Attorney General Kwame Raoul and District of Columbia Attorney General Brian Schwalb led a coalition of 18 attorneys general in filing an amicus brief urging a federal court to reject a challenge to the Department of Housing and Urban Development’s (HUD) Discriminatory Effects Rule. The homeowners insurance industry is challenging the rule, which under the Fair Housing Act, says insurers and other parties are liable for housing practices that may appear neutral but in reality are discriminatory and have a “disparate impact” on certain populations.
“Accessible homeowners insurance is vital to combatting housing discrimination, and disparate impact litigation can help address both intentional and unintentional bias in home insurance policies and practices,” Raoul said. “Discriminatory insurance policies should not be tolerated as we work to ensure all homeowners, regardless of race, national origin or other protected characteristic, have access to fair housing.”
Courts have long recognized the Fair Housing Act prohibits housing practices that, while not overtly discriminatory, have a disparate impact on individuals based on race, national origin or other protected characteristics. However, a trade association representing property and casualty insurance companies sued to have HUD’s Discriminatory Effects Rule declared invalid as it applies to homeowners insurers. The insurers argued that HUD should have granted a blanket exemption to the rule and its failure to do so makes the rule invalid for multiple reasons, including because many states require insurers to rely only on market-based factors in making underwriting decisions.
Raoul and the coalition filed their brief in the U.S. Court of Appeals for the District of Columbia Circuit, arguing that disparate-impact liability is a critical tool to fight housing discrimination, which is a major and ongoing cause of widespread residential segregation. Raoul and the attorneys general explain the law in many states already imposes disparate-impact liability on entities in the housing industry, so the insurers are wrong to invoke state law as a basis for their requested exemption.
This brief is the latest example of Raoul’s work addressing discriminatory practices in the housing industry. In October 2023, Raoul led a coalition supporting HUD in a separate challenge to the same rule. The district court in that case rejected a challenge to the rule in March 2024, citing the coalition’s brief as a “significant” reason to uphold the rule. That case is now on appeal.
Joining Raoul and Schwalb in filing the brief are the attorneys general of Arizona, California, Colorado, Delaware, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island and Washington.
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