4 Bias 4 Bias

4.1 Proposed Rule, HUD's Implementation of the Fair Housing Act's Disparate Impact Standard, 84 Fed. Reg. 42854 (July 29, 2019) [Excerpt] 4.1 Proposed Rule, HUD's Implementation of the Fair Housing Act's Disparate Impact Standard, 84 Fed. Reg. 42854 (July 29, 2019) [Excerpt]

Note: this has been edited to include only portions relevant to this class, and re-ordered so the text of the proposed rule precedes the discussion of the proposed changes.

II. This Proposed Rule

In response to comments received on HUD's May 15, 2017, notice and June 20, 2018, ANPR, this rule proposes to replace HUD's current discriminatory effects standard at § 100.500 with a new standard and incorporate minor amendments to §§ 100.5, 100.7, 100.70, and 100.120. These amendments are intended to bring HUD's disparate impact rule into closer alignment with the analysis and guidance provided in Inclusive Communities as understood by HUD and to codify HUD's position that its rule is not intended to infringe upon any State law for the purpose of regulating the business of insurance. HUD intends these regulations as an update to HUD's existing framework for evaluating administrative actions alleging a claim of disparate impact and to provide guidance to members of the public seeking to comply with the Fair Housing Act or in bringing a claim for disparate impact that meets the prima facie requirements outlined in Inclusive Communities.
 
[sections omitted]

§ 100.500 Discriminatory Effect Prohibited

Section 100.500 continues to provide that liability under the Fair Housing Act may be established based on a specific practice's discriminatory effect on members of a protected class, even if the specific practice was not motivated by a discriminatory intent. HUD seeks to amend this regulation to provide additional guidance in light of Inclusive Communities; this proposed revision represents HUD's interpretation of disparate impact law under the Fair Housing Act. Paragraph (a) would be slightly amended to reflect the removal of a definition for discriminatory effect and the changes to the burden-shifting framework. The previous definition simply reiterated the elements of a disparate impact claim, which HUD believes is now adequately defined in more detail in the later sections, thus, making the definition unnecessary. New paragraphs (b) through (d) would provide a new burden-shifting framework and new paragraph (e) would address the application of the section to the business of insurance.

[Here is HUD's proposed rule:

§ 100.500 Discriminatory effect prohibited.

(a) General. Liability may be established under the Fair Housing Act based on a specific policy's or practice's discriminatory effect on members of a protected class under the Fair Housing Act even if the specific policy or practice was not motivated by a discriminatory intent.

(b) Prima facie burden. To allege a prima facie case based on an allegation that a specific, identifiable policy or practice has a discriminatory effect, a plaintiff or the charging party (collectively, “plaintiff”) must state facts plausibly alleging each of the following elements:

(1) That the challenged policy or practice is arbitrary, artificial, and unnecessary to achieve a valid interest or legitimate objective such as a practical business, profit, policy consideration, or requirement of law;

(2) That there is a robust causal link between the challenged policy or practice and a disparate impact on members of a protected class that shows the specific practice is the direct cause of the discriminatory effect;

(3) That the alleged disparity caused by the policy or practice has an adverse effect on members of a protected class;

(4) That the alleged disparity caused by the policy or practice is significant; and

(5) That there is a direct link between the disparate impact and the complaining party's alleged injury.

(c) Failure to allege a prima facie case. A defendant, or responding party, may establish that a plaintiff's allegations do not support a prima facie case of discriminatory effect under paragraph (b) of this section, if:

(1) The defendant shows that its discretion is materially limited by a third party such as through:

(i) A Federal, state, or local law; or

(ii) A binding or controlling court, arbitral, regulatory, administrative order, or administrative requirement;

(2) Where a plaintiff alleges that the cause of a discriminatory effect is a model used by the defendant, such as a risk assessment algorithm, and the defendant:

(i) Provides the material factors that make up the inputs used in the challenged model and shows that these factors do not rely in any material part on factors that are substitutes or close proxies for protected classes under the Fair Housing Act and that the model is predictive of credit risk or other similar valid objective;

(ii) Shows that the challenged model is produced, maintained, or distributed by a recognized third party that determines industry standards, the inputs and methods within the model are not determined by the defendant, and the defendant is using the model as intended by the third party; or

(iii) Shows that the model has been subjected to critical review and has been validated by an objective and unbiased neutral third party that has analyzed the challenged model and found that the model was empirically derived and is a demonstrably and statistically sound algorithm that accurately predicts risk or other valid objectives, and that none of the factors used in the algorithm rely in any material part on factors that are substitutes or close proxies for protected classes under the Fair Housing Act; or

(3) The defendant demonstrates that the plaintiff has failed to allege sufficient facts under paragraph (b) of this section.

(d) Burdens of proof for discriminatory effect. If a case is not resolved at the pleading stage, the burden of proof to establish that a specific, identifiable policy or practice has a discriminatory effect, are as follows:

(1) Plaintiff's burden.

(i) A plaintiff must prove by the preponderance of the evidence, through evidence that is not remote or speculative, each of the elements in paragraphs (b)(2) through (5) of this section; and

(ii) If the defendant rebuts a plaintiff's assertion that the policy or practice is arbitrary, artificial, and unnecessary under paragraph (b)(1) of this section by producing evidence showing that the challenged policy or practice advances a valid interest (or interests), the plaintiff must prove by the preponderance of the evidence that a less discriminatory policy or practice exists that would serve the defendant's identified interest in an equally effective manner without imposing materially greater costs on, or creating other material burdens for, the defendant.

(2) Defendant's burden. The defendant may, as a complete defense:

(i) Prove any element identified under paragraph (c)(1) or (2) of this section;

(ii) Demonstrate that the plaintiff has not proven by the preponderance of the evidence an element identified under paragraph (d)(1)(i) of this section; or

(iii) Demonstrate that the alternative policy or practice identified by the plaintiff under paragraph (d)(1)(ii) of this section would not serve the valid interest identified by the defendant in an equally effective manner without imposing materially greater costs on, or creating other material burdens for, the defendant.

(e) Business of insurance laws. Nothing in this section is intended to invalidate, impair, or supersede any law enacted by any state for the purpose of regulating the business of insurance.]

New Burden-Shifting Framework

The proposed new burden-shifting framework provides, in paragraph (b), that a plaintiff's allegations that a specific, identifiable, policy or practice has a discriminatory effect must plead facts supporting five elements. HUD notes that since Inclusive Communities many parties have failed to identify a “specific, identifiable practice.” [FN36] It is insufficient to identify a program as a whole without explaining how the program itself causes the disparate impact as opposed to a particular element of the program. Plaintiffs must identify the particular policy or practice that causes the disparate impact. Plaintiffs will likely not meet the standard, and HUD will not bring a disparate impact claim, alleging that a single event—such as a local government's zoning decision or a developer's decision to construct a new building in one location instead of another—is the cause of a disparate impact, unless the plaintiff can show that the single decision is the equivalent of a policy or practice.[FN37] In unusual cases, a plaintiff may still be able to succeed at identifying a one-time decision, if the plaintiff can establish that the one-time decision is in fact a policy or practice.[FN38]

The first proposed element would require a plaintiff to plead that the challenged policy or practice is arbitrary, artificial, and unnecessary to achieve a valid interest or legitimate objective. Inclusive Communities requires plaintiffs to allege facts at the pleading stage supporting a prima facie claim of disparate impact and requires courts to analyze these claims “with care” to ensure that “the specter of disparate-impact litigation” does not prevent parties “from achieving legitimate objectives.” [FN39] In accordance with this standard, this proposed rule would require plaintiffs to allege facts plausibly showing that the challenged practice is arbitrary, artificial, and unnecessary. This requirement is supported by Ellis v. City of Minneapolis, which dismissed the plaintiffs' disparate impact claim against the city's housing code for failure to plead facts showing how the housing code was arbitrary, artificial, and unnecessary.[FN40] In Ellis, the challenged housing code was, on its face, intended to require sanitary housing, and the plaintiffs made no attempt to explain how the housing code was arbitrary, artificial, and unnecessary to advance this goal.[FN41] HUD recognizes that plaintiffs will not always know what legitimate objective the defendant will assert in response to the plaintiff's claim or how the policy advances that interest, and, in such cases, will not be able to plead specific facts showing why the policy or practice is arbitrary, artificial, and unnecessary. In such cases, a pleading plausibly alleging that a policy or practice advances no obvious legitimate objective would be sufficient to meet this pleading requirement. However, in cases where a policy or practice has a facially legitimate objective, the plaintiff must allege facts at the pleading stage sufficient to support a plausible allegation that the policy is arbitrary, artificial, and unnecessary.[FN42]

If a plaintiff adequately alleges facts to support the assertion that the practice or policy is arbitrary, artificial, and unnecessary, only then does the defendant have the burden to identify a valid interest or interests that the challenged policy or practice serves, which may then be rebutted by the plaintiff, as described below.[FN43]

The second proposed element would require a plaintiff to allege a robust causal link between the challenged policy or practice and a disparate impact on members of a protected class. Claims relying on statistical disparities must articulate how the statistical analysis used supports a claim of disparate impact by providing an appropriate comparison that shows that the policy is the actual cause of the disparity.[FN44]

The third proposed element would require a plaintiff to allege that the challenged policy or practice has an adverse effect on members of a protected class. This element would require a plaintiff to explain how the policy or practice identified has a harmful impact on members of a particular “race, color, religion, sex, familial status, or national origin.” [FN45] Consistent with Inclusive Communities, it would be insufficient to allege only that the plaintiff is a member of a protected class and would be adversely affected or that members of a protected class are impacted as are all individuals. This element would require the plaintiff to show that the policy or practice has the “effect of discriminating against a protected class” as a group.[FN46]

The fourth proposed element would require a plaintiff to allege that the disparity caused by the policy or practice is significant. Where a disparity exists but is not material, a plaintiff will not have stated a plausible disparate impact claim. If a defendant were subject to liability for policies that have a negligible disparity, the defendant could be forced to “resort to the use of racial quotas” [FN47] to ensure that no subset of its data appears to present a disparate impact. Inclusive Communities specifically noted that courts must “examine with care whether a plaintiff has made out a prima facie showing of disparate impact, and prompt resolution is important . . .” to avoid injecting “racial considerations into every housing decision.” [FN48] Therefore, a plaintiff would be required to show that the statistical disparity identified is material and caused by the challenged policy or practice, rather than attributable to chance.

The fifth proposed element would require a plaintiff to allege that the complaining party's alleged injury is directly caused by the challenge policy or practice. This element seeks to codify the proximate cause requirement under the Fair Housing Act that there be “some direct relation between the injury asserted and the injurious conduct alleged.” [FN49]

If a party brings a claim under paragraph (b), HUD proposes that the defending party may rebut a claim at the pleading stage by asserting that a plaintiff has not alleged facts to support their prima facie claim as explained in paragraph (c).[FN50] Paragraph (c) also provides defendants with three methods through which to establish that plaintiffs have not alleged a disparate impact claim. HUD proposes to provide that the defendants may raise any of these defenses in paragraph (c) through a variety of procedural motions. For example, in a rule 12(b)(6) motion to dismiss, the defendant can make an argument under the paragraph (c) defense that the facts alleged in the complaint fail to allege sufficient facts to support a claim under paragraph (b). Another example is a rule 56 motion for summary judgment where the defendant could assert facts outside of the complaint to substantiate a defense under paragraph (c). For instance, on a rule 56 motion for summary judgment, the defendant may succeed where the defendant “shows that there is no genuine dispute as to any material fact and . . . is entitled to judgment as a matter of law.”

Paragraph (c)(1) provides that the defendant may show its discretion is materially limited by a third party—such as through a Federal law or a State or local law—or a binding or controlling court, arbitral, regulatory, administrative order, or administrative requirement. In cases where a State actor or municipality is the defendant, a State or local law, respectively, may not be considered materially limiting for purposes of this defense.[FN51] This defense would allow a defendant to show that the complaining party has not shown a robust causality as required in Inclusive Communities and codified in paragraph (b)(2), by failing to show that the defendant's policy is the actual cause of the alleged disparate impact.[FN52] This defense partially overlaps with proposed paragraph (e) of this section, which clarifies that nothing in § 100.500 is intended to conflict with State insurance law. This defense applies to any Federal, State, or local law that limits the defendant's discretion. As discussed further in the Business of Insurance section below, § 100.500(e) applies only to State insurance law.

Paragraph (c)(2) provides that, where a plaintiff identifies an offending policy or practice that relies on an algorithmic model, a defending party may defeat the claim by: (i) Identifying the inputs used in the model and showing that these inputs are not substitutes for a protected characteristic and that the model is predictive of risk or other valid objective; (ii) showing that a recognized third party, not the defendant, is responsible for creating or maintaining the model; or (iii) showing that a neutral third party has analyzed the model in question and determined it was empirically derived, its inputs are not substitutes for a protected characteristic, the model is predictive of risk or other valid objective, and is a demonstrably and statistically sound algorithm.

HUD received comments expressing concern that complicated, yet increasingly commonly used, algorithmic models to assess factors such as risk or creditworthiness, should be provided a safe harbor. While disparate impact provides an important tool to root out factors that may cause these models to produce discriminatory outputs, these models can also be an invaluable tool in extending access to credit and other services to otherwise underserved communities. Therefore, HUD proposes these defenses to provide parties with three methods of defending their models where they can show their models achieve “legitimate objectives[.]” [FN53] They are intended to ensure that disparate impact liability is “limited so employers and other regulated entities are able to make the practical business choices and profit-related decisions that sustain a vibrant and dynamic free-enterprise system.” [FN54] This section is not intended to provide a special exemption for parties who use algorithmic models, but merely to recognize that additional guidance is necessary in response to the complexity of disparate impact cases challenging these models. HUD proposes that a successful defense under this section would demonstrate the lack of a robust causal link between the defendant's use of the model and the alleged disparate impact, as described below.

The first defense allows a defendant to provide analysis showing that the model is not the actual cause of the disparate impact alleged by the plaintiff. It allows the defendant to break down the model piece-by-piece and demonstrate how each factor considered could not be the cause of the disparate impact and to show how each factor advances a valid objective. This defense simply lays out the steps that a defendant would take in defending its actions. A defendant will succeed under this defense where the plaintiff is unable to then show that the defendant's analysis is somehow flawed, such as by showing that a factor used in the model is correlated with a protected class despite the defendant's assertion.

The second defense provides that a defendant can show that use of the model is standard in the industry, it is being used for the intended purpose of the third party, and that the model is the responsibility of a third party. It is similar to the defense that the defendant's actions are materially limited by law, as discussed above, in that it recognizes that there are situations in which standard practice is so clearly established that the proper party responsible for the challenged conduct is not the defendant, but the party who establishes the industry standard. In these situations, the defendant may not have access to the reasons these factors are used or may not even have access to the factors themselves, and, therefore, may not be able to defend the model itself, even where a perfectly rational reason exists for its use. Further, if the plaintiff prevails, the plaintiff would only remove the model from use by one party, whereas suing the party that is actually responsible for the creation and design of the model would remove the disparate impact from the industry as a whole. A plaintiff may rebut this allegation by showing that the plaintiff is not challenging the standard model alone, but the defendant's unique use or misuse of the model, as the cause of the disparate impact.

The third defense is similar to the first and provides defendants with another method of showing that the model is not the actual cause of the disparate impact. This defense allows defendants to prove through the use of a qualified expert that the model is not the cause of a disparate impact. A plaintiff may rebut this defense by showing that the third party is not neutral, that the analysis is incomplete, or that there is some other reason why the third party's analysis is insufficient evidence that the defendant's use of the model is justified.

Given the complicated nature of this issue, HUD is specifically soliciting comments on the nature, propriety, and use of algorithmic models as related to the defenses in (c)(2).

Paragraph (c)(3) provides that a defendant may make any additional claims that the plaintiff has failed to allege sufficient facts to support a prima facie case under paragraph (b).

If a party alleges facts sufficient to show a prima facie case under paragraph (b), a case proceeds beyond the pleading stage. Under paragraph (d)(1), HUD's proposed rule provides that the plaintiff has the burden of proving by a preponderance of the evidence each of the elements of the prima facie case, established not by statistical imbalances or disparities alone, but through evidence that is not remote or speculative. A plaintiff may now have access to discovery to establish facts supporting each allegation, including the allegation that the identified policy or practice is “arbitrary, artificial, and unnecessary.” In addition, a defendant may show that the policy or procedure advances a valid interest. The plaintiff must counter this by proving by a preponderance of the evidence that a less discriminatory policy or practice would serve the interest in an equally effective manner without imposing materially greater costs on, or creating other material burdens for, the defendant, consistent with existing disparate impact case law.[FN55]

Under paragraph (d)(2), the proposed rule provides that the defendant may rebut a plaintiff's case by proving any element identified under paragraph (c)(1) or (2). The defendant may also rebut a plaintiff's case by demonstrating that the plaintiff has not met the burden of proof laid out in paragraph (d)(1), either by failing to prove the elements of a prima facie case or by failing to identify an alternative practice that advances the valid interest identified by the defendant without creating materially greater costs or other material burdens for the defendant, and, therefore, has not in fact “made out a prima facie case of disparate impact.” [FN56] HUD is also particularly seeking input on whether it would be consistent with Inclusive Communities to provide a defense for housing authorities who can show that the policy being challenged is a reasonable approach and in the housing authority's sound discretion.

HUD specifically seeks comments on the terms used in this section of the rule and whether HUD should define those terms. Examples of terms that HUD would consider providing definitions to are “robust causal link,” “evidence that is not remote or speculative,” “algorithmic model,” and “material part.”

Footnotes

[FN36] See, e.g., Frederick v. Wells Fargo Home Mortg., 649 F. App'x 29, 30 (2d Cir. 2016) (Plaintiff challenging lender's denial of a mortgage application failed to identify the specific policy or practice that caused the disparate impact).

[FN37] See, e.g., Barrow v. Barrow, Civil Action No. 16-11493-FDS, 2017 U.S. Dist. LEXIS 103495, at *8 (D. Mass. July 5, 2017) (citing Inclusive Communities, 135 S. Ct. at 2523) (“[A] plaintiff challenging the decision of a private developer to construct a new building in one location rather than another will not easily be able to show this is a policy causing a disparate impact because such a one-time decision may not be a policy at all.”).

[FN38] See 135 S. Ct. at 2523-24 (“For instance, a plaintiff challenging the decision of a private developer to construct a new building in one location rather than another will not easily be able to show this is a policy causing a disparate impact because such a one-time decision may not be a policy at all. It may also be difficult to establish causation because of the multiple factors that go into investment decisions about where to construct or renovate housing units.”).

[FN39] 135 S. Ct. at 2523-24.

[FN40] See Ellis v. City of Minneapolis, 860 F.3d 1106, 1112-14 (8th Cir. 2017) (citing Inclusive Communities, 135 S. Ct. at 2524).

[FN41] Id.

[FN42] See id. at 1114 (“a plaintiff must, at the very least, point to an ‘artificial, arbitrary, and unnecessary” policy causing the problematic disparity.).

[FN43] See Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989) (holding that the defendant has the burden of producing evidence of the justification for the alleged policy or practice but making clear that the burden of persuasion to prove their case ultimately remains with the plaintiff).

[FN44] See id. (holding that a disparate impact claim is not adequately pled where the alleged disparity is the result of factors outside the defendant's control and does not support the assertion that the defendant's policy itself is the cause of the disparity).

[FN45] 42 U.S.C. 3604(a).

[FN46] Anderson v. City of Blue Ash, 798 F.3d 338, 364 (6th Cir. 2015).

[FN47] 135 S. Ct. at 2512.

[FN48] Id.

[FN49] Bank of Am. Corp. v. City of Miami, 137 S. Ct. 1296, 1306 (2017).

[FN50] For example, the Supreme Court in Wards Cove Packing Co. dismissed a disparate impact claim against a firm that denied job applicants from a protected class at a higher rate than non-protected class members. Despite the statistical disparity, the plaintiffs had not identified an injury because a disproportionate number of qualified minorities were not denied employment. 490 U.S. at 650, 653.

[FN51] See Mount Holly, 658 F.3d 375 (3d Cir. 2011).

[FN52] 135 S. Ct. at 2524 (“[I]f [the plaintiff] cannot show a causal connection between the Department's policy and a disparate impact—for instance, because Federal law substantially limits the Department's discretion—that should result in dismissal of this case.”).

[FN53] Id. at 2524.

[FN54] Id. at 2518.

[FN55] Wards Cove, 490 U.S. at 661.

4.2 Massachusetts Fair Housing Center v. Dep't of Housing and Urban Dev't (D. Mass. Oct. 25, 2020) 4.2 Massachusetts Fair Housing Center v. Dep't of Housing and Urban Dev't (D. Mass. Oct. 25, 2020)

MASSACHUSETTS FAIR HOUSING CENTER, and Housing Works, Inc., Plaintiffs,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, and Ben Carson, Department of Housing and Urban Development, Defendants.

Civil Action No. 20-11765-MGM

Filed 10/25/2020

Attorneys and Law Firms
Annie Lee, Mina S. Makarious, Scott P. Lewis, Anderson & Kreiger LLP, Lauren A. Sampson, Oren M. Sellstrom, Lawyers' Committee for Civil Rights and Economic Justic, Boston, MA, for Plaintiffs.

James D. Todd, Jr., Vinita B. Andrapalliyal, United States Department of Justice, Washington, DC, for Defendants.

MEMORANDUM AND ORDER REGARDING PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION UNDER 5 U.S.C. § 705 TO POSTPONE THE EFFECTIVE DATE OF HUD'S UNLAWFUL NEW RULE

MASTROIANNI, U.S.D.J.

I. Introduction

Presently before the court is a motion, filed by Plaintiffs Massachusetts Fair Housing Center (“MFHC”) and Housing Works, Inc., seeking a preliminary injunction and stay of the effective date of a new Department of Housing and Urban Development (“HUD”) rule, HUD's Implementation of the Fair Housing Act's Disparate Treatment Standard, 85 Fed. Reg. 60288 (Sept. 24, 2020) (“2020 Rule”), under the Administrative Procedure Act (“APA”), 5 U.S.C. § 705. For the following reasons, the court will grant Plaintiffs’ motion.

II. Background

HUD has long recognized so-called “disparate impact” liability under the Fair Housing Act. Unlike disparate treatment liability, which requires discriminatory intent, disparate impact liability is based on the discriminatory impact of a policy or practice and the absence of an adequate justification. See Texas Dep't of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519, 524, 135 S.Ct. 2507, 192 L.Ed.2d 514 (2015) (recognizing disparate impact liability under the Fair Housing Act). In 2013, HUD issued a rule setting forth its interpretation of the standards for such disparate impact claims under the Fair Housing Act: Implementation of the Fair Housing Act's Discriminatory Effects Standard, 78 Fed. Reg. 11560 (Feb. 15, 2013) (“2013 Rule”). The 2013 Rule, codified at 24 C.F.R. § 100.500, provides a relatively straight-forward burden-shifting framework. Specifically, it states:

Liability may be established under the Fair Housing Act based on a practice's discriminatory effect, as defined in paragraph (a) of this section, even if the practice was not motivated by a discriminatory intent. The practice may still be lawful if supported by a legally sufficient justification, as defined in paragraph (b) of this section. The burdens of proof for establishing a violation under this subpart are set forth in paragraph (c) of this section.

(a) Discriminatory effect. A practice has a discriminatory effect where it actually or predictably results in a disparate impact on a group of persons or creates, increases, reinforces, or perpetuates segregated housing patterns because of race, color, religion, sex, handicap, familial status, or national origin.

(b) Legally sufficient justification.

(1) A legally sufficient justification exists where the challenged practice:

(i) Is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests of the respondent, with respect to claims brought under 42 U.S.C. 3612, or defendant, with respect to claims brought under 42 U.S.C. 3613 or 3614; and

(ii) Those interests could not be served by another practice that has a less discriminatory effect.

(2) A legally sufficient justification must be supported by evidence and may not be hypothetical or speculative. The burdens of proof for establishing each of the two elements of a legally sufficient justification are set forth in paragraphs (c)(2) and (c)(3) of this section.

(c) Burdens of proof in discriminatory effects cases.

(1) The charging party, with respect to a claim brought under 42 U.S.C. 3612, or the plaintiff, with respect to a claim brought under 42 U.S.C. 3613 or 3614, has the burden of proving that a challenged practice caused or predictably will cause a discriminatory effect.

(2) Once the charging party or plaintiff satisfies the burden of proof set forth in paragraph (c)(1) of this section, the respondent or defendant has the burden of proving that the challenged practice is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests of the respondent or defendant.

(3) If the respondent or defendant satisfies the burden of proof set forth in paragraph (c)(2) of this section, the charging party or plaintiff may still prevail upon proving that the substantial, legitimate, nondiscriminatory interests supporting the challenged practice could be served by another practice that has a less discriminatory effect.

(d) Relationship to discriminatory intent. A demonstration that a practice is supported by a legally sufficient justification, as defined in paragraph (b) of this section, may not be used as a defense against a claim of intentional discrimination.

24 C.F.R. § 100.500.

In contrast, the 2020 Rule, set to go into effect on October 26, 2020, significantly alters the 2013 Rule's standards. It provides:

(a) General. Liability may be established under the Fair Housing Act based on a specific policy's or practice's discriminatory effect on members of a protected class under the Fair Housing Act even if the specific practice was not motivated by a discriminatory intent.

(b) Pleading stage. At the pleading stage, to state a discriminatory effects claim based on an allegation that a specific, identifiable policy or practice has a discriminatory effect, a plaintiff or charging party (hereinafter, “plaintiff”) must sufficiently plead facts to support each of the following elements:

(1) That the challenged policy or practice is arbitrary, artificial, and unnecessary to achieve a valid interest or legitimate objective such as a practical business, profit, policy consideration, or requirement of law;

(2) That the challenged policy or practice has a disproportionately adverse effect on members of a protected class;

(3) That there is a robust causal link between the challenged policy or practice and the adverse effect on members of a protected class, meaning that the specific policy or practice is the direct cause of the discriminatory effect;

(4) That the alleged disparity caused by the policy or practice is significant; and

(5) That there is a direct relation between the injury asserted and the injurious conduct alleged.

(c) Burdens of proof in discriminatory effect cases. The burdens of proof to establish that a policy or practice has a discriminatory effect, are as follows:

(1) A plaintiff must prove by the preponderance of the evidence each of the elements in paragraphs (b)(2) through (5) of this section.

(2) A defendant or responding party (hereinafter, “defendant”) may rebut a plaintiff's allegation under (b)(1) of this section that the challenged policy or practice is arbitrary, artificial, and unnecessary by producing evidence showing that the challenged policy or practice advances a valid interest (or interests) and is therefore not arbitrary, artificial, and unnecessary.

(3) If a defendant rebuts a plaintiff's assertion under paragraph (c)(1) of this section, the plaintiff must prove by the preponderance of the evidence either that the interest (or interests) advanced by the defendant are not valid or that a less discriminatory policy or practice exists that would serve the defendant's identified interest (or interests) in an equally effective manner without imposing materially greater costs on, or creating other material burdens for, the defendant.

(d) Defenses. The following defenses are available to a defendant in a discriminatory effect case.

(1) Pleading stage. The defendant may establish that a plaintiff has failed to sufficiently plead facts to support an element of a prima facie case under paragraph (b) of this section, including by showing that the defendant's policy or practice was reasonably necessary to comply with a third-party requirement, such as a:

(i) Federal, state, or local law;

(ii) Binding or controlling court, arbitral, administrative order or opinion; or

(iii) Binding or controlling regulatory, administrative or government guidance or requirement.

