The United States Supreme Court ended the nationwide residential eviction moratorium that has been in place for nearly a year. Alabama Association of Realtors v. U.S. Department of Health and Human Services, 594 U.S. ___, WL 3783142 (Aug. 26, 2021)
On August 26, 2021, the Supreme Court agreed with the parties challenging the CDC’s orders. Saying that it “strains credibility to believe that this statute grants the CDC the sweeping authority it asserts,” the court found that the CDC’s broad interpretation of its mandate could permit dramatic administrative overreach. To illustrate this, the court posed several hypotheticals: “Could the CDC, for example, mandate free grocery delivery to the homes of the sick or vulnerable? Require manufacturers to provide free computers to enable people to work from home? Order telecommunications companies to provide free high-speed Internet service to facilitate remote work?” To the contrary, the court found that § 361(a)’s second sentence was instructive as to the types of measures the CDC could implement, which focused strictly on “measures [that] directly relate to preventing the interstate spread of disease by identifying, isolating, and destroying the disease itself.” Here, the CDC’s remedy was too attenuated.
“It is up to Congress, not the CDC, to decide whether the public interest merits further action here.” Indeed, “Congress was on notice that a further extension would almost surely require new legislation, yet it failed to act in the several weeks leading up to the moratorium’s expiration.” Even if the CDC was faced with legislative inaction and motivated by “desirable ends,” “our system does not permit agencies to act unlawfully[.]” See also Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 582, 585-586 (1952).
Given all of this, the court determined that the parties challenging the moratorium “not only have a substantial likelihood of success on the merits—it is difficult to imagine them losing.”
This decision does not affect any moratoria by states and localities (none in Oklahoma to date), and it leaves open the unlikely possibility of further congressional action. Because states and localities possess police powers that the federal government does not, challenges to local moratoria will likely be unsuccessful, unless it can be shown that the local government lacked the requisite authority or failed to follow the required processes to enact or order their foreclosure moratoria.
The U.S. Centers for Disease Control and Prevention (CDC), at the direction of President Trump, filed an order in the Federal Register that temporarily halts residential evictions to prevent the further spread of COVID-19. Huddleston Law Offices is preparing for the order which will go into effect this Friday, September 4. The order will bar virtually all evictions for both single family and multi-family housing until December 31, 2020. The CDC Order specifically states it is not a rule within the meaning of the Administrative Procedures Act, but is an emergency action taken under the existing authority of 42 CFR 70.2. To the extent it qualifies as a rule, notice and comment periods are ineffective as it is issued under a public-health emergency. Thus, the order takes immediate effect upon publication in the Federal Register this Friday. The CDC Order lists the compelling public interest, danger and police powers necessary to take this sweeping action under 5 U.S.C. Section 553(b)(3)(B).
|Here is what you need to know about the order:
1) It applies to virtually all rental housing and prohibits any eviction action to remove a renter during the covered period, so long as the renter provides the required declaration to their landlord.
2) The order does not prevent evictions based on the lawful reasons articulated in the order, i.e.: a) engaging in criminal activity while on the premises; b) threatening the health or safety of other residents; c) damaging or posing an immediate and significant risk of damage to property; d) violating any applicable building code, health ordinance, or similar regulation relating to health and safety; or e) violating any other contractual obligation, other than the timely payment of rent, late fees, penalties, or interest.
3) Outstanding balances will become due when the moratorium ends, including late fees.
4) To be eligible for the order’s protections, a renter must provide a declaration under penalty of perjury to their landlord (an example form is contained in the order and here) indicating the following: a) The individual has used best efforts to obtain rental assistance; b) The individual expects to earn no more than $99,000 (no more than $198,000 when filing jointly); was not required to report income in 2019 to the IRS; or received a stimulus check pursuant to the CARES Act; c) The individual is unable to pay their full rent due to a number of factors that remain unconnected to COVID-19; d) The individual is using best efforts to make timely partial payments; and e) Eviction would likely render the individual homeless or force the individual to move into and live in close quarters in a new congregate or shared living setting because the individual has no other available housing options.
5) Any landlord that violates the order may be subject to up to $500,000 in fines per violation and/or jail time. Enhanced penalties apply if the violation resulted in death, at the discretion of the U.S. Department of Justice.
6) Jurisdictions that have an eviction moratorium providing the same or greater level of public-health protection than the CDC order are exempt from its requirements.
We understand landlords are concerned about President Trump’s actions, and the complexity of the language in the CDC’s order will amplify the strain of sustaining your investment property during these difficult times. Huddleston Law Offices is studying the enforceability of the order, how it will interact with existing federal, state and local requirements and a number of other ambiguities in the text, such as whether the order applies to eviction filings or is limited to the physical removal of tenants. Specifically, the statutory authority of the CDC to issue and enforce this order needs to be examined. 42 U.S.C.A. Section 264(e) gives the Surgeon General preemptive powers over conflicting state and local laws as to Federal authority. It references 42 U.S.C.A. Section 266, which provides for special CDC quarantine powers in times of war. Clearly, we are not at war in the traditional sense of that word.
42 U.S.C.A. Section 264(a) gives the Surgeon General, with the approval of the Secretary, authorization to make and enforce regulations regarding communicable diseases to prevent their introduction or transmission from one state to another (and to or from foreign countries).
42 C.F.R. 70.2 grants the Director of the Centers for Disease Control and Prevention, when it is determined measures taken by local health authorities are insufficient to prevent the spread of any communicable disease from such State/possession to any other State/possession, to take such measures to prevent the spread the Director deems reasonably necessary.
Other outstanding issues include whether landlords may require proof to support the tenant’s declaration; if the declaration applies as an affirmative defense to an eviction action; and how these requirements apply to holdover tenancies, non-renewals and termination notices. The CDC order clearly does not bar the filing of eviction cases. Instead, it provides a new Federal affirmative defense to a state law based eviction that must be pled and proved. If the tenant does not appear at the court hearing, a default judgement can still be entered. If the tenant fails to submit the Declaration, or if the tenant makes a false Declaration and the landlord can prove it, an eviction can still occur. One of the conditions of the Declaration may prove problematic for employed tenants trying to take advantage of the CDC order. That is the requirement that the tenant keep paying as much rent as the tenant can under the circumstances. Otherwise, the tenant could be found to have failed the eligibility test, which says the tenant should be trying to make partial payments to the best of the tenant’s ability.
As the situation and our understanding of the order continues to evolve, we will post updates of new developments.