Seven Levels of Fallout from the Eviction Moratorium Case

This shadow docket ruling, combined with Biden v. DHS, may be the most significant administrative law rulings of the Term.

On Thursday evening, the Court vacated the stay in Alabama Association of Realtors v. HHS. The Court released an eight-page per curiam majority opinion, and an eight page dissent by Justice Breyer. There are seven levels of fallout.

First, the Biden Administration suffered two significant losses in the span of 48 hours. The Roberts Court does not seem to be going easy on the new President. So far, Biden has received a remarkably rough reception. And these rulings do not bode well for the many other cases trickling up the lower courts. The Court did not cite Biden's statements, but alluded to the political pressure with a reference to the "three day" gap.

Second, Larry Tribe and the other members of the LawProf Kitchen Cabinet did not serve the President well. The Court found that the new policy was virtually "indistinguishable from the old." OLC and the SG no doubt predicted this devastating defeat. But they were marginalized. The relationships between DOJ and the White House will need to be mended.

Third, this shadow docket entry included a well-reasoned majority opinion. The Court spelled out with some clarity why the policy was almost certainly unlawful. The majority opinion favorably cited UARG and Brown & Williamson to invoke the "major question" doctrine.

Even if the text were ambiguous, the sheer scope of the CDC's claimed authority under §361(a) would counsel against the Government's interpretation. We expect Congress to speak clearly when authorizing an agency to exercise powers of "vast 'economic and political significance.'" Utility Air Regulatory Group v. EPA, 573 U. S. 302, 324 (2014) (quoting FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 160 (2000)). That is exactly the kind of power that the CDC claims here. At least 80% of the country, including between 6 and 17 million tenants at risk of eviction, falls within the moratorium. 

Additionally, the Court explained that Congress needs to use a clear statement to intrude onto a longstanding attribute of state law: landlord-tenant relationships. I raised this argument in an amicus brief I filed in Terkel v. CDC.

Fourth, the Court favorably cited Loretto, and endorsed the right to exclude.

And preventing them from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership—the right to exclude. See Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S. 419, 435 (1982).

This last citation, which reinforces Cedar Point, provides a strong basis for the inevitable takings claims. But the landlords may not get much. Later, the Court suggested that the potential measure of just compensation was the amount of money Congress appropriated.

Congress has provided nearly $50 billion in emergency rental assistance—a reasonable proxy of the moratorium's economic impact.

In other words, if the landlords get their money from Congress, they would not be owed anything extra for just compensation. They would be made whole. This sort of ruling would resemble the remedial punt from Horne II, in which the Court pegged the amount of compensation to the fine imposed by USDA.

The Government has already calculated the amount of just compensation in this case, when it fined the Hornes the fair market value of the raisins: $483,843.53. The Government cannot now disavow that valuation and does not suggest that the marketing order affords the Hornes compensation in that amount.

Fifth, this case doesn't immediately end the eviction moratorium. District Courts throughout the country will have to enter final judgments barring the enforcement of the eviction moratorium. They should do so promptly, though some may drag their feet. A few may even resist. (I said it.)  As best as I can tell, the only case that will remain live is the constitutional challenge to the moratorium, Terkel v. CDC. The case is set for argument in October before the Fifth Circuit.

Sixth, the Biden Administration's gamble backfired, big league. Indeed, the Court provide a very narrow construction of 42 U.S.C. § 264, an essential public health law. In future disasters unknown, the federal government will have its hands tied by this decision. The Court read the second sentence, which refers to "measures like fumigation and pest extermination," as a limitation on the first sentence. I first proposed this reading on September 1, 2020. I think my approach was the best reading of the statute. But many lower courts disagreed. Now, the Supreme Court has settled the matter. And the Court identified hard limits on the scope of the CDC's authority.  Here is the pivotal passage:

The Government contends that the first sentence of §361(a) gives the CDC broad authority to take whatever measures it deems necessary to control the spread of COVID–19, including issuing the moratorium. But the second sentence informs the grant of authority by illustrating the kinds of measures that could be necessary: inspection, fumigation, disinfection, sanitation, pest extermination, and destruction of contaminated animals and articles. These measures directly relate to preventing the interstate spread of disease by identifying, isolating, and destroying the disease itself. The CDC's moratorium, on the other hand, relates to interstate infection far more indirectly: If evictions occur, some subset of tenants might move from one State to another, and some subset of that group might do so while infected with COVID–19. See 86 Fed. Reg. 43248–43249. This downstream connection between eviction and the interstate spread of disease is markedly different from the direct targeting of disease that characterizes the measures identified in the statute. Reading both sentences together, rather than the first in isolation, it is a stretch to maintain that §361(a) gives the CDC the authority to impose this eviction moratorium. 

Now, other exercises of authority based on this statute are in doubt. The government needs to show a fairly direct link between the regulation and "interstate infection." The key phrase is "direct targeting of disease." I suspect many OLC and CDC internal opinions need to be rewritten. The airplane mask mandate is probably okay. But an interstate travel vaccine requirement may go too far under the major question doctrine.

Seventh, the Court stressed that the government's "unprecedented" argument was especially weak in light of the risk of high fines, and incarceration.

This claim of expansive authority under §361(a) is unprecedented. Since that provision's enactment in 1944, no regulation premised on it has even begun to approach the size or scope of the eviction moratorium. And it is further amplified by the CDC's decision to impose criminal penalties of up to a $250,000 fine and one year in jail on those who violate the moratorium. Section 361(a) is a wafer-thin reed on which to rest such sweeping power. 

I recently wrote about the $5 fine at issue in Jacobson. The Chief seems especially troubled by punitive measures. The amount of the penalty in NFIB was central to the saving construction. If any jurisdiction imposes some sort of vaccine mandate with a high penalty, the Court may find it unlawful--in light of Jacobson's nominal penalty. I may be reading too much here, but this passage really stuck out.

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My guess is that the Chief wrote the per curiam opinion, perhaps with Justice Kavanaugh's help. The remedy resembles Horne II. Roberts relied on the major question doctrine in King v. Burwell. And the citation to Loretto seems to echo Roberts's Cedar Point majority. If Gorsuch or Alito wrote the opinion, there would be allegations of bad faith against the Biden Administration. This opinion is fairly sterile. Also, the citation to Youngstown at the end is a very Roberts move.

But our system does not permit agencies to act unlawfully even in pursuit of desirable ends. Cf. Youngstown Sheet & Tube Co. v. Sawyer, 343 U. S. 579, 582, 585–586 (1952) (concluding that even the Government's belief that its action "was necessary to avert a national catastrophe" could not overcome a lack of congressional authorization). It is up to Congress, not the CDC, to decide whether the public interest merits further action here. 

There is a direct link from Roberts to Rehnquist to Jackson.

This shadow docket ruling, combined with Biden v. DHS, may be the most significant administrative law rulings of the Term. I did not expect so much fireworks before First Monday.