(2) After the pleading stage. The defendant may establish that the plaintiff has failed to meet the burden of proof to establish a discriminatory effects claim under paragraph (c) of this section, by demonstrating any of the following:

(i) The policy or practice is intended to predict an occurrence of an outcome, the prediction represents a valid interest, and the outcome predicted by the policy or practice does not or would not have a disparate impact on protected classes compared to similarly situated individuals not part of the protected class, with respect to the allegations under paragraph (b). This is not an adequate defense, however, if the plaintiff demonstrates that an alternative, less discriminatory policy or practice would result in the same outcome of the policy or practice, without imposing materially greater costs on, or creating other material burdens for the defendant.

(ii) The plaintiff has failed to establish that a policy or practice has a discriminatory effect under paragraph (c) of this section.

(iii) The defendant's policy or practice is reasonably necessary to comply with a third party requirement, such as a:

(A) Federal, state, or local law;

(B) Binding or controlling court, arbitral, administrative order or opinion; or

(C) Binding or controlling regulatory, administrative, or government guidance or requirement.

(e) Business of insurance laws. Nothing in this section is intended to invalidate, impair, or supersede any law enacted by any state for the purpose of regulating the business of insurance.

(f) Remedies in discriminatory effect cases. In cases where liability is based solely on a discriminatory effect theory, remedies should be concentrated on eliminating or reforming the discriminatory practice so as to eliminate disparities between persons in a particular protected class and other persons. In administrative proceedings under 42 U.S.C. 3612(g) based solely on discriminatory effect theory, HUD will seek only equitable remedies, provided that where pecuniary damage is proved, HUD will seek compensatory damages or restitution; and provided further that HUD may pursue civil money penalties in discriminatory effect cases only where the defendant has previously been adjudged, within the last five years, to have committed unlawful housing discrimination under the Fair Housing Act, other than under this section.

(g) Severability. The framework of the burdens and defenses provisions are considered to be severable. If any provision is stayed or determined to be invalid or their applicability to any person or circumstances invalid, the remaining provisions shall be construed as to be given the maximum effect permitted by law.

24 C.F.R. § 100.500 (effective October 26, 2020).

There can be no doubt that the 2020 Rule weakens, for housing discrimination victims and fair housing organizations, disparate impact liability under the Fair Housing Act. It does so by introducing new, onerous pleading requirements on plaintiffs,[FN1] and significantly altering the burden-shifting framework by easing the burden on defendants of justifying a policy with discriminatory effect while at the same time rendering it more difficult for plaintiffs to rebut that justification.[FN2] In addition, the 2020 Rule arms defendants with broad new defenses which appear to make it easier for offending defendants to dodge liability and more difficult for plaintiffs to succeed. In short, these changes constitute a massive overhaul of HUD's disparate impact standards, to the benefit of putative defendants and to the detriment of putative plaintiffs (and, by extension, fair housing organizations, such as MFHC).

Plaintiffs are fair housing organizations that provide an array of services to victims of housing and lending discrimination, including legal representation, education, and advocacy. (See Dkt. No. 12-1; Dkt. No. 12-2.) They filed this action on September 28, 2020, seeking to vacate the 2020 Rule under the APA. (Dkt. No. 1.) On October 6, 2020, Plaintiffs filed their motion for preliminary injunction and stay under 5 U.S.C. § 705. (Dkt. No. 11.) Defendants opposed Plaintiffs’ motion on October 14, 2020, arguing a lack of standing and ripeness as well as failure to satisfy the requirements for obtaining a preliminary injunction. Plaintiffs thereafter filed a reply brief, and the court held a hearing on October 16, 2020. (Dkt. Nos. 25, 27, 28.)

III. Subject Matter Jurisdiction

“Article III of the Constitution confines the judicial power of federal courts to deciding actual ‘Cases’ or ‘Controversies.’ ” Hollingsworth v. Perry, 570 U.S. 693, 704, 133 S.Ct. 2652, 186 L.Ed.2d 768 (2013). “Two of the ... manifestations [of this limitation] are the justiciability doctrines of standing and ripeness, which are interrelated; each is rooted in Article III.” Reddy v. Foster, 845 F.3d 493, 499 (1st Cir. 2017).

A. Standing

“[T]he standing inquiry [is] focused on whether the party invoking jurisdiction had the requisite stake in the outcome when the suit was filed.” Davis v. Fed. Election Comm'n, 554 U.S. 724, 734, 128 S.Ct. 2759, 171 L.Ed.2d 737 (2008). To show standing, “[a] plaintiff must demonstrate (1) an injury in fact which is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical,’ (2) that the injury is ‘fairly traceable to the challenged action,’ and (3) that it is ‘likely ... that the injury will be redressed by a favorable decision.’ ” Massachusetts v. United States Dep't of Health & Human Servs., 923 F.3d 209, 221–22 (1st Cir. 2019) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). Moreover, “[i]t is well-established that an organization can sue to obtain compensation for injuries it sustains,” so long as these same requirements are met. Sexual Minorities Uganda v. Lively, 960 F. Supp. 2d 304, 324 (D. Mass. 2013); see Havens Realty Corp. v. Coleman, 455 U.S. 363, 379-80, 102 S.Ct. 1114, 71 L.Ed.2d 214 (1982). Accordingly, organizational standing exists when the organization suffers (or likely will suffer) “an injury to its organizational activities.” Equal Means Equal v. Ferriero, ––– F.Supp.3d ––––, ––––, 2020 WL 4548248, at (D. Mass. Aug. 6, 2020).

The court concludes, at this preliminary stage of the litigation, that Plaintiff MFHC has demonstrated standing. See Massachusetts v. E.P.A., 549 U.S. 497, 518, 127 S.Ct. 1438, 167 L.Ed.2d 248 (2007) (only one plaintiff need establish standing). Contrary to the government's significantly overstated argument, MFHC has shown more than “a mere interest in a problem.” Sierra Club v. Morton, 405 U.S. 727, 739, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972). Rather, MFHC “has set forth predictions of injury, supported by evidence” which “would be caused by the federal regulations and would be redressable by an injunction.” Massachusetts, 923 F.3d. at 227; see also E. Bay Sanctuary Covenant v. Barr, 964 F.3d 832, 843–44 (9th Cir. 2020). Specifically, MFHC attests that if the 2020 Rule goes into effect, it will be forced to expend additional resources in preparing to bring disparate impact claims due to the heightened pleading and proof requirements, abandon potential disparate impact claims which are otherwise viable under the 2013 Rule, and modify its education and training programs. (See Dkt. No. 12-1 ¶¶ 24-28, 44-49.) As the First Circuit has explained, plaintiffs “need not wait for an actual injury to occur before filing suit” nor “demonstrate that it is literally certain that the harms they identify will come about.” Massachusetts, 923 F.3d. at 222, 224; see also Adams v. Watson, 10 F.3d 915, 921 (1st Cir. 1993) (“[I]t could hardly be thought that administrative action likely to cause harm cannot be challenged until it is too late.” (internal quotation marks omitted)). By demonstrating a “substantial probability” that concrete and particularized harm will occur to MFHC's core mission of combatting housing discrimination, MFHC has satisfied the standing requirement. Maine People's All. And Nat. Res. Def. Council v. Mallinckrodt, Inc., 471 F.3d 277, 284 (1st Cir. 2006).

B. Ripeness

The court also concludes that this APA challenge is ripe. The “ripeness doctrine seeks to prevent the adjudication of claims relating to ‘contingent future events that may not occur as anticipated, or indeed may not occur at all.’ ” Reddy, 845 F.3d at 500 (quoting Texas v. United States, 523 U.S. 296, 300, 118 S.Ct. 1257, 140 L.Ed.2d 406 (1998)); see also Roman Catholic Bishop of Springfield v. City of Springfield, 724 F.3d 78, 89 (1st Cir. 2013) (“The basic rationale of the ripeness inquiry is to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements.” (internal quotation marks omitted)). Moreover, as to APA challenges, “[w]here, as here, a petition involves purely legal claims in the context of a facial challenge to a final rule, a petition is ‘presumptively reviewable,’ ” i.e., ripe. Owner-Operator Indep. Drivers Ass'n, Inc. v. Fed. Motor Carrier Safety Admin., 656 F.3d 580, 586 (7th Cir. 2011) (quoting Sabre, Inc. v. Dep't of Transp., 429 F.3d 1113, 1119 (D.C. Cir. 2005)). Plaintiffs have brought such a facial challenge to a final rule based on purely legal claims. See Bucklew v. Precythe, ––– U.S. ––––, 139 S. Ct. 1112, 1127, 203 L.Ed.2d 521 (2019) (“A facial challenge is really just a claim that the law or policy at issue is [unlawful] in all its applications.”); Nat'l Ass'n of Home Builders v. U.S. Army Corps of Engineers, 417 F.3d 1272, 1281–84 (D.C. Cir. 2005) (“[C]laims that an agency's action is arbitrary and capricious or contrary to law present purely legal issues.”) (internal quotation marks omitted) Although Plaintiffs’ challenge to the 2020 Rule is somewhat abstract, that is in the nature of disparate impact theory. The government has made well-reasoned points on this issue but, at this preliminary stage, the court finds Plaintiffs’ challenge is sufficiently “fit” for judicial resolution and they face immediate hardship if the court were to withhold review. See Roman Catholic Bishop of Springfield, 724 F.3d at 89-93.

IV. Analysis

Plaintiffs seek a preliminary injunction barring implementation of HUD's 2020 Disparate Impact Rule and a stay of the effective date of this rule under the Administrative Procedure Act (“APA”), 5 U.S.C. § 705.[FN3] The parties agree that the same standard governs both forms of relief.

“A preliminary injunction is an extraordinary remedy never awarded as of right.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). “In each case, courts ‘must balance the competing claims of injury and must consider the effect on each party of the granting or withholding of the requested relief.’ ” Id. (quoting Amoco Production Co. v. Village of Gambell, Ak., 480 U.S. 531, 542, 107 S.Ct. 1396, 94 L.Ed.2d 542 (1987)). “The purpose of such interim equitable relief is not to conclusively determine the rights of the parties ... but to balance the equities as the litigation moves forward.” Trump v. Int'l Refugee Assistance Project, ––– U.S. ––––, 137 S. Ct. 2080, 2087, 198 L.Ed.2d 643 (2017) (internal citation omitted). In order to obtain such preliminary injunctive relief, a plaintiff must demonstrate “(1) a substantial likelihood of success on the merits, (2) a significant risk of irreparable harm if the injunction is withheld, (3) a favorable balance of hardships, and (4) a fit (or lack of friction) between the injunction and the public interest.” NuVasive, Inc. v. Day, 954 F.3d 439, 443 (1st Cir. 2020) (internal quotation marks omitted). The First Circuit has explained that likelihood of success on the merits is “the most important of the four preliminary injunction factors.” Doe v. Trustees of Bos. Coll., 942 F.3d 527, 533 (1st Cir. 2019).

A. Likelihood of Success on the Merits

In support of their preliminary injunction motion, Plaintiffs rely on three arguments: (1) the 2020 Rule is “contrary to law”; (2) the changes to the 2013 Rule are “arbitrary and capricious”; and (3) the 2020 Rule's inclusion of the “outcome prediction defense,” to be codified at 24 C.F.R. § 100.500(d)(2)(i), violates the APA's “notice and comment” requirements. The court only addresses Plaintiffs’ second argument, which it finds is likely meritorious.

“The APA ‘sets forth the procedures by which federal agencies are accountable to the public and their actions subject to review by the courts.’ ” Dep't of Homeland Sec. v. Regents of the Univ. of California, ––– U.S. ––––, 140 S. Ct. 1891, 1905, 207 L.Ed.2d 353 (2020) (quoting Franklin v. Massachusetts, 505 U.S. 788, 796, 112 S.Ct. 2767, 120 L.Ed.2d 636 (1992)). “It requires agencies to engage in ‘reasoned decisionmaking,’ ... and directs that agency actions be ‘set aside’ if they are ‘arbitrary’ or ‘capricious,’ 5 U.S.C. § 706(2)(A).” Id. (internal citation omitted). This standard of review is “narrow” and “a court is not to substitute its judgment for that of the agency.” Id. (internal quotation marks omitted); see also F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502, 513, 129 S.Ct. 1800, 173 L.Ed.2d 738 (2009) (“Under what we have called this ‘narrow’ standard of review, we insist that an agency ‘examine the relevant data and articulate a satisfactory explanation for its action.’ ” (quoting Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983))).

As explained above, the 2020 Rule constitutes a significant overhaul to HUD's interpretation of disparate impact standards. HUD's explanation for these changes generally boil down to two justifications: (1) they bring these standards into alignment with the Supreme Court's decision in Inclusive Communities, and (2) they provide greater clarity to the public. See generally 85 Fed Reg. 60288-01.

As to the first justification, the parties vigorously dispute whether the changes “merely incorporate” the standards set forth by the Supreme Court in Inclusive Communities and other precedent, as Defendants argue. (Dkt. No. 24 at 16; see also id. at 22-24.) The court believes both sides have exaggerated their respective arguments on this point. For example, Plaintiffs argue there is no judicial support for the 2020 Rule's requirement, to be codified in 24 C.F.R. § 100.500(b)(1), that a plaintiff must plead, at the outset, facts showing “[t]hat the challenged policy or practice is arbitrary, artificial, and unnecessary to achieve a valid interest or legitimate objective such as a practical business, profit, policy consideration, or requirement of law.” But, as Defendants point out, the “arbitrary, artificial, and unnecessary” language comes directly from Inclusive Communities, 576 U.S. at 540, 543, 544, 135 S.Ct. 2507. Moreover, Plaintiffs completely ignore, in their briefing, the Eighth Circuit's decision in Ellis v. City of Minneapolis, 860 F.3d 1106, 1112 (8th Cir. 2017), which interpreted Inclusive Communities to require that plaintiffs allege in the complaint that the challenged policy is “arbitrary and unnecessary.”

On the other hand, the additional language in 24 C.F.R. § 100.500(b)(1)—“such as a practical business, profit, policy consideration”—is not, as far as the court is aware, found in any judicial decision. The same is true as to other important provisions in the 2020 Rule, including the new “outcome prediction” defense; the requirement at the third step of the burden-shifting framework that the plaintiff prove “a less discriminatory policy or practice exists that would serve the defendant's identified interest (or interests) in an equally effective manner without imposing materially greater costs on, or creating other material burdens for, the defendant”; and the conflating of a plaintiff's prima facie burden and pleading burden. 2020 Rule, 24 C.F.R. § 100.500(c)(3) (emphasis added), (d)(1), and (d)(2)(iii). These significant alterations, which run the risk of effectively neutering disparate impact liability under the Fair Housing Act, appear inadequately justified.

Similarly, HUD's second explanation for the changes—to provide greater clarity—appear arbitrary and capricious. As Plaintiffs argue, the 2020 Rule, with its new and undefined terminology, altered burden-shifting framework, and perplexing defenses accomplish the opposite of clarity—“it raises far more questions than it answers.” (Dkt. No. 12 at 12.)

Accordingly, at this very preliminary stage, the court finds Plaintiffs have shown a substantial likelihood of success on the merits as to their claim that the 2020 Rule is arbitrary and capricious under the APA.

B. Irreparable Harm

As explained, the 2020 Rule's massive changes pose a real and substantial threat of imminent harm to MFHC's mission by raising the burdens, costs, and effectiveness of disparate impact liability. Moreover, because the APA does not provide for monetary damages, these harms are not recoverable if the 2020 Rule is allowed to go into effect but later vacated. See E. Bay Sanctuary Covenant, 964 F.3d at 854; D.C. v. U.S. Dep't of Agric., 444 F. Supp. 3d 1, 34–38 (D.D.C. 2020); City & Cty. of San Francisco v. U.S. Citizenship & Immigration Servs., 408 F. Supp. 3d 1057, 1121 (N.D. Cal. 2019); New Hampshire Hosp. Ass'n v. Burwell, 2016 WL 1048023, at *16–18 (D.N.H. Mar. 11, 2016). The court therefore finds Plaintiffs have demonstrated a significant risk of irreparable harm if the injunction is withheld.


C. Balance of Harms and Public Interest

The final two preliminary injunction factors “merge when the Government is the opposing party.” Nken v. Holder, 556 U.S. 418, 435, 129 S.Ct. 1749, 173 L.Ed.2d 550 (2009). Defendants have not identified any particularized risks of harm the government or the public would face should the injunction issue, especially given the existence of the 2013 Rule, which has been and can continue to be workable, for both sides, in the realm of disparate impact litigation. In addition, the court finds it is in the public interest to require agencies to adequately justify significant changes to its regulations, particularly changes that weaken anti-discrimination provisions. As the Supreme Court explained in Inclusive Communities, disparate impact liability “is consistent with the FHA's central purpose” of “eradicate[ing] discriminatory practices within a sector of our Nation's economy.” Inclusive Communities, 576 U.S. at 539, 135 S.Ct. 2507 (2015). Moreover, “disparate-impact liability under the FHA also plays a role in uncovering discriminatory intent: It permits plaintiffs to counteract unconscious prejudices and disguised animus that escape easy classification as disparate treatment.” Id. at 540, 135 S.Ct. 2507. The court finds the balance of harms and public interest supports a preliminary injunction pending a complete review of Plaintiffs’ APA challenge.

V. Conclusion

For these reasons, the court ALLOWS Plaintiffs’ Motion for a Preliminary Injunction Under 5 U.S.C. § 705 to Postpone the Effective Date of HUD's Unlawful New Rule (Dkt. No. 11).

(1)The court therefore, pursuant to 5 U.S.C. § 705, STAYS the implementation of HUD's Rule entitled HUD's Implementation of the Fair Housing Act's Disparate Treatment Standard, 85 Fed. Reg. 60288 (Sept. 24, 2020) (to be codified at 24 C.F.R. § 100.500), in its entirety, pending entry of a final judgment on Plaintiffs’ APA claims. The effective date of the Final Rule is hereby POSTPONED pending conclusion of these review proceedings.

(2) In addition, pursuant to Rule 65(a) of the Federal Rules of Civil Procedure, the court PRELIMINARILY ENJOINS Defendants and their officers, agents, servants, employees, and attorneys, and any person in active concert or participation with them, from implementing or enforcing the Rule entitled HUD's Implementation of the Fair Housing Act's Disparate Treatment Standard, 85 Fed. Reg. 60288 (Sept. 24, 2020), in any manner or in any respect, and shall preserve the status quo pursuant to the regulations in effect as of the date of this Order, until further order of the court.

(3) No bond shall be required pursuant to Federal Rule of Civil Procedure 65(c).

It is So Ordered.

Footnotes

[FN1] See 2020 Rule, 24 C.F.R. § 100.500(b) (requiring at “the pleadings stage,” among other things, that plaintiffs “sufficiently plead facts to support” ... “[t]hat the challenged policy or practice is arbitrary, artificial, and unnecessary to achieve a valid interest or legitimate objective such as a practical business, profit, policy consideration, or requirement of law.”)

[FN2] For example, the 2013 Rule requires defendants, after plaintiffs meet their initial burden of showing that the practice “caused or predictably will cause a discriminatory effect,” to prove “that the challenged practice is necessary to achieve one or more substantial, legitimate, nondiscriminatory interests,” before the burden shifts back to plaintiffs. 2013 Rule, 24 C.F.R. § 100.500(c)(2) (emphasis added). The 2020 Rule, however, permits defendants to “rebut a plaintiff's allegation under (b)(1) ... that the challenged policy or practice is arbitrary, artificial, and unnecessary by producing evidence showing that the challenged policy or practice” merely “advances a valid interest.” 2020 Rule, 24 C.F.R. § 100.500(c)(2) (emphasis added). In addition, the 2013 Rule, at the third step of the burden-shifting framework, permits a plaintiff to prevail by “proving that the substantial, legitimate, nondiscriminatory interests supporting the challenged practice could be served by another practice that has a less discriminatory effect,” 2013 Rule, 24 C.F.R. § 100.500(c)(2), whereas the 2020 Rule requires the plaintiff to prove “that a less discriminatory policy or practice exists that would serve the defendant's identified interest (or interests) in an equally effective manner without imposing materially greater costs on, or creating other material burdens for, the defendant,” 2020 Rule 24 C.F.R. § 100.500(c)(2) (emphasis added).

[FN3] In relevant part, 5 U.S.C. § 705 provides: “On such conditions as may be required and to the extent necessary to prevent irreparable injury, the reviewing court, including the court to which a case may be taken on appeal from or on application for certiorari or other writ to a reviewing court, may issue all necessary and appropriate process to postpone the effective date of an agency action or to preserve status or rights pending conclusion of the review proceedings.” 5 U.S.C. § 705.

 

4.3 Ricci v. DeStefano 4.3 Ricci v. DeStefano

RICCI et al. v. DeSTEFANO et al.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

No. 07-1428.

Argued April 22, 2009

Decided June 29, 2009*

*560Kennedy, J., delivered the opinion of the Court, in which Roberts, C. J., and Scalia, Thomas, and Alito, JJ., joined. Scalia, J., filed a concurring opinion, post, p. 594. Alito, J., filed a concurring opinion, in which Scalia and Thomas, JJ., joined, post, p. 596. Ginsburg, J., filed a dissenting opinion, in which Stevens, Souter, and Breyer, JJ., joined, post, p. 608.

Gregory S. Coleman argued the cause for petitioners in both cases. With him on the briefs were Edward C. Dawson, Dori K. Goldman, and Karen Lee Torre.

Deputy Solicitor General Kneedler argued the cause for the United States as amicus curiae in both cases supporting vacatur and remand. With him on the brief were Acting Assistant Attorney General King, Deputy Solicitor General Katyal, Lisa S. Blatt, Leondra R. Kruger, Steven H. Rosenbaum, Jessica Dunsay Silver, Gregory B. Friel, Lisa J. Stark, Carol A. DeDeo, Edward D. Sieger, Carolyn L. Wheeler, and Gail S. Coleman.

Christopher J. Meade argued the cause for respondents in both cases. With him on the brief were Seth P. Waxman, Anne K. Small, Victor A. Bolden, Kathleen M. Foster, David T. Goldberg, and Richard A. Roberts.

*561Justice Kennedy

delivered the opinion of the Court.

In the fire department of New Haven, Connecticut — as in emergency-service agencies throughout the Nation — fire*562fighters prize their promotion to and within the officer ranks. An agency’s officers command respect within the department and in the whole community; and, of course, added responsibilities command increased salary and benefits. Aware of the intense competition for promotions, New Haven, like many cities, relies on objective examinations to identify the best qualified candidates.

In 2003, 118 New Haven firefighters took examinations to qualify for promotion to the rank of lieutenant or captain. Promotion examinations in New Haven (or City) were infrequent, so the stakes were high. The results would determine which firefighters would be considered for promotions during the next two years, and the order in which they would be considered. Many firefighters studied for months, at considerable personal and financial cost.

When the examination results showed that white candidates had outperformed minority candidates, the mayor and other local politicians opened a public debate that turned rancorous. Some firefighters argued the tests should be discarded because the results showed the tests to be discriminatory. They threatened a discrimination lawsuit if the City made promotions based on the tests. Other firefighters said the exams were neutral and fair. And they, in' turn, threatened a discrimination lawsuit if the City, relying on the statistical racial disparity, ignored the test results and denied promotions to the candidates who had performed well. In the end the City took the side of those who protested the test results. It threw out the examinations.

Certain white and Hispanic firefighters who likely would have been promoted based on their good test performance *563sued the City and some of its officials. Theirs is the suit now before us. The suit alleges that, by discarding the test results, the City and the named officials discriminated against the plaintiffs based on their race, in violation of both Title VII of the Civil Rights Act of 1964, 78 Stat. 258, as amended, 42 U. S. C. § 2000e et seq., and the Equal Protection Clause of the Fourteenth Amendment. The City and the officials defended their actions, arguing that if they had certified the results, they could have faced liability under Title VII for adopting a practice that had a disparate impact on the minority firefighters. The District Court granted summary judgment for the defendants, and the Court of Appeals affirmed.

We conclude that race-based action like the City’s in this case is impermissible under Title VII unless the employer can demonstrate a strong basis in evidence that, had it not taken the action, it would have been liable under the disparate-impact statute. Respondents, we further determine, cannot meet that threshold standard. As a result, the City’s action in discarding the tests was a violation of Title VII. In light of our ruling under the statutes, we need not reach the question whether respondents’ actions may have violated the Equal Protection Clause.

I

This litigation comes to us after the parties’ cross-motions for summary judgment, so we set out the facts in some detail. As the District Court noted, although “the parties strenuously dispute the relevance and legal import of, and inferences to be drawn from, many aspects of this case, the underlying facts are largely undisputed.” 554 F. Supp. 2d 142, 145 (Conn. 2006).

A

When the City of New Haven undertook to fill vacant lieutenant and captain positions in its fire department (Department), the promotion and hiring process was governed by the City charter, in addition to federal and state law. The *564charter establishes a merit system. That system requires the City to fill vacancies in the classified civil-service ranks with the most qualified individuals, as determined by job-related examinations. After each examination, the New Haven Civil Service Board (CSB) certifies a ranked list of applicants who passed the test. Under the charter’s “rule of three," the relevant hiring authority must fill each vacancy by choosing one candidate from the top three scorers on the list. Certified promotional lists remain valid for two years.

The City’s contract with the New Haven firefighters’ union specifies additional requirements for the promotion process. Under the contract, applicants for lieutenant and captain positions were to be screened using written and oral examinations, with the written exam accounting for 60 percent and the oral exam 40 percent of an applicant’s total score. To sit for the examinations, candidates for lieutenant needed 30 months’ experience in the Department, a high school diploma, and certain vocational training courses. Candidates for captain needed one year’s service as a lieutenant in the Department, a high school diploma, and certain vocational training courses.

After reviewing bids from various consultants, the City hired Industrial/Organizational Solutions, Inc. (IOS), to develop and administer the examinations, at a cost to the City of $100,000. IOS is an Illinois company that specializes in designing entry-level and promotional examinations for fire and police departments. In order to fit the examinations to the New Haven Department, IOS began the test-design process by performing job analyses to identify the tasks, knowledge, skills, and abilities that are essential for the lieutenant and captain positions. IOS representatives interviewed incumbent captains and lieutenants and their supervisors. They rode with and observed other on-duty officers. Using information from those interviews and ride-alongs, IOS wrote job-analysis questionnaires and administered them to most of the incumbent battalion chiefs, captains, and *565lieutenants in the Department. At every stage of the job analyses, IOS, by deliberate choice, oversampled minority firefighters to ensure that the results — which IOS would use to develop the examinations — would not unintentionally favor white candidates.

With the job-analysis information in hand, IOS developed the written examinations to measure the candidates’ job-related knowledge. For each test, IOS compiled a list of training manuals, Department procedures, and other materials to use as sources for the test questions. IOS presented the proposed sources to the New Haven fire chief and assistant fire chief for their approval. Then, using the approved sources, IOS drafted a multiple-choice test for each position. Each test had 100 questions, as required by CSB rules, and was written below a 10th-grade reading level. After IOS prepared the tests, the City opened a 3-month study period. It gave candidates a list that identified the source material for the questions, including the specific chapters from which the questions were taken.

IOS developed the oral examinations as well. These concentrated on job skills and abilities. Using the job-analysis information, IOS wrote hypothetical situations to test incident-command skills, firefighting tactics, interpersonal skills, leadership, and management ability, among other things. Candidates would be presented with these hypothetical and asked to respond before a panel of three assessors.

IOS assembled a pool of 30 assessors who were superior in rank to the positions being tested. At the City’s insistence (because of controversy surrounding previous examinations), all the assessors came from outside Connecticut. IOS submitted the assessors’ resumes to City officials for approval. They were battalion chiefs, assistant chiefs, and chiefs from departments of similar sizes to New Haven’s throughout the country. Sixty-six percent of the panelists were minorities, and each of the nine three-member assessment panels con*566tained two minority members. IOS trained the panelists for several hours on the day before it administered the examinations, teaching them how to score the candidates’ responses consistently using checklists of desired criteria.

