A&B ABstract: The National Apartment Association, along with several landlords, has challenged the order of the Centers for Disease Control and Prevention (“CDC”) that imposed a nationwide moratorium on certain residential evictions. This lawsuit follows one we previously covered, and could have a major impact on the scope of federal power during the pandemic.
Refresher on the Moratorium and CDC Emergency Order
As we previously discussed, the CARES Act imposed a temporary moratorium on certain residential evictions. On August 8, President Trump directed executive agencies to “take all lawful measures to prevent residential evictions and foreclosures resulting from financial hardships caused by COVID-19,” and he ordered the CDC and the Department of Health and Human Services (“HHS”) to consider whether “temporarily halting residential evictions” was “reasonably necessary to prevent further spread of COVID-19” between states.
In response, on September 4, the CDC issued an emergency order imposing a nationwide moratorium on certain residential evictions through December 31, 2020 (“CDC Order”). The CDC Order prevents the eviction of any tenant who certifies that he or she satisfies several financial hardship criteria. However, the Order does not provide any compensation for landlords or property owners who are prevented from evicting non-paying tenants.
The New Class Action
Following on the Tiger Lily case (discussed in our September 23 post), on September 18, a group of landlords and the National Apartment Association filed Richard Lee Brown et al v. Alex Azar et al., No. 1:20-cv-03702 (N.D. Ga.), a purported class action lawsuit challenging the constitutionality of the CDC Order. Plaintiffs also seek a preliminary injunction against enforcement of the CDC Order.
Plaintiffs’ key claims are very similar to those asserted in Tiger Lily. The Amended Complaint asserts that the CDC Order was promulgated in violation of the Administrative Procedure Act, violates landlords’ right to due process and access to courts, is unauthorized by the statute upon which it relies, and improperly seeks both to displace state eviction laws and to “commandeer” state resources to enforce its mandate. Unlike Tiger Lily, Plaintiffs do not assert a Takings claim.
Our prior analysis is largely applicable to this new class action, and it seems probable that the outcome will turn on the general question of whether the scope of the CDC Order is consistent with past practice and the intent underlying the federal statute on which it purports to be based. The CDC’s broad interpretation of its power would arguably give the Executive the power to restrict almost any type of activity, as applied to any “communicable” disease. And the eviction moratorium is very different than exemplary public health measures listed in the statute, perhaps exceeding its intended scope.
Brown v. Azar has the potential to be quite significant regardless of its outcome. It embodies the nationwide class action we previously predicted might flow from Tiger Lily, and may generate more class action tag-along cases, miring the CDC Order in a morass of litigation akin to that involving the Paycheck Protection Program “agent fee” litigation. The involvement of the National Apartment Association, which has nearly 83,000 members managing over 9.7 million rental homes in the United States, Canada, and the United Kingdom, credentializes and raises the profile of this matter as well.
As was true for Tiger Lily, success in this class action would result not just in restoration the ability for the plaintiff landlords to evict non-paying tenants, but it could yield important clarifications and limits on the regulatory power of the federal government in connection with the pandemic. If the CDC Order is struck down, this could spur Congress to consider addressing residential evictions directly again, either through another statutory moratorium on evictions, or more stimulus payments for struggling renters. For these reasons, Brown v. Azar is worth watching.