMICUSCURIAE,SUPPORTINGRESPONDENT

    17 GENERALVERRILLI: Mr.ChiefJustice,and

    18 mayitpleasetheCourt:

    19 Thestatutoryprovisionsthatmostclearly

    20 showthatHUD'sdisparateimpactregulationsarea

    21 permissibleinterpretationoftheFairHousingActare

    22 thethreeexemptions. Thoseexemptionspresupposethe

    23 existenceofdisparateimpactliabilityandsoserveno

    24 realpurposewithoutthemwithoutdisparateimpact

    25 liability.

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    38

    1 Andtheprovenanceofthoseexemptionslends

    2 particularlystrongsupportforthereasonablenessof

    3 HUD'sreading. Theywereaddedbyamendmentin1988at

    4 atimewhennine,Ithinkthenumberisninecourtsof

    5 appeals,hadruledthattheFairHousingActauthorized

    6 disparateimpact,andtheyandtheywereaddedto

    7 providedefensestoexemptionsfromthey'relabeled

    8 asexemptionsfrom,carveoutsfrom,disparateimpact

    9 liability. Soyou'vegot

    10 JUSTICESCALIA: Ithinkyourcasewouldbe

    11 strongeriftherehadbeennocourtofappealsthat

    12 hadthathadfavoreddisparateimpact. Thenthen

    13 youcouldn'tpossiblyargue,well,thatwasputinjust

    14 toeliminatetheerroneousjudgmentsofthesecourtsof

    15 appealsinincertainareas,anyway. Itwouldbe

    16 betterifnocourtofappealshadsaidthat

    17 GENERALVERRILLI: Well

    18 JUSTICESCALIA: andCongresshadenacted

    19 these

    20 GENERALVERRILLI: No,Iactuallythinkit's

    21 betterthewayithappenedbecauseforourcase

    22 becauseofthereenactmentcanon. YouhaveSection

    23 805ofthislawwasreenactedagainstthebackdrop,so

    24 youhavethereenactmentofthoseninecourtsof

    25 appeals. Soyouhavethereenactmentcanonandyouhave

    AldersonReportingCompany

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    39

    1 thecanonagainstthepresumptionagainstsuperfluous

    2 amendmentsbothworking. Andremember,we'reinChevron

    3 territoryhere. Sothequestioniswhetherthe

    4 statutorytextunambiguouslyforeclosesHUD's

    5 interpretation.

    6 JUSTICEALITO: CanIaskyouaquestion

    7 CHIEFJUSTICEROBERTS: Well,oneconcern

    8 oneconcernaboutdisparateimpactisthatit'svery

    9 difficulttodecidewhatimpactisisgoodandbad.

    10 Taketwoproposals. Oneisaproposaltobuildnew

    11 housinginalowincomearea,itwouldbenefit

    12 primaryprimarilyminorities;newhousing,good

    13 thing. Theotherproposalistobuildhousinginamore

    14 affluentarea. Itwouldhelppromoteintegrationof

    15 housing;alsoagoodthing.

    16 Whichonegetscreditforundertryingto

    17 decidetheimpact? Theonethatisrevitalizinga

    18 lowincomeareaortheonethatisintegratinga

    19 highincomearea?

    20 GENERALVERRILLI: Right. Iunderstand

    21 that,Mr.ChiefJustice,andtheremaybedifficult

    22 questions. Ofcourse,theagencyherechargedby

    23 Congressexpressly,inthe1988amendments,Iwouldadd,

    24 withinterpretingandenforcingtheseprovisions,has

    25 concludedthattheydothatdisparateimpactisthe

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    1 rightpolicyjudgment.

    2 CHIEFJUSTICEROBERTS: No,no. But

    3 whichwhichcounts? Imean,whichbenefitsyou're

    4 tryingtoseeifthere'sadisparateimpacton

    5 minorities.

    6 GENERALVERRILLI: Itmaywellbe

    7 CHIEFJUSTICEROBERTS: Ifyougivethe

    8 proposaltothelowincomehousingintheaffluent

    9 neighborhood,thatcertainlybenefitsintegration. If

    10 yougivetheproposaltofundtheproposalinthe

    11 lowincomearea,thatcertainlyhelpshousing

    12 opportunitiesthere.

