The CDC’s Order declaring a national moratorium on residential evictions was just declared unconstitutional by a U.S. District Court in Terkel v. C.D.C., Case No. No. 6:20-cv-00564 (E.D. Texas, February 25, 2021).
The trial court phrased the issue as:
whether a nationwide moratorium on evicting specified tenants is within the limited powers that our Constitution grants to the federal government, namely, its authority to legislate as necessary and proper to regulate commerce among the several States.
The trial court pointedly commented that the Federal Government’s position was not reliant upon the current pandemic, but was asserted to be available at any time, “open-ended.”
The parties agreed that as a facial challenge to the constitutionality of a law this was a pure question of law, no issue of fact, no discovery necessary.
The decision quickly drew a distinction between a state’s authority to regulate residential foreclosures which is not addressed in the order, as opposed to the Federal Article I power to regulate commerce. The Federal Government did not assert Article II executive authority.
The Government asserted only one prong of the commerce clause in support, “activities having a substantial relation to interstate commerce”. The court looked to a four part test:
(1) the economic character of the intrastate activity;
(2) whether the regulation contains a “jurisdictional element” that may “establish whether the enactment is in pursuance of Congress’ regulation of interstate commerce”;
(3) any congressional findings regarding the effect of the regulated activity on commerce among the States; and
(4) attenuation in the link between the regulated intra-state activity and commerce among the States.
United States v. Morrison, 529 U.S. 598, 609-13 (2000).
Applying the test, the court looked at substantial effects of the activity sought to be regulated, evictions in state court, and found that:
the regulated activity is not the production or use of a commodity that is traded in an interstate market. Rather, the challenged order regulates property rights in buildings—specifically, whether an owner may regain possession of property from an inhabitant. 86 Fed. Reg. at 8,021 (defining “eviction” as any action “to remove or cause the removal of a covered person from a residential property”). Real estate is inherently local. Residential buildings do not move across state lines. And eviction is fundamentally the vindication of the property owner’s possessory interest.
Concerning Federal jurisdiction the court questioned whether evictions created an effect on interstate commerce, remarking that there were no Congressional findings. Further, though a quarantine may prevent interstate commerce, the C.D.C. order was not a quarantine.
The court took care to distinguishing the ability regulate leasing.
In short, the criminalization of court eviction proceedings to enforce a property right of possession, a first for the Federal Government, invaded an area traditionally regulated by the states. This unique, first time for this type of regulation, created doubt, if not a presumption that it was inappropriate.
The court concludes its analysis with “Although the COVID-19 pandemic persists, so does the Constitution.”
Based on representations by the Government that it would “respect the declaratory judgment”, apparently anticipating a recission of the C.D.C. order, the court did not enter an injunction; but, invited the Plaintiff’s to seek that relief “should defend-ants threaten to depart from the declaratory judgment.”
As a reminder, though this is from a U.S. District Court located in Texas, a U.S. District Court has national wide injunction authority. The Federal Government may seek a stay pending appeal, if an appeal is sought.
Recognizing that the C.D.C. has had only one business day to react as the time this mini-brief is posted, the C.D.C. website link to the moratorium order does not show a rescission of the moratorium or any action in regard to the court’s Order. Thus, it is uncertain whether there will be an appeal or a stay. https://www.cdc.gov/coronavirus/2019-ncov/covid-eviction-declaration.html Likely landlords will be getting ready, but waiting to file for evictions until the C.D.C.’s next step. Certainly after the anticipated recission there will be a flood of filings which will have many impacts to be discussed later.
Though this Order is from a trial court, and precedential value, especially in Florida would be limited, it is interesting that the court found that evictions are not “economic activity” in the interstate commerce realm.
Best for a safe and healthy weekend.
Michael J. Gelfand
Real Property, Probate and Trust Law Section
of The Florida Bar
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© 2021 Michael J. Gelfand
Florida Bar Board Certified Real Estate Attorney
Florida Supreme Court Certified Mediator:
Civil Circuit Court & Civil County Court
Fellow, American College of Real Estate Attorneys