Class Action Filed by Mich. Landlords Over COVID-19 Eviction Moratorium

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The United States’ and the Centers for Disease Control and Prevention’s nationwide moratorium on evictions amid the COVID-19 pandemic is unconstitutional, Michigan property owners allege in a proposed class action. 

The nationwide eviction moratorium was a measure implemented by way of an executive order from former president Donald Trump, who in August 2020 directed the Secretary of Health and Human Services and the Director of the CDC to consider whether a halt on evictions would help combat the spread of COVID-19. From there, the CDC issued on September 4, 2020 an order imposing a nationwide ban on evictions of certain tenants until at least December 31, unless modified or otherwise extended. 

The 19-page lawsuit in the court of federal claims alleges the moratorium, which earlier this month was extended for a fifth time through October 3 after expiring on July 31, amounts to a compensable taking of proposed class members’ property and property rights in violation of the Fifth and Fourteenth Amendments of the United States Constitution. 

“Specifically, the CDC Order constitutes a physical taking because it has affected a Government-authorized invasion, occupation, or appropriation of Plaintiffs’ private property, for the Government itself or for third parties,” the lawsuit claims. “The Constitution requires just compensation for the taking.” 

In the alternative, the suit says, the nationwide eviction moratorium is an overstep by the CDC of its statutory and regulatory authority.

“Plaintiffs seek just compensation for the deprivation of their property rights and the value of the property taken or illegally extracted by the Government,” the lawsuit reads. “This includes the amount of rental income Plaintiffs would have received in the absence of the physical occupation and taking or exaction of their property and property rights under and as a direct result of the CDC order.”

According to the complaint, the eviction moratorium directs that landlords and residential property owners shall not evict any tenant, lessee or resident from any property nationwide while the order is in effect. Those protected by the order include tenants unable to pay full rent or make a full housing payment due to loss of household income, compensable work hours, a layoff or the incursion of extraordinary out-of-pocket medical expenses, and those likely to become homeless, the suit says. Moreover, the order imposes penalties on violators, including fines of up to $500,000 should an eviction result in a death, the case relays. 

The plaintiffs argue that the “harsh” civil and criminal penalties that come with the eviction moratorium compel property owns to “accept the representations of tenants about qualifying under the CDC Order, even if apparently untruthful,” to avoid the consequences of pursuing an eviction during the COVID-19 pandemic. The plaintiffs also contend that although the moratorium “does not technically relieve a tenant from the legal and contractual obligation to pay rent,” property owners, as a practical matter, have little ability to recoup what they’ve lost in past-due rent from someone who may have “little money, or a tenant that simply moves out at the end of the moratorium” after living in a place for a period of time free of charge.

Other obstacles landlords face include finding new tenants should a previous one move, or selling a private property in a climate in which residents might not have to pay to live there, the suit goes on.

The lawsuit looks to represent a proposed class that includes all persons and entities who currently own or at one time owned any residential real property in the U.S., for rent and occupied by occupants that filed a declaration pursuant to the CDC order, and who were not entirely compensated during the period of September 4, 2020 to the date of final judgment in the case. 

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