    13 GENERALVERRILLI: SoI'mgoingtoanswer

    14 YourHonor'squestiondirectly.

    15 CHIEFJUSTICEROBERTS: Good.

    16 GENERALVERRILLI: ButIthinkyou'vegotto

    17 doitinthecontextofthewayinwhicha

    18 disparateimpactcasehasgottobeproven. It'snot

    19 enoughjustthatthere'sastatisticaldisparity. A

    20 plaintiffhasgottodemonstratethataparticular

    21 practiceorcriterionbeingappliedisbeing

    22 JUSTICEGINSBURG: Andwhatisthepractice

    23 here? BecausethatwasthequestionJudgeJones

    24 GENERALVERRILLI: Well,youknow,that'sa

    25 verygoodquestion. IfImayjustanswerJustice

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    1 Ginsburg,andI'llcomebackandfinishmyanswerto

    2 you,Mr.ChiefJustice.

    3 Thatthethat'saverygoodpoint,

    4 JusticeGinsburg. Andwearealthoughwearehere

    5 defendingHUD'sinterpretation,andwethinktheanswer

    6 tothequestionpresentedisyes. Thatthat'swe

    7 don'thaveapositiononwhetherthisisaviable

    8 disparateimpactclaim,andwethinkJudgeJoneshas

    9 madeagoodpointinourinherconcurrencebecause

    10 it'snotcleartouswhatspecificpracticethatthe

    11 theStateagencyhasengagedinherethatwouldwould

    12 justifythefindingofdisparateimpactliability. And

    13 onethingthatwassuggestedismaybethatcouldbe

    14 dealtwithonremandfromthedistrictcourt.

    15 AndIdothinkthat'sandthatgetsto

    16 whatIwastryingtosaytoyou,Mr.ChiefJustice,

    17 whichisthatyou'vegottoapplythetestwhichis

    18 HUDhassetoutasarealtest.

    19 CHIEFJUSTICEROBERTS: Well,withrespect,

    20 Idon'tthinkthat'sresponsive. Yousayyoulookat

    21 whichprovisionishavingthedisparateimpact,butI

    22 stilldon'tunderstandwhichisthedisparateimpact.

    23 GENERALVERRILLI: Well

    24 CHIEFJUSTICEROBERTS: Inotherwords,is

    25 ittheprovisionthatcausesmoreproposalstogoto

    AldersonReportingCompany

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    1 lowincomehousingintheaffluentarea? Orisitthe

    2 provisionthatcausesmoreapprovalofmoreproposals

    3 inthelowincomearea? You'vegottoknowwhatyou're

    4 shootingatbeforeyoucantellifyou'vemissed.

    5 GENERALVERRILLI: Well,thedisparate

    6 right. Thedisparitytiedtoaparticularpractice,

    7 it'sjustthefirststepintheanalysis. Thesecond

    8 stepintheanalysisisjustification,what'sthe

    9 justification.

    10 CHIEFJUSTICEROBERTS: I'msorry,Iand

    11 I'lljustaskitforthelasttimeandthenletyouget

    12 on.

    13 GENERALVERRILLI: Yeah.

    14 CHIEFJUSTICEROBERTS: You'resayingyou

    15 needthejustification,butforwhat? Whichisthebad

    16 thingtodo,notpromotebetterhousinginthe

    17 lowincomeareaornotpromotehousingintegration?

    18 GENERALVERRILLI: Youknow,itmaybe

    19 CHIEFJUSTICEROBERTS: Yousayyoulookat

    20 what'scausingthebadeffect,butwhat'sthebad

    21 effect?

    22 GENERALVERRILLI: Itmaybethatneitheris

    23 becausethestatemaysaythethegovernmentmaysay

    24 inthefirstcase,well,thisisourjustification,and

    25 thatmaybeajustificationthatholdsup. The

    AldersonReportingCompany

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    1 governmentmaysayinthesecondcase,well,that'sour

    2 justification,andthatmaybeajustificationthat

    3 holdsup. SoIjustthinkthatyou'vegot

    4 JUSTICESOTOMAYOR: Doyouthinkthata

    5 privatedeveloperwouldeverbefoundguiltyof

    6 disparateimpactbecauseheownsapieceofpropertyin

    7 anaffluentneighborhood?

