Supreme Court Highlights, Part 2: What You Need to Know, and How Your City Will Be Affected

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You can view the first installment of this post here.

The Supreme Court recently ruled on a number of cases that directly affect cities nationwide. (Getty Images)

Same-Sex Couples Now Have A Constitutional Right to Marry

Obergefell v. Hodges will be celebrated and condemned internationally.

In a 5-4 decision written by Justice Kennedy, the Supreme Court held that same-sex couples have a constitutional right to marry. All state laws and court decisions banning same-sex marriage are now invalid. The National League of Cities signed onto an amicus brief in this case supporting the couples.

Justice Kennedy’s opinion can be described as a celebration of marriage itself.  “No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice and family.”

More specifically, the majority opinion offers four principles that demonstrate why the fundamental right to marry applies with equal force to same-sex couples. First, the right to choose who you marry is “inherent in the concept of individual autonomy.” Second, because the right to marry is “unlike any other in its importance,” it should not be denied to any two-person union. Third, marriage between same-sex couples safeguards children and families just as it does for opposite-sex couples. Finally, marriage is a keystone of American social order from which no one should be excluded.

The Court relied on the Constitution’s Fourteenth Amendment Due Process Clause and the Equal Protection Clause in its opinion. In previous marriage cases like Loving v. Virginia, invalidating bans on interracial marriage, the Court relied on both Clauses. The Court did not state what standard of review it applied to decide this case.

The Court rejected the argument that sufficient debate had not occurred over this issue, noting that “individuals need not await legislative action before asserting a fundamental right.”

After acknowledging that many may take the view that same-sex marriage should not be condoned on religious grounds, the Court stated that the First Amendment protects this view and the views of religious organizations.

Justice Kennedy’s final words in his majority opinion effectively summarize his opinion:

“[The] hope [of the same-sex couples in this case] is not to be condemned to live in loneliness, excluded from one of civilization’s oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.”

Chief Justice Roberts and Justices Scalia, Thomas, and Alito dissented.

Federal Government Wins Health Care Case:  ACA Subsidies Continue

The third time’s a charm for the Affordable Care Act (ACA). King v. Burwell is the first complete victory for the law.

In 6-3 decision, the Supreme Court ruled today that health insurance tax credits are available on the 34 Federal Exchanges. The Court’s opinion focused largely on the consequences of ruling to the contrary: the destruction of health insurance markets.

Chief Justice Roberts, writing for the majority, began his opinion by pointing out that the Affordable Care Act relies on three reforms: making sure health insurance is available to everyone regardless of their heath and not charging higher premiums depending on health; requiring everyone to be insured; and offering tax credits to those with low incomes so they can afford insurance. If only the first reforms were to be implemented, a well-documented economic “death spiral” would occur, wherein health insurance premiums skyrocket because only the sick buy insurance.

The ACA allows the states and the federal government to sell insurance on health care exchanges. The ACA states that tax credits are available when insurance is purchased through “an exchange established by the state.”

So the technical legal question in this case was whether a Federal Exchange is “an exchange established by the state” that may offer tax credits.

The Supreme Court said yes. The Court first concluded that the above language is ambiguous. But by looking at it in the context of the entire statute, the meaning of the language became clearer. Specifically, if tax credits weren’t available on Federal Exchanges “it would destabilize the individual insurance market in any state with a Federal Exchange, and likely create the very ‘death spirals’ that Congress designed the Act to avoid.”

The Chief Justice’s analysis is simple and pragmatic:

“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. [The statutory language at issue] can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt.”

As a result of this decision, the status quo remains: if an individual otherwise eligible for a tax credit buys health insurance on a State Exchange or a Federal Exchange, the tax credit will be available.

Justices Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan joined the majority opinion. Justices Scalia, Thomas, and Alito dissented.

SCOTUS Rules Disparate-Impact Fair Housing Claims are Possible But Limited

If you were surprised by the Supreme Court’s ruling in the Affordable Care Act Case, you may have even been more surprised by the Court’s ruling in the Fair Housing Act case.

In Texas Department of Housing and Community Affairs v. Inclusive Communities Project the Supreme Court held 5-4 that disparate-impact claims may be brought under the Fair Housing Act (FHA). All Federal Circuit Courts of Appeals had decided this issue, ruling that such claims were possible. The Supreme Court was expected to come to the opposite conclusion (or else why would they have taken this case?). Having taken up this question twice before, only to have the cases settle, the Court has finally resolved it.

While state and local governments are more likely to be sued under the FHA, they do occasionally sue others for violating it. Justice Kennedy pointed out at the end of his majority opinion that the City of San Francisco filed an amicus brief supporting disparate-impact liability under the FHA, despite being a “potential defendant.”

