A federal judge overturned the Obama administration’s “desperation” move to try to find more ways to prove discrimination in housing in a decision Monday that also delivered a searing rebuke to Thomas Perez, a Cabinet official whom liberals are pushing to be the next attorney general.
Judge Richard J. Leon ruled that the administration cannot rely on “disparate impact” to judge discrimination, dealing a blow to civil rights groups that said the analytical tool gave them more room to file discrimination cases.
Potentially just as important for President Obama’s postelection moves was the rebuke Judge Leon delivered to Mr. Perez, whom he accused of gaming the legal system, timing cases and arranging a settlement in order to keep the Supreme Court from issuing a ruling that would have undercut the administration’s discrimination argument.
Judge Leon called that “particularly troubling.”
In his ruling, Judge Leon said the administration’s bid to establish disparate impact as a legitimate measure of discrimination showed “hutzpah (bordering on desperation).”
“This is yet another example of an administrative agency trying desperately to write into law that which Congress never intended to sanction,” Judge Leon wrote in a scorching opinion that described Obama administration attorneys’ arguments as “nothing less than an artful misinterpretation” of the law.
The case stems from a Department of Housing and Urban Development rule issued last year that said discrimination could be proved using disparate impact, which means looking at statistical analysis to see whether one group fares differently from another.
Previously, someone had to prove intentional discrimination to win a housing complaint.
Civil rights groups argue that disparate impact helps weed out hidden discrimination, while opponents say it is intrusive and papers over other reasons why outcomes may differ between races or other demographic categories.
HUD argued that Congress authorized disparate impact analysis in the Fair Housing Act. Several major insurance organizations sued.
Judge Leon said neither the wording of the Fair Housing Act nor his reading of Congress’ intent when it passed the legislation supports HUD’s interpretation.
Besides, he ruled, disparate impact would force insurers and others to collect information on race, religion and other factors — questions they often are banned from asking even under state laws.
Although some appeals courts have upheld disparate impact analysis as valid, the judge said, the Supreme Court took a dim view in a 2005 ruling that seemed to reset the legal thinking.
In a statement, HUD said the department was reviewing the ruling and considering whether to appeal.
Judge Leon went beyond the Fair Housing Act ruling to rebuke Mr. Perez for gaming the legal system.
He said the Justice Department asked him to halt the insurers’ challenge in order to give the Supreme Court a chance to rule on disparate impact in another case. But just months later, Mr. Perez negotiated a quid pro quo in that other case, reaching a settlement and deleting it from the Supreme Court’s docket so the justices wouldn’t get a chance to rule against him.
Judge Leon called that “troubling.”
A spokesman for Mr. Perez at the Labor Department didn’t respond to a message seeking comment Monday afternoon.
Mr. Perez is a favorite of liberal groups, which are pushing Mr. Obama to name him to replace Attorney General Eric H. Holder Jr.
Mr. Holder has submitted his resignation but made it effective upon Mr. Obama getting a replacement confirmed.
The president put off a decision on a replacement until after the midterm elections, preferring to spare vulnerable Senate Democrats a bruising fight.
Mr. Perez would be just such a fight. His nomination to be labor secretary squeaked through on a 54-46 vote. He likely would have been blocked had Democrats not changed filibuster rules to eliminate the 60-vote threshold for nominations to all bodies but the Supreme Court.