    8 GENERALVERRILLI:

    9 coursenot.

    10 JUSTICESOTOMAYOR:

    11 develophisproperty,right?

    12 GENERALVERRILLI:

    13 thoughtthequestion

    14 JUSTICESOTOMAYOR:

    No,certainlynot,of

    He'spermittedto

    Yes,ofcourse. AndI

    Thedisparateimpact

    15 wouldbeifhefailstosellormakeavailabletopeople

    16 ofallraces,let'ssay,theunitsinthatproperty,

    17 correct?

    18 GENERALVERRILLI:

    19 specificpractice.

    20 JUSTICESOTOMAYOR:

    21 GENERALVERRILLI:

    22 justthefirststate

    23 JUSTICESOTOMAYOR:

    24 practice

    25 GENERALVERRILLI:

    There'sgottobea

    Practice.

    That'sright. Andthat's

    Allright. Thespecific

    Andthat'sjustthefirst

    AldersonReportingCompany

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    1 statementintheanalysis

    2 JUSTICESOTOMAYOR: thathasa

    3 business

    4 GENERALVERRILLI: andit'sgottobe

    5 unjustified.

    6 JUSTICESOTOMAYOR: Exactly.

    7 GENERALVERRILLI: Thatandthat's

    8 CHIEFJUSTICEROBERTS: Ithoughtthe

    9 questionwas,though,Imean,theit'snota

    10 developer,it'stheDepartmentofHousingandCommunity

    11 Affairs,andIthoughtthechallengewenttowherethey

    12 werebeenwheretheyweresupporting

    13 development

    14 GENERALVERRILLI: Well,this

    15 CHIEFJUSTICEROBERTS: notthe

    16 developer,butbut

    17 GENERALVERRILLI: Thismaynotbeagood

    18 disparateimpactclaim,Mr.ChiefJustice. Butthe

    19 casesthatareintheHeartlandarereallypretty

    20 straightforward.

    21 JUSTICEKENNEDY: Butareyousayingthatin

    22 eachcasethattheChiefJusticeputs,thereis

    23 initiallyadisparateimpactatstepone,thatisto

    24 say,CommunityAwantsthedevelopmenttobeinthe

    25 suburbs. Andthenextstate,thecommunitywantsitto

    AldersonReportingCompany

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    1 beinthepoorneighborhood. Isityourposition,it

    2 seemstome,andthepositionoftheRespondents,that

    3 ineithercase,steponehasbeensatisfied.

    4 GENERALVERRILLI: Thatmayberight,

    5 JusticeKennedy,butIthinkthepoint

    6 JUSTICEKENNEDY: Butthatthatseems

    7 veryoddtome.

    8 GENERALVERRILLI: ButIthinkthatevenif

    9 they'redifficultcasesunderdisparateimpact,there

    10 arecasesintheHeartlandthathavebeenadjudicated

    11 for35or40years,casessuchasthereisazoning

    12 restrictionthathasadisparateimpactthatitcannot

    13 bejustifiedonasubstantialbasis. Therethereis

    14 anoccupancyrestrictionforanapartment

    15 JUSTICEALITO: CanIaskyouaquestion

    16 I'msorry,aboutChevron. Shouldwebeconcernedhere

    17 abouttheuseofChevrontomanipulatethedecisionsof

    18 thisCourt? ThetheFairHousingActwasenactedin

    19 1968. For40yearsplus,therewerenoHUDregulations.

    20 ThenwegrantedcertintheGallaghercase,anditwas

    21 onlyafterthatandwithin,Ithink,daysafterthat

    22 thattheHUDregulationswereissued. Andthenthe

    23 Gallaghercasesettled,andthenweissuedthenwe

    24 grantedcertintheMt.Hollycase,andtheMt.Holly

    25 casesettled. Soshouldwebetroubledbythis

    AldersonReportingCompany

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    1 chronology?

