SCOTUS Asked to Decide Whether Eviction Moratorium is a Taking
Since the beginning of the COVID pandemic in 2020, we have covered the private impacts resulting from local and federal eviction moratoriums and shutdown orders:
- Gym Owner Loses Challenge to COVID Shutdown Order
- U.S. Supreme Court’s Emphatic “Take That!” To CDC Eviction Moratorium
- When Will The New Jersey Eviction Moratorium End?
- COVID Eviction Freezes – Who Is Supposed To Pay?
- Suit Alleges Los Angeles’ Anti-Eviction and Rent Freeze Laws a Taking
To make a long story short, trial and appellate courts have provided little relief to private parties negatively impacted by these sweeping regulations. In one New Jersey case, the Appellate Division held that the government is relieved of its duty to pay “just compensation” for a regulatory or per se taking if the regulation at issue merely asserts a “pre-existing limitation upon the landowner’s title” (i.e., the State’s police power to abate the danger powers by an imminent threat to public safety). See N.J. Appellate Court Rejects Another COVID “Shutdown” Order Challenge.
Luckily, the fight is not yet over as SCOTUS appears to be fully briefed on a cert petition that raises the following question presented:
In March 2020, the City of Los Angeles adopted one of the most onerous eviction moratoria in the country, stripping property owners like Petitioners of their right to exclude nonpaying tenants. The City pressed private property into public service, foisting the cost of its coronavirus response onto housing providers to avoid expensive and less expedient—but constitutional—means to help those in need. In doing so, the City in effect imposed and transferred to defaulting tenants an exclusive easement in the private property of others without paying for it. By August 2021, when Petitioners sued the City seeking just compensation for that physical taking, back rents owed by their unremovable tenants had ballooned to over $20 million. The moratorium concluded in 2024.
Relying on a mobile home rent control case from this Court, Yee v. City of Escondido, the Ninth Circuit affirmed dismissal of Petitioners’ complaint because they “voluntarily opened” their properties to tenants in the first instance and thus could never state a physical takings claim against the City’s law, drastic as it was. The Federal and Eighth Circuits disagree. In Darby Development Co. v. United States and Heights Apartments, LLC v. Walz, both courts held Yee inapposite and validated identical claims because moratoria like the City’s deprive owners of the right to exclude akin to Cedar Point Nursery v. Hassid.
The question presented is:
Whether an eviction moratorium depriving property owners of the fundamental right to exclude nonpaying tenants effects a physical taking. [GHP Management Corporation, et al., v. City of Los Angeles, California, et al.]
As always, our colleague Robert Thomas has provided cutting edge coverage on this pending petition, and I would highly recommend any readers to check out his recent blog about the case.
This issue has also recently been analyzed in the article published today in the Counselors of Real Estate’s peer-reviewed journal, Real Estate Issues.
Stay tuned…we will continue to track this matter as the litigation continues.
If you are confronted with a governmental taking and need guidance regarding the proper procedure to follow, please contact McKirdy, Riskin, Olson & DellaPelle, P.C. to speak with an experienced attorney.
