(CNN) —  

Civil rights groups are concerned that the Supreme Court is poised to make it more difficult for people to bring housing discrimination claims under federal law.

Under the Fair Housing Act – passed in 1968 – it is unlawful to “make unavailable or deny, a dwelling to any person because of race.”

There is no question that the law was meant to cover intentional discrimination. At issue before the Court is whether the law also authorizes claims where practices have a discriminatory effect, even if they were not motivated by an intent to discriminate. Such a standard is known as “disparate impact.”

The justices will hear arguments in the case on Wednesday.

“The FHA was passed for the purpose of dealing with both intentional discrimination, but also to deal with the effects of discriminatory policies that end up perpetuating segregation,” said John Relman of the National Fair Housing Alliance at a recent press conference.

Relman and other civil rights lawyers are fearful that if the Supreme Court rejects a disparate impact theory for housing, it might later reject the test as it applies to other civil rights laws.

“Without a question, the Roberts Court is poised to do damage to a key means of vindicating claims under the FHA,” said Sherrilyn Ifill, President of the NAACP Legal Defense and Educational Fund.

The case began in 2008 when the Inclusive Communities Project a nonprofit 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. ICP accused the Texas agency of disproportionately allocating the tax credits to properties in minority populated areas.

The courts below ruled in favor of the ICP.

Now Texas is appealing the matter to the Supreme Court.

Texas officials argued that the FHA precludes claims of disparate impact. “There is no language anywhere in the Fair Housing Act’s anti-discrimination rules that refers to ‘effect’ or actions that ‘adversely affect’ others,” state lawyers wrote in court briefs. They argue that the FHA only forbids actions that “discriminate because of race,” and not actions that “discriminate because of any factor that happens to be correlated with race.”

They argue that if disparate impact claims can be made in the area of housing, a state or private entity is forced to engage in race-conscious decision-making to avoid legal liability.

“The private company must spend time and money to investigate the ultimate effect of every action it takes, even when it is clearly intended for a good business purpose,” says Michael W. Skojeca, a partner at Ballard Spahr who represents management companies, developers and housing authorities.

“If there is discrimination occurring, there ought to be some evidence of it, then action should be taken without having to get into statistics about whether or not it had a slight, medium, or large effect over some group,” he said.

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.