    2 GENERALVERRILLI: SotheIunderstand

    3 theimportofyourquestion,YourHonor. IguessI

    4 wouldsayacoupleofthingsinresponse. Thefirstis

    5 thatHUD,intheformaladjudicationsreviewedbythe

    6 secretary,hasfounddisparateimpactliability

    7 availableundertheseprovisionsintheFairHousingAct

    8 since1992,Ibelieve. Andthosewouldbeentitledto

    9 Chevrondeference,andIdothink,respectfully,that

    10 that'sapointthatwemadeinourbriefininthe

    11 firstcase,thetheGallaghercase.

    12 Second,andIdon'tmeantobeflipaboutit

    13 becauseIunderstandtheimportofYourHonor's

    14 question,butIdothinkitoverestimatestheefficiency

    15 ofthegovernmenttothinkthatyoucouldget,youknow,

    16 asupposedrulemakingonanissuelikethisoutwithin

    17 sevendays.

    18 CHIEFJUSTICEROBERTS: Itwasa

    19 coincidence.

    20 JUSTICESCALIA: Thatwasverypersuasive.

    21 GENERALVERRILLI: Ireallyandsoso

    22 Idon'tIthink,actually,thishasbeenaposition

    23 ofHUDforaverylongtime,andyouwouldgetChevron

    24 deferencefortheadjudications. Ithinkthat's

    25 prettyprettyclear,whollyapartfromthereg,but

    AldersonReportingCompany

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    1 wedohavetheregnowandIdothinkitgetsChevron

    2 deference.

    3 AndifIcouldturntothequestionof

    4 avoidance,constitutionalavoidance,thathascomeup.

    5 Idon'tthinkthisisasuitablecaseforconstitutional

    6 avoidance,andletmetrytoexplainwhy. Whateverone

    7 mightthinkintheTitleVIIcontextaboutthe

    8 consequencesoffindingdisparateimpactliability,this

    9 isaverydifferentcontext. InaTitleVIIcontext,

    10 theissuehasbeenraisedisthattheonlywaytoavoid

    11 disparateimpactliabilityistoengageinracebased

    12 remedies,notracebasedthinkingaboutwhatneutral

    13 criteriontoadopt,butracebasedremedies.

    14 AndhereintheHeartlandcasesunderthe

    15 FairHousingAct,youaren'tgoingtohavethatkindof

    16 anissue. Theremedyisgoingtobethesubstitutionof

    17 oneraceneutralruleforanotherraceneutralrule.

    18 Forexample,ifaifalandlordcannotjustifyan

    19 occupancyrestrictionthat'sparticularlytight,the

    20 theremedythereisgoingtobeeithernooccupancy

    21 restrictionoralooseroccupancyrestriction. Andthe

    22 consequenceinthosecasessamethingwithzoningand

    23 otherthingstheconsequenceinthosecasesisis

    24 thatnoonegetsclassifiedbyrace,noonegetsa

    25 burdenimposeduponthembecauseofrace,andnoone

    AldersonReportingCompany

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    1 getsabenefitbecauseofrace.

    2 JUSTICESCALIA: Whatwhatruleyou

    3 selectdependsonwhataffectthatwillhaveonracial

    4 racialuseofthefacility.

    5 GENERALVERRILLI: Well,Ithinkthe

    6 consequencenoIthink,JusticeScalia,withall

    7 dueall

    8 JUSTICESCALIA: Youselectonthebasisof

    9 whataffectitwillhaveonrace.

