Lawsuits Threaten Future Of CDC Eviction Moratorium

By Grace Dixon
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Law360 (April 19, 2021, 8:16 PM EDT) -- The wave of litigation challenging the eviction moratorium issued by the U.S. Centers for Disease Control and Prevention is resulting in disparate rulings across the country, prompting divergent applications and casting uncertainty on the moratorium's future.

The temporary halt to residential evictions, which protects renters from eviction and keeps them out of congregate settings like homeless shelters, was recently extended until June 30. The CDC policy is facing a wealth of legal challenges leveled by landlords, property owners and trade associations as they push to recover properties from nonpaying tenants and as at least 8.8 million households find themselves behind on rent more than a year into the pandemic.

The district courts' wide-ranging legal interpretations of the constitutional and statutory claims brought against the moratorium are leaving state courts with inconsistent guidance on how to handle eviction cases, according to Emily Benfer, visiting law professor at Wake Forest University and chair of the American Bar Association's Eviction Committee.

"There are some magistrate judges who have very publicly, outwardly said, 'I do not recognize the CDC's authority over my courtroom' and are not adhering to the spirit of the order at all," Benfer said. "There are others that have misinterpreted the order, adding qualifications or eligibility criteria."

This has left the moratorium's enforcement really up to each individual judges' discretion, argued Eric Dunn, director of litigation at the National Housing Law Project.

"It's a lottery ticket," Dunn said. "It might help you, it might not."

Though a number of suits have leveled constitutional claims in their challenge to the moratorium, only one district court judge has issued a ruling on the constitutional basis so far.

Brought by seven Texas landlords in the Eastern District of Texas, Terkel et al. v. Centers for Disease Control and Prevention et al. billed the CDC's move as an unconstitutional overreach exceeding the federal government's powers.

The suit came less than two months after the CDC on Sept. 4 stepped in to prohibit evictions after a moratorium imposed by Congress under the Coronavirus Aid, Relief and Economic Security Act expired over the summer. The CDC's ban covered a broader swath of renters who must meet an income threshold and first attempt to obtain government rental assistance, among other qualifications.

A U.S. district judge ruled in the case in February that the agency lacks the constitutional authority to regulate private property rights. The ruling has been appealed to the Fifth Circuit.

The federal government had argued that when families and individuals are evicted, they may cross state lines to secure housing, falling under its purview to regulate interstate commerce, according to Kimberly Hermann, counsel to the landlords and general counsel at Southeastern Legal Foundation.

"Our argument and what the court found was that no, what the eviction moratorium actually does is regulate eviction. It doesn't regulate who can rent and where they can rent; it regulates whether or not a private property owner can evict a tenant who is refusing to pay, and that that is an internal state action because evictions are a state court proceeding," Herman added.

Though the court declined to issue an injunction, a ruling on constitutional challenges holds potentially broader implications for eviction moratorium efforts promulgated at the federal level.

"In bringing a commerce clause challenge, we are challenging the federal government's power as a whole," Hermann said.

Others find it unlikely that the moratorium will be undermined on constitutional grounds.

"I think that the constitutional issue here may be a little bit more difficult than the statutory issue because the constitutional issue goes to whether the federal government, Congress, has the authority to impose this sort of moratorium," said Steven Gordon, partner at Holland & Knight LLP.

Gordon anticipates that any potential sweeping court action is more likely to hinge on a dispute over whether the CDC has the statutory authority to advance the eviction ban.

The CDC cites a section of the 1944 Public Health Service Act as authority for the moratorium. The statute, 42 USC § 264(a), hands the Department of Health and Human Services the authority to "make and enforce such regulations as are necessary to prevent the introduction, transmission or spread of communicable diseases."

The statute catalogs actions the department can take, concluding the list with "and other measures, as in [the HHS Secretary's] judgment may be necessary." The CDC argues that the moratorium is authorized as an "other measure" necessary to prevent the spread of COVID-19.

"[Section 264] is a catchall provision. It authorizes … the CDC director to take any measures that he or she deems necessary to prevent or slow the transmission of communicable diseases across state borders, or from outside the U.S. into the U.S., and that's incredibly broad," said Lindsay Wiley, professor of law at American University and a public health law and ethics expert.

Only four district courts have issued rulings on the statutory claims, taking contradictory approaches to applying the public health catchall provision.

A Georgia federal judge broadly interpreted the statute in October, writing in Brown et al. v. Azar et al. that Congress clearly intended to give HHS sweeping power to issue regulations needed to prevent the spread of disease.

The judge declined to issue a preliminary injunction in the suit brought on behalf of individual landlords and the National Apartment Association by nonprofit New Civil Liberties Alliance, which has challenged pandemic-related orders across the country. The ruling was immediately appealed to the Eleventh Circuit.

Chambless Enterprises LLC et al. v. Redfield et al., brought by nonprofit Pacific Legal Foundation in the Western District of Louisiana, resulted in a similarly broad reading. The district court's finding — that the statute demonstrates a legislative determination to defer to the judgment of public health authorities on what measures are deemed necessary to prevent contagion — has been appealed to the Fifth Circuit.

