Federal Court Rules That CDC Exceeded its Authority with Nationwide Eviction Moratorium

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Hinshaw & Culbertson - Consumer Crossroads

On May 5, 2021, the U.S. District Court for the District of Columbia struck down the Centers for Disease Control and Prevention's nationwide eviction moratorium. According to the court, the CDC exceeded the scope of its authority under the Public Health Services Act, 42 U.S.C. § 264(a) (PHSA) when it enacted the "Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19" (CDC Order). The decision could have wide-reaching ramifications and set a precedent for challenges to various eviction and foreclosure moratoriums across the country.

Applicable to properties nationwide, the CDC Order prohibited landlords, owners of residential property, or others with the legal right to evict from evicting any covered person. Under the original eviction moratorium order, an individual had to submit a declaration to their landlord stating the following to qualify as a covered person:

  1. used "best efforts" to obtain government assistance for rent or housing;
  2. expect to earn less than $99,000 in annual income in 2020, were not required to report any income in 2019 to the IRS, or received a stimulus check under the CARES Act;
  3. are "unable to pay the full rent or make a full housing payment due to substantial loss of household income, loss of compensable hours of work or wages, a lay-off, or extraordinary out-of-pocket medical expenses";
  4. are "using best efforts to make timely partial payments";
  5. would likely become homeless or be forced to move into a shared residence if evicted;
  6. understand that rent obligations still apply; and
  7. understand that the moratorium is scheduled to end on December 31, 2020.

Congress subsequently extended the CDC Order through January 31, 2021. Then, soon after taking office, President Joe Biden further extended the order, first through March 31, 2021, then again through June 30, 2021. The CDC has defended this order as a reasonably necessary measure to combat the spread of COVID-19 by facilitating self-isolation for infected persons or those at higher risk of illness from the coronavirus based on underlying health conditions.

In November of 2020, three corporations that manage rental properties—Fordham & Associates, LLC, H.E. Cauthen Land and Development, LLC, and Title One Management, LLC—along with two trade associations—the Alabama and Georgia Associations of Realtors—filed a lawsuit in the District of Columbia challenging the lawfulness of the eviction moratorium. In striking down the CDC Order, the court noted that while the CDC has broad rulemaking authority to enact regulations to prevent the introduction, transmission, or spread of communicable diseases, this power is narrowed by the language of the PHSA. The PSHA limits the CDC's enactment of regulations to the "inspection, fumigation, disinfection, sanitation, pest extermination [and] destruction of animals or articles found to be so infected or contaminated as to be sources of dangerous infection to human beings." While the CDC can enact other measures not expressly enumerated by the PHSA, these "other measures" must be similar to those listed in § 264(a) and directed toward "specific targets 'found' to be sources of infection." The court found that the national eviction moratorium and CDC Order satisfies none of these textual limitations.

Opponents of the moratorium—including the National Association of Realtors—have embraced the District of Columbia's decision, advocating instead for rental assistance as a means to not only help renters, but smaller housing providers who still have financial obligations of their own to meet during the pandemic. With unemployment rates improving, the economy strengthening, and rental assistance in place, opponents contend there is no need to continue a nationwide eviction ban. Proponents of the ban contend that the pandemic still presents a risk, and a rash of evictions at this time would destabilize the progress the United States has made in combatting the coronavirus pandemic.

The District of Columbia's ruling is only the latest decision on the eviction moratorium, which has been the subject of at least six other lawsuits—all of which are currently on appeal. Thus far, the courts have been evenly split on this issue, with three federal judges supporting the ban and three deciding against it. The Justice Department has already said it will appeal the District of Columbia ruling, meaning the court's decision ordering a vacatur of the ban will likely not have an immediate impact. Notably, although this decision does not impact state or local eviction or foreclosure moratoriums, the public policy conclusions could be persuasive in other actions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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