    10 GENERALVERRILLI: Wellwell,butthat

    11 kindofconsideration,solongasthetherulethat

    12 comeslaterisaraceneutralrule,seemstomeis

    13 exactlythekindofthingthatthepluralityopinionof

    14 thisCourtinCrosonsaidinthecontractingcontext

    15 thatgovernmentscoulddo. Theycouldn'tafforda

    16 preferencetominoritycontractors,buttheycoulddo

    17 suchthingstheCourtsuggestedaschangingthebonding

    18 requirementsorchangingotherfinancialrequirementsin

    19 ordertomaketheminoritycontractorswhichtendedto

    20 benewer,smallerbusinessesmoreeligible. Those

    21 those

    22 JUSTICESOTOMAYOR: Tounderscorethat,

    23 becauseIthinkeverybodyisgettingconfusedwiththis,

    24 disparateimpactdoesnotgotowhotheytakeunless

    25 theysetupapractice

    AldersonReportingCompany

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    49

    1 GENERALVERRILLI: That'sthat'scorrect.

    2 JUSTICESOTOMAYOR: thathasthataffect.

    3 GENERALVERRILLI: AndsointheHeartland

    4 cases,withrespecttotheFairHousingAct,thekinds

    5 ofremediesthataregoingtobeimposedarelikethe

    6 kindsofremediesthattheCourtsaidorthe

    7 plurality,excuseme,setinCrosonwouldfind.

    8 And,JusticeKennedy,they'relikethekinds

    9 ofraceneutralconsiderationsthatYourHonor'sopinion

    10 inParentsinvolvesthatwererefined.

    11 JUSTICEBREYER: Whatyou'resayingis

    12 supposethattheplaintiffsinthiscase,thatside,

    13 winstotrythey'retryingtowin. Thedefense,

    14 ontheotherit'snottruethatthatmeansall

    15 Section8housingisnowgoingtobeorevenalarge

    16 amountisgoingtobeputinrichneighborhoods.

    17 First,theycandefendonthegroundthatwe

    18 don'thavethatpractice,toputitinpoor

    19 neighborhoods. Second,theycansay,yes,wedo,but

    20 don'tyouseethatisn'tgoingtohurtminorities

    21 becauseitputsthoseminoritiesinhousingwheremany

    22 ofthemare,unfortunately,inpoorneighborhoods,and

    23 itdoesn'thavethegreateffectondesegregationthat

    24 theythink. Orthird,iftheyloseonthat,theycan

    25 saybutanywayit'sjustifiedforawholebunchof

    AldersonReportingCompany

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    1 reasons.

    2 GENERALVERRILLI: Yes,butso

    3 JUSTICEBREYER: Sotheansweriscaseby

    4 case,theyhaveaspecificsetofformsthatgive

    5 answers

    6 GENERALVERRILLI: That's

    7 JUSTICEBREYER: andjudgesjudgeit

    8 GENERALVERRILLI: Absolutely.

    9 JUSTICEBREYER: andHUDcancomeinand

    10 decide,andthereisnoneedtothrowthewholebaby

    11 outorIdon'tknowwhetherit'sthebabyorthebath

    12 water,whateveryou'rethrowingout. Butyoudon'thave

    13 tothrowoutthewholebigthinginordertoprevent

    14 CHIEFJUSTICEROBERTS: SojustI'm

    15 sorry. SoJustsoIcanunderstand,because,again,I

    16 don'tknowwhatyou'reshootingfor. Twodifferent

    17 communities,okay? Theyhavethesetaxcredits,

    18 whatevertogiveout. Oneplace,theygiveittothe

    19 housingintheaffluentneighborhood;theother,they

    20 giveittothehouseinthelowincomeneighborhood.

    21 They'rebothsuedfordisparateimpact. Intheone,

    22 theysay,oh,no,no,thisisgoodbecausewe're

    23 promotingintegrationsotheimpactonminoritiesisnot

    24 aproblem. Andtheothersays,no,thisisgoodbecause

    25 we'rerevitalizinglowincomeneighborhoodsandthat

    AldersonReportingCompany

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    1 helpstheminorities. Theybothwin?

    2 MR.VERRILLI: Theymightbothwin,yes.

    3 AndifIcould,Ijustwanttofinishuponthe

    4 constitutionalavoidancepoint,ifIcouldconnecting

    5 somethingJusticeBreyersaid.

