Eviction Moratorium

Courtesy of the Manufactured Housing Institute

The Centers for Disease Control and Prevention (CDC) has extended the federal eviction moratorium through June 30, 2021. The order was originally set to expire on March 31, 2021. In addition to extending the moratorium, the CDC also modified the order to include a statement of intent, changes to the applicability section, a new section concerning the declaration forms and new information about the pandemic. Click here to read the CDC statement.

Furthermore, the Consumer Financial Protection Bureau and the Federal Trade Commission issued a joint statement regarding their agencies’ work to help stop illegal evictions and protect American consumers facing economic hardship due to COVID-19. Specifically, the statement says: “Evicting tenants in violation of the CDC, state, or local moratoria, or evicting or threatening to evict them without apprising them of their legal rights under such moratoria, may violate prohibitions against deceptive and unfair practices, including under the Fair Debt Collection Practices Act and the Federal Trade Commission Act.” Click here to read the statement.

MHI and its coalition of national housing industry organizations continues to strongly argue that the current approach of eviction moratoriums is failing to address the scope of damage in the housing sector and will not meet the long term needs of renters and housing providers. Arguing that a robust and targeted rental assistance program is a better approach, the recently passed COVID-19 relief package included an additional $27.5 billion for emergency rental aid of which $21.5 billion is allocated for the Emergency Rental Assistance Program.

Over the past few weeks, a series of decisions by federal court judges have ruled that the CDC eviction moratoriums are unlawful. Below is an article by Harry J. Kelly and Brendan Cardella-Koll, attorneys practicing in the Washington, D.C. office of Nixon Peabody LLP, that discusses these recent cases and their impact on the CDC’s federal eviction moratorium.

Federal Courts Rule CDC Eviction Moratoriums Are Unlawful

by Harry J. Kelly and Brendan Cardella-Koll

Attorneys practicing in the Washington, D.C. office of Nixon Peabody LLP

In a series of decisions over the last several weeks, federal court judges in different states have ruled that the eviction moratoriums imposed by the Centers for Disease Control and Prevention (CDC) are unlawful. In one decision from Texas, the court held that the eviction moratorium exceeded the scope of the federal government’s power under the Commerce Clause of the U.S. Constitution, using language that, if upheld, would make any such moratorium unlikely to pass constitutional muster. Two other decisions, from judges in Ohio and Tennessee, respectively, more narrowly attacked the moratorium on administrative law grounds, holding that the moratorium exceeded the CDC’s statutorily delegated authority. While none of these decisions imposed a nationwide injunction against the CDC moratoriums, they indicate that sustaining an eviction moratorium, even in the middle of a massive pandemic, is no sure thing, and that courts will be looking over the shoulder of Congress and the Biden administration as they consider future eviction moratoriums.

A brief history of the CDC moratoriums

As you may recall, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed in the early days of the COVID-19 pandemic in 2020, imposed a federal-level eviction moratorium that continued in effect until July 2020. After the lapse of the original CARES Act moratorium, the CDC issued a follow-up eviction moratorium in September 2020 on the grounds that evictions would lead to families moving into shelter housing or cohabitating with other families, which would tend to spread the virus, and that it could impose an eviction moratorium under its authority to prevent the spread of communicable diseases across state lines. 85 Fed. Reg. 55292 (Sept. 4, 2020). The most-recent COVID-19 relief bill extended that moratorium to December 31, 2020. The CDC extended the moratorium to March 31, 2021 and on March 29, 2021, announced an additional extension, through June 30, 2021.

Texas judge declares CDC eviction moratorium is unconstitutional

A basic rule of statutory construction is that when called upon to rule about the legality of a law, judges should rule on narrower grounds and avoid constitutional issues when possible. In Terkel v. Centers for Disease Control and Prevention, Case No, 6:20-cv-00564 (E.D. Tex. Feb. 25, 2021) (slip op.), however, a U.S. district court judge in Texas took on the constitutionality of the CDC eviction moratorium directly. While acknowledging that eviction moratoriums may be lawful as part of state laws managing eviction procedures generally and under states’ broad “police powers” to promote “the lives, health, morals, comfort, and general welfare” of their citizens, Terkel slip op. at 1 (citations omitted), the CDC eviction moratoriums reflect a significant expansion of federal power:

 The federal government cannot say that it has ever before invoked its power over interstate commerce to impose a residential eviction moratorium. It did not do so during the deadly Spanish Flu pandemic. Nor did it invoke such a power during the exigencies of the Great Depression. The federal government has not claimed such a power at any point during our Nation’s history until last year. Terkel slip op. at 2 (citations omitted).

In reaching this conclusion, the court engaged in a detailed analysis of Congress’s power under the Commerce Clause to regulate interstate commerce, as well as other constitutional provisions, and concluded that the moratoriums exceeded the government’s authority.

