Is the CDC’s Nationwide COVID-19 Eviction Moratorium Down for the Count?

A second federal district court has declared the Centers for Disease Control and Prevention’s (“CDC”) eviction moratorium (“CDC Moratorium”) invalid.[1] On March 10, 2021, Judge J. Philip Calabrese of the Northern District of Ohio struck down the CDC Moratorium, ruling in Skyworks, Ltd. v. Centers for Disease Control and Prevention[2] that Congress had not authorized the CDC to adopt a nationwide eviction moratorium for COVID-19. This follows the late February 2021 decision of Judge J. Campbell Barker of the United States District Court for the Eastern District of Texas, in Terkel v. Centers for Disease Control and Prevention, where the court ruled that the CDC Moratorium violated the Commerce Clause.[3]

The CDC Eviction Moratorium.

We previously summarized the restrictions of the CDC Moratorium here, and highlighted the recent extension of its reach through March 2021 here. In short, the CDC Moratorium subjects landlords to possible criminal and civil penalties if they proceed with actions to evict certain “covered” residential tenants affected by COVID-19 for nonpayment of rent; it does not affect tenants’ underlying rental payment obligations or landlords’ ability to sue for unpaid rent.[4]

Terkel v. Centers for Disease Control and Prevention.

The Terkel plaintiffs, who are landlords, challenged that the CDC Moratorium exceeded the federal government’s authority under Article I of the Constitution to make laws.[5]  Article I sets forth the “Legislative powers” granted to Congress in the Constitution. The CDC Moratorium derived from Congressional legislation (a 120-day eviction moratorium) passed in the March 2020 Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”),[6] which was subsequently administered by a federal agency—the CDC—that Congress authorized to extend it.[7]

The court evaluated the CDC Moratorium under the Supreme Court’s United States v. Morrison standard, establishing four “significant considerations” which limit Congress’s regulation of intrastate conduct:  “(1) the economic character of the intrastate activity; (2) whether the regulation contains a ‘jurisdictional element’ that may ‘establish whether the enactment is in pursuance of Congress’ regulation of interstate commerce’; (3) any congressional findings regarding the effect of the regulated activity on the commerce among the States; and (4) attenuation in the link between the regulated intrastate activity and commerce among the States.”[8]

The court first addressed whether the CDC Moratorium was constitutionally justified by regulating “activities having a substantial relation to interstate commerce” through having “substantial-effects” on interstate commerce.[9] The court analyzed whether evictions, defined by the court as involving “whether an owner may regain possession of property from an inhabitant,” could have such “substantial-effects” on interstate commerce.[10] The court concluded evictions could not:  “Real estate is inherently local.  Residential buildings do not move across state lines.  And eviction is fundamentally the vindication of the property owner’s possessory interest.”[11] Additionally, because the CDC Moratorium expressly does not implicate the financial relationship between landlords and tenants, and merely delays the timing of evictions, the court held that economic considerations could not be used to justify “substantial-effects” on interstate commerce to allow federal regulation.[12]

With regard to the Morrison test’s “jurisdictional element” consideration, the court found that enactment of the CDC Moratorium had no jurisdictional “case-by-case limitation” confirming a specific connection with or impact on interstate commerce. The court found the Department of Health and Human Services’ (HHS) authority to enact regulations necessary to protect against the “spread of communicable diseases” between the States insufficient to allow the CDC to federally regulate evictions.[13]

For the Congressional findings factor, the court found that “neither Congress nor the agency made findings that a broader regulation of commerce among the States would be undercut without the [CDC Moratorium].”[14] The public-health benefits of limiting COVID-19 spread from eviction displacement were ruled insufficient for lack of a sufficient nexus to economic effects on interstate commerce.[15] Similarly, the relationship between criminalizing evictions and interstate commerce was too attenuated to support federal regulation of intrastate evictions.[16]

On February 25, 2021, the Terkel court rendered summary judgment for the plaintiffs in a declaratory judgment finding the CDC Moratorium unenforceable as an unconstitutional overreach of federal regulatory power. Two days later, the government appealed the decision to the United States Court of Appeals for the Fifth Circuit.[17] In announcing its appeal, the government stated that “it does not extend beyond the particular plaintiffs in that case, and it does not prohibit the application of the CDC’s eviction moratorium [Order] to other parties,” and proclaimed, “[f]or other landlords who rent to covered persons, the CDC’s eviction moratorium remains in effect.”[18]

The Terkel decision did not address several other federal court decisions that had previously upheld the enforceability of the CDC Moratorium, perhaps because the landlord-plaintiffs made different legal arguments in them. In previous cases, the landlord-plaintiffs claimed that the CDC Moratorium exceeded the agency’s statutory authority and ran afoul of the “non-delegation” doctrine, rather than exceeded Congress’s Commerce and Necessary and Proper Clause powers.

Two of the cases challenged the CDC Moratorium on statutory and non-delegation doctrine grounds:  Brown v. Azar[19] and Chambless Enterprises, LLC v. Redfield.[20] These courts rested their decisions on findings that Congress gave HHS broad authority to issue regulations necessary to limit the spread of communicable diseases, which HHS delegated to the CDC, and that because the CDC Moratorium was necessary to control the COVID-19 pandemic, CDC was authorized to temporarily regulate the timing of evictions as a proper exercise of federal police powers.[21] A third decision, Tiger Lily, LLC v. U.S. Dep’t of Housing & Urban Development, did not address the merits of the landlord-plaintiff’s challenges to the CDC Moratorium. It denied preliminary injunctive relief on the ground that they failed to establish irreparable injury because the CDC Moratorium merely delayed rather than prevented their ability to evict nonpaying tenants.[22] Other court decisions, such as in the District of Columbia, have ruled unconstitutional state or local laws restricting the filing of eviction cases by landlords during the COVID-19 state of emergency.[23]

Skyworks, Ltd. v. Centers for Disease Control and Prevention.