    6 Ifthereareparticularinstancesinwhich

    7 thereisaconcernthattherecognitionofdisparate

    8 impactliabilitycouldresultinnotjustracebased

    9 thinkingaboutneutralmeansbutracebasedremedies,it

    10 seemstometheanswerthereistheanswerthatthe

    11 Courtusuallygives,whichisthinkaboutthemonan

    12 asappliedbasis. Butthatisn'tajustificationfor

    13 denyingHUDtheauthoritythatwesubmitthatHUDhas

    14 underundertheregulationsunderthestatuteas

    15 amendedin1988whenCongressspecificallygaveHUDthe

    16 authoritytointerprettheseprovisionsanddidso

    17 againstthebackdropofimposingtheexemptionswhich

    18 presupposeddisparateimpactliabilityandreenacting

    19 thestatuteinwhich,afterninecourtsofappealshad

    20 foundthatitdidimposedisparateimpactliability.

    21 ThequestionhereiswhetherunderChevronthestatutory

    22 textreadfairlyin1988,takingallprovisionsofthe

    23 statutetogether,unambiguouslyforeclosesHUDfrom

    24 findingdisparateimpactliabilityhere. Andweassume

    25 andweawesubmitthattheanswertothatquestion

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    1 mustbeno,itdoesnotunambiguouslyforforbidHUD

    2 fromreachingtheconclusionthatitreachedand,

    3 therefore,theanswertothequestionpresentedinthis

    4 casewhichiswhethertheFairHousingActrecognizes

    5 disparateimpactliabilityisyes.

    6 JUSTICEKAGAN: AndGeneral,couldIjust

    7 askIdon'tknowalotaboutthisareaandItakeit

    8 thatoneofthethingsthatyouarewarningusagainst

    9 isseeingtheentireareathroughtheprismofthisone

    10 quiteunusualcase. Andyou'vereferredafewtimesto

    11 sortoftheHeartlandcaseswithoutreallygettingout

    12 whattheHeartlandcasesare. So,forme,whatare

    13 they?

    14 MR.VERRILLI: Surethey'rethekindmay

    15 Ianswer,Mr.ChiefJustice?

    16 CHIEFJUSTICEROBERTS: Sure.

    17 MR.VERRILLI: Thankyou. They'rethekinds

    18 ofcasesthathavebeenlitigatedandyou'llseeinthe

    19 courtsofopinions,courtofappeals'opinionsfor35

    20 yearsrestrictionssayatownadoptsarestriction

    21 sayingyoucan'tconverthousingfromownershipto

    22 rentalunlessyou'rerentingtoabloodrelativehasthe

    23 effectofexcludingminorities. Townadoptsan

    24 occupancyrestrictionforapartmentbuildingsthat'sso

    25 tightthatyou'renotgoingtobeabletofamilies

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    1 withkidsaren'tgoingtobeabletolivethere. That

    2 disproportionatelyeffectsminoritiesgroupswithkids.

    3 Thosekindofthings,zoningrestrictions,housing

    4 programrestrictions,thosekindsofrulesarethe

    5 Heartlandcases. Thankyou.

    6 CHIEFJUSTICEROBERTS: Thankyou,General.

    7 GeneralKeller,youhavefourminutesremaining.

    8 ORALARGUMENTOFMR.SCOTTA.KELLER

    9 ONBEHALFOFTHEPETITIONER

    10 MR.KELLER: Mr.ChiefJustice,toanswer

    11 yourquestion,bothwouldopenupliabilityfor

    12 disparateimpact. HeretheDepartmentcouldhavefaced

    13 disparateimpactliabilityifitwasgoingtotaketax

    14 creditsandsendthemtolowerincomeneighborhoodsor

    15 moreaffluentneighborhoods. Andeven

    16 JUSTICESOTOMAYOR: Well,youkeepsaying

    17 that,butthat'snotwhathappenedhere. Theremedywas

    18 nottotellyoutomoveyourdevelopmentfromonearea

    19 toanother. Theremedyhereisitdidpreclude

    20 developmentnexttolandfills,butitalsoincluded

    21 otherothertinkeringwiththequalifications. But

    22 you'regoingtostillneedpeoplewhowanttodo

    23 MR.KELLER: Butintheremedyinthiscase

    24 thedistrictcourt

    25 JUSTICESOTOMAYOR: whattheywanttodo.

    AldersonReportingCompany

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    1 MR.KELLER: keptitandretained

    2 jurisdictionforfiveyearssoevenifthedisparity's

    3 notclosed

    4 JUSTICESOTOMAYOR: Thathastogowithyour

    5 attacksontheremedy. Thathasdoesn'thave

    6 anythingtodowithwhatdisparateimpactasanapproach

    7 setoutbyHUDdirectshouldbedone.