Candidates took the examinations in November and December 2003. Seventy-seven candidates completed the lieutenant examination — 43 whites, 19 blacks, and 15 Hispanics. Of those, 34 candidates passed — 25 whites, 6 blacks, and 3 Hispanics. 554 F. Supp. 2d, at 145. Eight lieutenant positions were vacant at the time of the examination. As the rule of three operated, this meant that the top 10 candidates were eligible for an immediate promotion to lieutenant. All 10 were white. Ibid. Subsequent vacancies would have allowed at least 3 black candidates to be considered for promotion to lieutenant.

Forty-one candidates completed the captain examination— 25 whites, 8 blacks, and 8 Hispanics. Of those, 22 candidates passed — 16 whites, 3 blacks, and 3 Hispanics. Ibid. Seven captain positions were vacant at the time of the examination. Under the rule of three, 9 candidates were eligible for an immediate promotion to captain — 7 whites and 2 Hispanics. Ibid.

The City’s contract with IOS contemplated that, after the examinations, IOS would prepare a technical report that described the examination processes and methodologies and analyzed the results. But in January 2004, rather than requesting the technical report, City officials, including the City’s counsel, Thomas Ude, convened a meeting with IOS Vice President Chad Legel. (Legel was the leader of the IOS team that developed and administered the tests.) Based on the test results, the City officials expressed concern that the tests had discriminated against minority candidates. Legel defended the examinations’ validity, stating that any numerical disparity between white and minority candidates was likely due to various external factors and was *567in line with results of the Department’s previous promotional examinations.

Several days after the meeting, Ude sent a letter to the CSB purporting to outline its duties with respect to the examination results. Ude stated that under federal law, “a statistical demonstration of disparate impact,” standing alone, “constitutes a sufficiently serious claim of racial discrimination to serve as a predicate for employer-initiated, voluntar[y] remedies — even . . . race-conscious remedies.” App. to Pet. for Cert. in No. 07-1428, p. 443a; see also 554 F. Supp. 2d, at 145 (issue of disparate impact “appears to have been raised by . . . Ude”).

1

The CSB first met to consider certifying the results on January 22, 2004. Tina Burgett, director of the City’s Department of Human Resources, opened the meeting by telling the CSB that “there is a significant disparate impact on these two exams.” App. to Pet. for Cert. in No. 07-1428, at 466a. She distributed lists showing the candidates’ races and scores (written, oral, and composite) but not their names. Ude also described the test results as reflecting “a very significant disparate impact,” id., at 477a, and he outlined possible grounds for the CSB’s refusing to certify the results.

Although they did not know whether they had passed or failed, some firefighter-candidates spoke at the first CSB meeting in favor of certifying the test results. Michael Blatchley stated that “[e]very one” of the questions on the written examination “came from the [study] material.... [I]f you read the materials and you studied the material, you would have done well on the test.” App. in No. 06-4996-cv (CA2), pp. A772-A773 (hereinafter CA2 App.). Frank Ricci stated that the test questions were based on the Department’s own rules and procedures and on “nationally recognized” materials that represented the “accepted standard[s]” for firefighting. Id., at A785-A786. Ricci stated that he *568had “several learning disabilities,” including dyslexia; that he had spent more than $1,000 to purchase the materials and pay his neighbor to read them on tape so he could “give it [his] best shot”; and that he had studied “8 to 13 hours a day to prepare” for the test. Id., at A786, A789. “I don’t even know if I made it,” Ricci told the CSB, “[b]ut the people who passed should be promoted. When your life’s on the line, second best may not be good enough.” Id., at A787-A788.

Other firefighters spoke against certifying the test results. They described the test questions as outdated or not relevant to firefighting practices in New Haven. Gary Tinney stated that source materials “came out of New York. . . . Their makeup of their city and everything is totally different than ours.” Id., at A774-A775; see also id., at A779, A780-A781. And they criticized the test materials, a full set of which cost about $500, for being too expensive and too long.

2

At a second CSB meeting, on February 5, the president of the New Haven firefighters’ union asked the CSB to perform a validation study to determine whether the tests were job related. Petitioners’ counsel in this action argued that the CSB should certify the results. A representative of the International Association of Black Professional Firefighters, Donald Day from neighboring Bridgeport, Connecticut, “beseech[ed]” the CSB “to throw away that test,” which he described as “inherently unfair” because of the racial distribution of the results. Id., at A830-A831. Another Bridgeport-based representative of the association, Ronald Mackey, stated that a validation study was necessary. He suggested that the City could “adjust” the test results to “meet the criteria of having a certain amount of minorities get elevated to the rank of Lieutenant and Captain.” Id., at A838. At the end of this meeting, the CSB members agreed to ask IOS to send a representative to explain how it had developed and administered the examinations. They also *569discussed asking a panel of experts to review the examinations and advise the CSB whether to certify the results.

3

At a third meeting, on February 11, Legel addressed the CSB on behalf of IOS. Legel stated that IOS had previously prepared entry-level firefighter examinations for the City but not a promotional examination. He explained that IOS had developed examinations for departments in communities with demographics similar to New Haven’s, including Orange County, Florida; Lansing, Michigan; and San Jose, California.

Legel explained the exam-development process to the CSB. He began by describing the job analyses IOS performed of the captain and lieutenant positions — the interviews, ride-alongs, and questionnaires IOS designed to “generate a list of tasks, knowledge, skills and abilities that are considered essential to performance” of the jobs. Id., at A931-A932. He outlined how IOS prepared the written and oral examinations, based on the job-analysis results, to test most heavily those qualities that the results indicated were “eritica[l]” or “essential[l].” Id., at A931. And he noted that IOS took the material for each test question directly from the approved source materials. Legel told the CSB that third-party reviewers had scrutinized the examinations to ensure that the written test was drawn from the source material and that the oral test accurately tested real-world situations that captains and lieutenants would face. Legel confirmed that IOS had selected oral-examination panelists so that each three-member assessment panel included one white, one black, and one Hispanic member.

Near the end of his remarks, Legel “implor[ed] anyone that had... concerns to review the content of the exam. In my professional opinion, it’s facially neutral. There’s nothing in those examinations ... that should cause somebody to think that one group would perform differently than another group.” Id., at A961.

*5704

At the next meeting, on March 11, the CSB heard from three witnesses it had selected to “tell us a little bit about their views of the testing, the process, [and] the methodology.” Id., at A1020. The first, Christopher Hornick, spoke to the CSB by telephone. Hornick is an industrial/organizational psychologist from Texas who operates a consulting business that “direct[ly]” competes with IOS. Id., at A1029. Hornick, who had not “studied] the test at length or in detail” and had not “seen the job analysis data,” told the CSB that the scores indicated a “relatively high adverse impact.” Id., at A1028, A1030, A1043. He stated that “[n]ormally, whites outperform ethnic minorities on the majority of standardized testing procedures,” but that he was “a little surprised” by the disparity in the candidates’ scores— although “[s]ome of it is fairly typical of what we’ve seen in other areas of the countrfy] and other tests.” Id., at A1028-A1029. Hornick stated that the “adverse impact on the written exam was somewhat higher but generally in the range that we’ve seen professionally.” Id., at A1030-A1031.

When asked to explain the New Haven test results, Hornick opined in the telephone conversation that the collective-bargaining agreement’s requirement of using written and oral examinations with a 60/40 composite score might account for the statistical disparity. He also stated that “[b]y not having anyone from within the [D]epartment review” the tests before they were administered — a limitation the City had imposed to protect the security of the exam questions — “you inevitably get things in there” that are based on the source materials but are not relevant to New Haven. Id., at A1034-A1035. Hornick suggested that testing candidates at an “assessment center” rather than using written and oral examinations “might serve [the City’s] needs better.” Id., at A1039-A1040. Hornick stated that assessment centers, where candidates face real-world situations and respond just as they would in the field, allow candi*571dates “to demonstrate how they would address a particular problem as opposed to just verbally saying it or identifying the correct option on a written test.” Ibid.

Hornick made clear that he was “not suggesting that [IOS] somehow created a test that had adverse impacts that it should not have had.” Id., at A1038. He described the IOS examinations as “reasonably good test[s].” Id., at A1041. He stated that the CSB’s best option might be to “certify the list as it exists” and work to change the process for future tests, including by “[r]ewriting the Civil Service Rules.” Ibid. Hornick concluded his telephonic remarks by telling the CSB that “for the future,” his company “certainly would like to help you if we can.” Id., at A1046.

The second witness was Vincent Lewis, a fire program specialist for the Department of Homeland Security and a retired fire captain from Michigan. Lewis, who is black, had looked “extensively” at the lieutenant exam and “a little less extensively” at the captain exam. He stated that the candidates “should know that material.” Id., at A1048, A1052. In Lewis’ view, the “questions were relevant for both exams,” and the New Haven candidates had an advantage because the study materials identified the particular book chapters from which the questions were taken. In other departments, by contrast, “you had to know basically the . . . entire book.” Id., at A1053. Lewis concluded that any disparate impact likely was due to a pattern that “usually whites outperform some of the minorities on testing,” or that “more whites . .. take the exam.” Id., at A1054.

The final witness was Janet Helms, a professor at Boston College whose “primary area of expertise” is “not with firefighters per se” but in “race and culture as they influence performance on tests and other assessment procedures.” Id., at A1060. Helms expressly declined the CSB’s offer to review the examinations. At the outset, she noted that “regardless of what kind of written test we give in this country ... we can just about predict how many people will pass *572who are members of under-represented, groups. And your data are not that inconsistent with what predictions would say were the case.” Id., at A1061. Helms nevertheless offered several “ideas about what might be possible factors” to explain statistical differences in the results. Id., at A1062. She concluded that because 67 percent of the respondents to the job-analysis questionnaires were white, the test questions might have favored white candidates, because “most of the literature on firefighters shows that the different groups perform the job differently.” Id., at A1063. Helms closed by stating that no matter what test the City had administered, it would have revealed “a disparity between blacks and whites, Hispanics and whites,” particularly on a written test. Id., at A1072.

5

At the final CSB meeting, on March 18, Ude (the City’s counsel) argued against certifying the examination results. Discussing the City’s obligations under federal law, Ude advised the CSB that a finding of adverse impact “is the beginning, not the end, of a review of testing procedures” to determine whether they violated the disparate-impact provision of Title VII. Ude focused the CSB on determining “whether there are other ways to test for ... those positions that are equally valid with less adverse impact.” Id., at A1101. Ude described Hornick as having said that the written examination “had one of the most severe adverse impacts that he had seen” and that “there are much better alternatives to identifying [firefighting] skills.” Ibid. Ude offered his “opinion that promotions ... as a result of these tests would not be consistent with federal law, would not be consistent with the purposes of our Civil Service Rules or our Charter[,] nor is it in the best interests of the firefighters ... who took the exams.” Id., at A1103-A1104. He stated that previous Department exams “have not had this kind of result,” and that previous results had not been “challenged as *573having adverse impact, whereas we are assured that these will be.” Id., at A1107, A1108.

CSB Chairman Segaloff asked Ude several questions about the Title VII disparate-impact standard.

“CHAIRPERSON SEGALOFF: [M]y understanding is the group . . . that is making to throw the exam out has the burden of showing that there is out there an exam that is reasonably probable or likely to have less of an adverse impact. It’s not our burden to show that there’s an exam out there that can be better. We’ve got an exam. We’ve got a result....
“MR. UDE: Mr. Chair, I point out that Dr. Hornick said that. He said that there are other tests out there that would have less adverse impact and that [would] be more valid.
“CHAIRPERSON SEGALOFF: You think that’s enough for us to throw this test upside-down... because Dr. Hornick said it?
“MR. UDE: I think that by itself would be sufficient. Yes. I also would point out that... it is the employer’s burden to justify the use of the examination.” Id., at A1108-A1109.

Karen DuBois-Walton, the City’s chief administrative officer, spoke on behalf of Mayor John DeStefano and argued against certifying the results. DuBois-Walton stated that the results, when considered under the rule of three and applied to then-existing captain and lieutenant vacancies, created a situation in which black and Hispanic candidates were disproportionately excluded from opportunity. DuBoisWalton also relied on Hornick’s testimony, asserting that Hornick “made it extremely clear that . . . there are more appropriate ways to assess one’s ability to serve” as a captain or lieutenant. Id., at A1120.

Burgett (the human resources director) asked the CSB to discard the examination results. She, too, relied on Hor*574nick’s statement to show the existence of alternative testing methods, describing Hornick as having “started to point out that alternative testing does exist” and as having “begun to suggest that there are some different ways of doing written examinations.” Id., at A1125, A1128.

Other witnesses addressed the CSB. They included the president of the New Haven firefighters’ union, who supported certification. He reminded the CSB that Hornick “also concluded that the tests were reasonable and fair and under the current structure to certify them.” Id., at A1137. Firefighter Frank Ricci again argued for certification; he stated that although “assessment centers in some cases show less adverse impact,” id., at A1140, they were not available alternatives for the current round of promotions. It would take several years, Ricci explained, for the Department to develop an assessment-center protocol and the accompanying training materials. Id., at A1141. Lieutenant Matthew Marcarelli, who had taken the captain’s exam, spoke in favor of certification.

At the close of witness testimony, the CSB voted on a motion to certify the examinations. With one member recused, the CSB deadlocked 2 to 2, resulting in a decision not to certify the results. Explaining his vote to certify the results, Chairman Segaloff stated that “nobody convinced me that we can feel comfortable that, in fact, there’s some likelihood that there’s going to be an exam designed that’s going to be less discriminatory.” Id., at A1159-A1160.

C

The CSB’s decision not to certify the examination results led to this lawsuit. The plaintiffs — who are the petitioners here — are 17 white firefighters and 1 Hispanic firefighter who passed the examinations but were denied a chance at promotions when the CSB refused to certify the test results. They include the named plaintiff, Frank Ricci, who addressed the CSB at multiple meetings.

*575Petitioners sued the City, Mayor DeStefano, DuBoisWalton, Ude, Burgett, and the two CSB members who voted against certification. Petitioners also named as a defendant Boise Kimber, a New Haven resident who voiced strong opposition to certifying the results. Those individuals are respondents in this Court. Petitioners filed suit under Rev. Stat. §§ 1979 and 1980, 42 U. S. C. §§ 1983 and 1985, alleging that respondents, by arguing or voting against certifying the results, violated and conspired to violate the Equal Protection Clause of the Fourteenth Amendment. Petitioners also filed timely charges of discrimination with the Equal Employment Opportunity Commission (EEOC); upon the EEOC’s issuing right-to-sue letters, petitioners amended their complaint to assert that the City violated the disparate-treatment prohibition contained in Title VII of the Civil Rights Act of 1964, as amended. See 42 U. S. C. § 2000e-2(a).

The parties filed cross-motions for summary judgment. Respondents asserted they had a good-faith belief that they would have violated the disparate-impact prohibition in Title VII, § 2000e-2(k), had they certified the examination results. It follows, they maintained, that they cannot be held liable under Title VII’s disparate-treatment provision for attempting to comply with Title VIPs disparate-impact bar. Petitioners countered that respondents’ good-faith belief was not a valid defense to allegations of disparate treatment and unconstitutional discrimination.

The District Court granted summary judgment for respondents. 554 F. Supp. 2d 142. It described petitioners’ argument as “boil[ing] down to the assertion that if [respondents] cannot prove that the disparities on the Lieutenant and Captain exams were due to a particular flaw inherent in those exams, then they should have certified the results because there was no other alternative in place.” Id., at 156. The District Court concluded that, “ [notwithstanding the shortcomings in the evidence on existing, effective alterna*576tives, it is not the case that [respondents] must certify a test where they cannot pinpoint its deficiency explaining its disparate impact . . . simply because they have not yet formulated a better selection method.” Ibid. It also ruled that respondents’ “motivation to avoid making promotions based on a test with a racially disparate impact. . . does not, as a matter of law, constitute discriminatory intent” under Title VII. Id., at 160. The District Court rejected petitioners’ equal protection claim on the theory that respondents had not acted because of “discriminatory animus” toward petitioners. Id., at 162. It concluded that respondents’ actions were not “based on race” because “all applicants took the same test, and the result was the same for all because the test results were discarded and nobody was promoted.” Id., at 161.

After full briefing and argument by the parties, the Court of Appeals affirmed in a one-paragraph, unpublished summary order; it later withdrew that order, issuing in its place a nearly identical, one-paragraph per curiam opinion adopting the District Court’s reasoning. 580 F. 3d 87 (CA2 2008). Three days later, the Court of Appeals voted 7 to 6 to deny rehearing en bane, over written dissents by Chief Judge Jacobs and Judge Cabranes. 530 F. 3d 88.

This action presents two provisions of Title VII to be interpreted and reconciled, with few, if any, precedents in the courts of appeals discussing the issue. Depending on the resolution of the statutory claim, a fundamental constitutional question could also arise. We found it prudent and appropriate to grant certiorari. 555 U. S. 1091 (2009). We now reverse.

II

Petitioners raise a statutory claim, under the disparate-treatment prohibition of Title VII, and a constitutional claim, under the Equal Protection Clause of the Fourteenth Amendment. A decision for petitioners on their statutory claim would provide the relief sought, so we consider it first. *577See Atkins v. Parker, 472 U. S. 115, 123 (1985); Escambia County v. McMillan, 466 U. S. 48, 51 (1984) (per curiam) (“[N]ormally the Court will not decide a constitutional question if there is some other ground upon which to dispose of the case”).

A

Title VII of the Civil Rights Act of 1964,42 U. S. C. § 2000e et seq., as amended, prohibits employment discrimination on the basis of race, color, religion, sex, or national origin. Title VII prohibits both intentional discrimination (known as “disparate treatment”) as well as, in some cases, practices that are not intended to discriminate but in fact have a disproportionately adverse effect on minorities (known as “disparate impact”).

As enacted in 1964, Title VII’s principal nondiscrimination provision held employers liable only for disparate treatment. That section retains its original wording today. It makes it unlawful for an employer “to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” §2000e-2(a)(1); see also 78 Stat. 255. Disparate-treatment cases present “the most easily understood type of discrimination,” Teamsters v. United States, 431 U. S. 324, 335, n. 15 (1977), and occur where an employer has “treated [a] particular person less favorably than others because of” a protected trait, Watson v. Fort Worth Bank & Trust, 487 U. S. 977, 985-986 (1988). A disparate-treatment plaintiff must establish “that the defendant had a discriminatory intent or motive” for taking a job-related action. Id., at 986.

The Civil Rights. Act of 1964 did not include an express prohibition on policies or practices that produce a disparate impact. But in Griggs v. Duke Power Co., 401 U. S. 424 (1971), the Court interpreted the Act to prohibit, in some cases, employers’ facially neutral practices that, in fact, are *578“discriminatory in operation.” Id., at 431. The Griggs Court stated that the “touchstone” for disparate-impact liability is the lack of “business necessity”: “If an employment practice which operates to exclude [minorities] cannot be shown to be related to job performance, the practice is prohibited.” Ibid.; see also id., at 432 (employer’s burden to demonstrate that practice has “a manifest relationship to the employment in question”); Albemarle Paper Co. v. Moody, 422 U. S. 405, 425 (1975). Under those precedents, if an employer met its burden by showing that its practice was job related, the plaintiff was required to show a legitimate alternative that would have resulted in less discrimination. Ibid. (allowing complaining party to show “that other tests or selection devices, without a similarly undesirable racial effect, would also serve the employer’s legitimate interest”).

Twenty years after Griggs, the Civil Rights Act of 1991, 105 Stat. 1071, was enacted. The Act included a provision codifying the prohibition on disparate-impact discrimination. That provision is now in force along with the disparate-treatment section already noted. Under the disparate-impact statute, a plaintiff establishes a prima facie violation by showing that an employer uses “a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin.” 42 U. S. C. §2000e-2(k)(l)(A)(i). An employer may defend against liability by demonstrating that the practice is “job related for the position in question and consistent with business necessity.” Ibid. Even if the employer meets that burden, however, a plaintiff may still succeed by showing that the employer refuses to adopt an available alternative employment practice that has less disparate impact and serves the employer’s legitimate needs. §§ 2000e-2(k)(l)(A)(ii) and (C).

B

Petitioners allege that when the CSB refused to certify the captain and lieutenant exam results based on the race of *579the successful candidates, it discriminated against them in violation of Title VIPs disparate-treatment provision. The City counters that its decision was permissible because the tests “appeared] to violate Title VIPs disparate-impact provisions.” Brief for Respondents 12.

Our analysis begins with this premise: The City’s actions would violate the disparate-treatment prohibition of Title VII absent some valid defense. All the evidence demonstrates that the City chose not to certify the examination results because of the statistical disparity based on race— i. e., how minority candidates had performed when compared to white candidates. As the District Court put it, the City rejected the test results because “too many whites and not enough minorities would be promoted were the lists to be certified.” 554 F. Supp. 2d, at 152; see also ibid, (respondents’ “own arguments . . . show that the City’s reasons for advocating non-certification were related to the racial distribution of the results”). Without some other justification, this express, race-based decisionmaking violates Title VIPs command that employers cannot take adverse employment actions because of an individual’s race. See § 2000e-2(a)(l).

The District Court did not adhere to this principle, however. It held that respondents’ “motivation to avoid making promotions based on a test with a racially disparate impact . . . does not, as a matter of law, constitute discriminatory intent.” Id., at 160. And the Government makes a similar argument in this Court. It contends that the “structure of Title VII belies any claim that an employer’s intent to comply with Title VIPs disparate-impact provisions constitutes prohibited discrimination on the basis of race.” Brief for United States as Amicus Curiae 11. But both of those statements turn upon the City’s objective — avoiding disparate-impact liability — while ignoring the City’s conduct in the name of reaching that objective. Whatever the City’s ultimate aim — however well intentioned or benevolent it might have seemed — the City made its employment decision *580because of race. The City rejected the test results solely because the higher scoring candidates were white. The question is not whether that conduct was discriminatory but whether the City had a lawful justification for its race-based action.

We consider, therefore, whether the purpose to avoid disparate-impact liability excuses what otherwise would be prohibited disparate-treatment discrimination. Courts often confront cases in which statutes and principles point in different directions. Our task is to provide guidance to employers and courts for situations when these two prohibitions could be in conflict absent a rule to reconcile them. In providing this guidance our decision must be consistent with the important purpose of Title VII — that the workplace be an environment free of discrimination, where race is not a barrier to opportunity.

With these principles in mind, we turn to the parties’ proposed means of reconciling the statutory provisions. Petitioners take a strict approach, arguing that under Title VII, it cannot be permissible for an employer to take race-based adverse employment actions in order to avoid disparate-impact liability — even if the employer knows its practice violates the disparate-impact provision. See Brief for Petitioners 43. Petitioners would have us hold that, under Title VII, avoiding unintentional discrimination cannot justify intentional discrimination. That assertion, however, ignores the fact that, by codifying the disparate-impact provision in 1991, Congress has expressly prohibited both types of discrimination. We must interpret the statute to give effect to both provisions where possible. See, e. g., United States v. Atlantic Research Corp., 551 U. S. 128,137 (2007) (rejecting an interpretation that would render a statutory provision “a dead letter”). We cannot accept petitioners’ broad and inflexible formulation.

Petitioners next suggest that an employer in fact must be in violation of the disparate-impact provision before it can *581use compliance as a defense in a disparate-treatment suit. Again, this is overly simplistic and too restrictive of Title VIFs purpose. The rule petitioners offer would run counter to what we have recognized as Congress’ intent that “voluntary compliance” be “the preferred means of achieving the objectives of Title VII.” Firefighters v. Cleveland, 478 U. S. 501, 515 (1986); see also Wygant v. Jackson Bd. of Ed., 476 U. S. 267, 290 (1986) (O’Connor, J., concurring in part and concurring in judgment). Forbidding employers to act unless they know, with certainty, that a practice violates the disparate-impact provision would bring compliance efforts to a near standstill. Even in the limited situations when this restricted standard could be met, employers likely would hesitate before taking voluntary action for fear of later being proved wrong in the course of litigation and then held to account for disparate treatment.

At the opposite end of the spectrum, respondents and the Government assert that an employer’s good-faith belief that its actions are necessary to comply with Title VIFs disparate-impact provision should be enough to justify race-conscious conduct. But the original, foundational prohibition of Title VII bars employers from taking adverse action “because of... race.” § 2000e-2(a)(l). And when Congress codified the disparate-impact provision in 1991, it made no exception to disparate-treatment liability for actions taken in a good-faith effort to comply with the new, disparate-impact provision in subsection (k). Allowing employers to violate the disparate-treatment prohibition based on a mere good-faith fear of disparate-impact liability would encourage race-based action at the slightest hint of disparate impact. A minimal standard could cause employers to discard the results of lawful and beneficial promotional examinations even where there is little if any evidence of disparate-impact discrimination. That would amount to a defacto quota system, in which a “focus on statistics .. . could put undue pressure on employers to adopt inappropriate prophylactic measures.” *582 Watson, 487 U. S., at 992 (plurality opinion). Even worse, an employer could discard test results (or other employment practices) with the intent of obtaining the employer’s preferred racial balance. That operational principle could not be justified, for Title VII is express in disclaiming any interpretation of its requirements as calling for outright racial balancing. §2000e-2(j). The purpose of Title VII “is to promote hiring on the basis of job qualifications, rather than on the basis of race or color.” Griggs, 401 U. S., at 434.

In searching for a standard that strikes a more appropriate balance, we note that this Court has considered cases similar to this one, albeit in the context of the Equal Protection Clause of the Fourteenth Amendment. The Court has held that certain government actions to remedy past racial discrimination — actions that are themselves based on race— are constitutional only where there is a “ ‘strong basis in evidence’” that the remedial actions were necessary. Richmond v. J A. Croson Co., 488 U. S. 469, 500 (1989) (quoting Wygant, supra, at 277 (plurality opinion)). This suit does not call on us to consider whether the statutory constraints under Title VII must be parallel in all respects to those under the Constitution. That does not mean the constitutional authorities are irrelevant, however. Our cases discussing constitutional principles can provide helpful guidance in this statutory context. See Watson, supra, at 993 (plurality opinion).

Writing for a plurality in Wygant and announcing the strong-basis-in-evidence standard, Justice Powell recognized the tension between eliminating segregation and discrimination on the one hand and doing away with all governmentally imposed discrimination based on race on the other. 476 U. S., at 277. The plurality stated that those “related constitutional duties are not always harmonious,” and that “reconciling them requires ... employers to act with extraordinary care.” Ibid. The plurality required a strong basis in evidence because “[ejvidentiary support for the conclusion that *583remedial action is warranted becomes crucial when the remedial program is challenged in court by nonminority employees.” Ibid. The Court applied the same standard in Croson, observing that “an amorphous claim that there has been past discrimination . . . cannot justify the use of an unyielding racial quota.” 488 U. S., at 499.

The same interests are at work in the interplay between the disparate-treatment and disparate-impact provisions of Title VII. Congress has imposed liability on employers for unintentional discrimination in order to rid the workplace of “practices that are fair in form, but discriminatory in operation.” Griggs, supra, at 431. But it has also prohibited employers from taking adverse employment actions “because of” race. §2000e-2(a)(1). Applying the strong-basis-in-evidence standard to Title VII gives effect to both the disparate-treatment and disparate-impact provisions, allowing violations of one in the name of compliance with the other only in certain, narrow circumstances. The standard leaves ample room for employers’ voluntary compliance efforts, which are essential to the statutory scheme and to Congress’ efforts to eradicate workplace discrimination. See Firefighters, supra, at 515. And the standard appropriately constrains employers’ discretion in making race-based decisions: It limits that discretion to cases in which there is a strong basis in evidence of disparate-impact liability, but it is not so restrictive that it allows employers to act only when there is a provable, actual violation.