The broad scope of the opinion suggests that, if it is upheld, any federal eviction moratorium is unlikely to pass muster under the Commerce Clause, in part because the decision to evict a tenant is not, in the court’s view, an “economic” act within Congress’s power to regulate. An argument could be made that the Texas judge gave short shrift to the other grounds cited in support of the CDC moratorium—for example, that a massive wave of evictions could drive up infections and result in further destabilizing of the economy. At a minimum, the Terkel decision suggests that any future eviction moratoriums, whether adopted at the level of the CDC or other federal agency or in subsequent Congressional legislation, need to be accompanied by substantial findings to show the impact of COVID-19 on interstate commerce and how the moratorium will promote pandemic relief and prevent further harm to the national economy. Possibly, with additional factual findings about the economic impact of a wave of evictions, Congress or a federal agency could provide sufficient evidence to meet even the tough standards that the Terkel decision imposes.

At the moment, the impact of the Terkel decision is limited. The judge wrote that “it is anticipated that [defendants] would respect the declaratory judgment,” but left open the possibility of imposing an injunction if they do not. Terkel slip op. at 20 (citations omitted). The Justice Department announced that it will appeal the Terkel decision.

Ohio and Tennessee judges rule that eviction moratorium exceeds CDC’s delegated authority

A few weeks after the Terkel decision, the U.S. District Court for the Northern District of Ohio set aside the CDC’s eviction moratorium on narrower grounds under the Administrative Procedures Act (APA). Skyworks, LTD., et al. v. Centers for Disease Control and Prevention, Case No. 5:20-cv-2407 (N.D. Ohio March 10, 2021) (slip op.). Rather than the constitutional question raised by the plaintiffs in Terkel, the Skyworks decision turns on the question of whether the authority delegated by Congress through Section 361 of the Public Health Service Act, 42 U.S.C. § 264, authorizes the CDC to adopt a nationwide eviction moratorium. The district judge in Skyworks held that it does not.

Under Section 361, the Secretary of the Department of Health and Human Services may, among other things, authorize the CDC to make and enforce regulations that are necessary, in the secretary’s judgment, to prevent the spread of communicable diseases between states. 42 U.S.C. § 264(a). To carry out and enforce such regulations, the secretary “may provide for such inspection, fumigation, disinfection, sanitation, pest extermination, destruction of animals or articles found to be so infected or contaminated as to be sources of dangerous infection to human beings, and other measures, as in his judgment may be necessary.” 42. U.S.C. § 264(a).

The district judge reasoned that the authority delegated through Section 361 was limited to actions related to “specific animals or articles, which are themselves infested or a source of contagion that present a risk of transmission to other people.” Skyworks slip op. at 21. In the judge’s view, “articles” as used in Section 361 means a particular object or item and does not extend to activities such as evictions. Skyworks slip op. at 22-23.

Shortly after the Skyworks decision, a district judge for the Western District of Tennessee held that the eviction moratorium is unenforceable in the Western District of Tennessee on similar grounds. Tiger Lily, LLC v. U.S. Department of Housing and Urban Development, Case No. 2:20-cv-02692-MSN-atc (W.D. Tenn. March 15, 2021) (Holding that Section 361 authorizes a narrow list of actions that does not include eviction moratoriums). The district judges in both Skyworks and Tiger Lily also held that the extension of the deadline of the eviction moratorium by Congress was not a ratification of the moratorium. Skyworks slip op. at 27-28; Tiger Lily slip op. at 19.

While these three decisions have undermined the legality of the CDC moratoriums, they are not the only cases scrutinizing the CDC’s actions. A number of complaints are filed in courts across the country challenging the constitutionality of the CDC moratoriums and the CDC’s authority to issue such moratoriums.

Where things stand now

As a legal matter, the impact of these three decisions is limited. As noted above, the judge in the Terkel case did not impose an injunction blocking the moratorium, and no injunction was issued in either the Skyworks or Tiger Lily cases. It appears that those decisions will affect only the parties to those cases, which may include the members of national housing organizations who were plaintiffs. In the Tiger Lily case, the court also ruled that the CDC moratorium was “unenforceable in the Western District of Tennessee.” Tiger Lily slip op. at 20. Apparently these decisions have not deterred CDC, which as noted above just announced a further extension of its moratorium (with some modifications and additional explanations) through June 30, 2021.

Even if the virus can be contained and the economy gains vigor in the course of 2021, undoing the damage done by COVID-19 will not be easy. Whether the nation faces a tsunami of evictions or just a trickle, there is no doubt that many families who have lost jobs and incomes will continue to face serious risk of eviction. For the moment at least—and absent more vigorous judicial interventions—it appears that some form of federal eviction moratorium will remain in place to prevent further housing dislocations while efforts continue to rebuild the economy and end the pandemic.