• August 4, 2021

An eminent domain lawsuit against CDC’s moratorium on eviction – Reason.com

The enactment by the Centers for Disease Control of a new and modified version of its eviction moratorium is not the only significant legal advance on this front. Last week, a group of plaintiffs led by the National Apartment Association (a trade association of rental home owners and managers) filed a condemnation lawsuit against the original version of the CDC moratorium. They argue that the moratorium qualifies as an expropriation requiring “just compensation” under the expropriation clause of the Fifth Amendment. The cover page indicates that they are seeking an estimated $ 26 billion in compensation payments.

Prominent collections attorney Robert Thomas has a useful summary of the complaint on the Inverse Condemnation blog:

The Lawsuit alleges a physical invasion because it prevents “landlords from foreclosing [tenants] and leasing the rental houses to people who pay the rent, including when the owners must continue to pay taxes, utility payments, employee wages, maintenance costs, cost of capital and other expenses. ”Complaint at 10. Alternatively, the owners allege that the CDC order is an “unlawful levy because the CDC exceeded and contravened its legal and regulatory authority and, as a direct result, demanded the private property and property interests of Plaintiffs.[.]” ID. at 2.

The just compensation requested “includes the amount of rental income that the claimants would have received in the absence of physical occupancy and the taking or extortion of their property …” ID.

Previous efforts to challenge the eviction moratorium on the grounds of expropriation have met with little success. But, for the reasons I’ve outlined here, that may change as a result of the Supreme Court’s decision. recent sentence in Cedar Point Nursery v. Hassid:

A key reason such claims faced bleak prospects is that Supreme Court precedent made it very difficult for landowners to prevail in an expropriation case if the government imposed a merely “temporary” physical occupation of their land. It was often difficult to distinguish between a temporary and a permanent occupation. But the CDC had a strong argument that the eviction moratorium was temporary, because each successive extension of the order included a specific time limit, usually only a few weeks into the future.

cedar point change that. Now, at least as a general rule, “a physical appropriation is a shot, whether permanent or temporary.” This makes the potential collection challenges for the CDC much stronger. A moratorium on evictions in situations where the property owner would have the right to remove the tenant clearly imposes at least one temporary physical occupation against the owner’s will. And the federal government is not paying “just compensation” to affected homeowners, as required by the Seizure Clause.

While this case was brought against the old version of the CDC moratorium, it applies just as easily to the new one. The two are very similar. And, of course, the claim against the original version is still valid, since the plaintiffs still have the right to claim compensation for the losses suffered during the period in which it was in force.

Even after cedar point, the problem is not a mate. The federal government can still present various arguments to try to avoid liability, such as the claim that the moratorium falls within the “police power” exception to the assumption of responsibility, due to the fact that it was enacted for the purpose of controlling the spread of disease. . But I doubt the courts are willing to extend the police power exception until now, and I hope they won’t. At the very least, plaintiffs have a substantial chance of success, much higher than before. cedar point.

Winning the condemnation claim will not necessarily give the NAA and other plaintiffs the massive $ 26 billion in compensation they seek. I don’t know how they calculated that figure (the complaint gives little indication of their methodology), and it could easily be a long way off. Compensation will have to be calculated on a case-by-case basis and can vary widely between different owners. If the courts rule that the moratorium qualifies as an expropriation, it could take months, or even years, of additional litigation to determine the amount of compensation owed.

Regardless of the amount of compensation, this asset may become an important case that sets an important precedent applicable to future eviction moratoriums, and perhaps other regulations as well. Anyone interested in expropriation and property rights issues should keep an eye on her.

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