The plaintiffs in Skyworks are landlords, property managers, and a trade association. They challenged whether Congress authorized the CDC to adopt a nationwide eviction moratorium. The District Court examined the scope of the CDC’s delegated authority under Section 361 of the Public Health Services Act (the “Health Act”), 42 U.S.C. § 264, and its implementing regulation,[24] and concluded that the Health Act unambiguously limited the CDC’s authorized actions to addressing communicable diseases that were transmitted by or through infected “animals or articles.”[25] It disagreed with the Brown and Chambless Enterprises decisions, concluding that the CDC Moratorium exceeded the agency’s authority because it was not addressed to limiting the spread of disease through these express means or related “measures.” The court also rejected the government’s argument that Congress had ratified the CDC Moratorium by its one-month extension in the December 2020 Consolidated Appropriations Act, finding the Act did not include any ratification language.[26]

Although the Skyworks court issued its ruling on the plaintiffs’ motion for a permanent injunction, it denied any injunctive relief. It concluded that money damages could provide adequate relief to redress the harm suffered by the aggrieved plaintiffs, and entered a declaratory judgment.[27] In light of the government’s immediate appeal of theTerkel decision, Skyworks is likely to be appealed as well, to the United States Court of Appeals for the Sixth Circuit.

Takeaways.

Having now been struck down by two federal district courts each on different theories, the CDC Moratorium has just gone down to the mat. However, it’s a long 10-count. These are only lower court decisions that did not impose injunctions and have no binding precedential effect.  Terkel is on appeal and Skyworks is likely to be appealed. The appeals may eventually result in appellate decisions that could be binding upon the federal courts in those circuits, or everywhere in the United States if this issue is ultimately resolved by the Supreme Court. For now, everyone except for the plaintiffs in Terkel and Skyworks who wish to challenge the CDC Moratorium must prosecute their own lawsuits, or be joined to another party’s, in order to mount their own challenges.

The CDC Moratorium is presently scheduled to expire at the end of March 2021.[28] In light of the United States Supreme Court’s new decision in Uzuegbunam v. Presczewski, Slip Opinion, No. 19-968 (U.S. Mar. 8, 2021), anyone challenging the CDC Moratorium in federal court would be wise to include a demand for actual damages, or at least a request for nominal damages. The Court held in Uzuegbunam that a request for nominal damages satisfies the redressability element necessary for Article III standing where a plaintiff’s claim is based on a completed violation of a legal right, and may accordingly save an otherwise moot case with a completed injury from being dismissed for mootness.

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[1] See “Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19,” 85 Fed. Reg. 55,292 (Sept. 4, 2020) (“CDC Moratorium”). The CDC Moratorium is presently scheduled to expire on March 31, 2021. See Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, § 502, 134 Stat. 1182, 2078-79 (2020) (extending the CDC Moratorium through Jan. 31, 2021); 86 Fed. Reg. 8,020, 8,021 (Feb. 3, 2021) (further extending the CDC Moratorium through March 31, 2021).

[2] Skyworks, Ltd. v. Centers for Disease Control & Prevention, Case No. 5:20-cv-2407, 2021 WL 911720 (N.D. Ohio March 10, 2021).

[3] Terkel v. Centers for Disease Control & Prevention, No. 6:20-cv-00564, 2021 WL 742877 (E.D. Tex. Feb. 25, 2021), appeal filed, No. 21-40137 (5th Cir. 2021).

[4] Terkel, 2021 WL 742877, at *2-3.

[5] Id. at *1.

[6] Pub. L. No. 116-136 § 4024, 134 Stat. 281 at 492-93 (2020).

[7] Terkel, 2021 WL 742877, at *4.  The Government defended the CDC Moratorium under the Commerce and Necessary and Proper Clauses of Article I of the Constitution. It did not seek to justify it under Article II (“Executive powers”) of the Constitution.

[8] Id. at *5 (citing United States v. Morrison, 529 U.S. 598, 616 (2000)).

[9] Id. at *5-7.

[10] Id. at *6.

[11] Id.

[12] Id. at *6-7.

[13] Id. at *7.  HHS is CDC’s parent agency.

[14] Id. at *8.

[15] Id.

[16] Id. at *8-10.

[17] “Department of Justice Issues Statement Announcing Decision to Appeal Terkel v. CDC,” U.S. Department of Justice, Office of Public Affairs (Feb. 27, 2021), copy at https://www.justice.gov/opa/pr/department-justice-issues-statement-announcing-decision-appeal-terkel-v-cdc (last viewed March 10, 2021).

[18] Id.

[19] __ F.3d __, Civil Action No. 1:20-CV-03702-JPB, 2020 WL 6364310 (N.D. Ga. Oct. 29, 2020).

[20] Civil Action No. 3:20-cv-01455, 2020 WL 7588849 (W.D. La. Dec. 22, 2020).

[21] Brown, 2020 WL 6364310, at *6-10; Chambless Enterprises, 2020 WL 7588849, at *3-11.

[22] __ F.3d __, No. 2:20-cv-2692-MSN-atc, 2020 WL 7658126, at *8-10 (W.D. Tenn. Nov. 6, 2020).

[23] See, e.g., Borger Management, Inc. v. Hernandez-Cruz, Case No. 2020 LTB 006637, Order (D.C. Super. Ct. Dec. 16, 2020).

[24] Skyworks, Ltd., 2021 WL 911720, at *8-10.

[25] Id. at *9.

[26] Id. at *12.

[27] Id. at *12-13.

[28] See 86 Fed. Reg. 8,020, 8,021 (Feb. 3, 2021).

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