    8 MR.KELLER: Andeachregulatedentityis

    9 goingtohavetoexaminetheracialoutcomesoftheir

    10 policiesineveryzoningdecisionmade

    11 JUSTICESOTOMAYOR: No.

    12 MR.KELLER: ineveryraiseinrent

    13 JUSTICESOTOMAYOR: Whattheydoiswhat

    14 everyoneshoulddo. Isbeforetheysetupanypolicies,

    15 thinkaboutwhatisthemostraceneutralpolicy.

    16 That'saverydifferentthing. That,Ithink,everyone

    17 isobligatedtodo.

    18 MR.KELLER: Andthat'spreciselywhatthe

    19 Department

    20 JUSTICESOTOMAYOR: It'sonlyiftheother

    21 sideprovesthataqualificationhasanaraceeffect

    22 that'snotnecessary,cantheywin.

    23 MR.KELLER: AndheretheDepartmentengaged

    24 inraceneutralpolicies.

    25 JusticeAlito,toyourpointaboutSmithand

    AldersonReportingCompany

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    1 theADA'sreasonablefactorsotherthanageexemptions,

    2 therearethreethingsthatdistinguishthatfromthis

    3 case. First,there'sanimportanttexturaldifference.

    4 TheADA'sreasonablefactorotherthanageprovision

    5 referredtoactionsotherwiseprohibited. AndtheCourt

    6 inSmithinterpretedthatasrecognizingthedisparate

    7 impactliabilitycouldlieundertheADA. IntheFair

    8 HousingAct,wedon'thavethatlanguage. The

    9 exemptionssaynothingintheFHAprohibitsorlimits.

    10 Sothisistrulyasafeharbor.

    11 Second,SmithalreadynotedthattheADA

    12 usedadverselyeffect. Andthird,Smithdidn'tinvolve

    13 raceandsonoconstitutionalavoidancecanandwould

    14 haveappliedthere.

    15 Andonconstitutionalavoidance,thereason

    16 we'reheretodayisbecausetheTexasdepartmentdidnot

    17 useracebaseddecisionmaking. Takeahypothetical

    18 fromGruder. IftheUniversityofMichiganhadsaid,

    19 theincomingclassmusthave30percentofitsincoming

    20 classofacertainraceandwepreferthat

    21 raceconsciousorraceneutralmeanswereusedtodo

    22 that,butifthosearen'tavailable,racebasedmeans

    23 mustbeused,thatwouldbesuspect. Attheveryleast

    24 allweneedtoshowisaconstitutionaldoubtforthe

    25 constitutionalavoidancecanontoapplyhereandthe

    AldersonReportingCompany

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    1 remedysaidthattherewasone.

    2 JUSTICESOTOMAYOR: Whatintheremedy

    3 orderedherewasracebased? Whatremedysaidyouhave

    4 totakein10,20,15percent?

    5 MR.KELLER: Theparticularremedyhere

    6 wasn'tracebased,buttheliabilitytobeginwithand

    7 whetherthedisparityisgoingtocloseandwhetherthe

    8 Departmentisgoingtoremainnotincompliancewiththe

    9 FairHousingAct,isstillracebased.

    10 Thankyou,Mr.ChiefJustice.

    11 CHIEFJUSTICEROBERTS: Thankyou,Counsel.

    12 Thecaseissubmitted.

    13 (Whereupon,at11:21a.m.,thecaseinthe

    14 aboveentitledmatterwassubmitted.)

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    AldersonReportingCompany

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    57

    A

    a.m 1:16 3:2

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    40:8 42:1 43:7

    50:19 53:15

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    17:25 19:22

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    29:17,20 51:13

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