disparate impact

CVS Pharmacy, Inc. v. Doe

Issues

Does Section 504 of the Rehabilitation Act’s prohibition on discrimination based on disability provide a cause of action for plaintiffs who allege that a neutral policy disproportionately burdened them?

Court below

United States Court of Appeals for the Ninth Circuit

This case would have asked the Court to determine whether Section 504 of the Rehabilitation Act, which prohibits discrimination based on disability, provides a cause of action for disparate impact claims. Numerous John Does use CVS Pharmacy’s prescription plan for medication to treat HIV/AIDS, which only allows drugs to be dispensed through mail or CVS pharmacies. These John Does sued, arguing that this plan had a disparate impact on individuals living with HIV/AIDS and meaningfully impacted their health. Petitioners CVS Pharmacy et al. contend that claims under Section 504, which is incorporated in Section 1557 of the Affordable Care Act, require evidence of discriminatory intent or differential treatment. Respondents John Doe, et al., argue that Section 504 provides for disparate impact claims. Although this case will no longer be argued in front of the Court, due to an agreement for dismissal by the parties, the case could have had implications for the administration of health insurance and pharmacy benefits programs, and the risk of litigation.

Questions as Framed for the Court by the Parties

Whether Section 504 of the Rehabilitation Act of 1973 — and by extension Section 1557 of the Patient Protection and Affordable Care Act, which incorporates the “enforcement mechanisms” of other federal antidiscrimination statutes — provides a disparate-impact cause of action for plaintiffs alleging disability discrimination.

Petitioners, CVS Pharmacy, Inc., Caremark L.L.C. and Caremark California Specialty Pharmacy, L.L.C., (collectively “CVS”) are all affiliates of CVS Health Corporation. Doe v. CVS Pharmacy, at 1207. Respondents John Doe et al. (“Does”) are enrolled in CVS’s prescription benefit plan for medication to treat HIV/AIDS.

Additional Resources

Mary Anne Pazanowski, Mail-Order Drug Dispute Could Clarify Obamacare Bias Protections, Bloomberg Law (May 7, 2021).
Michael Roppolo, CVS withdraws Supreme Court case on disability rights, announces new partnership, CBS News (Nov. 11, 2021).
Consumer Watchdog, Groups Commend CVS's Withdrawal of U.S. Supreme Court Challenge To HIV Rights, says Consumer Watchdog, PR Newswire (Nov. 11, 2021).

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Magner v. Gallagher

Issues

Whether owners of rental properties may claim St. Paul city officials violated the Fair Housing Act by aggressively enforcing the City’s housing codes, which increased rental costs and reduced the supply of low-income housing whose renters are disproportionately African-American.

If such a claim is allowed, whether the appropriate test is the burden-shifting test used by the Eighth Circuit.

Court below

United States Court of Appeals for the Eighth Circuit

Thomas J. Gallagher, together with other owners and former owners of rental properties, sued the City of St. Paul, Minnesota for violating the Fair Housing Act, which prohibits discriminatory housing practices. Gallagher claimed that the City’s aggressive and targeted enforcement of city housing codes against rental units reduced the availability of low-income rentals, with a disparate impact upon African-Americans. The Eighth Circuit held that Gallagher stated a valid FHA claim under the disparate impact theory. St. Paul appeals, arguing that, because the FHA requires evidence of discriminatory intent, Gallagher’s disparate impact claim is insufficient to establish a violation under the Act. Gallagher contends that, given the Court’s prior findings regarding disparate impact claims under the similarly-worded Age Discrimination in Employment Act and Title VII, disparate impact claims are cognizable under the FHA. The Supreme Court’s decision may affect the extent to which city officials can use ordinances, code enforcement actions, and other land-use regulations to regulate low-income neighborhoods.

Questions as Framed for the Court by the Parties

The Fair Housing Act makes it unlawful "[t]o refuse to sell or rent after the making of a bona fide offer ... or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin." 42 U.S.C. § 3604(a). Respondents are owners of rental properties who argue that Petitioners violated the Fair Housing Act by "aggressively" enforcing the City of Saint Paul's housing code. According to Respondents, because a disproportionate number of renters are African-American, and Respondents rent to many African-Americans, requiring them to meet the housing code will increase their costs and decrease the number of units they make available to rent to African-American tenants. Reversing the district court's grant of summary judgment for Petitioners, the Eighth Circuit held that Respondents should be allowed to proceed to trial because they presented sufficient evidence of a "disparate impact" on African-Americans.

The following are the questions presented:

Are disparate impact claims cognizable under the Fair Housing Act?
If such claims are cognizable, should they be analyzed under the burden shifting approach used by three circuits, under the balancing test used by four circuits, under a hybrid approach used by two circuits, or by some other test?

This case concerns the proper interpretation of Section 804(a) of the Fair Housing Act (“FHA” or “Act”). Respondents Thomas J. Gallagher, and other owners and former owners of rental properties in St. Paul, Minnesota (collectively, “Gallagher”), sued Petitioners Steve Magner and other city officials of St.

Written by

wac57

twang

Edited by

coregan

Additional Resources

Bank Talk: Magner v. Gallagher: The Sunset for the Disparate Impact Claim (Jan. 18, 2012)
PLF Liberty Blog: Some reader comments on Magner v. Gallagher (Jan. 9, 2012)
Examiner.com: Court Brief in Magner v. Gallagher Seeks to Limit Racial Preferences, Bad Loans (Jan. 6, 2012)

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Mount Holly v. Mt. Holly Garden Citizens in Action, Inc.

Issues

Can disparate impact claims be brought under Section 804(a) of the Fair Housing Act absent any evidence of intentional discrimination?

(Note: This case settled on November 13, 2013. The Supreme Court dismissed the case on November 15, 2013.)

Court below

United States Court of Appeals for the Third Circuit

This case asked whether disparate impact claims are cognizable under Section 804(a) of the Fair Housing Act (“FHA”). That section makes it unlawful “to refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.” The Township of Mount Holly argued that the plain language of the statute does not permit disparate treatment claims, whereas residents of Mount Holly Gardens argued the opposite. Further, the Township asserted that permitting disparate-impact claims raises constitutional concerns—including Equal Protection Clause and Tenth Amendment violations, but the Residents countered that no such violations result from acknowledging disparate-impact liability under the statute. This case presented the Supreme Court with the opportunity to definitively rule on whether the FHA allows for disparate-impact claims. On November 13, 2013, the parties settled, and on November 15, 2013, the Supreme Court dismissed the case.

Questions as Framed for the Court by the Parties

Are disparate impact claims cognizable under the Fair Housing Act?

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Facts

Congress passed the Civil Rights Act of 1968, which includes the Fair Housing Act (“FHA”), to secure equal housing opportunities regardless of race, creed, or national origin.