Resolving the statutory conflict in this way allows the disparate-impact prohibition to work in a manner that is consistent with other provisions of Title VII, including the prohibition on adjusting employment-related test scores on the basis of race. See §2000e-2(l). Examinations like those administered by the City create legitimate expectations on the part of those who took the tests. As is the case with any promotion exam, some of the firefighters here invested substantial time, money, and personal commitment in prepar*584ing for the tests. Employment tests can be an important part of a neutral selection system that safeguards against the very racial animosities Title VII was intended to prevent. Here, however, the firefighters saw their efforts invalidated by the City in sole reliance upon race-based statistics.

If an employer cannot rescore a test based on the candidates’ race, §2000e-2(0, then it follows a fortiori that it may not take the greater step of discarding the test altogether to achieve a more desirable racial distribution of promotion-eligible candidates — absent a strong basis in evidence that the test was deficient and that discarding the results is necessary to avoid violating the disparate-impact provision. Restricting an employer’s ability to discard test results (and thereby discriminate against qualified candidates on the basis of their race) also is in keeping with Title VII’s express protection of bona fide promotional examinations. See § 2000e-2(h) (“[N]or shall it be an unlawful employment practice for an employer to give and to act upon the results of any professionally developed ability test provided that such test, its administration or action upon the results is not designed, intended or used to discriminate because of race”); cf. AT&T Corp. v. Hulteen, 556 U. S. 701, 710 (2009).

For the foregoing reasons, we adopt the strong-basis-in-evidence standard as a matter of statutory construction to resolve any conflict between the disparate-treatment and disparate-impact provisions of Title VII.

Our statutory holding does not address the constitutionality of the measures taken here in purported compliance with Title VII. We also do not hold that meeting the strong-basis-in-evidence standard would satisfy the Equal Protection Clause in a future case. As we explain below, because respondents have not met their burden under Title VII, we need not decide whether a legitimate fear of disparate impact is ever sufficient to justify discriminatory treatment under the Constitution.

*585Nor do we question an employer’s affirmative efforts to ensure that all groups have a fair opportunity to apply for promotions and to participate in the process by which promotions will be made. But once that process has been established and employers have made clear their selection criteria, they may not then invalidate the test results, thus upsetting an employee’s legitimate expectation not to be judged on the basis of race. Doing so, absent a strong basis in evidence of an impermissible disparate impact, amounts to the sort of racial preference that Congress has disclaimed, §2000e-2(j), and is antithetical to the notion of a workplace where individuals are guaranteed equal opportunity regardless of race.

Title VII does not prohibit an employer from considering, before administering a test or practice, how to design that test or practice in order to provide a fair opportunity for all individuals, regardless of their race. And when, during the test-design stage, an employer invites comments to ensure the test is fair, that process can provide a common ground for open discussions toward that end. We hold only that, under Title VII, before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action.

C

The City argues that, even under the strong-basis-in-evidence standard, its decision to discard the examination results was permissible under Title VII. That is incorrect. Even if respondents were motivated as a subjective matter by a desire to avoid committing disparate-impact discrimination, the record makes clear there is no support for the conclusion that respondents had an objective, strong basis in evidence to find the tests inadequate, with some consequent disparate-impact liability in violation of Title VII.

*586On this basis, we conclude that petitioners have met their obligation to demonstrate that there is “no genuine issue as to any material fact” and that they are “entitled to judgment as a matter of law.” Fed. Rule Civ. Proc. 56(c). On a motion for summary judgment, “facts must be viewed in the light most favorable to the nonmoving party only if there is a ‘genuine’ dispute as to those facts.” Scott v. Harris, 550 U. S. 372, 380 (2007). “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.” Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U. S. 574, 587 (1986) (internal quotation marks omitted). In this Court, the City’s only defense is that it acted to comply with Title VII’s disparate-impact provision. To succeed on their motion, then, petitioners must demonstrate that there can be no genuine dispute that there was no strong basis in evidence for the City to conclude it would face disparate-impact liability if it certified the examination results. See Celotex Corp, v. Catrett, 477 U. S. 317, 324 (1986) (where the nonmoving party “will bear the burden of proof at trial on a dispositive issue,” the nonmoving party bears the burden of production under Rule 56 to “designate specific facts showing that there is a genuine issue for trial” (internal quotation marks omitted)).

The racial adverse impact here was significant, and petitioners do not dispute that the City was faced with a prima facie case of disparate-impact liability. On the captain exam, the pass rate for white candidates was 64 percent but was 37.5 percent for both black and Hispanic candidates. On the lieutenant exam, the pass rate for white candidates was 58.1 percent; for black candidates, 31.6 percent; and for Hispanic candidates, 20 percent. The pass rates of minorities, which were approximately one-half the pass rates for white candidates, fall well below the 80-percent standard set by the EEOC to implement the disparate-impact provision of Title VII. See 29 CFR § 1607.4(D) (2008) (selection rate that *587is less than 80 percent “of the rate for the group with the highest rate will generally be regarded by the Federal enforcement agencies as evidence of adverse impact”); Watson, 487 U. S., at 995-996, n. 3 (plurality opinion) (EEOC’s 80-percent standard is “a rule of thumb for the courts”). Based on how the passing candidates ranked and an application of the “rule of three,” certifying the examinations would have meant that the City could not have considered black candidates for any of the then-vacant lieutenant or captain positions.

Based on the degree of adverse impact reflected in the results, respondents were compelled to take a hard look at the examinations to determine whether certifying the results would have had an impermissible disparate impact. The problem for respondents is that a prima facie case of disparate-impact liability — essentially, a threshold showing of a significant statistical disparity, Connecticut v. Teal, 457 U. S. 440, 446 (1982), and nothing more — is far from a strong basis in evidence that the City would have been liable under Title VII had it certified the results. That is because the City could be liable for disparate-impact discrimination only if the examinations were not job related and consistent with business necessity, or if there existed an equally valid, less-discriminatory alternative that served the City’s needs but that the City refused to adopt. §§2000e-2(k)(l)(A), (C). We conclude there is no strong basis in evidence to establish that the tests were deficient in either of these respects. We address each of the two points in turn, based on the record developed by the parties through discovery — a record that concentrates in substantial part on the statements various witnesses made to the CSB.

1

There is no genuine dispute that the examinations were job related and consistent with business necessity. The City’s assertions to the contrary are “blatantly contradicted *588by the record.” Scott, supra, at 380. The CSB heard statements from Chad Legel (the IOS vice president) as well as City officials outlining the detailed steps IOS took to develop and administer the examinations. IOS devised the written examinations, which were the focus of the CSB’s inquiry, after painstaking analyses of the captain and lieutenant positions — analyses in which IOS made sure that minorities were overrepresented. And IOS drew the questions from source material approved by the Department. Of the outside witnesses who appeared before the CSB, only one, Vincent Lewis, had reviewed the examinations in any detail, and he was the only one with any firefighting experience. Lewis stated that the “questions were relevant for both exams.” CA2 App. A1053. The only other witness who had seen any part of the examinations, Christopher Hornick (a competitor of IOS’), criticized the fact that no one within the Department had reviewed the tests — a condition imposed by the City to protect the integrity of the exams in light of past alleged security breaches. But Hornick stated that the exams “appea[r] to be . . . reasonably good” and recommended that the CSB certify the results. Id., at A1041.

Arguing that the examinations were not job related, respondents note some candidates’ complaints that certain examination questions were contradictory or did not specifically apply to firefighting practices in New Haven. But Legel told the CSB that IOS had addressed those concerns— that it entertained “a handful” of challenges to the validity of particular examination questions, that it “reviewed those challenges and provided feedback [to the City] as to what we thought the best course of action was,” and that he could remember at least one question IOS had thrown out (“offer-ting] credit to everybody for that particular question”). Id., at A955-A957. For his part, Hornick said he “suspect[ed] that some of the criticisms ... [leveled] by candidates” were not valid. Id., at A1035.

*589The City, moreover, turned a blind eye to evidence that supported the exams’ validity. Although the City’s contract with IOS contemplated that IOS would prepare a technical report consistent with EEOC guidelines for examination-validity studies, the City made no request for its report. After the January 2004 meeting between Legel and some of the City-official respondents, in which Legel defended the examinations, the City sought no further information from IOS, save its appearance at a CSB meeting to explain how it developed and administered the examinations. IOS stood ready to provide respondents with detailed information to establish the validity of the exams, but respondents did not accept that offer.

2

Respondents also lacked a strong basis in evidence of an equally valid, less discriminatory testing alternative that the City, by certifying the examination results, would necessarily have refused to adopt. Respondents raise three arguments to the contrary, but each argument fails. First, respondents refer to testimony before the CSB that a different composite-score calculation — weighting the written and oral examination scores 30/70 — would have allowed the City to consider two black candidates for then-open lieutenant positions and one black candidate for then-open captain positions. (The City used a 60/40 weighting as required by its contract with the New Haven firefighters’ union.) But respondents have produced no evidence to show that the 60/40 weighting was indeed arbitrary. In fact, because that formula was the result of a union-negotiated collective-bargaining agreement, we presume the parties negotiated that weighting for a rational reason. Nor does the record contain any evidence that the 30/70 weighting would be an equally valid way to determine whether candidates possess the proper mix of job knowledge and situational skills to earn promotions. Changing the weighting formula, moreover, could well have violated Title VII’s prohibition of altering test scores on the *590basis of race. See § 2000e-2(l). On this record, there is no basis to conclude that a 30/70 weighting was an equally valid alternative the City could have adopted.

Second, respondents argue that the City could have adopted a different interpretation of the “rule of three” that would have produced less discriminatory results. The rule, in the New Haven city charter, requires the City to promote only from “those applicants with the three highest scores” on a promotional examination. New Haven, Conn., Code of Ordinances, Tit. I, Art. XXX, §160 (1993). A state court has interpreted the charter to prohibit so-called “banding”— the City’s previous practice of rounding scores to the nearest whole number and considering all candidates with the same whole-number score as being of one rank. Banding allowed the City to consider three ranks of candidates (with the possibility of multiple candidates filling each rank) for purposes of the rule of three. See Kelly v. New Haven, No. CV000444614,2004 WL 114377, *3 (Conn. Super. Ct., Jan. 9, 2004). Respondents claim that employing banding here would have made four black and one Hispanic candidates eligible for then-open lieutenant and captain positions.

A state court’s prohibition of banding, as a matter of municipal law under the charter, may not eliminate banding as a valid alternative under Title VII. See 42 U. S. C. § 2000e-7. We need not resolve that point, however. Here, banding was not a valid alternative for this reason: Had the City reviewed the exam results and then adopted banding to make the minority test scores appear higher, it would have violated Title VIPs prohibition of adjusting test results on the basis of race. §2000e-2(Z); see also Chicago Firefighters Local 2 v. Chicago, 249 F. 3d 649, 656 (CA7 2001) (Posner, J.) (“We have no doubt that if banding were adopted in order to make lower black scores seem higher, it would indeed be ... forbidden”). As a matter of law, banding was not an alternative available to the City when it was considering whether to certify the examination results.

*591Third, and finally, respondents refer to statements by Hornick in his telephone interview with the CSB regarding alternatives to the written examinations. Hornick stated his “belie[f]” that an “assessment center process,” which would have evaluated candidates’ behavior in typical job tasks, “would have demonstrated less adverse impac[t].” CA2 App. A1039. But Hornick’s brief mention of alternative testing methods, standing alone, does not raise a genuine issue of material fact that assessment centers were available to the City at the time of the examinations and that they would have produced less adverse impact. Other statements to the CSB indicated that the Department could not have used assessment centers for the 2003 examinations. Supra, at 574. And although respondents later argued to the CSB that Hornick had pushed the City to reject the test results, supra, at 572-574, the truth is that the essence of Hornick’s remarks supported its certifying the test results. See Scott, 550 U. S., at 380. Hornick stated that adverse impact in standardized testing “has been in existence since the beginning of testing,” CA2 App. A1037, and that the disparity in New Haven’s test results was “somewhat higher but generally in the range that we’ve seen professionally,” id., at A1030-A1031. He told the CSB he was “not suggesting” that IOS “somehow created a test that had adverse impacts that it should not have had.” Id., at A1038. And he suggested that the CSB should “certify the list as it exists.” Id., at A1041.

Especially when it is noted that the strong-basis-in-evidence standard applies, respondents cannot create a genuine issue of fact based on a few stray (and contradictory) statements in the record. And there is no doubt respondents fall short of the mark by relying entirely on isolated statements by Hornick. Hornick had not “studied] the test at length or in detail.” Id., at A1030. And as he told the CSB, he is a “direct competitor” of IOS’. Id., at A1029. The remainder of his remarks showed that Hornick’s pri*592mary concern — somewhat to the frustration of CSB members — was marketing his services for the future, not commenting on the results of the tests the City had already administered. See, e. g., id., at A1026, A1027, A1032, A1036, A1040, A1041. Hornick’s hinting had its intended effect: The City has since hired him as a consultant. As for the other outside witnesses who spoke to the CSB, Vincent Lewis (the retired fire captain) thought the CSB should certify the test results. And Janet Helms (the Boston College professor) declined to review the examinations and told the CSB that, as a society, “we need to develop a new way of assessing people.” Id., at A1073. That task was beyond the reach of the CSB, which was concerned with the adequacy of the test results before it.

3

On the record before us, there is no genuine dispute that the City lacked a strong basis in evidence to believe it would face disparate-impact liability if it certified the examination results. In other words, there is no evidence — let alone the required strong basis in evidence — that the tests were flawed because they were not job related or because other, equally valid and less discriminatory tests were available to the City. Fear of litigation alone cannot justify an employer’s reliance on race to the detriment of individuals who passed the examinations and qualified for promotions. The City’s discarding the test results was impermissible under Title VII, and summary judgment is appropriate for petitioners on their disparate-treatment claim.

* * *

The record in this litigation documents a process that, at the outset, had the potential to produce a testing procedure that was true to the promise of Title VII: No individual should face workplace discrimination based on race. Re*593spondents thought about promotion qualifications and relevant experience in neutral ways. They were careful to ensure broad racial participation in the design of the test itself and its administration. As we have discussed at length, the process was open and fair.

The problem, of course, is that after the tests were completed, the raw racial results became the predominant rationale for the City’s refusal to certify the results. The injury arises in part from the high, and justified, expectations of the candidates who had participated in the testing process on the terms the City had established for the promotional process. Many of the candidates had studied for months, at considerable personal and financial expense, and thus the injury caused by the City’s reliance on raw racial statistics at the end of the process was all the more severe. Confronted with arguments both for and against certifying the test results — and threats of a lawsuit either way — the City was required to make a difficult inquiry. But its hearings produced no strong evidence of a disparate-impact violation, and the City was not entitled to disregard the tests based solely on the racial disparity in the results.

Our holding today clarifies how Title VII applies to resolve competing expectations under the disparate-treatment and disparate-impact provisions. If, after it certifies the test results, the City faces a disparate-impact suit, then in light of our holding today it should be clear that the City would avoid disparate-impact liability based on the strong basis in evidence that, had it not certified the results, it would have been subject to disparate-treatment liability.

Petitioners are entitled to summary judgment on their Title VII claim, and we therefore need not decide the underlying constitutional question. The judgment of the Court of Appeals is reversed, and the cases are remanded for further proceedings consistent with this opinion.

It is so ordered.

*594Justice Scalia,

concurring.

I join the Court’s opinion in full, but write separately to observe that its resolution of this dispute merely postpones the evil day on which the Court will have to confront the question: Whether, or to what extent, are the disparate-impact provisions of Title VII of the Civil Rights Act of 1964 consistent with the Constitution’s guarantee of equal protection? The question is not an easy one. See generally Primus, Equal Protection and Disparate Impact: Round Three, 117 Harv. L. Rev. 493 (2003).

The difficulty is this: Whether or not Title VII’s disparate-treatment provisions forbid “remedial” race-based actions when a disparate-impact violation would not otherwise result — the question resolved by the Court today — it is clear that Title VII not only permits but affirmatively requires such actions when a disparate-impact violation would otherwise result. See ante, at 580-581. But if the Federal Government is prohibited from discriminating on the basis of race, Bolling v. Sharpe, 347 U. S. 497, 500 (1954), then surely it is also prohibited from enacting laws mandating that third parties — e. g., employers, whether private, state, or municipal — discriminate on the basis of race. See Buchanan v. Warley, 245 U. S. 60, 78-82 (1917). As the facts of these cases illustrate, Title VII’s disparate-impact provisions place a racial thumb on the scales, often requiring employers to evaluate the racial outcomes of their policies, and to make decisions based on (because of) those racial outcomes. That type of racial decisionmaking is, as the Court explains, discriminatory. See ante, at 578-579; Personnel Administrator of Mass. v. Feeney, 442 U. S. 256, 279 (1979).

To be sure, the disparate-impact laws do not mandate imposition of quotas, but it is not clear why that should provide a safe harbor. Would a private employer not be guilty of unlawful discrimination if he refrained from establishing a racial hiring quota but intentionally designed his hiring practices to achieve the same end? Surely he would. In*595tentional discrimination is still occurring, just one step up the chain. Government compulsion of such design would therefore seemingly violate equal protection principles. Nor would it matter that Title VII requires consideration of race on a wholesale, rather than retail, level. “[T]he Government must treat citizens as individuals, not as simply components of a racial, religious, sexual or national class.” Miller v. Johnson, 515 U. S. 900, 911 (1995) (internal quotation marks omitted). And of course the purportedly benign motive for the disparate-impact provisions cannot save the statute. See Adarand Constructors, Inc. v. Peña, 515 U. S. 200, 227 (1995).

It might be possible to defend the law by framing it as simply an evidentiary tool used to identify genuine, intentional discrimination — to “smoke out,” as it were, disparate treatment. See Primus, supra, at 498-499, 520-521. Disparate impact is sometimes (though not always, see Watson v. Fort Worth Bank & Trust, 487 U. S. 977, 992 (1988) (plurality opinion)) a signal of something illicit, so a regulator might allow statistical disparities to play some role in the evidentiary process. Cf. McDonnell Douglas Corp. v. Green, 411 U. S. 792, 802-803 (1973). But arguably the disparate-impact provisions sweep too broadly to be fairly characterized in such a fashion — since they fail to provide an affirmative defense for good-faith (i. e., nonracially motivated) conduct, or perhaps even for good faith plus hiring standards that are entirely reasonable. See post, at 621-623, and n. 3 (Ginsburg, J., dissenting) (describing the demanding nature of the “business necessity” defense). This is a question that this Court will have to consider in due course. It is one thing to free plaintiffs from proving an employer’s illicit intent, but quite another to preclude the employer from proving that its motives were pure and its actions reasonable.

The Court’s resolution of these cases makes it unnecessary to resolve these matters today. But the war between disparate impact and equal protection will be waged sooner or *596later, and it behooves us to begin thinking about how — and on what terms — to make peace between them.

Justice Alito, with whom Justice Scalia and Justice Thomas join, concurring.

I join the Court’s opinion in full. I write separately only because the dissent, while claiming that “[t]he Court’s recitation of the facts leaves out important parts of the story,” post, at 609 (opinion of Ginsburg, J.), provides an incomplete description of the events that led to New Haven’s decision to reject the results of its exam. The dissent’s omissions are important because, when all of the evidence in the record is taken into account, it is clear that, even if the legal analysis in Parts II and III-A of the dissent were accepted, affirmance of the decision below is untenable.

I

When an employer in a disparate-treatment case under Title VII of the Civil Rights Act of 1964 claims that an employment decision, such as the refusal to promote, was based on a legitimate reason, two questions — one objective and one subjective — must be decided. The first, objective question is whether the reason given by the employer is one that is legitimate under Title VII. See St. Mary’s Honor Center v. Hicks, 509 U. S. 502, 506-507 (1993). If the reason provided by the employer is not legitimate on its face, the employer is liable. Id., at 509. The second, subjective question concerns the employer’s intent. If an employer offers a facially legitimate reason for its decision but it turns out that this explanation was just a pretext for discrimination, the employer is again liable. See id., at 510-512.

The question on which the opinion of the Court and the dissenting opinion disagree concerns the objective component of the determination that must be made when an employer justifies an employment decision, like the one made in *597this litigation, on the ground that a contrary decision would have created a risk of disparate-impact liability. The Court holds — and I entirely agree — that concern about disparate-impact liability is a legitimate reason for a decision of the type involved here only if there was a “strong basis in evidence to find the tests inadequate.” Ante, at 585. The Court ably demonstrates that in this litigation no reasonable jury could find that the city of New Haven (City) possessed such evidence and therefore summary judgment for petitioners is required. Because the Court correctly holds that respondents cannot satisfy this objective component, the Court has no need to discuss the question of respondents’ actual intent. As the Court puts it, “[e]ven if respondents were motivated as a subjective matter by a desire to avoid committing disparate-impact discrimination, the record makes clear there is no support for the conclusion that respondents had an objective, strong basis in evidence to find the tests inadequate.” Ibid.

The dissent advocates a different objective component of the governing standard. According to the dissent, the objective component should be whether the evidence provided “good cause” for the decision, post, at 625, and the dissent argues — incorrectly, in my view — that no reasonable juror could fail to find that such evidence was present here. But even if the dissent were correct on this point, I assume that the dissent would not countenance summary judgment for respondents if respondents’ professed concern about disparate-impact litigation was simply a pretext. Therefore, the decision below, which sustained the entry of summary judgment for respondents, cannot be affirmed unless no reasonable jury could find that the City’s asserted reason for scrapping its test — concern about disparate-impact liability — was a pretext and that the City’s real reason was illegitimate, namely, the desire to placate a politically important racial constituency.

*598II

A

As initially described by the dissent, see post, at 609-618, the process by which the City reached the decision not to accept the test results was open, honest, serious, and deliberative. But even the District Court admitted that “a jury could rationally infer that city officials worked behind the scenes to sabotage the promotional examinations because they knew that, were the exams certified, the Mayor would incur the wrath of [Rev. Boise] Kimber and other influential leaders of New Haven’s African-American community.” 554 F. Supp. 2d 142, 162 (Conn. 2006) (internal quotation marks omitted), summarily aff’d, 530 F. 3d 87 (CA2 2008) (per curiam).

This admission finds ample support in the record. Rev. Boise Kimber, to whom the District Court referred, is a politically powerful New Haven pastor and a self-professed “‘kingmaker.’” App. to Pet. for Cert, in No. 07-1428, p. 906a; see also id., at 909a. On one occasion, “[i]n front of TV cameras, he threatened a race riot during the murder trial of the black man arrested for killing white Yalie Christian Prince. He continues to call whites racist if they question his actions.” Id., at 931a.

Reverend Kimber’s personal ties with seven-term New Haven Mayor John DeStefano (Mayor) stretch back more than a decade. In 1996, for example, Mayor DeStefano testified for Reverend Kimber as a character witness when Reverend Kimber — then the manager of a funeral home — was prosecuted and convicted for stealing prepaid funeral expenses from an elderly woman and then lying about the matter under oath. See id., at 126a, 907a. “Reverend Kimber has played a leadership role in all of Mayor DeStefano’s political campaigns, [and] is considered a valuable political supporter and vote-getter.” Id., at 126a. According to the Mayor’s former campaign manager (who is currently his executive assistant), Reverend Kimber is an invaluable political *599asset because “[h]e’s very good at organizing people and putting together field operations, as a result of his ties to labor, his prominence in the religious community and his longstanding commitment to roots.” Id., at 908a (internal quotation marks and alteration omitted).

In 2002, the Mayor picked Reverend Kimber to serve as the chairman of the New Haven Board of Fire Commissioners (BFC), “despite the fact that he had no experience in the profession, fire administration, [or] municipal management.” Id., at 127a; see also id., at 928a-929a. In that capacity, Reverend Kimber told firefighters that certain new recruits would not be hired because “ ‘they just have too many vowels in their name[s].’” Thanawala, New Haven Fire Panel Chairman Steps Down Over Racial Slur, Hartford Courant, June 13, 2002, p. B2. After protests about this comment, Reverend Kimber stepped down as chairman of the BFC, ibid.; see also App. to Pet. for Cert, in No. 07-1428, at 929a, but he remained on the BFC and retained “a direct line to the mayor,” id., at 816a.

Almost immediately after the test results were revealed in “early January” 2004, Reverend Kimber called the City’s chief administrative officer, Karen Dubois-Walton, who “acts ‘on behalf of the Mayor.’” Id., at 221a, 812a. DuboisWalton and Reverend Kimber met privately in her office because he wanted “to express his opinion” about the test results and “to have some influence” over the City’s response. Id., at 815a-816a. As discussed in further detail below, Reverend Kimber adamantly opposed certification of the test results — a fact that he or someone in the Mayor’s office eventually conveyed to the Mayor. Id., at 229a.

B

On January 12, 2004, Tina Burgett (the director of the City’s Department of Human Resources) sent an e-mail to Dubois-Walton to coordinate the City’s response to the test results. Burgett wanted to clarify that the City’s executive *600officials would meet “sans the Chief, and that once we had a better fix on the next steps we would meet with the Mayor (possibly) and then the two Chiefs.” Id., at 446a. The “two Chiefs” are Fire Chief William Grant (who is white) and Assistant Fire Chief Ronald Dumas (who is African-American). Both chiefs believed that the test results should be certified. Id., at 228a, 817a. Petitioners allege, and the record suggests, that the Mayor and his staff colluded “sans the Chief[s]” because “the defendants did not want Grant’s and Dumas’ views to be expressed or known; accordingly both men were prevented by the Mayor and his staff from making any statements regarding the matter.” Id., at 228a.1

The next day, on January 13, 2004, Chad Legel, who had designed the tests, flew from Chicago to New Haven to meet with Dubois-Walton, Burgett, and Thomas Ude, the City’s corporate counsel. Id., at 179a. “Legel outlined the merits of the examination and why city officials should be confident in the validity of the results.” Ibid. But according to Legel, Dubois-Walton was “argumentative” and apparently had already made up her mind that the tests were “ ‘discriminatory.’ ” Id., at 179a-180a. Again according to Legel, “[a] theme” of the meeting was “the political and racial overtones of what was going on in the City.” Id., at 181a. “Legel came away from the January 13, 2004 meeting with the impression that defendants were already leaning toward discarding the examination results.” Id., at 180a.

On January 22, 2004, the Civil Service Board (CSB or Board) convened its first public meeting. Almost immediately, Reverend Kimber began to exert political pressure on the CSB. He began a loud, minutes-long outburst that required the CSB chairman to shout him down and hold him out of order three times. See id., at 187a, 467a-468a; see *601also App. in No. 06-4996-cv (CA2), pp. A703-A705. Reverend Kimber protested the public meeting, arguing that he and the other fire commissioners should first be allowed to meet with the CSB in private. App. to Pet. for Cert. in No. 07-1428, at 188a.

Four days after the CSB’s first meeting, Mayor DeStefano’s executive aide sent an e-mail to Dubois-Walton, Burgett, and Ude. Id., at 190a. The message clearly indicated that the Mayor had made up his mind to oppose certification of the test results (but nevertheless wanted to conceal that fact from the public):

“I wanted to make sure we are all on the same page for this meeting tomorrow. . . . [LJet’s remember, that these folks are not against certification yet. So we can’t go in and tell them that is our position; we have to deliberate and arrive there as the fairest and most cogent outcome.” Ibid.

On February 5, 2004, the CSB convened its second public meeting. Reverend Kimber again testified and threatened the CSB with political recriminations if they voted to certify the test results:

“I look at this [Board] tonight. I look at three whites and one Hispanic and no blacks. ... I would hope that you would not put yourself in this type of position, a political ramification that may come back upon you as you sit on this [Board] and decide the future of a department and the future of those who are being promoted.

“(APPLAUSE).” Id., at 492a (emphasis added).

One of the CSB members “t[ook] great offense” because he believed that Reverend Kimber “considered] [him] a bigot because [his] face is white.” Id., at 496a. The offended *602CSB member eventually voted not to certify the test results. Id., at 586a-587a.