In early March, an Ohio federal judge sided with a collection of landlords, property owners and trade associations in Skyworks Ltd. et al. v. Centers for Disease Control and Prevention et al. The order found that the eviction freeze exceeded the CDC's authority but did not go so far as to halt enforcement of the order.

Most recently, the Sixth Circuit ruled in Tiger Lily LLC et al. v. United States Department of Housing and Urban Development et al. that it is unreasonable to assume that Congress intended to give the Secretary of HHS the "unprecedented power" to insert itself into the landlord-tenant relationship in denying a motion to stay a lower court's finding that the moratorium is unenforceable in the Western District of Tennessee.

"The enabling statute authorizes the CDC to take certain defined actions aimed at limiting the spread of contagious disease between states," said Joshua Kahane, counsel to the landlords and member at Glankler Brown PLLC.

"The CDC halt order cannot fall under the confines of the enabling statute because the halt order is not limited to those with COVID-19 and capable of spreading the illness but instead extends to every tenant, whether they have COVID-19 or not," he said

The opinion marked the first time a circuit court has weighed in on the moratorium, ruling that the CDC has overstepped its authority, according to John McDermott, general counsel at the National Apartment Association.

"Under this interpretation, the CDC could determine that breaking government relations with Mexico would be a 'measure' to address unhealthy conditions in refugees at our southern border," McDermott said. "Or the CDC could ground all air traffic because airports are crowded places where diseases may be spread."

The CDC and the Department of Justice did not respond to requests for comment on the lawsuits challenging the eviction moratorium.

Judges' reluctance so far to issue preliminary injunctions against the eviction moratorium has left uncertainty clouding the scope of their orders as landlords continue to use loopholes in the CDC's moratorium to commence eviction proceedings.

"I think that what you find in the injunction denials in Brown, and likewise with us in Tiger Lily, is that the district courts were reticent to grant injunctions because they struggled with the 'irreparable harm' element of the injunction standard, which they viewed as financial loss," Kahane said.

"In other words, because the CDC halt order does not forgive tenants' rent obligation but simply defers that obligation, the district courts seemed to consider the harm to landowners 'repairable' by ultimate recovery of money," he added, though he argues that the harm being done is more than monetary.

Though the moratorium has slowed eviction rates, it has not halted them. More than 300,000 evictions have taken place since the start of the pandemic across 27 cities monitored by The Eviction Lab, compared to nearly 900,000 in 2016. The lab does not track which evictions are potentially precluded by the moratorium.

According to Benfer, some landlords have evicted nonpaying tenants for lease violations or after their lease has expired to bypass the eviction freeze.

"[The CDC] created numerous loopholes that have been exploited, including lease violations, so there's an increase in filings for lease violations where the underlying trigger for that position was really the nonpayment of rent," Benfer said. "[Tenants] are being filed against for insignificant lease violations that would have been overlooked in the past."

These evictions have been unevenly distributed. Households of color are twice as likely to be behind on rent than white households, and nearly 1 in 10 Black and Latinx renter households face imminent eviction, according to a report from the Institute for Policy Studies.

Though a clear ruling from an appellate court would assuage some of the endemic uncertainty, according to tenant and landlord advocates, the suits are still winding their way through the courts while the reality of the pandemic is rapidly changing.

"It will be a few more months before we get the decision on the merits by the appellate courts, and by that point, the pandemic situation is going to look a lot different because people are going to be vaccinated," Gordon said.

Attorneys and advocates for property owners argued that a clear ruling against the moratorium would bring much needed certainty.

"It'll help the rental and the rental housing market gain some perspective on where it's heading again … once we can end the CDC moratorium. I think it'll bring some clarity back to the marketplace," said David Howard, executive director of the National Rental Home Council.

"I'm worried for the future, that the country goes through recessions from time to time and my concern is that 10 years from now, somebody is going to say, 'Oh, why don't we just pull out another rent moratorium,' since this experience has been bad for everyone," said McDermott, of the National Apartment Association.

Other advocates noted that a ruling further undermining the eviction ban could have disastrous results for the spread of COVID-19.

"When you lift a moratorium, the rate of COVID-19 infection and mortality increases significantly, so there's a direct association between a lack of a moratorium and increased transmission of COVID-19," Benfer said.

A study released in November found that states that lifted eviction moratoriums were associated with increased rates of COVID-19 contraction and mortality.

Dunn, of the National Housing Law Project, said the nature of evictions lends itself to increased exposure.

"Most people when they're evicted … you're going to stay with your brother for a couple of weeks and then you're going to sleep in your mom's basement for a month and then you're going to spend a couple of days at a residential motel," Dunn said. "These people are going to be bouncing around from different households and all of that is exactly the type of thing that the CDC is saying you need to avoid to deal with transmission risk."

Wiley, the American University law professor, said that any decision at the appellate court level holds implications for the federal government's use of the catchall public health provision in the future.

"The authority that the eviction moratorium relies on is the same statutory authority that the transit mask order relies on. It's also the authority that arguably could have been used to issue other, more far-reaching pandemic restrictions at the federal level," she said. "The decisions on the CDC eviction moratorium … could also affect a future administration's response to a future public health crisis of this sort."

--Editing by Rich Mills.

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