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(IBD) The opening salvo in a high court test of the administration's "disparate
impact" theory shreds its justification for shaking down banks for alleged
racism.
Under the dubious legal theory, which has a ridiculously low standard of proof,
the Justice Department and HUD have extorted huge settlements from lenders even
in cases where there was zero evidence of actual racial discrimination.
But a bruising brief filed last week by the petitioner in a landmark
civil-rights case — Township of Mount Holly v. Mt. Holly Gardens Citizens in
Action — could convince the Supreme Court that such disparate-impact claims are
illegal.
The 48-page brief argues the administration, which earlier this year formalized
its use of the theory to police "fairness" in housing and lending across all
relevant regulatory agencies, is grossly misinterpreting the Fair Housing Act.
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