One of Reverend Kimber’s “friends and allies,” Lieutenant Gary Tinney, also exacerbated racial tensions before the CSB. Id., at 129a. After some firefighters applauded in support of certifying the test results, “Lt. Tinney exclaimed, ‘Listen to the Klansmen behind us.’” Id., at 225a.

Tinney also has strong ties to the Mayor’s office. See, e. g., id., at 129a-130a, 816a-817a. After learning that he had not scored well enough on the captain’s exam to earn a promotion, Tinney called Dubois-Walton and arranged a meeting in her office. Id., at 830a-831a, 836a. Tinney alleged that the white firefighters had cheated on their exams — an accusation that Dubois-Walton conveyed to the Board without first conducting an investigation into its veracity. Id., at 837a-838a; see also App. 164 (statement of CSB chairman, noting the allegations of cheating). The allegation turned out to be baseless. App. to Pet. for Cert. in No. 07-1428, at 836a.

Dubois-Walton never retracted the cheating allegation, but she and other executive officials testified several times before the CSB. In accordance with directions from the May- or’s office to make the CSB meetings appear deliberative, see id., at 190a, executive officials remained publicly uncommitted about certification — while simultaneously “work[ing] as a team” behind closed doors with the secretary of the CSB to devise a political message that would convince the CSB to vote against certification, see id., at 447a. At the public CSB meeting on March 11, 2004, for example, Corporation Counsel Ude bristled at one board member’s suggestion that City officials were recommending against certifying the test results. See id., at 215a (“Attorney Ude took offense, stating, ‘Frankly, because I would never make a recommendation — I would not have made a recommendation like that’ ”). But within days of making that public statement, Ude privately told other members of the Mayor’s team “the ONLY *603way we get to a decision not to certify is” to focus on something other than “a big discussion re: adverse impact” law. Id., at 458a-459a.

As part of its effort to deflect attention from the specifics of the test, the City relied heavily on the testimony of Dr. Christopher Hornick, who is one of Chad Legel’s competitors in the test-development business. Hornick never “stud-tied] the test [that Legel developed] at length or in detail,” id., at 549a; see also id., at 203a, 553a, but Hornick did review and rely upon literature sent to him by Burgett to criticize Legel’s test. For example, Hornick “noted in the literature that [Burgett] sent that the test was not customized to the New Haven Fire Department.” Id., at 551a. The chairman of the CSB immediately corrected Hornick. Id., at 552a (“Actually, it was, Dr. Hornick”). Hornick also relied on newspaper accounts — again, sent to him by Burgett — pertaining to the controversy surrounding the certification decision. See id., at 204a, 557a. Although Hornick again admitted that he had no knowledge about the actual test that Legel had developed and that the City had administered, see id., at 560a-561a, the City repeatedly relied upon Hornick as a testing “guru” and, in the CSB chairman’s words, “the City ke[pt] quoting him as a person that we should rely upon more than anybody else [to conclude that there] is a better way— a better mousetrap.”2 App. in No. 06-4996-cv (CA2), at A1128. Dubois-Walton later admitted that the City rewarded Hornick for his testimony by hiring him to develop and administer an alternative test. App. to Pet. for Cert. in *604No. 07-1428, at 854a; see also id., at 562a-563a (Hornick’s plea for future business from the City on the basis of his criticisms of Legel’s tests).

At some point prior to the CSB’s public meeting on March 18,2004, the Mayor decided to use his executive authority to disregard the test results — even if the CSB ultimately voted to certify them. Id., at 819a-820a. Accordingly, on the evening of March 17th, Dubois-Walton sent an e-mail to the Mayor, the Mayor’s executive assistant, Burgett, and attorney Ude, attaching two alternative press releases. Id., at 457a. The first would be issued if the CSB voted not to certify the test results; the second would be issued (and would explain the Mayor’s invocation of his executive authority) if the CSB voted to certify the test results. Id., at 217a-218a, 590a-591a, 819a-820a. Half an hour after Dubois-Walton circulated the alternative drafts, Burgett replied: “[W]ell, that seems to say it all. Let’s hope draft #2 hits the shredder tomorrow nite.” Id., at 457a.

Soon after the CSB voted against certification, Mayor De-Stefano appeared at a dinner event and “took credit for the scu[tt]ling of the examination results.” Id., at 230a.

C

Taking into account all the evidence in the summary judgment record, a reasonable jury could find the following. Almost as soon as the City disclosed the racial makeup of the list of firefighters who scored the highest on the exam, the City administration was lobbied by an influential community leader to scrap the test results, and the City administration decided on that course of action before making any real assessment of the possibility of a disparate-impact violation. To achieve that end, the City administration concealed its internal decision but worked — as things turned out, successfully — to persuade the CSB that acceptance of the test results would be illegal and would expose the City to disparate-impact liability. But in the event that the CSB *605was not persuaded, the Mayor, wielding ultimate decision-making authority, was prepared to overrule the CSB immediately. Taking this view of the evidence, a reasonable jury could easily find that the City’s real reason for scrapping the test results was not a concern about violating the disparate-impact provision of Title VII but a simple desire to please a politically important racial constituency. It is noteworthy that the Solicitor General — whose position on the principal legal issue here is largely aligned with the dissent — eon-' eludes that “[n]either the district court nor the court of appeals . . . adequately considered whether, viewing the evidence in the light most favorable to petitioners, a genuine issue of material fact remained whether respondents’ claimed purpose to comply with Title VII was a pretext for intentional racial discrimination . . . .” Brief for United States as Amicus Curiae 6; see also id., at 32-33.

Ill

I will not comment at length on the dissent’s criticism of my analysis, but two points require a response.

The first concerns the dissent’s statement that I “equat[e] political considerations with unlawful discrimination.” Post, at 642. The dissent misrepresents my position: I draw no such equation. Of course “there are many ways in which a politician can attempt to win over a constituency — including a racial constituency — without engaging in unlawful discrimination.” Ibid. But — as I assume the dissent would agree — there are some things that a public official cannot do, and one of those is engaging in intentional racial discrimination when making employment decisions.

The second point concerns the dissent’s main argument— that efforts by the Mayor and his staff to scuttle the test results are irrelevant because the ultimate decision was made by the CSB. According to the dissent, “[t]he relevant decision was made by the CSB,” post, at 640, and there is “scant cause to suspect” that anything done by the opponents *606of certification, including the Mayor and his staff, “prevented the CSB from evenhandedly assessing the reliability of the exams and rendering an independent, good-faith decision on certification,” post, at 641.

Adoption of the dissent’s argument would implicitly decide an important question of Title VII law that this Court has never resolved — the circumstances in which an employer may be held liable based on the discriminatory intent of subordinate employees who influence but do not make the ultimate employment decision. There is a large body of Court of Appeals case law on this issue, and these cases disagree about the proper standard. See EEOC v. BCI Coca-Cola Bottling Co. of Los Angeles, 450 F. 3d 476, 484-488 (CA10 2006) (citing cases and describing the approaches taken in different Circuits). One standard is whether the subordinate “exerted influencie] over the titular decisionmaker.” Russell v. McKinney Hosp. Venture, 235 F. 3d 219, 227 (CA5 2000); see also Poland v. Chertoff, 494 F. 3d 1174, 1182 (CA9 2007) (A subordinate’s bias is imputed to the employer where the subordinate “influenced or was involved in the decision or decisionmaking process”). Another is whether the discriminatory input “caused the adverse employment action.” See BCI Coca-Cola Bottling Co. of Los Angeles, supra, at 487.

In the present cases, a reasonable jury could certainly find that these standards were met. The dissent makes much of the fact that members of the CSB swore under oath that their votes were based on the good-faith belief that certification of the results would have violated federal law. See post, at 640. But the good faith of the CSB members would not preclude a finding that the presentations engineered by the Mayor and his staff influenced or caused the CSB decision.

The least employee-friendly standard asks only whether “the actual decisionmaker” acted with discriminatory intent, see Hill v. Lockheed Martin Logistics Management, Inc., *607354 F. 3d 277, 291 (CA4 2004) (en banc), and it is telling that, even under this standard, summary judgment for respondents would not be proper. This is so because a reasonable jury could certainly find that in New Haven, the Mayor — not the CSB — wielded the final decisionmaking power. After all, the Mayor claimed that authority and was poised to use it in the event that the CSB decided to accept the test results. See supra, at 604. If the Mayor had the authority to overrule a CSB decision accepting the test results, the Mayor also presumably had the authority to overrule the CSB’s decision rejecting the test results. In light of the Mayor’s conduct, it would be quite wrong to throw out petitioners’ case on the ground that the CSB was the ultimate decisionmaker.

* * *

Petitioners are firefighters who seek only a fair chance to move up the ranks in their chosen profession. In order to qualify for promotion, they made personal sacrifices. Petitioner Frank Ricci, who is dyslexic, found it necessary to “hir[e] someone, at considerable expense, to read onto audiotape the content of the books and study materials].” App. to Pet. for Cert. in No. 07-1428, at 169a. He “studied an average of eight to thirteen hours a day ... , even listening to audio tapes while driving his car.” Ibid. Petitioner Benjamin Vargas, who is Hispanic, had to “give up a part-time job,” and his wife had to “take leave from her own job in order to take care of their three young children while Vargas studied.” Id., at 176a. “Vargas devoted countless hours to study..., missed two of his children’s birthdays and over two weeks of vacation time,” and “incurred significant financial expense” during the 3-month study period. Id., at 176a-177a.

Petitioners were denied promotions for which they qualified because of the race and ethnicity of the firefighters who achieved the highest scores on the City’s exam. The District Court threw out their case on summary judgment, even *608though that court all but conceded that a jury could find that the City’s asserted justification was pretextual. The Court of Appeals then summarily affirmed that decision.

The dissent grants that petitioners’ situation is “unfortunate” and that they “understandably attract this Court’s sympathy.” Post this page and 644. But “sympathy” is not what petitioners have a right to demand. What they have a right to demand is evenhanded enforcement of the law — of Title VII’s prohibition against discrimination based on race. And that is what, until today’s decision, has been denied them.

Justice Ginsburg, with whom Justice Stevens, Justice Souter, and Justice Breyer join, dissenting.

In assessing claims of race discrimination, “[c]ontext matters.” Grutter v. Bollinger, 539 U. S. 306, 327 (2003). In 1972, Congress extended Title VII of the Civil Rights Act of 1964 to cover public employment. At that time, municipal fire departments across the country, including New Haven’s, pervasively discriminated against minorities. The extension of Title VII to cover jobs in firefighting effected no overnight change. It took decades of persistent effort, advanced by Title VII litigation, to open firefighting posts to members of racial minorities.

The white firefighters who scored high on New Haven’s promotional exams understandably attract this Court’s sympathy. But they had no vested right to .promotion. Nor have other persons received promotions in preference to them. New Haven maintains that it refused to certify the test results because it believed, for good cause, that it would be vulnerable to a Title VII disparate-impact suit if it relied on those results. The Court today holds that New Haven has not demonstrated “a strong basis in evidence” for its plea. Ante, at 563. In so holding, the Court pretends that “[t]he City rejected the test results solely because the higher scoring candidates were white. ” Ante, at 580. That preten*609sion, essential to the Court’s disposition, ignores substantial evidence of multiple flaws in the tests New Haven used. The Court similarly fails to acknowledge the better tests used in other cities, which have yielded less racially skewed outcomes.1

By order of this Court, New Haven, a city in which African-Americans and Hispanics account for nearly 60 percent of the population, must today be served — as it was in the days of undisguised discrimination — by a fire department in which members of racial and ethnic minorities are rarely seen in command positions. In arriving at its order, the Court barely acknowledges the pathmarking decision in Griggs v. Duke Power Co., 401 U. S. 424 (1971), which explained the centrality of the disparate-impact concept to effective enforcement of Title VII. The Court’s order and opinion, I anticipate, will not have staying power.

I

A

The Court’s recitation of the facts leaves out important parts of the story. Firefighting is a profession in which the legacy of racial discrimination casts an especially long shadow. In extending Title VII to state and local government employers in 1972, Congress took note of a U. S. Commission on Civil Rights (USCCR) report finding racial discrimination in municipal employment even “more pervasive than in the private sector.” H. R. Rep. No. 92-288, p. 17 (1971). According to the report, overt racism was partly to blame, but so too was a failure on the part of municipal em*610ployers to apply merit-based employment principles. In making hiring and promotion decisions, public employers often “rel[ied] on criteria unrelated to job performance,” including nepotism or political patronage. 118 Cong. Rec. 1817 (1972). Such flawed selection methods served to entrench preexisting racial hierarchies. The USCCR report singled out police and fire departments for having “[bjarriers to equal employment. . . greater . . . than in any other area of State or local government,” with African-Americans “holding] almost no positions in the officer ranks.” Ibid. See also National Commission on Fire Prevention and Control, America Burning 5 (1973) (“Racial minorities are under-represented in the fire departments in nearly every community in which they live.”).

The city of New Haven (City) was no exception. In the early 1970’s, African-Americans and Hispanics composed 30 percent of New Haven’s population, but only 3.6 percent of the City’s 502 firefighters. The racial disparity in the officer ranks was even more pronounced: “[O]f the 107 officers in the Department only one was black, and he held the lowest rank above private.” Firebird Soc. of New Haven, Inc. v. New Haven Bd. of Fire Comm’rs, 66 F. R. D. 457, 460 (Conn. 1975).

Following a lawsuit and settlement agreement, see ibid., the City initiated efforts to increase minority representation in the New Haven Fire Department (Department). Those litigation-induced efforts produced some positive change. New Haven’s population includes a greater proportion of minorities today than it did in the 1970’s: Nearly 40 percent of the City’s residents are African-American and more than 20 percent are Hispanic. Among entry-level firefighters, minorities are still underrepresented, but not starkly so. As of 2003, African-Americans and Hispanics constituted 30 percent and 16 percent of the City’s firefighters, respectively. In supervisory positions, however, significant disparities remain. Overall, the senior officer ranks (captain and higher) *611are nine percent African-American and nine percent Hispanic. Only one of the Department’s 21 fire captains is African-American. See App. in No. 06-4996-cv (CA2), p. A1588 (hereinafter CA2 App.). It is against this backdrop of entrenched inequality that the promotion process at issue in this litigation should be assessed.

B

By order of its charter, New Haven must use competitive examinations to fill vacancies in fire-officer and other civil-service positions. Such examinations, the City’s civil-service rules specify, “shall be practical in nature, shall relate to matters which fairly measure the relative fitness and capacity of the applicants to discharge the duties of the position which they seek, and shall take into account character, training, experience, physical and mental fitness.” Id., at A331. The City may choose among a variety of testing methods, including written and oral exams and “[performance tests to demonstrate skill and ability in performing actual work.” Id., at A332.

New Haven, the record indicates, did not closely consider what sort of “practical” examination would “fairly measure the relative fitness and capacity of the applicants to discharge the duties” of a fire officer. Instead, the City simply adhered to the testing regime outlined in its two-decades-old contract with the local firefighters’ union: a written exam, which would account for 60 percent of an applicant’s total score, and an oral exam, which would account for the remaining 40 percent. Id., at A1045. In soliciting bids from exam development companies, New Haven made clear that it would entertain only “proposals that include a written component that will be weighted at 60%, and an oral component that will be weighted at 40%. ” Id., at A342. Chad Legel, a representative of the winning bidder, Industrial/Organizational Solutions, Inc. (IOS), testified during his deposition that the City never asked whether alternative methods *612might better measure the qualities of a successful fire officer, including leadership skills and command presence. See id., at A522 (“I was under contract and had responsibility only to create the oral interview and the written exam.”).

Pursuant to New Haven’s specifications, IOS developed and administered the oral and written exams. The results showed significant racial disparities. On the lieutenant exam, the pass rate for African-American candidates was about one-half the rate for Caucasian candidates; the pass rate for Hispanic candidates was even lower. On the captain exam, both African-American and Hispanic candidates passed at about half the rate of their Caucasian counterparts. See App. 225-226. More striking still, although nearly half of the 77 lieutenant candidates were African-American or Hispanic, none would have been eligible for promotion to the eight positions then vacant. The highest scoring African-American candidate ranked 13th; the top Hispanic candidate was 26th. As for the seven then-vacant captain positions, two Hispanic candidates would have been eligible, but no African-Americans. The highest scoring African-American candidate ranked 15th. See id., at 218-219.

These stark disparities, the Court acknowledges, sufficed to state a prima facie case under Title VII’s disparate-impact provision. See ante, at 586 (“The pass rates of minorities ... f[e]ll well below the 80-percent standard set by the [Equal Employment Opportunity Commission (EEOC)] to implement the disparate-impact provision of Title VII.”). New Haven thus had cause for concern about the prospect of Title VII litigation and liability. City officials referred the matter to the New Haven Civil Service Board (CSB), the entity responsible for certifying the results of employment exams.

Between January and March 2004, the CSB held five public meetings to consider the proper course. At the first meeting, New Haven’s Corporation Counsel, Thomas Ude, described the legal standard governing Title VII disparate-impact claims. Statistical imbalances alone, Ude correctly *613recognized, do not give rise to liability. Instead, presented with a disparity, an employer “has the opportunity and the burden of proving that the test is job-related and consistent with business necessity.” CA2 App. A724. A Title VII plaintiff may attempt to rebut an employer’s showing of job-relatedness and necessity by identifying alternative selection methods that would have been at least as valid but with “less of an adverse or disparate or discriminatory effect.” Ibid. See also id., at A738. Accordingly, the CSB commissioners understood, their principal task was to decide whether they were confident about the reliability of the exams: Had the exams fairly measured the qualities of a successful fire officer despite their disparate results? Might an alternative examination process have identified the most qualified candidates without creating sueh significant racial imbalances?

Seeking a range of input on these questions, the CSB heard from test takers, the test designer, subject-matter experts, City officials, union leaders, and community members. Several candidates for promotion, who did not yet know their exam results, spoke at the CSB’s first two meetings. Some candidates favored certification. The exams, they emphasized, had closely tracked the assigned study materials. Having invested substantial time and money to prepare themselves for the test, they, felt it would be unfair to scrap the results. See, e. g., id., at A772-A773, A785-A789.

Other firefighters had a different view. A number of the exam questions, they pointed out, were not germane to New Haven’s practices and procedures. See, e. g., id., at A774-A784. At least two candidates opposed to certification noted unequal access to study materials. Some individuals, they asserted, had the necessary books even before the syllabus was issued. Others had to invest substantial sums to purchase the materials and “wait a month and a half for some of the books because they were on back-order.” Id., at A858. These disparities, it was suggested, fell at least in part along racial lines. While many Caucasian applicants could obtain *614materials and assistance from relatives in the fire service, the overwhelming majority of minority applicants were “first-generation firefighters” without such support networks. See id., at A857-A861, A886-A887.

A representative of the Northeast Region of the International Association of Black Professional Firefighters, Donald Day, also spoke at the second meeting. Statistical disparities, he told the CSB, had been present in the Department’s previous promotional exams. On earlier tests, however, a few minority candidates had fared well enough to earn promotions. Id., at A828. See also App. 218-219. Day contrasted New Haven’s experience with that of nearby Bridgeport, where minority firefighters held one-third of lieutenant and captain positions. Bridgeport, Day observed, had once used a testing process similar to New Haven’s, with a written exam accounting for 70 percent of an applicant’s score, an oral exam for 25 percent, and seniority for the remaining five percent. CA2 App. A830. Bridgeport recognized, however, that the oral component, more so than the written component, addressed the sort of “real-life scenarios” fire officers encounter on the job. Id., at A832. Accordingly, that city “changed the relative weights” to give primacy to the oral exam. Ibid. Since that time, Day reported, Bridgeport had seen minorities “fairly represented” in its exam results. Ibid.

The CSB’s third meeting featured IOS representative Legel, the leader of the team that had designed and administered the exams for New Haven. Several City officials also participated in the discussion. Legel described the exam development process in detail. The City, he recounted, had set the “parameters” for the exams, specifically, the requirement of written and oral components with a 60/40 weighting. Id., at A923, A974. For security reasons, Department officials had not been permitted to check the content of the questions prior to their administration. Instead, IOS retained a senior fire officer from Georgia to review the exams “for con*615tent and fidelity to the source material.” Id., at A936. Legel defended the exams as “facially neutral,” and stated that he “would stand by the[ir] validity.” Id., at A962. City officials did not dispute the neutrality of IOS’s work. But, they cautioned, even if individual exam questions had no intrinsic bias, the selection process as a whole may nevertheless have been deficient. The officials urged the CSB to consult with experts about the “larger picture.” Id., at A1012.

At its fourth meeting, CSB solicited the views of three individuals with testing-related expertise. Dr. Christopher Hornick, an industrial/organizational psychology consultant with 25 years’ experience with police and firefighter testing, described the exam results as having “relatively high adverse impact.” Id., at A1028. Most of the tests he had developed, Hornick stated, exhibited “significantly and dramatically less adverse impact.” Id., at A1029. Hornick downplayed the notion of “facial neutrality.” It was more important, he advised the CSB, to consider “the broader issue of how your procedures and your rules and the types of tests that you are using are contributing to the adverse impact.” Id., at A1038.

Specifically, Hornick questioned New Haven’s union-prompted 60/40 written/oral examination structure, noting the availability of “different types of testing procedures that are much more valid in terms of identifying the best potential supervisors in [the] fire department.” Id., at A1032. He suggested, for example, “an assessment center process, which is essentially an opportunity for candidates ... to demonstrate how they would address a particular problem as opposed to just verbally saying it or identifying the correct option on a written test.” Id., at A1039-A1040. Such selection processes, Hornick said, better “identify] the best possible people” and “demonstrate dramatically less adverse impacts.” Ibid. Hornick added:

*616“I’ve spoken to at least 10,000, maybe 15,000, firefighters in group settings in my consulting practice and I have never one time ever had anyone in the fire service say to me, ‘Well, the person who answers — gets the highest score on a written job knowledge, multiple-guess test makes the best company officer.’ We know that it’s not as valid as other procedures that exist.” Id., at A1033.

See also id., at A1042-A1043 (“I think a person’s leadership skills, their command presence, their interpersonal skills, their management skills, their tactical skills could have been identified and evaluated in a much more appropriate way.”).

Hornick described the written test itself as “reasonably good,” id., at A1041, but he criticized the decision not to allow Department officials to check the content. According to Hornick, this “inevitably” led to “test[ing] for processes and procedures that don’t necessarily match up into the department.” Id., at A1034-A1035. He preferred “experts from within the department who have signed confidentiality agreements ... to make sure that the terminology and equipment that’s being identified from standardized reading sources apply to the department.” Id., at A1035.

Asked whether he thought the City should certify the results, Hornick hedged: “There is adverse impact in the test. That will be identified in any proceeding that you have. You will have industrial psychology experts, if it goes to court, on both sides. And it will not be a pretty or comfortable position for anyone to be in.” Id., at A1040-A1041. Perhaps, he suggested, New Haven might certify the results but immediately begin exploring “alternative ways to deal with these issues” in the future. Id., at A1041.

The two other witnesses made relatively brief appearances. Vincent Lewis, a specialist with the Department of Homeland Security and former fire officer in Michigan, believed the exams had generally tested relevant material, although he noted a relatively heavy emphasis on questions *617pertaining to being an “apparatus driver.” He suggested that this may have disadvantaged test takers “who had not had the training or had not had an opportunity to drive the apparatus.” Id., at A1051. He also urged the CSB to consider whether candidates had, in fact, enjoyed equal access to the study materials. Ibid. Cf. supra, at 613-614.

Janet Helms, a professor of counseling psychology at Boston College, observed that two-thirds of the incumbent fire officers who submitted job analyses to IOS during the exam-design phase were Caucasian. Members of different racial groups, Helms told the CSB, sometimes do their jobs in different ways, “often because the experiences that are open to white male firefighters are not open to members of these other under-represented groups.” CA2 App. A1063-A1064. The heavy reliance on job analyses from white firefighters, she suggested, may thus have introduced an element of bias. Id., at A1063.

The CSB’s fifth and final meeting began with statements from City officials recommending against certification. Ude, New Haven’s counsel, repeated the applicable disparate-impact standard:

“[A] finding of adverse impact is the beginning, not the end, of a review of testing procedures. Where a procedure demonstrates adverse impact, you look to how closely it is related to the job that you’re looking to fill and you also look at whether there are other ways to test for those qualities, those traits, those positions that are equally valid with less adverse impact.” Id., at A1100-A1101.

New Haven, Ude and other officials asserted, would be vulnerable to Title VII liability under this standard. Even if the exams were “facially neutral,” significant doubts had been raised about whether they properly assessed the key attributes of a successful fire officer. Id., at A1103. See also id., at A1125 (“Upon close reading of the exams, the *618questions themselves would appear to test a candidate’s ability to memorize textbooks but not necessarily to identify solutions to real problems on the fire ground.”). Moreover, City officials reminded the CSB, Hornick and others had identified better, less discriminatory selection methods— such as assessment centers or exams with a more heavily weighted oral component. Id., at A1108-A1109, A1129-A1130.

After giving members of the public a final chance to weigh in, the CSB voted on certification, dividing 2 to 2. By rule, the result was noncertification. Voting no, Commissioner Webber stated, “I originally was going to vote to certify. . . . But I’ve heard enough testimony here to give me great doubts about the test itself and . . . some of the procedures. And I believe we can do better.” Id., at A1157. Commissioner Tirado likewise concluded that the “flawed” testing process counseled against certification. Id., at A1158. Chairman Segaloff and Commissioner Caplan voted to certify. According to Segaloff, the testimony had not “compelled [him] to say this exam was not job-related,” and he was unconvinced that alternative selection processes would be “less discriminatory.” Id., at A1159-A1160. Both Segaloff and Caplan, however, urged the City to undertake civil-service reform. Id., at A1150-A1154.

C

Following the CSB’s vote, petitioners — 17 white firefighters and one Hispanic firefighter, all of whom had high marks on the exams — filed suit in the United States District Court for the District of Connecticut. They named as defendants — respondents here — the City, several City officials, a local political activist, and the two CSB members who voted against certifying the results. By opposing certification, petitioners alleged, respondents had discriminated against them in violation of Title VII’s disparate-treatment provision and the Fourteenth Amendment’s Equal Protec*619tion Clause. The decision not to certify, respondents answered, was a lawful effort to comply with Title VII’s disparate-impact provision and thus could not have run afoul of Title VII’s prohibition of disparate treatment. Characterizing respondents’ stated rationale as a mere pretext, petitioners insisted that New Haven would have had a solid defense to any disparate-impact suit.

In a decision summarily affirmed by the Court of Appeals, the District Court granted summary judgment for respondents. 554 F. Supp. 2d 142 (Conn. 2006), aff’d, 530 F. 3d 87 (CA2 2008) (per curiam). Under Second Circuit precedent, the District Court explained, “the intent to remedy the disparate impact” of a promotional exam “is not equivalent to an intent to discriminate against non-minority applicants.” 554 F. Supp. 2d, at 157 (quoting Hayden v. County of Nassau, 180 F. 3d 42, 51 (CA2 1999)). Rejecting petitioners’ pretext argument, the court observed that the exam results were sufficiently skewed “to make out a prima facie case of discrimination” under Title VII’s disparate-impact provision. 554 F. Supp. 2d, at 158. Had New Haven gone forward with certification and been sued by aggrieved minority test takers, the City would have been forced to defend tests that were presumptively invalid. And, as the CSB testimony of Hornick and others indicated, overcoming that presumption would have been no easy task. Id., at 153-156. Given Title VII’s preference for voluntary compliance, the court held, New Haven could lawfully discard the disputed exams even if the City had not definitively “pinpoint[ed]” the source of the disparity and “ha[d] not yet formulated a better selection method.” Id., at 156.

