By Ariane de Vogue

WASHINGTON (CNN) — The Supreme Court affirmed that a federal law passed in 1968 to combat housing discrimination by holding that the law allows not only claims for intentional discrimination but also claims that cover practices have a discriminatory effect even if they were not motivated by an intent to discriminate.

While many await Supreme Court rulings on Obamacare and same-sex marriage, civil rights groups are nervously anticipating what might be the sleeper case of the term.

The case concerns the scope of the Fair Housing Act, a law passed in 1968 that makes it unlawful to deny a dwelling to someone based on race.

The court is considering whether the 1968 law allows people to pursue lawsuits when a practice has a discriminatory effect, even if there was no intent to discriminate. Civil rights advocates say such “disparate impact” claims are essential to combat subtle instances of discrimination, but some companies, developers and housing authorities say they cost time and money investigating actions made with good intentions. And they argue these claims force a state or private entity to engage in race-conscious decision-making to avoid legal liability.

“There is a huge divide that exists between us,” said Sherrilyn Ifill, the president of the NAACP Legal Defense and Educational Fund who was at the Supreme Court on Monday waiting for a possible decision. “Our country remains deeply segregated and we need not only provisions of the Fair Housing Act to be intact, but we need aggressive, and affirmative enforcement of the act by the federal government and by state jurisdictions.”

The case, Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, began in 2008, when the Inclusive Communities Project, a non-profit organization that seeks to promote racial integration in Dallas, sued a state agency charged with allocating tax credits to developers who build low-income housing projects. The ICP accused the Texas agency of disproportionately allocating the tax credits to properties in minority populated areas.

Lower courts have ruled in favor of the ICP, and for years, other courts have allowed disparate impact claims to go forward. But critics say such claims have a negative impact on affordable housing.

“Housing authorities and developers are not able to make the same kind of decisions to develop affordable housing if they have to consider the effects of where they are developing and how the money is invested in housing,” says Michael W. Skojec, a lawyer with Ballard Spahr who has filed a brief on behalf of the Houston Housing Authority in support of Texas.

Skojec says that whether housing is developed in poor neighborhoods or more affluent neighborhoods, developers could still be subject to claims of disparate impact based on statistics of how minorities are affected.

“What we are trying to do is get people not to consider race, or think of people in racial terms,” he said. “The disparate impact concept encourages and requires people to think about race in every decision.”

Justices divided

At arguments, the justices seemed closely divided. Justice Antonin Scalia asked questions that could be favorable to both sides, and Justice Stephen Breyer noted that the lower courts have been allowing such disparate impact claims for years.

“It’s been the law for 40 years,” he said. “Disaster has not occurred, and why, when something is so well established throughout the United States, should this court come in and change it?”

Elizabeth Wydra, chief counsel of the Constitutional Accountability Center, who also serves as a CNN analyst, filed a brief in support of the ICP. She links the case to recent events of civil unrest around the country. 

“It would be wrong for the Supreme Court to seriously weaken one of our country’s most important civil rights protections when we still don’t live in a country where all Americans have an equal opportunity to seek a home and fair treatment in any neighborhood,” she said.

But Texas’s solicitor general argued that the Fair Housing Act “unambiguously precludes” claims of disparate impact. He said that while the statute forbids actions that discriminate “because of race” the language of the law “cannot support an additional prohibition on actions that discriminate because of any factor that happens to be correlated with race.”

The Obama administration has weighed in against Texas, noting that the Department of Housing and Urban Development — the agency charged with administering the FHA — interprets the act to allow disparate impact claims.

A decision in the case is expected by the end of the month.