Jan 23, 2013

Posted in Uncategorized

DOJ Role In Settlement of Disparate Impact FHA Case Holding Up Sri Srinivasan’s D.C. Circuit Nomination

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Remember Magner v. Gallagher? It was a Supreme Court case last year that considered the application of the disparate impact standard under the Fair Housing Act. Two weeks before the case was to be argued, it was voluntarily dismissed. But why?

WSJ reported that Assistant Attorney General Thomas Perez, the head of the Civil Rights Division pressured the City of St. Paul to withdraw the case.

Readers may recall that the City of St. Paul, Minnesota in February withdrew a case that the Supreme Court had already agreed to hear—and the city thought it would win—under pressure from the Department of Justice (“Squeezed in St. Paul,” Feb. 13). Our source at the time wouldn’t name names at Justice, but now Reuters reports that the man working the phones was none other than Assistant Attorney General Thomas Perez, the head of the Civil Rights Division. A Justice spokeswoman confirmed that Mr. Perez spoke to St. Paul and the plaintiff in the case.

Mr. Perez had a personal interest in stopping the Supreme Court from hearing Magner v. Gallagher, a fight between St. Paul and local slumlords who accused the city of racism for enforcing its housing code. The city was presenting the Court with a dispute about the legality of disparate impact analysis under the Fair Housing Act. The text of that law doesn’t explicitly allow for such analysis. The city figured it would win—and said so publicly.

If the Justices had found disparate impact illegal under the Fair Housing Act, one of the government’s biggest hammers against banks and others would disappear. So Mr. Perez decided to press the city to take the decision out of the hands of the nation’s highest Court so he could continue pursuing a policy that the Justices probably would have found illegal. Another triumph of politics over the law.

Well, now DOJ’s role in that case is holding up the confirmation of Sri Srinivasan’s to the D.C.

Senate Republicans are holding up the nomination of Sri Srinivasan for the U.S. Court of Appeals for the D.C. Circuit, saying they want to know more about his role in the abrupt settlement of a Fair Housing Act case a year ago.

Senator Patrick Leahy (D-Vt.) today said Republican members of the Senate Judiciary Committee have delayed a hearing for Srinivasan, currently the principal deputy U.S. solicitor general, while they seek more information about an agreement reached between the Department of Justice and the City of St. Paul, Minn.

Senator Chuck Grassley (R-Iowa), the ranking member of the judiciary committee, has since written several letters to the DOJ requesting more information and documents about how the agency and the city came to the sudden agreement, including a “quid pro arrangement that potentially cost taxpayers $180 million.”

A letter from Grassley and other congressional Republicans to Attorney General Eric Holder Jr. alleges that in exchange for the city dropping its case, the Justice Department declined to intervene in unrelated False Claims Act cases that could have recovered that money.

Grassley announced in November that questions about the same agreement would hold up the confirmation of Tony West, who was nominated to be the associate attorney general, unless he received documents from the DOJ.

Let’s see if we learn how that settlement went down.

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