In a disparate-impact case, a plaintiff is claiming that a particular practice isn’t intentionally discriminatory but instead has a disproportionately adverse impact on a particular group.

The Inclusive Communities Project (ICP) sued the Texas Department of Housing and Community Affairs, claiming that its selection criteria for federal low-income tax credits in Dallas had a disparate impact on minorities, in violation of the FHA. Specifically, ICP claimed the Department was giving too many tax credits to low-income housing in predominately black inner-city areas compared to predominately white suburban neighborhoods. While 92% of low-income housing tax credits in Dallas were located in census tracts with less than 50% white residents, federal law favors distribution of such tax credits in low-income areas.

The Court held that disparate impact claims are cognizable under the FHA. In prior cases, the Court held that disparate impacts claims are possible under Title VII (prohibiting race, etc. discrimination in employment) and the Age Discrimination in Employment Act relying on the statutes’ “otherwise adversely affect” language. The FHA uses similar language — “otherwise make unavailable” — in prohibiting race, etc. discrimination in housing. And Congress seems to have acknowledged that disparate impact claims are possible under the FHA. Congress amended the FHA in 1988 to include “three exemptions from liability that assume the existence of disparate-impact claims.” (By 1988, nine Courts of Appeals had held ruled in favor of such claims.) Finally, the Court reasoned that recognizing disparate-impact claims is “consistent with the FHA’s central purpose” — to eradicate housing discrimination.

Justice Kennedy opined that when the lower court takes this case up again it “may be seen simply as an attempt to second-guess which of two reasonable approaches a housing authority should follow in the sound exercise of its discretion in allocating tax credits for low income housing.” To make sure disparate-impact lawsuits aren’t successful in this instance, he suggests the following: first, governments and developers should be able to maintain a housing policy that they can prove is necessary to achieve a valid interest; second, disparate-impact claims that, like this one, rely on a statistical disparity will fail if the plaintiff can’t prove that the defendant’s policy caused the disparity; and third, remedies must be consistent with the constitution and not include quotas.

Why You Should Care About SCOTUS’s Recent Case Involving Raisins

In Horne v. Department of Agriculture the Supreme Court held 8-1 that the federal government violated the Fifth Amendment Takings Clause by physically setting aside a percentage of a grower’s raisin crop each year without pay. At least six other agriculture set aside programs are in trouble as a result of this case. But what about its impact on state and local government?

Horne is a complicated case with four issues. The holding most relevant to state and local government is that taking an interest in personal property (here, raisins) rather than land is a per se taking rather than a “more flexible and forgiving” regulatory taking. As the International Municipal Lawyers Association amicus brief points out, an argument can now be made that towing illegal parked cars, removing abused and neglected pets, confiscating drugs or pirated copyrighted materials, and confiscating guns from felons might amount to takings requiring just compensation.

Per the Agricultural Marketing Act, raisin growers are required in certain years to give a percentage of their crops to the federal government free of charge to maintain a stable market for raisins. Raisin growers sometimes receive proceeds from the sale of set-aside raisins. The Hornes refused to set aside raisins for the federal government and were fined the fair market value of the raisins for failing to comply with the order. The Hornes sued, claiming the set-aside requirement was an unconstitutional taking.

The Court first held that the appropriation of personal property is a per se taking just like the appropriation of land, stating that the text, history and precedents interpreting the Takings Clause don’t suggest a different rule. The Court next concluded the government could not avoid paying just compensation because the growers in this case had a contingent interest in the value of the set aside raisins. “The fact that the growers retain a contingent interest of indeterminate value does not mean there has been no physical taking, particularly since the value of the interest depends on the discretion of the taker, and may be worthless, as it was for one of the two years at issue here.” To the question of whether the government’s mandate to turn over raisins as a condition of participating in commerce is a per se taking, the Court said yes in this case. It is not enough that the growers voluntarily chose to sell raisins rather than wine.

Only five Justices agreed that the Hornes’ just compensation should be the fair market value of the set aside raisins (and that the fine for disobeying the order should be dropped). Three Justices would have sent the case back to the lower court to determine whether, through the price supports for the raisins the Hornes did not have to set aside, they received just compensation.

Only time will tell whether people will try to bring takings claims against state and local governments, citing Horne for government seizures of personal property more common than raisins — and whether those claims will be successful.

Lisa Soronen bio photoAbout the Author: Lisa Soronen is the Executive Director of the State and Local Legal Center and a regular contributor to CitiesSpeak.