Respondents were no doubt conscious of race during their decisionmaking process, the court acknowledged, but this did not mean they had engaged in racially disparate treatment. The conclusion they had reached and the action thereupon taken were race neutral in this sense: “[A]ll the test results were discarded, no one was promoted, and firefighters of *620every race will have to participate in another selection process to be considered for promotion.” Id., at 158. New Haven’s action, which gave no individual a preference, “was ‘simply not analogous to a quota system or a minority set-aside where candidates, on the basis of their race, are not treated uniformly.’ ” Id., at 157 (quoting Hayden, 180 F. 3d, at 50). For these and other reasons, the court also rejected petitioners’ equal protection claim.

II

A

Title VII became effective in July 1965. Employers responded to the law by eliminating rules and practices that explicitly barred racial minorities from “white” jobs. But removing overtly race-based job classifications did not usher in genuinely equal opportunity. More subtle — and sometimes unconscious — forms of discrimination replaced once undisguised restrictions.

In Griggs v. Duke Power Co., 401 U. S. 424 (1971), this Court responded to that reality and supplied important guidance on Title VII’s mission and scope. Congress, the landmark decision recognized, aimed beyond “disparate treatment”; it targeted “disparate impact” as well. Title VII’s original text, it was plain to the Court, “proscribe [d] not only overt discrimination but also practices that are fair in form, but discriminatory in operation.” Id., at 431.2 Only by ig*621noring Griggs could one maintain that intentionally disparate treatment alone was Title VIPs “original, foundational prohibition,” and disparate impact a mere afterthought. Cf. ante, at 581.

Griggs addressed Duke Power Company’s policy that applicants for positions, save in the company’s labor department, be high school graduates and score satisfactorily on two professionally prepared aptitude tests. “[T]here was no showing of a discriminatory purpose in the adoption of the diploma and test requirements.” 401 U. S., at 428. The policy, however, “operated to render ineligible a markedly disproportionate number of [African-Americans].” Id., at 429. At the time of the litigation, in North Carolina, where the Duke Power plant was located, 34 percent of white males, but only 12 percent of African-American males, had high school diplomas. Id., at 430, n. 6. African-Americans also failed the aptitude tests at a significantly higher rate than whites. Ibid. Neither requirement had been “shown to bear a demonstrable relationship to successful performance of the jobs for which it was used.” Id., at 431.

The Court unanimously held that the company’s diploma and test requirements violated Title VII. “[T]o achieve equality of employment opportunities,” the Court comprehended, Congress “directed the thrust of the Act to the consequences of employment practices, not simply the motivation.” Id., at 429, 432. That meant “unnecessary barriers to employment” must fall, even if “neutral on their face” and “neutral in terms of intent.” Id., at 430, 431. “The touchstone” for determining whether a test or qualification meets Title VIPs measure, the Court said, is not “good intent or the absence of discriminatory intent”; it is “business necessity.” Id., at 431, 432. Matching procedure to substance, the Griggs Court observed, Congress “placed on the em*622ployer the burden of showing that any given requirement... ha[s] a manifest relationship to the employment in question.” Id., at 432.

In Albemarle Paper Co. v. Moody, 422 U. S. 405 (1975), the Court, again without dissent, elaborated on Griggs. When an employment test “select[s] applicants for hire or promotion in a racial pattern significantly different from the pool of applicants,” the Court reiterated, the employer must demonstrate a “manifest relationship” between test and job. 422 U. S., at 425. Such a showing, the Court cautioned, does not necessarily mean the employer prevails: “[I]t remains open to the complaining party to show that other tests or selection devices, without a similarly undesirable racial effect, would also serve the employer’s legitimate interest in ‘efficient and trustworthy workmanship.’” Ibid.

Federal trial and appellate courts applied Griggs and Albemarle to disallow a host of hiring and promotion practices that “operate[d] as ‘built in headwinds’ for minority groups.” Griggs, 401 U. S., at 432. Practices discriminatory in effect, courts repeatedly emphasized, could be maintained only upon an employer’s showing of “an overriding and compelling business purpose.” Chrisner v. Complete Auto Transit, Inc., 645 F. 2d 1251, 1261, n. 9 (CA6 1981).3 That a prac*623tice served “legitimate management functions” did not, it was generally understood, suffice to establish business necessity. Williams v. Colorado Springs, Colo., School Dish, 641 F. 2d 835, 840-841 (CA10 1981) (internal quotation marks omitted). Among selection methods cast aside for lack of a “manifest relationship” to job performance were a number of written hiring and promotional examinations for firefighters.4

Moving in a different direction, in Wards Cove Packing Co. v. Atonio, 490 U. S. 642 (1989), a bare majority of this Court significantly modified the Griggs-Albemarle delineation of Title VIPs disparate-impact proscription. As to business necessity for a practice that disproportionately excludes members of minority groups, Wards Cove held, the employer bears only the burden of production, not the burden of persuasion. 490 U. S., at 659-660. And in place of the instruction that the challenged practice “must have a manifest relationship to the employment in question,” Griggs, 401 U. S., at 432, Wards Cove said that the practice would be permissible as long as it “serve[d], in a significant way, the legitimate employment goals of the employer,” 490 U. S., at 659.

*624In response to Wards Cove and “a number of [other] recent decisions by the United States Supreme Court that sharply cut back on the scope and effectiveness of [civil rights] laws,” Congress enacted the Civil Rights Act of 1991. H. R. Rep. No. 102-40, pt. 2, p. 2 (1991). Among the 1991 alterations, Congress formally codified the disparate-impact component of Title VII. In so amending the statute, Congress made plain its intention to restore “the concepts of ‘business necessity’ and ‘job related’ enunciated by the Supreme Court in Griggs v. Duke Power Co. . . . and in other Supreme Court decisions prior to Wards Cove Packing Co. v. Atonio.” §3(2), 105 Stat. 1071. Once a complaining party demonstrates that an employment practice causes a disparate impact, amended Title VII states, the burden is on the employer “to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity.” 42 U. S. C. §2000e-2(k)(l)(A)(i). If the employer carries that substantial burden, the complainant may respond by identifying “an alternative employment practice” which the employer “refuses to adopt.” § 2000e-2(k)(l)(A)(ii), (C).

B

Neither Congress’ enactments nor this Court’s Title VII precedents (including the now-discredited decision in Wards Cove) offer even a hint of “conflict” between an employer’s obligations under the statute’s disparate-treatment and disparate-impact provisions. Cf. ante, at 580. Standing on an equal footing, these twin pillars of Title VII advance the same objectives: ending workplace discrimination and promoting genuinely equal opportunity. See McDonnell Douglas Cory. v. Green, 411 U. S. 792, 800 (1973).

Yet the Court today sets at odds the statute’s core directives. When an employer changes an employment practice in an effort to comply with Title VII’s disparate-impact pro*625vision, the Court reasons, it acts “because of race” — something Title VIPs disparate-treatment provision, see § 2000e-2(a)(1), generally forbids. Ante, at 579-580. This characterization of an employer’s compliance-directed action shows little attention to Congress’ design or to the Griggs line of cases Congress recognized as pathmarking.

“[O]ur task in interpreting separate provisions of a single Act is to give the Act the most harmonious, comprehensive meaning possible in light of the legislative policy and purpose.” Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U. S. 609, 631-632 (1973) (internal quotation marks omitted). A particular phrase need not “extend to the outer limits of its definitional possibilities” if an incongruity would result. Dolan v. Postal Service, 546 U. S. 481, 486 (2006). Here, Title VII’s disparate-treatment and disparate-impact proscriptions must be read as complementary.

In codifying the Griggs and Albemarle instructions, Congress declared unambiguously that selection criteria operating to the disadvantage of minority group members can be retained only if justified by business necessity.5 In keeping with Congress’ design, employers who reject such criteria due to reasonable doubts about their reliability can hardly be held to have engaged in discrimination “because of” race. A reasonable endeavor to comply with the law and to ensure that qualified candidates of all races have a fair opportunity to compete is simply not what Congress meant to interdict. I would therefore hold that an employer who jettisons a selection device when its disproportionate racial impact becomes apparent does not violate Title VII’s disparate-treatment bar automatically or at all, subject to this key condition: The employer must have good cause to believe the *626device would not withstand examination for business necessity. Cf. Faragher v. Boca Raton, 524 U. S. 775, 806 (1998) (observing that it accords with “clear statutory policy” for employers “to prevent violations” and “make reasonable efforts to discharge their duty” under Title VII).

EEOC’s interpretative guidelines are corroborative. “[B]y the enactment of title VII,” the guidelines state, “Congress did not intend to expose those who comply with the Act to charges that they are violating the very statute they are seeking to implement.” 29 CFR § 1608.1(a) (2008). Recognizing EEOC’s “enforcement responsibility” under Title VII, we have previously accorded the Commission’s position respectful consideration. See, e.g., Albemarle, 422 U. S., at 431; Griggs, 401 U. S., at 434. Yet the Court today does not so much as mention EEOC’s counsel.

Our precedents defining the contours of Title VII’s disparate-treatment prohibition further confirm the absence of any intrastatutory discord. In Johnson v. Transportation Agency, Santa Clara Cty., 480 U. S. 616 (1987), we upheld a municipal employer’s voluntary affirmative-action plan against a disparate-treatment challenge. Pursuant to the plan, the employer selected a woman for a road-dispatcher position, a job category traditionally regarded as “male.” A male applicant who had a slightly higher interview score brought suit under Title VII. This Court rejected his claim and approved the plan, which allowed consideration of gender as “one of numerous factors.” Id., at 638. Such consideration, we said, is “fully consistent with Title VII” because plans of that order can aid “in eliminating the vestiges of discrimination in the workplace.” Id., at 642.

This litigation does not involve affirmative action. But if the voluntary affirmative action at issue in Johnson does not discriminate within the meaning of Title VII, neither does an employer’s reasonable effort to comply with Title VII’s disparate-impact provision by refraining from action of doubtful consistency with business necessity.

*627c

To “reconcile” the supposed “conflict” between disparate treatment and disparate impact, the Court offers an enigmatic standard. Ante, at 580. Employers may attempt to comply with Title VII’s disparate-impact provision, the Court declares, only where there is a “strong basis in evidence” documenting the necessity of their action. Ante, at 583. The Court’s standard, drawn from inapposite equal protection precedents, is not elaborated. One is left to wonder what cases would meet the standard and why the Court is so sure cases of this genre do not.

1

In construing Title VII, I note preliminarily, equal protection doctrine is of limited utility. The Equal Protection Clause, this Court has held, prohibits only intentional discrimination; it does not have a disparate-impact component. See Personnel Administrator of Mass. v. Feeney, 442 U. S. 256, 272 (1979); Washington v. Davis, 426 U. S. 229, 239 (1976). Title VII, in contrast, aims to eliminate all forms of employment discrimination, unintentional as well as deliberate. Until today, cf. ante, at 584; ante, p. 594 (Scalia, J., concurring), this Court has never questioned the constitutionality of the disparate-impact component of Title VII, and for good reason. By instructing employers to avoid needlessly exclusionary selection processes, Title VIPs disparate-impact provision calls for a “race-neutral means to increase minority . . . participation” — something this Court’s equal protection precedents also encourage. See Adarand Constructors, Inc. v. Pena, 515 U. S. 200, 238 (1995) (quoting Richmond v. J. A. Croson Co., 488 U. S. 469, 507 (1989)). “The very radicalism of holding disparate impact doctrine unconstitutional as a matter of equal protection,” moreover, “suggests that only a very uncompromising court would issue such a decision.” Primus, Equal Protection and Dis*628parate Impact: Round Three, 117 Harv. L. Rev. 493, 585 (2003).

The cases from which the Court draws its strong-basis-in-evidence standard are particularly inapt; they concern the constitutionality of absolute racial preferences. See Wygant v. Jackson Bd. of Ed., 476 U. S. 267, 277 (1986) (plurality opinion) (invalidating a school district’s plan to lay off nonminority teachers while retaining minority teachers with less seniority); Croson, 488 U. S., at 499-500 (rejecting a set-aside program for minority contractors that operated as “an unyielding racial quota”). An employer’s effort to avoid Title VII liability by repudiating a suspect selection method scarcely resembles those cases. Race was not merely a relevant consideration in Wygant and Croson; it was the decisive factor. Observance of Title VII’s disparate-impact provision, in contrast, calls for no racial preference, absolute or otherwise. The very purpose of the provision is to ensure that individuals are hired and promoted based on qualifications manifestly necessary to successful performance of the job in question, qualifications that do not screen out members of any race.6

2

The Court’s decision in this litigation underplays a dominant Title VII theme. This Court has repeatedly emphasized that the statute “should not be read to thwart” efforts at voluntary compliance. Johnson, 480 U. S., at 630. Such *629compliance, we have explained, is “the preferred means of achieving [Title VIPs] objectives.” Firefighters v. Cleveland, 478 U. S. 501, 515 (1986). See also Kolstad v. American Dental Assn., 527 U. S. 526, 545 (1999) (“Dissuading employers from [taking voluntary action] to prevent discrimination in the workplace is directly contrary to the purposes underlying Title VII.”); 29 CFR § 1608.1(e). The strong-basis-in-evidence standard, however, as barely described in general, and cavalierly applied in this litigation, makes voluntary compliance a hazardous venture.

As a result of today’s decision, an employer who discards a dubious selection process can anticipate costly disparate-treatment litigation in which its chances for success — even for surviving a summary-judgment motion — are highly problematic. Concern about exposure to disparate-impact liability, however well grounded, is insufficient to insulate an employer from attack. Instead, the employer must make a “strong” showing that (1) its selection method was “not job related and consistent with business necessity,” or (2) that it refused to adopt “an equally valid, less discriminatory alternative.” Ante, at 587. It is hard to see how these requirements differ from demanding that an employer establish “a provable, actual violation” against itself. Cf. ante, at 583. There is indeed a sharp conflict here, but it is not the false one the Court describes between Title VIPs core provisions. It is, instead, the discordance of the Court’s opinion with the voluntary compliance ideal. Cf. Wygant, 476 U. S., at 290 (O’Connor, J., concurring in part and concurring in judgment) (“The imposition of a requirement that public employers make findings that they have engaged in illegal discrimination before they [act] would severely undermine public employers’ incentive to meet voluntarily their civil rights obligations.”).7

*6303

The Court’s additional justifications for announcing a strong-basis-in-evidence standard are unimpressive. First, discarding the results of tests, the Court suggests, calls for a heightened standard because it “upset[s] an employee’s legitimate expectation.” Ante, at 585. This rationale puts the cart before the horse. The legitimacy of an employee’s expectation depends on the legitimacy of the selection method. If an employer reasonably concludes that an exam fails to identify the most qualified individuals and needlessly shuts out a segment of the applicant pool, Title VII surely does not compel the employer to hire or promote based on the test, however unreliable it may be. Indeed, the statute’s prime objective is to prevent exclusionary practices from “operating] to ‘freeze’ the status quo.” Griggs, 401 U. S., at 430.

Second, the Court suggests, anything less than a strong-basis-in-evidence standard risks creating “a de facto quota system, in which ... an employer could discard test results . . . with the intent of obtaining the employer’s preferred racial balance.” Ante, at 581-582. Under a reasonableness standard, however, an employer could not cast aside a selection method based on a statistical disparity alone.8 The employer must have good cause to believe that the method *631screens out qualified applicants and would be difficult to justify as grounded in business necessity. Should an employer repeatedly reject test results, it would be fair, I agree, to infer that the employer is simply seeking a racially balanced outcome and is not genuinely endeavoring to comply with Title VII.

The Court stacks the deck further by denying respondents any chance to satisfy the newly announced strong-basis-in-evidence standard. When this Court formulates a new legal rule, the ordinary course is to remand and allow the lower courts to apply the rule in the first instance. See, e. g., Johnson v. California, 543 U. S. 499, 515 (2005); Pullman-Standard v. Swint, 456 U. S. 273, 291 (1982). I see no good reason why the Court fails to follow that course today. Indeed, the sole basis for the Court’s peremptory ruling is the demonstrably false pretension that respondents showed “nothing more” than “a significant statistical disparity.” Ante, at 587; see supra, at 630, n. 8.9

*632III

A

Applying what I view as the proper standard to the record thus far made, I would hold that New Haven had ample cause to believe its selection process was flawed and not justified by business necessity. Judged by that standard, petitioners have not shown that New Haven’s failure to certify the exam results violated Title VII’s disparate-treatment provision.10

The City, all agree, “was faced with a prima facie ease of disparate-impact liability,” ante, at 586 (majority opinion): The pass rate for minority candidates was half the rate for nonminority candidates, and virtually no minority candidates would have been eligible for promotion had the exam results been certified. Alerted to this stark disparity, the CSB heard expert and lay testimony, presented at public hearings, in an endeavor to ascertain whether the exams were fair and consistent with business necessity. Its investigation revealed grave cause for concern about the exam process itself and the City’s failure to consider alternative selection devices.

Chief among the City’s problems was the very nature of the tests for promotion. In choosing to use written and oral exams with a 60/40 weighting, the City simply adhered to the union’s preference and apparently gave no consideration to whether the weighting was likely to identify the most qualified fire-officer candidates.11 There is strong reason to think it was not.

*633Relying heavily on written tests to select fire officers is a questionable practice, to say the least. Successful fire officers, the City’s description of the position makes clear, must have the “[a]bility to lead personnel effectively, maintain discipline, promote harmony, exercise sound judgment, and cooperate with other officials.” CA2 App. A432. These qualities are not well measured by written tests. Testifying before the CSB, Christopher Hornick, an exam-design expert with more than two decades of relevant experience, was emphatic on this point: Leadership skills, command presence, and the like “could have been identified and evaluated in a much more appropriate way.” Id., at A1042-A1043.

Hornick’s commonsense observation is mirrored in case law and in Title VII’s administrative guidelines. Courts have long criticized written firefighter promotion exams for being “more probative of the test taker’s ability to recall what a particular text stated on a given topic than of his firefighting or supervisory knowledge and abilities.” Vulcan Pioneers, Inc. v. New Jersey Dept. of Civil Serv., 625 F. Supp. 527, 539 (NJ 1985). A fire officer’s job, courts have *634observed, “involves complex behaviors, good interpersonal skills, the ability to make decisions under tremendous pressure, and a host of other abilities — none of which is easily measured by a written, multiple choice test.” Firefighters Inst. for Racial Equality v. St. Louis, 616 F. 2d 350, 359 (CA8 1980).12 Interpreting the Uniform Guidelines, EEOC and other federal agencies responsible for enforcing equal opportunity employment laws have similarly recognized that, as measures of “interpersonal relations” or “ability to function under danger (e. g., firefighters),” “[p]encil-andpaper tests . . . generally are not close enough approximations of work behaviors to show content validity.” 44 Fed. Reg. 12007 (1979). See also 29 CFR § 1607.15(C)(4).13

Given these unfavorable appraisals, it is unsurprising that most municipal employers do not evaluate their fire-officer candidates as New Haven does. Although comprehensive statistics are scarce, a 1996 study found that nearly two-thirds of surveyed municipalities used assessment centers *635(“simulations of the real world of work”) as part of their promotion processes. P. Lowry, A Survey of the Assessment Center Process in the Public Sector, 25 Public Personnel Management 307, 315 (1996). That figure represented a marked increase over the previous decade, see ibid., so the percentage today may well be even higher. Among municipalities still relying in part on written exams, the median weight assigned to them was 30 percent — half the weight given to New Haven’s written exam. Id., at 309.

Testimony before the CSB indicated that these alternative methods were both more reliable and notably less discriminatory in operation. According to Donald Day of the International Association of Black Professional Firefighters, nearby Bridgeport saw less skewed results after switching to a selection process that placed primary weight on an oral exam. CA2 App. A830-A832; see supra, at 614. And Hornick described assessment centers as “demonstrat[ing] dramatically less adverse impacts” than written exams. CA2 App. A1040.14 Considering the prevalence of these proven alternatives, New Haven was poorly positioned to argue that promotions based on its outmoded and exclusionary selection process qualified as a business necessity. Cf. Robinson v. Lorillard Corp., 444 F. 2d 791, 798, n. 7 (CA4 1971) (“It should go without saying that a practice is hardly ‘necessary’ if an alternative practice better effectuates its intended purpose or is equally effective but less discriminatory.”).15

*636Ignoring the conceptual and other defects in New Haven’s selection process, the Court describes the exams as “painstaking[ly]” developed to test “relevant” material and on that basis finds no substantial risk of disparate-impact liability. See ante, at 588. Perhaps such reasoning would have sufficed under Wards Cove, which permitted exclusionary practices as long as they advanced an employer’s “legitimate” goals. 490 U. S., at 659. But Congress repudiated Wards Cove and reinstated the “business necessity” rule attended by a “manifest relationship” requirement. See Griggs, 401 U. S., at 431-432. See also supra, at 624. Like the chess player who tries to win by sweeping the opponent’s pieces off the table, the Court simply shuts from its sight the formidable obstacles New Haven would have faced in defending against a disparate-impact suit. See Lanning v. Southeastern Pa. Transp. Auth., 181 F. 3d 478, 489 (CA3 1999) (“Judicial application of a standard focusing solely on whether the qualities measured by an . . . exam bear some relationship to the job in question would impermissibly write out the business necessity prong of the Act’s chosen standard.”).

*637That IOS representative Chad Legel and his team may-have been diligent in designing the exams says little about the exams’ suitability for selecting fire officers. IOS worked within the City’s constraints. Legel never discussed with the City the propriety of the 60/40 weighting and “was not asked to consider the possibility of an assessment center.” CA2 App. A522. See also id., at A467.' The IOS exams, Legel admitted, had not even attempted to assess “command presence”: “[Y]ou would probably be better off with an assessment center if you cared to measure that.” Id., at A521. Cf. Boston Chapter, NAACP, Inc. v. Beecher, 504 F. 2d 1017, 1021-1022 (CA1 1974) (“A test fashioned from materials pertaining to the job . . . superficially may seem job-related. But what is at issue is whether it demonstrably selects people who will perform better the required on-the-job behaviors.”).

In addition to the highly questionable character of the exams and the neglect of available alternatives, the City had other reasons to worry about its vulnerability to disparate-impact liability. Under the City’s ground rules, IOS was not allowed to show the exams to anyone in the New Haven Fire Department prior to their administration. This “precluded [IOS] from being able to engage in [its] normal subject matter expert review process” — something Legel described as “very critical.” CA2 App. A477, A506. As a result, some of the exam questions were confusing or irrelevant, and the exams may have overtested some subject-matter areas while missing others. See, e. g., id., at A1034-A1035, A1051. Testimony before the CSB also raised questions concerning unequal access to study materials, see id., at A857-A861, and the potential bias introduced by relying principally on job analyses from nonminority fire officers to develop the exams, see id., at A1063-A1064.16 See also supra, at 613-614, 617.

*638The Court criticizes New Haven for failing to obtain a “technical report” from IOS, which, the Court maintains, would have provided “detailed information to establish the validity of the exams.” Ante, at 589. The record does not substantiate this assertion. As Legel testified during his deposition, the technical report merely summarized “the steps that [IOS] took methodologically speaking,” and would not have established the exams’ reliability. CA2 App. A461. See also id., at A462 (the report “doesn’t say anything that other documents that already existed wouldn’t say”).

In sum, the record solidly establishes that the City had good cause to fear disparate-impact liability. Moreover, the Court supplies no tenable explanation why the evidence of the tests’ multiple deficiencies does not create at least a triable issue under a strong-basis-in-evidence standard.

B

Concurring in the Court’s opinion, Justice Alito asserts that summary judgment for respondents would be improper even if the City had good cause for its noncertification decision. A reasonable jury, he maintains, could have found that respondents were not actually motivated by concern about disparate-impact litigation, but instead sought only “to placate a politically important [African-American] constitu*639ency.” Ante, at 597. As earlier noted, I would not oppose a remand for further proceedings fair to both sides. See supra, at 632, n. 10. It is the Court that has chosen to short circuit this litigation based on its pretension that the City has shown, and can show, nothing more than a statistical disparity. See supra, at 630, n. 8, 631. Justice Alito compounds the Court’s error.

Offering a truncated synopsis of the many hours of deliberations undertaken by the CSB, Justice Alito finds evidence suggesting that respondents’ stated desire to comply with Title YII was insincere, a mere “pretext” for discrimination against white firefighters. Ante, at 596-597. In support of his assertion, Justice Alito recounts at length the alleged machinations of Rev. Boise Kimber (a local political activist), Mayor John DeStefano, and certain members of the mayor’s staff. See ante, at 598-604.

Most of the allegations Justice Alito repeats are drawn from petitioners’ statement of facts they deem undisputed, a statement displaying an adversarial zeal not uncommonly found in such presentations.17 What cannot credibly be de*640nied, however, is that the decision against certification of the exams was made neither by Kimber nor by the mayor and his staff. The relevant decision was made by the CSB, an unelected, politically insulated body. It is striking that Justice Alito’s concurrence says hardly a word about the CSB itself, perhaps because there is scant evidence that its motivation was anything other than to comply with Title VIPs disparate-impact provision. Notably, petitioners did not even seek to take depositions of the two commissioners who voted against certification. Both submitted uncontested affidavits declaring unequivocally that their votes were “based solely on [their] good faith belief that certification” would have discriminated against minority candidates in violation of federal law. CA2 App. A1605, A1611.

Justice Alito discounts these sworn statements, suggesting that the CSB’s deliberations were tainted by the preferences of Kimber and City officials, whether or not the CSB itself was aware of the taint. Kimber and City officials, Justice Alito speculates, decided early on to oppose certification and then “engineered” a skewed presentation to the CSB to achieve their preferred outcome. Ante, at 606.

As an initial matter, Justice Alito exaggerates the influence of these actors. The CSB, the record reveals, designed and conducted an inclusive decisionmaking process, in which it heard from numerous individuals on both sides of the certification question. See, e.g., CA2 App. A1090. Kimber and others no doubt used strong words to urge the CSB not to certify the exam results, but the CSB received “pressure” from supporters of certification as well as opponents. Cf. ante, at 600. Petitioners, for example, engaged counsel to speak on their behalf before the CSB. Their counsel did not mince words: “[I]f you discard these results,” she warned, “you will get sued. You will force the taxpay*641ers of the city of New Haven into protracted litigation.” CA2 App. A816. See also id., at A788.

The local firefighters union — an organization required by law to represent all the City’s firefighters — was similarly outspoken in favor of certification. Discarding the test results, the union’s president told the CSB, would be “totally ridiculous.” Id., at A806. He insisted, inaccurately, that the City was not at risk of disparate-impact liability because the exams were administered pursuant to “a collective bargaining agreement.” Id., at A1137. Cf. supra, at 632-633, n. 11. Never mentioned by Justice Alito in his attempt to show testing expert Christopher Hornick’s alliance with the City, ante, at 603-604, the CSB solicited Hornick’s testimony at the union’s suggestion, not the City’s. CA2 App. A1128. Hornick’s cogent testimony raised substantial doubts about the exams’ reliability. See supra, at 615-616.18

There is scant cause to suspect that maneuvering or overheated rhetoric, from either side, prevented the CSB from evenhandedly assessing the reliability of the exams and rendering an independent, good-faith decision on certification. Justice Alito acknowledges that the CSB had little patience for Kimber’s antics. Ante, at 600-602.19 As to petitioners, Chairman Segaloff — who voted to certify the exam *642results — dismissed the threats made by their counsel as unhelpful and needlessly “inflammatory.” CA2 App. A821. Regarding the views expressed by City officials, the CSB made clear that they were entitled to no special weight. Id., at A1080.20

In any event, Justice Alito’s analysis contains a more fundamental flaw: It equates political considerations with unlawful discrimination. As Justice Alito sees it, if the mayor and his staff were motivated by their desire “to placate a . . . racial constituency,” ante, at 597, then they engaged in unlawful discrimination against petitioners. But Justice Alito fails to ask a vital question: “[P]lacate” how? That political officials would have politics in mind is hardly extraordinary, and there are many ways in which a politician can attempt to win over a constituency — including a racial constituency — without engaging in unlawful discrimination. As courts have recognized, “[politicians routinely respond to bad press . . . , but it is not a violation of Title VII to take advantage of a situation to gain political favor.” Henry v. Jones, 507 F. 3d 558, 567 (CA7 2007).

