DOJ Eliminates Disparate-Impact Liability from Title VI Regulations in the Wake of Loper Bright 

When the Supreme Court decided Loper Bright Enterprises v. Raimondo, overturning Chevron deference, it clarified the principle that federal agencies cannot extend their authority beyond what has been clearly authorized by Congress. In declaring that “statutes . . . have a single, best meaning,” the Court made clear that agencies must follow the law as written and not their policy preferences. Over the past year, this clarity has prompted many agencies to scrutinize long-standing policies, even those created before Chevron deference.  The Trump Administration has even made such reevaluation a central pillar of its deregulatory agenda, as reflected in Executive Order 14219 and guidance from the Office of Management and Budget. The Department of Justice’s (“DOJ”) new Title VI rule, which eliminates disparate-impact liability, is just one of the clearest and most recent examples of the real impact Loper Bright is having on the American regulatory space. 

Not long after the passage of Title VI as part of the 1964 Civil Rights Act, the DOJ created an enforcement framework that allowed liability based solely on outcomes, even without evidence of discriminatory intent. This “disparate impact” understanding of liability conflicted with Title VI’s plain text, which only prohibits cases of intentional discrimination on the basis of race, color, or national origin. As recently as 2001, the Supreme Court, in Alexander v. Sandoval, suggested “[Title VI] permits the very behavior that [DOJ’s] regulations forbid.” Although DOJ’s interpretation of Title VI to prohibit facially neutral policies or practices that have a disproportionate discriminatory impact was never directly challenged (or, for that matter, upheld) under Chevron, the agency’s position was long seen by many as straying from the statute’s actual wording and intended purpose.  

As DOJ’s final rule explains, under Loper Bright, statutes “have a single best meaning” that is “fixed at the time of enactment,” and agencies “cannot extend authorities . . . beyond [that] original public meaning.” Just as cases like Sandoval establish Title VI’s best meaning to provide for liability only in instances of intentional discrimination, Loper Bright eliminates the gray zone in which disparate-impact liability once operated.  

By eliminating disparate-impact liability, DOJ also aims to restore coherence between private and federal regulatory enforcement. Sandoval established that private plaintiffs do not enjoy a private right-of-action to allow for Title VI suits premised on disparate-impact. But the decision had no direct bearing on cases brought by the federal government.  Loper Bright’s requirement that there be a singular interpretation of Title VI ends this contradiction. It has forced DOJ to align its practices with the original meaning of Title VI, eliminating an incongruent civil rights regime. 

The DOJ’s recission of disparate-impact liability also alleviates pre-existing constitutional concerns. By forcing recipients of federal funds to engage in racial decision-making to avoid performative inequalities, the agency’s previous regulations often incentivized the very behavior proscribed by the Equal Protection Clause. As the final rule notes, disparate-impact liability “encourages” race-based discrimination that cannot meet strict-scrutiny limitations. And even when that is not so, the threat of liability can still chill “bona fide” merit or skill-based employment decisions, out of fear of potentially unequal outcomes.  Because of these constitutional conflicts and distortions of Title VI’s nondiscrimination guarantee, the DOJ concluded that the harm of disparate-impact liability outweighed any proposed benefit. 

Loper Bright requires agencies to implement statutes as written, eliminating any wiggle room for policy-based divergence, at least outside of an express delegation of discretionary authority. The recent rescission of DOJ’s disparate impact liability regulations vividly demonstrates this new legal reality. By returning to the original public meaning of Title VI, DOJ has taken a great leap forward in enforcing a real equality of opportunity against a regulated mandate of outcomes. In doing so, the agency underscores how Loper Bright continues to reshape administrative practice in a manner consistent with the Constitution. 

Liam Childers is a policy intern at Americans for Prosperity.