Landlords Sue Trump Administration and CDC Over Executive Order Banning Evictions

The National Apartment Association has joined a lawsuit brought by four individual landlords arguing the CDC's nationwide eviction moratorium is both illegal and unconstitutional.

The Trump administration's controversial nationwide eviction moratorium, issued through the Centers for Disease Control and Prevention (CDC) earlier this month, is now the subject of a lawsuit from landlords who argue that the public health agency exceeded its authority when it unilaterally banned landlords from evicting tenants in state courts.

On Friday, the National Apartment Association (NAA), a trade group, added its name to a lawsuit brought by four individual landlords in the U.S. District Court for the Northern District of Georgia, all of whom would move to evict a non-paying tenant but for the CDC's order.

That includes Jeffrey Rondeau, a North Carolina man who, in good times, nets $20 renting out a home that he intended to move into when he retires, according to the lawsuit. Rondeau's tenant has a spotty record of paying rent and hasn't paid since July. Another plaintiff, Rick Brown of Virginia, asserts that his tenant has stopped paying rent for several months, and currently owes some $8,000 in back rent.

These property owners "upheld their end of the bargain. They provided a habitable home to their tenants and continue to pay for maintenance, utilities, and other expenses," reads the complaint. "Plaintiffs should have been able to follow the lawful processes laid down by state law for retaking possession of their homes."

Health and Human Services Secretary Alex Azar, CDC Acting Chief of Staff Nina Witkofsky, and their respective departments/agencies are named as defendants in the lawsuit.

The CDC's eviction ban prohibits property owners from trying to remove tenants for nonpayment of rent, provided the tenant has informed their landlord in writing that they have suffered a loss of income or extraordinary medical bills, have made all efforts to obtain government assistance, and would be forced into homelessness or a crowded living situation if evicted.

The moratorium only protects individual renters earning less than $99,000 a year (or $198,000 for joint filers). Property owners that do try to evict tenants in violation of the CDC's order face criminal penalties of up to a year in jail and fines ranging from $100,000 to $250,000.

The CDC is resting the legal authority for its eviction moratorium on a section of the Public Health Service Act and related federal regulations which give the agency's director the power to take any measures he or she deems "reasonably necessary" to prevent the interstate spread of communicable disease, including "inspection, fumigation, disinfection, sanitation, pest extermination, and destruction of animals or articles believed to be sources of infection."

"If you look at the statute, it has a very clear list of things that it's contemplating. It's talking about quarantining livestock and impounding goods," Caleb Kruckenberg, an attorney with the New Civil Liberties Alliance (NCLA), which is representing the plaintiffs in this case, tells Reason. "It's a pretty clear indication that Congress was saying [public health authorities] have a pretty limited power here."

An eviction moratorium vastly exceeds those limited powers, Kruckenberg says. Even if the Public Health Service Act could be read so broadly as to give the CDC that power, he says, it would nevertheless be unconstitutional.

The NCLA's complaint argues that the CDC's moratorium, by effectively requiring state governments to administer a federal regulatory program, violates the 10th Amendment. The lawsuit also asserts that landlords are being denied access to the courts in violation of the Fifth and 14th Amendment's due process protections, among other provisions of the Constitution.

Eviction moratoriums have been a common policy adopted by all levels of government in response to the COVID-19 pandemic. They are often justified on the grounds that a wave of evictions would materialize in the absence of these protections.

So far, evictions have remained below historic averages in most cities where data are available, according to Princeton University's Eviction Lab, even in jurisdictions where local or state moratoriums were allowed to lapse.

The CDC's order was followed by a brief spike in eviction filings, but that has since subsided—yet more evidence that the moratoriums themselves could be responsible for the spikes in evictions we've seen.

A prior federal eviction moratorium, passed as part of the coronavirus aid bill, applied to the roughly 28 percent of rental housing units that have federally backed mortgages, and to landlords who benefited from other federal housing programs. It expired at the end of July.

Landlords, in addition to their legal and constitutional claims, argue eviction moratoriums are bad policy.

"Eviction moratoria saddle the apartment industry solely with the responsibility of offering a service without compensation, all while operating at a potential deficit," said Bob Pinnegar, NAA's president, in a press release. "Rental housing works on extremely narrow margins and, though last paid themselves, owners still need to pay extensive bills."

Many housing advocates, while not opposed to the federal government's eviction moratorium, see them as a half-measure since they do not actually relieve tenants of their responsibility to pay rent. It only temporarily protects them from eviction for not doing so. Once the federal moratorium expires in January, tenants with rent debt will be vulnerable to eviction.

The solution that advocates (excluding the far-left "cancel rent" crowd) and property owners have settled on is federal rental assistance. The Democrat-controlled House has twice passed bills that provide $100 billion in emergency funding for renters, although the Republican-controlled Senate has yet to pick up either proposal.

Free marketers have posited a number of objections to expanded federal rental assistance, arguing that the proposal put forward by House Democrats is poorly targeted at those most in need and would require yet more spending from an already fiscally overstretched federal government.

The federal government has two weeks to respond to the amended complaint that the plaintiffs filed on Friday.