WASHINGTON (Reuters) - A divided U.S. Supreme Court on Thursday embraced a broad interpretation of the type of civil rights allegations that can be made under the landmark Fair Housing Act by ruling that the law allows for discrimination claims based on seemingly neutral practices that may have a discriminatory effect.
On a 5-4 vote in a major civil rights case, the court handed a victory to civil rights groups and the administration of President Barack Obama, which had backed a Texas nonprofit that claimed the state violated the law by disproportionately awarding low-income housing tax credits to developers who own properties in poor, minority-dominated neighborhoods.
Justice Anthony Kennedy, a conservative who often casts the deciding vote in close cases, joined the court's four liberals in the majority.
The court was considering whether the 1968 law allows for so-called disparate impact claims in which plaintiffs only need to show the discriminatory effect of a particular practice and not evidence of discriminatory intent. There is no dispute over the law's prohibition on openly discriminatory acts in the sale and rental of housing.
The case was closely watched by lenders and insurance companies, which say they are unfairly targeted. Industry groups say that companies use neutral criteria when assessing risk. The existing law allows challenges to legitimate business practices, they argue.
(Reporting by Lawrence Hurley; Editing by Will Dunham)