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CDC Wins the Battle on Eviction Moratoriums . . . For Now

The COVID-19 pandemic and the associated actions taken to help mitigate its effects on public health and the economy have received mixed reactions from all facets of our society. Not least of which was the Centers for Disease Control’s (“CDC”) order placing a moratorium on evictions for non-payment of rent. However, despite multiple courts addressing the controversial matter, it remains murky in light of the Supreme Court of the United States’ (“SCOTUS”) emergency decision issued June 29, 2021.  With the moratorium set to end July 31, 2021, and the COVID – 19 Delta variant threatening to surge within the country, we could see this matter addressed by additional jurisdictions and argued under new theories well into the future.

The East District of Texas heard Terkel v. CDC in February 2021, which addressed the appropriateness of the moratorium from the perspective of agency authority to promulgate legislation regulating commerce “among the several states.” It did not approach the question from the perspective of landlord and property owner rights. Additionally, it did not limit the scope of the matter to the emergent situation of the pandemic, but instead the Federal Government asserted the time available for use of the authority to be “open-ended.” Ultimately, the Court was not required to address issues of facts nor the parties to conduct any discovery, analysis was purely based on the language of the applicable law.

As a matter of law, the Court analyzed the issue under Article I of the Constitution, the power to regulate interstate commerce. To determine whether the “activities” affected by the moratorium have “a substantial relation to interstate commerce,” the court applied the four-part test established in United States v. Morrison. The Court determined that in an eviction, the ability of a landowner to regain possession of his or her property by removal of a covered person, as a real estate matter, is “inherently local” and does not move across state lines. Thereby, finding that the CDC did not have the authority to regulate evictions for failure to pay rent in the manner it did, but rather the authority rests with individual states.

A U.S. District Judge in May heard a similar matter, again finding the CDC’s order goes beyond the agency’s authority; though, the ruling was placed on hold for appeal to the United States Court of Appeals for the District of Columbia Circuit. The Court of Appeals, on June 2, 2021, left the stay in place, allowing the moratorium order to continue.

The very next day, the matter was raised before SCOTUS by a group of real estate agents stressing the moratorium caused upwards of $13 billion in losses by landlords for unpaid rent. In a very close decision, 5-4, the moratorium will be left in place through the end of July.

Curiously, Justice Kavanaugh’s short concurring statement begins by acknowledging that the CDC’s actions did constitute overreach. His very first sentence states “the Centers for Disease Control and Prevention exceeded its existing statutory authority by issuing a nationwide eviction moratorium.” However, his determination to allow the moratorium to stand was based on its upcoming end and the need to allow for “additional and more orderly distribution of the congressionally appropriated rental assistance funds.”

For now, the CDC has indicated there will be no further extensions of the moratorium beyond July 31, 2021. However, Justice Kavanaugh’s concurring statement leaves open the question of what decision SCOTUS would reach if forced to fully analyze the issue based on either a further extension of the moratorium, or issuance of similar orders in the face of the surging Delta variant, like that occurring in other countries across the globe.

Posted in Community Association, Condominium Association, Court Decisions of Importance, COVID-19, Foreclosure, Homeowners Association, Tenant/Landlord
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