The real issue, then, is not whether the mayor and his staff were politically motivated; it is whether their attempt to score political points was legitimate (1 e., nondiscriminatory). Were they seeking to exclude white firefighters from promotion (unlikely, as a fair test would undoubtedly result in the addition of white firefighters to the officer ranks), or did they realize, at least belatedly, that their tests could be toppled in a disparate-impact suit? In the latter case, *643there is no disparate-treatment violation. Justice Alito, I recognize, would disagree. In his view, an employer^ action to avoid Title VII disparate-impact liability qualifies as a presumptively improper race-based employment decision. See ante, at 597. I reject that construction of Title VII. See supra, at 625-627. As I see it, when employers endeavor to avoid exposure to disparate-impact liability, they do not thereby encounter liability for disparate treatment.

Applying this understanding of Title VII, supported by Griggs and the long line of decisions following Griggs, see supra, at 623-624, and nn. 3-4, the District Court found no genuine dispute of material fact. That court noted, particularly, the guidance furnished by Second Circuit precedent. See supra, at 619. Petitioners’ allegations that City officials took account of politics, the District Court determined, simply “d[id] not suffice” to create an inference of unlawful discrimination. 554 F. Supp. 2d, at 160, n. 12. The noncertification decision, even if undertaken “in a political context,” reflected a legitimate “intent not to implement a promotional process based on testing results that had an adverse impact.” Id., at 158, 160. Indeed, the District Court perceived “a total absence of any evidence of discriminatory animus towards [petitioners].” Id., at 158. See also id., at 162 (“Nothing in the record in this case suggests that the City defendants or CSB acted ‘because of’ discriminatory animus toward [petitioners] or other non-minority applicants for promotion.”). Perhaps the District Court could have been more expansive in its discussion of these issues, but its conclusions appear entirely consistent with the record before it.21

*644It is indeed regrettable that the City’s noncertification decision would have required all candidates to go through another selection process. But it would have been more regrettable to rely on'flawed exams to shut out candidates who may well have the command presence and other qualities needed to excel as fire officers. Yet that is the choice the Court makes today. It is a choice that breaks the promise of Griggs that groups long denied equal opportunity would not be held back by tests “fair in form, but discriminatory in operation.” 401 U. S., at 431.

* * *

These cases present an unfortunate situation, one New Haven might well have avoided had it utilized a better selection process in the first place. But what this litigation does not present is race-based discrimination in violation of Title VIL I dissent from the Court’s judgment, which rests on the false premise that respondents showed “a significant statistical disparity,” but “nothing more.” See ante, at 587.

4.4 Louis v. Saferent Solutions, LLC 4.4 Louis v. Saferent Solutions, LLC

Mary LOUIS and Monica Douglas, on behalf of themselves and similarly situated persons, and Community Action Agency of Somerville, Inc., Plaintiffs,

v.

SAFERENT SOLUTIONS, LLC, and Metropolitan Management Group, LLC, Defendants.

Memorandum and Order on Defendants' Motion to Dismiss

A. Kelly, United States District Judge

Plaintiffs Mary Louis (“Louis”), Monica Douglas (“Douglas”), and Community Action Agency of Somerville, Inc. (“CAAS”), bring this putative class action against Defendants SafeRent Solutions, LLC (“SafeRent”), and Metropolitan Management Group, LLC (“Metropolitan”), on behalf of low-income and minority individuals who hold housing vouchers and were denied rental units. [Dkt. 15 at 1]. Plaintiffs allege that a tenant-screening service operated by SafeRent and Metropolitan's use thereof violate the Fair Housing Act, 42 U.S.C. § 3604, and Massachusetts antidiscrimination and consumer protection laws. [Id. at ¶ 1]. Metropolitan and SafeRent have filed motions to dismiss for lack of standing and for failure to state a claim pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). [Dkt. 29; Dkt. 31]. Plaintiffs oppose these motions. [Dkt. 36]. For the following reasons, Metropolitan's motion to dismiss [Dkt. 29] is DENIED and SafeRent's motion to dismiss [Dkt. 31] is GRANTED IN PART and DENIED IN PART.

I. Background

The Court recites here only those facts and law necessary to understand what has led to this action. Further details relevant to the Court's analysis will be discussed as needed. Unless otherwise noted, the facts are presented as alleged in the amended complaint. [See Dkt. 15 (“Am. Compl.”)]. Louis and Douglas are Black1 women who hold housing vouchers2 and whose rental applications were denied, at least in part, because of their credit histories and scores. [Id. at ¶¶ 7, 74-76, 84-85]. Metropolitan denied Louis’ application for an apartment, and another housing provider not named as a defendant in this action initially rejected Douglas’ application for an apartment, though it later approved her request through its appeal process. [Id. at ¶¶ 74-75, 83-89]. Metropolitan and the housing provider that denied Douglas’ application relied on SafeRent's tenant-screening services when denying these applications. [Id. at ¶¶ 20, 76, 85]. CAAS provides a variety of services to low-income, prospective renters, including those who have received housing vouchers. [Id. at ¶ 17]. Plaintiffs claim that the Defendants’ use of SafeRent's tenant-screening services, in particular, the “SafeRent Score,” which relies on “credit histories and other information which bears little to no relationship to the risk that their rent will be paid,” disproportionally affects Black and Hispanic applicants and voucher holders in violation of federal and state antidiscrimination and consumer protection laws. [Id. at 1, ¶ 1].

A. The SafeRent Score

SafeRent3 designs, markets, and sells a variety of tenant-screening services to landlords, real estate agents, brokerages, and property managers nationwide and in Massachusetts. [Id. at ¶¶ 21-22]. These “self-service tenant screening solutions,” as advertised by SafeRent, are intended to help “identify top quality applicants.” [Id. at ¶ 22]. One of these services is the “SafeRent Score,” which uses an algorithm to calculate the risk of leasing a property to a particular tenant. [See id. at ¶¶ 24-25]. The SafeRent Score aggregates several factors, including credit history, bankruptcy records, past due accounts, payment performance, and eviction history, according “to their statistical significance in predicting lease performance,” and calculates a numerical rating between two hundred and eight hundred for rental applicants. [Id. at ¶¶ 25, 27, 30, 35]. This score is intended to measure the applicant's “lease performance risk,” and applicants with higher scores generally outperform applicants with lower scores. [Id. at ¶ 28]. The SafeRent Score does not consider the financial benefits of housing vouchers. [Id. at ¶¶ 31].

SafeRent then issues an “accept/decline/conditional decision” to housing providers based on the applicant's SafeRent Score and the specific housing provider's “predetermined decision points.” [Id. at ¶ 26]. Housing providers select a minimum SafeRent Score required for approval of a rental application, and they can also establish a range to “accept with conditions.” [Id. at ¶ 39]. SafeRent does not disclose the weight assigned to any of the factors considered in the SafeRent Score, nor does it provide the specific sources of its data. [Id. at ¶¶ 34-35]. Housing providers cannot change SafeRent's algorithm. [Id. at ¶ 33]. As such, housing providers select the minimum approval score without knowing how scores are calculated. [Id. at ¶ 39].

B. Reliance on Credit History and Score

According to Plaintiffs, “the SafeRent Score assigned to an applicant dictates their rental eligibility” and “is calculated based in large part on factors that produce disproportionately lower SafeRent Scores for Black and Hispanic applicants, and those using housing vouchers.” [Id. at ¶ 41]. They allege that the SafeRent Score is based “in significant part on the applicant's credit score and credit history, including non-tenancy debts,” which are not intended to gauge whether an individual will be a “good tenant.” [Id. at ¶¶ 45-46]. In particular, these credit reviews fail to account accurately for an applicant's ability to pay rent, because they do not consider income and assets in their calculations. [Id. at ¶¶ 47-48].

Individuals receive a housing voucher only if they qualify as “extremely low-income,” “very low-income,” or “low-income.” [Id. at ¶ 58]. Individuals with lower incomes often have lower credit scores than those with higher incomes. [Id. at ¶ 59]. Housing providers who rent to tenants with housing vouchers are guaranteed to receive at least some of their tenants’ monthly rental payments, because the local housing authority disburses payment directly to the housing provider. [Id. at ¶ 65]. Moreover, voucher holders may also request exemptions from the minimum rent they are required to pay if they experience certain hardships, such as loss of assistance programs, the threat of eviction, decreased income, loss of employment, or a death. [Id. at ¶ 67]. This further insulates housing providers from the risk of non-payment for units rented to voucher holders. [Id.]. As such, credit scores and histories fail to predict whether a rental applicant would make a quality tenant, particularly when housing vouchers are involved. [See id. at ¶ 61].

Reliance on conventional credit history disproportionately affects Black and Hispanic tenants, in addition to tenants who hold housing vouchers, because Black and Hispanic consumers have a lower median credit score than White consumers. [Id. at ¶¶ 50-51]. As of October 2021, Black consumers had a median credit score of 612 and Hispanic consumers had a median credit score of 661, while White consumers had a median credit score of 725. [Id. at ¶ 51]. Moreover, as of that date, 45.1% of Black consumers and 31.5% of Hispanic consumers had subprime credit scores, while only 18.3% of White consumers had subprime credit scores, which leads to less favorable credit terms. [Id. at ¶ 52]. These “[r]acial disparities in credit health reflect historical inequities that reduced wealth and limited economic choices for communities of color.” [Id. at ¶ 54]. For example, as of 2017, Black families owned less than seven cents for every dollar in wealth owned by White families, and Latino families owned less than eight cents of every dollar of wealth owned by White families. [Id.]. The past credit data factored into credit scoring models is “systemically and historically biased against non-white consumers.” [Id. at ¶ 53]. These racial disparities in credit health further “perpetuate wealth inequalities through reduced financial opportunities and fewer financial safety nets.” [Id. at ¶ 55 (emphasis omitted)].

C. Plaintiffs' Expectations

Louis is a 54-year-old Black woman who has a housing voucher that pays for approximately 69% of her rent. [Id. at ¶ 13]. Her rental application at Granada Highlands, which was managed by Metropolitan, was denied because of her SafeRent Score, which included non-tenancy related debt in its calculations. [Id. at ¶¶ 14, 20]. Metropolitan's rejection letter informed Louis that “the third-party service [Metropolitan] utilize[s] to screen all prospective tenants has denied [her] tenancy,” and “the service's SafeRent tenancy score was lower than is permissible under [Metropolitan's] tenancy standards.” [Id. at ¶ 76]. Although Louis attempted to appeal Metropolitan's decision, offering landlord and employment references, Metropolitan told Louis that it “do[es] not accept appeals and cannot override the outcome of the Tenant Screening.” [Id. at ¶ 78]. Louis then had to move into an apartment which cost more, had fewer amenities, and was located in a less desirable area with a high crime rate. [Id. at ¶¶ 79-80].

Douglas is a 65-year-old Black woman who has a housing voucher that pays for approximately 57% of her rent. [Id. at ¶ 15]. Her rental application at Millside at Heritage Park was similarly denied because of her SafeRent Score. The management company at Millside at Heritage Park, who is not named as a defendant in this action, informed Douglas that her “screening,” which was conducted by SafeRent, “came back with a deny comment based on unsatisfactory credit history as well as landlord tenant court record.” [Id. at ¶ 85]. Douglas appealed the decision with the help of a local housing advocacy group, and her rental application was ultimately accepted. [Id. at ¶¶ 86-89].

CAAS provides a variety of services to low-income, prospective renters, including those who have received housing vouchers. [Id. at ¶¶ 93-94]. CAAS helps voucher holders locate, apply for, and secure apartments where they can use their housing vouchers, and it frequently works with clients who have “excellent tenancy histories” but have non-tenancy related debt. [Id. at ¶¶ 94, 96]. Because leasing agents often tell CAAS advocates that only applicants with good credit histories or scores will pass screening, and CAAS has limited resources and therefore cannot support futile efforts, CAAS cannot regularly encourage its clients to apply to housing providers who use SafeRent's tenant-screening services. [Id. at ¶ 99]. This impedes CAAS's ability to accomplish its mission, and CAAS has had to expend “time and resources addressing the barriers that tenant screening companies impose” on CAAS's clients. [Id. at ¶¶ 99, 101].

D. The Fair Housing Act

The Fair Housing Act (“FHA”) prohibits discrimination in the sale or rental of housing on the basis of race, color, religion, sex, familial status, or national origin. See 42 U.S.C. § 3604. In the 1960s, segregation permeated society, affecting economic and social conditions nationwide, including housing. The FHA was enacted during “a period of considerable social unrest,” after an executive commission found that “both open and covert racial discrimination prevented [B]lack families from obtaining better housing and moving into integrated communities,” which was moving “our Nation ... toward two societies, one [B]lack, one [W]hite—separate but unequal.” Tex. Dep't of Hous. & Cmt'y Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519, 529, 135 S.Ct. 2507, 192 L.Ed.2d 514 (2015). Various policies, practices, and prejudices, such as racially restrictive covenants preventing the conveyance of property to minorities, steering of potential buyers to consider homes in racially homogenous areas, and discriminatory lending practices, “created many predominantly [B]lack inner cities surrounded by mostly [W]hite suburbs.” Id. Congress enacted the FHA “to eradicate discriminatory practices within a sector of our Nation's economy,” including “housing restrictions that function unfairly to exclude minorities from certain neighborhoods without any sufficient justification.” Id. at 539, 135 S.Ct. 2507.

E. The Amended Complaint and Procedural History

Plaintiffs filed an amended complaint on August 26, 2022. [See Dkt. 15]. Plaintiffs allege that SafeRent's tenant-screening services discriminate against voucher holders and, in particular, Black and Hispanic applicants in violation of the FHA, 42 U.S.C. § 3604, Massachusetts General Laws ch. 93A, § 9, and Massachusetts General Laws ch. 151B, §§ 4(6), 4(10). [Dkt. 15 at ¶ 1]. They bring a variety of claims against each Defendant individually and on behalf of race and source of income classes.4 Plaintiffs seek a declaratory judgment, an injunction, damages, fees, and costs. [Id. at ¶¶ 184-93].

As to SafeRent, Plaintiffs allege that the SafeRent Score violates the FHA by making housing unavailable on the basis of race and national origin in violation of 42 U.S.C. § 3604(a) and by providing different terms and conditions and discriminating in the provision of services in connection with housing on the basis of race and national origin in violation of 42 U.S.C. § 3604(b) (“Count I”). [Id. at ¶¶ 120-26]. They bring claims for race discrimination under Massachusetts General Law ch. 151B, § 4(6)(b) (“Count III”) and source of income discrimination under Massachusetts General Law ch. 151B, § 4(10) (“Count V”). [Id. at ¶¶ 134-41, 150-57]. Plaintiffs also claim that SafeRent's provision of the SafeRent Score is an unfair business practice in violation of Massachusetts General Law ch. 93A, § 9 (“Counts VII and VIII”). [Id. at ¶¶ 165-83].

Only Louis brings claims against Metropolitan. Louis alleges that Metropolitan's practice of using the SafeRent Score to screen rental applicants violates the FHA by making housing unavailable on the basis of race and national origin in violation of 42 U.S.C. § 3604(a) and by providing different terms and conditions and discriminating in the provision of services in connection with housing on the basis of race and national origin in violation of 42 U.S.C. § 3604(b) (“Count II”). [Id. at ¶¶ 127-33]. She brings claims for race discrimination under Massachusetts General Law ch. 151B, § 4(6)(b) (“Count IV”) and source of income discrimination under Massachusetts General Law ch. 151B, § 4(10) (“Count VI”). [Id. at ¶¶ 142-49, 158-64].

In response to the amended complaint, Metropolitan filed a motion to dismiss for lack of standing and for failure to state a claim on October 27, 2022. [Dkt. 29]. That same day, SafeRent filed a motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) and for lack of jurisdiction, specifically, lack of standing, pursuant to Federal Rule of Civil Procedure 12(b)(1). [Dkt. 31]. Plaintiffs filed a single opposition to those motions. [Dkt. 36]. On January 9, 2023, the United States submitted a statement of interest regarding the application and interpretation of the FHA to this action. [Dkt. 37]. Metropolitan and SafeRent's replies in support of their motions addressed Plaintiffs’ opposition and the United States’ amicus brief. [See Dkt. 46; Dkt. 47]. The Consumer Data Industry Association (“CDIA”) submitted a brief in support of SafeRent's motion to dismiss. [Dkt. 44]. With the Court's permission, Plaintiffs filed a sur-reply to the CDIA's memorandum on March 8, 2023. [Dkt. 51]. The Court held a motion hearing on July 7, 2023. [Dkt. 58].

II. Legal Standard

To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint must allege sufficient facts to state a claim for relief that is “plausible on its face” and actionable as a matter of law. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Reading the complaint “as a whole,” the court must conduct a two-step, context-specific inquiry. García-Catalán v. United States, 734 F.3d 100, 103 (1st Cir. 2013). First, the court must perform a close reading of the complaint to distinguish factual allegations from conclusory legal statements. Id. Factual allegations must be accepted as true, while legal conclusions are not entitled to credit. Id. A court may not disregard properly pleaded factual allegations even if actual proof of those facts is improbable. Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2011). Second, the court must determine whether the factual allegations present a “reasonable inference that the defendant is liable for the misconduct alleged.” Haley v. City of Bos., 657 F.3d 39, 46 (1st Cir. 2011) (citation omitted). Dismissal is appropriate when the complaint fails to allege a “plausible entitlement to relief.” Rodríguez-Ortiz v. Margo Caribe, Inc., 490 F.3d 92, 95 (1st Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 559, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).

“Although review of a Rule 12(b)(6) dismissal for failure to state a claim and review to ensure the existence of standing are conceptually distinct, the same basic principles apply in both situations.” Hochendoner v. Genzyme Corp., 823 F.3d 724, 730 (1st Cir. 2016); see Murphy v. United States, 45 F.3d 520, 522 (1st Cir. 1995) (explaining that review for dismissal for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) is “similar to that accorded a dismissal for failure to state a claim pursuant to” Federal Rule of Civil Procedure 12(b)(6)). That is, when “a district court considers a Rule 12(b)(1) motion, it must credit the plaintiff's well-pled factual allegations and draw all reasonable inferences in the plaintiff's favor.” Merlonghi v. United States, 620 F.3d 50, 54 (1st Cir. 2010). The party “invoking the jurisdiction of a federal court carries the burden of proving its existence,” and a “plaintiff cannot rest a jurisdictional basis merely on unsupported conclusions or interpretations of law.” Johansen v. United States, 506 F.3d 65, 68 (1st Cir. 2007) (internal quotation marks and citations omitted). A federal court's subject matter jurisdiction “must be apparent from the face of the plaintiffs’ pleading,” id., and “the plausibility standard applicable under Rule 12(b)(6)” applies “to standing determinations at the pleading stage,” Hochendoner, 823 F.3d at 730. “Neither conclusory assertions nor unfounded speculation can supply the necessary heft” to establish standing at the pleading stage. Id. at 731.

III. Discussion

Defendants raise several arguments in favor of dismissal. Metropolitan argues that Louis does not have standing to assert claims for housing discrimination under the FHA or Massachusetts law. [Dkt. 30 at 15-18]. SafeRent similarly contends that CAAS lacks organizational standing, and that Plaintiffs lack standing to bring claims pursuant to 42 U.S.C. § 3604(b) (“Section 3604(b)”) and Massachusetts General Laws ch. 151B, § 4(6)(b) (“Section 4(6)(b)”). [Dkt. 32 at 22-24]. SafeRent also claims that the FHA does not apply to it, which Plaintiffs and the United States amicus brief dispute. [Dkt. 32 at 15-18; Dkt. 36 at 17-24; Dkt. 37 at 12-14]. Defendants also argue that Plaintiffs have failed to state a claim for disparate impact housing discrimination under federal and state law. [Dkt. 30 at 7-15; Dkt. 32 at 6-14]. Finally, SafeRent argues that Plaintiffs have failed to state a claim under Massachusetts General Law ch. 93A, § 9 (“Chapter 93A”). [Dkt. 32 at 19-22].

A. Standing

Standing is a “prerequisite to a federal court's subject matter jurisdiction,” Hochendoner, 823 F.3d at 730, and “therefore must be resolved before a court may reach the merits,” Cowels v. Fed. Bureau of Investigation, 327 F. Supp. 3d 242, 248 (D. Mass. 2018). The Constitution limits the jurisdiction of federal courts to actual cases or controversies. U.S. Const. art. III, § 2, cl. 1. For a “case or controversy” to exist, all plaintiffs must be able to demonstrate a “personal stake in the outcome of the controversy.” Katz v. Pershing, LLC, 672 F.3d 64, 71 (1st Cir. 2012) (quoting Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962)). To meet the “constitutional minimum” standing requirements, all plaintiffs must establish they have “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)).

To allege an injury in fact, plaintiffs must show they have suffered an “invasion of a legally protected interest” that was “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Id. at 339, 136 S.Ct. 1540 (quoting Lujan, 504 U.S. at 560, 112 S.Ct. 2130). Particularity requires plaintiffs to demonstrate that they have personally suffered some harm, and the “actual or imminent” requirement “ensures that the harm has either happened or is sufficiently threatening.” Katz, 672 F.3d at 71. “[I]t is not enough that the harm might occur at some future time,” and a “generalized grievance” is not enough. Id. at 71-72. A “mere interest in an event,” no matter how “passionate” or “charged with public import,” is not sufficient to provide an actual injury. United States v. AVX Corp., 962 F.2d 108, 114 (1st Cir. 1992). As to the second element, traceability, all plaintiffs must show “a sufficiently direct causal connection between the challenged action” of the defendant “and the identified harm.” Dantzler, Inc. v. Empresas Berríos Inventory & Operations, Inc., 958 F.3d 38, 47 (1st Cir. 2020) (citations omitted). This connection cannot be “overly attenuated” and cannot stem from the independent action of a third party. Id. “Although an indirect causal relationship is not prima facie fatal, an injury is less likely to satisfy this requirement where the causal chain between the defendant's action and the alleged harm depends on actions of a third party.” Delaney v. Baker, 511 F. Supp. 3d 55, 68 (D. Mass. 2021). The final standing hurdle, redressability, requires the Court to “consider the relationship between ‘the judicial relief requested’ and the ‘injury’ suffered.” Efreom v. McKee, 46 F.4th 9, 21 (1st Cir. 2022) (citing California v. Texas, ––– U.S. ––––, 141 S. Ct. 2104, 2115, 210 L.Ed.2d 230 (2021)).

1. Louis (Counts II, IV, and VI)

Metropolitan argues that Louis has not pleaded facts sufficient to demonstrate an injury in fact, causation, or redressability. [Dkt. 30 at 15-18]. Louis alleges she was injured because she had to move into an apartment with fewer amenities and fewer bathrooms in a “less desirable area due to the area's high crime rate.” [Am. Compl. at ¶¶ 79-80]. She also states that the apartment she ultimately secured cost $200 more per month than the unit she sought to rent from Metropolitan. [Id. at ¶ 79]. Louis further alleges that this was “a direct result of [Metropolitan's] rejection” of her application. [Id.]. Such allegations, which are “personal and individual,” see Lujan, 504 U.S. at 560 n.1, 112 S.Ct. 2130, are sufficient to establish an injury in fact and causation at this stage, see Czyzewski v. Jevic Holding Corp., 580 U.S. 451, 464, 137 S.Ct. 973, 197 L.Ed.2d 398 (2017) (“For standing purposes, a loss of even a small amount of money is ordinarily an ‘injury.’ ”). As to redressability, Louis seeks damages and equitable relief that would prohibit Metropolitan from using the type of tenant-screening services that led to Louis’ rental application denial. [See Am. Compl. at ¶¶ 184-93]. Such relief would redress Louis’ injuries. See Gustavsen v. Alcon Labs., 903 F.3d 1, 9 (1st Cir. 2018) (“Nor can there be any doubt that plaintiffs’ financial injury can be redressed by damages.”); see also Antilles Cement Corp. v. Fortuño, 670 F.3d 310, 318 (1st Cir. 2012) (explaining that the plaintiff “need only show that a favorable ruling could potentially lessen its injury” and “need not definitively demonstrate that a victory would completely remedy the harm”). Therefore, Louis has pleaded facts sufficient to establish standing.

2. CAAS (Counts I, III, V, VII, and VIII)

CAAS, as an organization bringing claims here, is also subject to constitutional standing requirements. The Court therefore “conduct[s] the same inquiry as in the case of an individual: Has the plaintiff ‘alleged such a personal stake in the outcome of the controversy’ as to warrant [its] invocation of federal-court jurisdiction?” Havens Realty Corp. v. Coleman, 455 U.S. 363, 378-79, 102 S.Ct. 1114, 71 L.Ed.2d 214 (1982) (citation omitted). An organization has standing “if it can show that the defendant's actions cause a ‘concrete and demonstrable injury to the organization's activities’ that is ‘more than simply a setback to the organization's abstract social interests,’ ” which is “not a demanding standard,” as “only a perceptible impairment of an organization's activities is necessary for there to be an injury in fact.’ ” Nat'l Ass'n of Consumer Advocates v. Uejio, 521 F. Supp. 3d 130, 142 (D. Mass. 2021) (citations omitted). SafeRent claims that CAAS has provided only vague and conclusory allegations of “diverted” resources and a “frustrated” mission, which are insufficient to establish organizational standing. [Dkt. 32 at 23-24]. Plaintiffs respond that CAAS has alleged that it must spend more time and resources helping clients who are unlikely to pass SafeRent's screening, which is sufficient at the pleading stage to show an injury in fact. [Dkt. 36 at 32-35]. Plaintiffs prevail here.

CAAS alleges that it “provides a multitude of services to low-income housing-seekers,” working “with 29 tenants with vouchers in the last year or about 36% of their entire housing caseload,” and that 28% of the individuals who qualify for CAAS’ services identify as Black and 20% identify as Hispanic. [Am. Compl. at ¶¶ 18, 93]. CAAS further claims that it “frequently encounter[s] clients who have excellent tenancy histories but have non-tenant related debt,” and that “[w]henever an applicant is denied an apartment because of credit screening or a low SafeRent Score, CAAS staff must expend additional time trying to help that applicant find another apartment.” [Id. at ¶¶ 96, 98]. CAAS elaborates:

Not being able to regularly encourage their clients to apply to housing providers who use SafeRent's tenant screening services limits the number of housing providers their clients can apply to. That, in turn, makes it harder for CAAS to accomplish its mission, particularly because the largest property management companies, with the most units, are most likely to use SafeRent or similar screening vendors.... CAAS has expended time and resources addressing the barriers that tenant screening companies impose on their clients. CAAS must therefore expend more money and resources in order to place their clients into other properties where they are not turned away because of their credit or other non-tenancy debt histories.

[Id. at ¶¶ 99, 101]. As “broadly alleged,” Defendants’ use of the SafeRent Score, which relies on credit history, has “perceptibly impaired [CAAS’] ability to provide counseling and referral services” for its clients, and “there can be no question that the organization has suffered injury in fact.” Havens Realty, 455 U.S. at 379, 102 S.Ct. 1114.

Contrary to SafeRent's assertion, CAAS’ allegations are neither conclusory nor insufficient, and their reliance on Equal Means Equal v. Ferriero, 3 F.4th 24, 30 (1st Cir. 2021) is misplaced. In Equal Means Equal, the organizations premised their standing on allegations that the defendant's unlawful conduct affected their lobbying activities and issue advocacy. Id. This type of harm is inapposite to the harm alleged here. Unlike the organizations in Equal Means Equal, CAAS states that it has already had to “expend more money and resources in order to place their clients into other properties where they are not turned away because of their credit or other non-tenancy debt histories,” which has “frustrated CAAS’ mission by interfering with its ability to assist voucher-holders in Massachusetts obtain housing”; they do not allege mere advocacy. [Am. Compl. at ¶¶ 100-02]. “Such concrete and demonstrable injury to the organization's activities—with the consequent drain on the organization's resources—constitutes far more than simply a setback to the organization's abstract social interests.” Havens Realty, 455 U.S. at 379, 102 S.Ct. 1114 (citing Sierra Club v. Morton, 405 U.S. 727, 739, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972)). CAAS has pleaded facts sufficient to establish standing at this juncture.

3. Section 3604(b) and Section 4(6)(b) (Counts I–IV)

SafeRent states that Plaintiffs have not established an injury in fact sufficient to support claims for violations of Section 3604(b) and Section 4(6)(b), which prohibit discrimination in the “terms, conditions, or privileges” of the sale or rental of housing or the provision of services in connection therewith. [Dkt. 32 at 22-23]. According to SafeRent, neither Louis nor Douglas has alleged an injury in fact, because Louis was never approved for housing, and therefore could not have received less favorable terms and conditions, and Douglas never alleges that she was offered less favorable terms or received less favorable services as compared to non-Black and non-voucher renters. [Id.]. Plaintiffs reply that SafeRent's interpretation of those sections is too narrow. [Dkt. 36 at 29-31].

Plaintiffs must establish standing “for each claim that they press and for each form of relief that they seek.” In re Evenflo Co., Inc., Mktg., Sales Pracs. & Prods. Liab. Litig., 54 F.4th 28, 34 (1st Cir. 2022) (citing TransUnion, LLC v. Ramirez, ––– U.S. ––––, 141 S. Ct. 2190, 2208, 210 L.Ed.2d 568 (2021)). Section 3604(b) and the corresponding state law make it unlawful to “discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, familial status, or national origin.” 42 U.S.C. § 3604(b); see Mass. Gen. Laws ch. 151B, § 4(6)(b) (prohibiting discrimination in the “terms, conditions or privileges of such accommodations or the acquisitions thereof, or in the furnishings of facilities and services in connection therewith”). Here, Louis and Douglas allege that the application process, particularly the use of the SafeRent Score, facilitated by the Defendants discriminated against them. [See Am. Compl. at ¶¶ 76, 84]. Such allegations are sufficient, at this stage, to confer standing for, at minimum, discrimination in the privilege of renting. See United States v. Hylton, 944 F. Supp. 2d 176, 188-89 (D. Conn. 2013) (finding that the defendant discriminated against a potential sublessee “in the privileges of a rental by refusing to allow her to rent” the unit, as such refusal prevented the sublessee “from assuming residency and enjoying the privilege of renting”).

B. Application of the FHA and Massachusetts Law to SafeRent (Counts I, III, and V)

SafeRent submits that the FHA does not apply to SafeRent, a tenant-screening service, because SafeRent does not make housing decisions. [Dkt. 32 at 15-17]. SafeRent also states that the Massachusetts housing discrimination laws, which are even narrower in reach, do not apply to it. [Id. at 17-18]. Plaintiffs counter that SafeRent's tenant-screening services result in a discriminatory housing practice, and it is this consequence that renders SafeRent liable under the FHA. [Dkt. 36 at 17-21]. Plaintiffs also assert that SafeRent is liable under Massachusetts law because it had a role in the “tenant selection process” and, alternatively, is a “credit service” subject to the state housing discrimination laws. [Id. at 21-24].

SafeRent relies on its assertion that it “is not a landlord and does not otherwise have authority to make housing decisions.” [Dkt. 32 at 17]. This, however, does not accurately capture SafeRent's role in the rental application process, at least as alleged by Plaintiffs here, and it conflicts with the intent and clear statutory text of the FHA. Plaintiffs allege that SafeRent has violated two provisions of the FHA: Section 3604(a), which prohibits conduct that “otherwise make[s] unavailable ... a dwelling to any person because of race ... or national origin,” and Section 3604(b), which proscribes discrimination in the “terms, conditions, or privileges of a sale or rental of a dwelling, or in the provision of services” because of race or national origin. 42 U.S.C. § 3604. Contrary to SafeRent's assertions, neither provision limits liability to people or entities that “make housing decisions.” [See, e.g., Dkt. 32 at 15-17]. Section 3604 instead “focuses on prohibited acts,” Meyer v. Holley, 537 U.S. 280, 285, 123 S.Ct. 824, 154 L.Ed.2d 753 (2003), and the Supreme Court has explained that the “language of the Act is broad and inclusive,” Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205, 209, 93 S.Ct. 364, 34 L.Ed.2d 415 (1972). That is, “Congress’ use of the phrase ‘otherwise make unavailable’ refers to the consequences of an action rather than the actor's intent,” and it is “results-oriented.” Inclusive Communities, 576 U.S. at 534, 135 S.Ct. 2507. Moreover, regulations issued by the Department of Housing and Urban Development (“HUD”) provide that an actor may be held liable under the FHA for its “own conduct that results in a discriminatory housing practice.” 24 C.F.R. § 100.7(a)(1)(i) (emphasis added). While “housing providers are often the target of FHA claims ... other entities are frequently held liable under the FHA,” and “[n]othing in the language of the statute precludes” SafeRent's liability here. Conn. Fair Housing Ctr. v. CoreLogic Rental Prop. Solutions, LLC, 369 F. Supp. 3d 362, 374-75 (D. Conn. 2019).

Plaintiffs allege that SafeRent markets and sells its SafeRent Score to housing providers to “automate human judgment” and to “identify top quality applicants” and “better renters.” [Am. Compl. at ¶¶ 22, 25, 29, 41-42]. While SafeRent delivers “an accept/decline/conditional decision” based on the housing provider's “predetermined decision points,” those housing providers “cannot change the screening algorithm” and do not know how the SafeRent Score is calculated before selecting its minimum score for applicant approval. [Id. at ¶¶ 24, 26, 33-35, 39]. In fact, Plaintiffs allege that SafeRent does not share any details about its algorithm's design with housing providers, rental applicants, or the public generally. [Id. at ¶¶ 34, 36-37]. Moreover, Plaintiffs state that housing providers rely on SafeRent's evaluations—the SafeRent Score—as the basis for any decisions to accept or deny a rental application. [Id. at ¶ 38]. Metropolitan explained to Louis that “the third-party service” it utilized “to screen all prospective tenants has denied [her] tenancy,” and it “cannot override the outcome of the Tenant Screening.” [Id. at ¶¶ 44, 47]. Contrary to SafeRent's characterization of its actions, the amended complaint plausibly claims that SafeRent did have the “authority to make housing decisions” [see Dkt. 32 at 16], because SafeRent “effectively controls the decision to approve or reject a rental application,” as it “has sole control over how scores are calculated” [Am. Compl. at ¶ 43]. Taken together, the allegations in the amended complaint suggest that SafeRent's provision of the SafeRent Score is “directly related” to the rental transaction “because it determined who was qualified to occupy a housing unit."5 CoreLogic, 369 F. Supp. 3d at 373. Because that determination may disqualify otherwise qualified rental applicants and, as alleged, results in a disparate impact on protected groups, SafeRent is subject to the FHA.6 See id. at 374-75 (noting that the application of the FHA “beyond direct housing providers” is a “logical extension[ ] which effectuate[s] the purpose of the FHA,” as “a housing provider could simply use an intermediary to take discriminatory and prohibited actions on its behalf and defeat the purpose of the FHA”).

SafeRent's attempt to escape liability under Massachusetts law also fails. While Sections 4(6) and 4(10) do list a number of actors to which they apply, see Crossing Over, Inc. v. City of Fitchburg, 98 Mass.App.Ct. 822, 161 N.E.3d 432, 443 n.17 (2020) (noting that Section 4(6) “list[s] a series of private actors ... to whom [it] appl[ies,], while the FHA[ ] is drafted more broadly”), another subsection provides that it is unlawful “to aid, abet, incite, compel or coerce the doing of any of the acts forbidden under this chapter,” which includes Sections 4(6) and 4(10), Mass Gen. Laws. ch. 151B, § 4(5). Plaintiffs allege that SafeRent provides Metropolitan and other housing management companies decisions on rental applications. [See Am. Compl. at ¶¶ 22-24, 27-28, 39-44]. The Massachusetts Supreme Court has found that defendants who play a role in the tenant selection process may be held liable under, at minimum, Section 4(10), even if they only “aid[ed] or abet[ted]” a violation of Section 4(10). See DiLiddo v. Oxford St. Realty, Inc., 450 Mass. 66, 876 N.E.2d 421, 430 (2007). Such logic similarly applies here to both the Section 4(6) and 4(10) claims, and they survive the motion to dismiss on this basis.7 See Mass. Gen. Laws. ch. 151B, § 9 (proclaiming that “[t]his chapter shall be construed liberally for the accomplishment of its purposes”).

C. Disparate Impact under the FHA and Massachusetts Law (Counts I-VI)

The heart of Defendants’ arguments for dismissal is that Plaintiffs have not pleaded a prima facie claim of disparate impact discrimination for race or source of income under federal or state housing laws. [Dkt. 30 at 8-15; Dkt. 32 at 6-15]. In particular, they submit that Plaintiffs have failed to allege that the use of the SafeRent Score is an “artificial, arbitrary, and unnecessary” policy that creates a barrier for Black, Hispanic, or voucher-holding applicants; that the amended complaint does not plead a disparate impact because it does not allege any significant statistical disparity in housing outcomes for Black, Hispanic, or voucher-holding applicants; and that Plaintiffs have failed to establish that the Defendants’ actions caused any such disparity in housing outcomes. [Dkt. 30 at 8-15; Dkt. 32 at 6-15]. Plaintiffs counter that their allegations regarding the disparities in credit histories and scores, when viewed alongside their allegations that the SafeRent Score incorporates such information into its tenant-screening, is sufficient to plead a claim of disparate impact here. [Dkt. 36 at 5-17].

Disparate impact claims are actionable under the FHA. Inclusive Communities, 576 U.S. at 539, 135 S.Ct. 2507 (noting that “[r]ecognition of disparate-impact claims is consistent with the FHA's central purpose”). They are also cognizable under Massachusetts housing discrimination laws, which follow the same burden-shifting framework as federal housing discrimination claims. Burbank Apartments Tenant Ass'n v. Kargman, 474 Mass. 107, 48 N.E.3d 394, 407, 411 (2016). As such, Plaintiffs’ federal and state law discrimination claims rise or fall together. A disparate impact claim “challenges practices that have a ‘disproportionately adverse effect on minorities’ and are otherwise unjustified by a legitimate rationale.” Inclusive Communities, 576 U.S. at 524, 135 S.Ct. 2507 (citing Ricci v. DeStefano, 557 U.S. 557, 577, 129 S.Ct. 2658, 174 L.Ed.2d 490 (2009)). “A plaintiff can make out a claim for disparate impact by showing that a defendant's actions actually or predictably result in racial discrimination.” Barrow v. Barrow, No. CV 16-11493-FDS, 2017 WL 2872820, at *3 (D. Mass. Jul. 5, 2017) (citing Macone v. Town of Wakefield, 277 F.3d 1, 7 (1st Cir. 2002)) (modifications omitted). A plaintiff must plead (1) a specific and actionable policy, (2) a disparate impact, and (3) facts raising a sufficient inference of causation. Miller v. Countrywide Bank, N.A., 571 F. Supp. 2d 251, 255 (D. Mass. 2008). Courts must engage in “a rigorous examination on the merits at the pleading stage” to “balance the interests of both property owners and protected classes.” Burbank Apartments, 48 N.E.3d at 411 (citation omitted).

1. Specific and Actionable Policy

Plaintiffs must point to “specific policies” that they allege result in racial discrimination to satisfy the first element of a disparate impact claim. See Barrow v. Barrow, No. CV 16-11493-FDS, 2016 WL 6996996, at *5 (D. Mass. Nov. 29, 2016). Plaintiffs have alleged that Defendants’ provision and use of the SafeRent Score when evaluating a rental application is such a policy, because the SafeRent Score relies on credit history, and Black, Hispanic, and low-income voucher holders are disproportionately likely to have poor credit history, resulting in a lower SafeRent Score and causing a disproportionate denial of housing. [See Am. Compl. at ¶¶ 122-23, 129-30, 136-37, 144-45, 152-53, 160-61]. Plaintiffs have therefore pleaded a “specific and actionable” policy. See Barrow, 2017 WL 2872820, at *3.

Defendants rely on Inclusive Communities, 576 U.S. at 543, 135 S.Ct. 2507, to insist that Plaintiffs have failed to plead that the provision and use of the SafeRent Score to evaluate rental applications create an “artificial, arbitrary, and unnecessary barrier[ ]” for Black, Hispanic, and voucher-holding applicants. [See Dkt. 30 at 9-11; Dkt. 32 at 7-9]. Inclusive Communities, however, did not add such a requirement at the pleading stage. Rather, Inclusive Communities invoked the “artificial, arbitrary, and unnecessary” language to illustrate the types of policies that the FHA is intended to reach, that is, the “ultimate purpose of disparate-impact liability.” Nat'l Fair Housing Alliance v. Travelers Indemnity Co., 261 F. Supp. 3d 20, 29 (D.D.C. 2017) (quoting Inclusive Communities, 576 U.S. at 543, 135 S.Ct. 2507). As such, Defendants’ attempt to require such allegations at the pleading stage fails.8 And even if it did not, Plaintiffs have alleged facts suggesting that the SafeRent Score's reliance on credit history is arbitrary and unnecessary.9 [See Am. Compl. at ¶¶ 30, 35, 45-50, 72, 131-32, 138-39, 146-47, 154-55, 162-63].

2. Disparate Impact

Defendants argue that the Plaintiffs do not allege facts demonstrating a disparate impact on Black and Hispanic applicants and voucher holders. [Dkt. 30 at 12-13; Dkt. 32 at 9-11]. In particular, SafeRent contends that the amended complaint provides no data regarding the housing outcomes of the two protected groups. [Dkt. 32 at 10]. Additionally, SafeRent claims that the statistical evidence provided in the amended complaint is inadequate because Plaintiffs ask the Court to infer a statistical disparity in housing outcomes based on racial disparities in credit history, but credit history is just one element of the formula used to calculate the SafeRent Score. [Id. at 10-11]. Metropolitan similarly argues that allegations in the amended complaint “say nothing about the actual people who applied to rent” at Metropolitan's properties, nor do they state anything about whether Black and Hispanic applicants and voucher holders are more frequently denied apartments at Metropolitan's properties. [Dkt. 30 at 12]. In other words, according to Metropolitan, the amended complaint “alleges disparate credit scores amongst the general population, but there are no allegations of a disparate impact at [Metropolitan's property] corresponding with these disparate credit scores.” [Id.]. Plaintiffs counter that the amended complaint is “replete” with allegations regarding the credit histories of Black, Hispanic, and low-income individuals, and it alleges “in detail” how SafeRent Scores incorporate such information into its calculations. [Dkt. 36 at 10]. According to Plaintiffs, this “predictable disparity is sufficient to satisfy pleading standards.” [Id. at 11].

To satisfy the second element of a disparate impact claim, a plaintiff must allege “specific facts showing a disparate impact.” Barrow, 2016 WL 6996996, at *5. These facts must “tie to the acts or practices of [the] defendant[s].” Id. “A showing of disparate impact is usually made using statistical evidence.” Id. (citing Hallmark Developers, Inc. v. Fulton Cnty., 466 F.3d 1276, 1286 (11th Cir. 2006)); see Mandala v. NTT Data, Inc., 975 F.3d 202, 209 (2d Cir. 2020) (“To nudge a disparate impact claim across the line from conceivable to plausible—and, indeed, to ultimately prove such a claim—plaintiffs typically rely on statistical evidence to show a disparity in outcome between groups.”).

Plaintiffs have alleged significant statistical disparities in the credit histories of Black and Hispanic consumers as compared to White consumers and of voucher holders as compared to individuals who do not use vouchers. [Am. Compl. at ¶¶ 51-61]. The question is whether these allegations are sufficient at the pleading stage to allow the Court to infer that such disparities result in “an adverse effect on the protected group.” Greater New Orleans Fair Hous. Action Ctr. v. U.S. Dep't of Hous. & Urban Dev., 639 F.3d 1078, 1085-86 (D.C. Cir. 2011) (quoting Garcia v. Johanns, 444 F.3d 625, 633 (D.C. Cir. 2006)). They are.

Plaintiffs have alleged that Defendants have a policy of providing and using the SafeRent Score to evaluate rental applications, and that the SafeRent Score relies heavily on credit history. Plaintiffs further allege that this policy has a disproportionate impact on Black and Hispanic applicants and voucher holders because they are significantly more likely to have poor credit histories, which results in a disproportionate rate of housing denials for these protected groups. In other words, if a lower credit score makes it more likely that a rental applicant will be denied, and Black and Hispanic individuals and voucher holders are disproportionately likely to have lower credit scores, it follows that any policy that relies on credit scores to evaluate rental applications will have a disproportionate impact on Black and Hispanic applicants and voucher holders who apply. This risk is heightened if the policy does not account for the impact a voucher has on a tenant's ability to pay rent each month. Louis and Douglas also specifically allege that they were denied housing because of their SafeRent Scores. See Miller, 571 F. Supp. 2d at 259 (noting that the alleged facts gave rise to an inference of disparate impact “especially [ ] in light of the individual named plaintiffs’ allegations”). Combined, these allegations are sufficient at the pleading stage to raise an inference of disparate impact, that is, that the “challenged practice caused or predictably will cause a discriminatory effect.” Burbank Apartments, 48 N.E. 3d at 411 (emphasis added); see CoreLogic, 369 F. Supp. 3d at 379 (“Defendant's claim that dismissal is required unless Plaintiffs allege statistical evidence of how the policy affects the protected and unprotected group again sets Plaintiffs’ bar too high.”); see also Nat'l Fair Housing Alliance, 261 F. Supp. 3d at 30 (explaining that courts do not need “to abandon common sense or necessary logical inferences that follow from the facts alleged” (citing Inclusive Communities, 576 U.S. at 543, 135 S.Ct. 2507)).

The fact that credit history is only one piece of SafeRent's formula does not doom Plaintiffs’ disparate impact claims at this stage. Plaintiffs allege that the SafeRent Score relies “in significant part on the applicant's credit score and credit history,” in addition to other factors, such as “bankruptcy records, past due accounts, payment performance, and eviction history.” [Am. Compl. at ¶¶ 35, 45]. With the exception of eviction history, all of these factors may contribute to credit history and the wealth inequalities that Plaintiffs allege exist and result in a disparate impact here. [See id. at ¶¶ 50-60]. Whether it is credit history or other SafeRent Score factors that drive any disparate impact on the protected groups is a question for a later stage in this proceeding.

3. Causality

Defendants argue that the amended complaint does not plausibly allege that either Defendant's actions caused any disparity in housing decisions. SafeRent and Metropolitan maintain that Plaintiffs fail to allege facts supporting an inference that the SafeRent Score's use of credit history, and not some other factor, causes any disparity in housing outcomes. [Dkt. 30 at 13-15; Dkt. 32 at 12]. SafeRent also contends that it is the housing providers, not SafeRent, who makes the housing decisions. [Dkt. 32 at 12]. Plaintiffs respond that the factors considered by the SafeRent score, as listed in the amended complaint and including credit history, are related to and reinforce each other. [Dkt. 36 at 13-15]. Because Plaintiffs have “alleged disparities across the range of inputs to the SafeRent Score,” the amended complaint states facts sufficient to support causality. [Id.]. Plaintiffs also reply that the amended complaint states facts sufficient to show how SafeRent's policies will cause predictable disparities in housing and that SafeRent is not absolved of liability simply because housing providers can choose to use SafeRent Scores. [Id. at 16].

The Supreme Court has made it clear that disparate impact claims under the FHA have a “robust causality requirement,” which ensures that “racial imbalance, does not, without more, establish a prima facie case of disparate impact and thus protects defendants from being held liable for racial disparities they did not create.” Inclusive Communities, 576 U.S. at 542, 135 S.Ct. 2507 (internal modifications and quotation marks omitted). There must be a “causal connection between the identified policy and the alleged disparate impact.” Miller, 571 F. Supp. 2d at 259. At the pleading stage, a plaintiff must “allege facts ... or produce statistical evidence demonstrating a causal connection [to] make out a prima facie case of disparate impact.” Inclusive Communities, 576 U.S. at 543, 135 S.Ct. 2507. “[A] disparate-impact claim that relies on a statistical disparity must fail if the plaintiff cannot point to a defendant's policy or policies causing that disparity.” Id. at 542, 135 S.Ct. 2507; see Burbank Apartments, 48 N.E.3d at 411. The question ultimately comes down to this: Have the Plaintiffs alleged facts demonstrating that the policy at issue—the provision and use of the SafeRent Score, which relies at least in part on credit history, to evaluate rental applications—causes the alleged disparate impact, that is, a disproportionate denial of rental applications for Black and Hispanic individuals and voucher holders generally?

The Court has already noted that Plaintiffs allege that the SafeRent Score “considers applicants’ credit history” and “other credit-related information, including non-tenancy debts.” [Am. Compl. at ¶ 30]. As explained, this “other credit-related information,” such as “bankruptcy records, past due accounts, [and] payment performance,” contributes to credit history and scores, thereby affecting the SafeRent Score as alleged by the Plaintiffs. [See id. at ¶ 35]. Indeed, as alleged by Plaintiffs, the only factor not related to financial data is eviction history, and even that could be due to non-payment of rent. [See id.]. Plaintiffs’ allegations of disparities in credit scores, credit health, debt collection rates, the use of payday and other alternative loan sources, and wealth inequality plausibly encompass many of these factors. [See id. at ¶¶ 51-60]. Because these factors relate to and reinforce one another, and given that Plaintiffs have alleged disparities across the range of factors considered by the SafeRent Score, it is not necessary to know the precise weight assigned to each factor at the pleading stage. Indeed, it is impossible for Plaintiffs to plead such information, as SafeRent does not disclose the data sources considered or the weights assigned to such data in calculating the SafeRent Score. [Id. at ¶ 34]. The Court will not penalize Plaintiffs for the “informational disadvantage” they suffer at this early stage in light of their other well-pleaded allegations. See Mandala, 975 F.3d at 212. While the existence of “other factors” could explain the disparate impact alleged, Plaintiffs have pleaded facts sufficient at this phase to support a plausible claim that the Defendants’ use of the SafeRent Score, which relies in part on credit history and related factors, disproportionately affects Black and Hispanic applicants and voucher holders generally. It does not matter that Defendants did not create the longstanding inequities in access to wealth and wealth-building mechanisms that have contributed to racial and income disparities in credit scores and histories; Defendants decided to rely on those inequities when providing and using the SafeRent Score, which includes credit scores and histories in the algorithm, and such reliance, as alleged by Plaintiffs, has a disparate impact on housing opportunities for Black and Hispanic applicants and voucher holders.

SafeRent's argument that housing providers, not SafeRent, make the final housing decision fails for the same reasons articulated in the Court's discussion of whether the FHA applies to SafeRent. SafeRent created and provided the tenant-screening process to Metropolitan and other housing providers, marketing its service as a means to “automate human judgement” and refusing to disclose the details of its algorithm or to allow providers to alter any of the factors considered. [See Am. Compl. at ¶¶ 25, 33-37]. Thus, at this stage, the relevant policy and the resulting disparate impact can be traced to SafeRent, even if housing providers also play a role.

D. Chapter 93A (Counts VII–VIII)

To state a claim for a Chapter 93A violation, a plaintiff must show that (1) the defendant engaged in trade or business and committed an unfair or deceptive act; (2) this act resulted in economic injury to the plaintiff; and (3) there is a casual connection between the practice and the plaintiff's economic injury. See Mass. Gen. Laws. ch. 93A, §§ 2, 9, 11. SafeRent maintains that Plaintiffs’ Chapter 93A claims are derivative of their disparate impact claims and must be dismissed for the same reasons. [Dkt. 32 at 19]. In the alternative, SafeRent argues that SafeRent's challenged conduct falls within Chapter 93A's “safe harbor” provision and that Plaintiffs allege “nothing more than good-faith or (at most) negligent conduct” that does not rise to an “unfair” practice. [Id. at 19-20]. Plaintiffs counter that the facts alleged do state a plausible claim for unfair acts or practices that are not covered by the safe harbor provision.10 [Dkt. 36 at 24-27].

The Court has already explained why Plaintiffs’ disparate impact claims survive dismissal, and therefore SafeRent's first argument is moot. Conduct is “unfair” under Chapter 93A if it (1) falls “within at least the penumbra of some common-law, statutory, or other established concept of unfairness”; (2) is “immoral, unethical, oppressive, or unscrupulous”; and (3) causes “substantial injury to consumers.” Walsh v. TelTech Sys., Inc., 821 F.3d 155, 160 (1st Cir. 2016) (citations omitted). “To rise to the level of an ‘unfair’ act or practice, the defendant's conduct must generally be of an egregious, non-negligent nature.”11Id.; see also Baker v. Goldman, Sachs & Co., 771 F.3d 37, 51 (1st Cir. 2014). Chapter 93A does not apply to “transactions or actions otherwise permitted under laws as administered by any regulatory board or officer acting under statutory authority of the commonwealth or of the United States.” Mass. Gen. Laws. ch. 93A, § 3 (“Section 3”). The “burden is on the defendant[ ]” to show that Section 3 “applies to the conduct in question,” which requires the defendant to “show more than the mere existence of a related or even overlapping regulatory scheme that covers the transaction.” Cablevision of Bos., Inc. v. Public Imp. Comm'n, 38 F. Supp. 2d 46, 61 (D. Mass. 1999) (citations omitted). This “burden is a difficult one to meet.” Bierig v. Everett Square Plaza Assocs., 34 Mass.App.Ct. 354, 611 N.E.2d 720, 728 n.14 (1993). A defendant must “show that such scheme affirmatively permits the practice which is alleged to be unfair.” Cablevision, 38 F. Supp. 2d at 61 (citation omitted).

Plaintiffs do not dispute that HUD allows, in certain circumstances, housing providers to consider credit history when screening applicants and to reject an applicant for poor credit history, which could support a finding that SafeRent's actions are protected by Section 3.12 See Dep't of Housing & Urban Dev., HUD Handbook 4350.3: Occupancy Requirements of Subsidized Multifamily Housing Programs, at 4-23, § 4-7(F) (Nov. 2013). Instead, Plaintiffs argue that “[j]ust because an act or practice may be authorized by statute or regulation does not mean that it ‘can never be an unfair or deceptive act or practice’ as applied.” [Dkt. 36 at 26 (citing Schubach v. Household Fin. Corp., 375 Mass. 133, 376 N.E.2d 140, 142 (1978))]. This is true. See Tomasella v. Nestlé USA, Inc., 962 F.3d 60, 79 (1st Cir. 2020) (“Under this rubric, the legality of the challenged act or practice is not dispositive of its unfairness.”). However, Plaintiffs have not alleged facts to suggest that SafeRent, in creating and providing the SafeRent Score to housing providers, acted in an immoral, unethical, oppressive, or unscrupulous manner such that its conduct was of an egregious nature sufficient to raise a plausible claim of unfairness under Chapter 93A.

IV. Conclusion

For the foregoing reasons, Metropolitan's motion to dismiss [Dkt. 29] is DENIED and SafeRent's motion to dismiss [Dkt. 31] is GRANTED IN PART and DENIED IN PART. Plaintiffs’ Chapter 93A claims against SafeRent, Counts VII and VIII, are DISMISSED.