A federal judge in Texas has declared the Centers for Disease Control and Prevention (CDC) eviction moratorium unconstitutional, holding that Article I’s power to regulate interstate commerce and enact laws necessary and proper for such regulation does not include the power to suspend residential evictions on a nationwide basis. While the court stopped short of issuing immediate injunctive relief, instead relying on the CDC to “respect the declaratory judgment” and withdraw the Order, the court stated that such relief would be available if the government does not comply with the decision. With this ruling, the most significant prohibition on residential evictions for nonpayment of rent is likely to be lifted, and many residential evictions halted or delayed under the Order may begin in earnest. While additional tenant protections remain in certain locales, this federal ruling increases the likely rate and pace of residential eviction activity across the country.
The CDC Eviction Moratorium was a nationwide order enacted under the Trump Administration in an effort to reduce the adverse economic impacts of the ongoing COVID-19 pandemic on residential tenants, and as a public health measure to prevent displacement of individuals into living situations conducive to the spread of the COVID-19. The Order allowed tenants facing eviction due to financial strains caused by the pandemic to certify in writing to their landlord that they are unable to pay full rent and that eviction would likely lead to homelessness or force the individual into unsafe congregate or shared living quarters. The CDC issued the order under its emergency pandemic powers under the Public Health Service Act. Initially in effect through December 31, 2020, the Order was subsequently extended through March 31, 2021.
While the Order was criticized at the time of enactment as being vulnerable to legal challenges due to its broad reach and structure, the Department of Justice successfully defended the initial rounds of legal challenges. On February 25, however, Judge J. Campbell Barker of the U.S. District Court for the Eastern District of Texas found the Order to be unconstitutional. The court held that a nationwide eviction moratorium is not under Congress’ limited powers of Article I to pass laws necessary and proper to regulate interstate commerce. The court found that the federal government had never previously invoked such powers, even during the Spanish flu pandemic and the Great Depression, and that in its arguments, the government did not claim that the COVID-19 pandemic led to any specific grant of constitutional power. Instead, the Court held, the case should be decided on whether Congress, delegating power to a federal agency, has the legislative powers under the Commerce Clause to temporarily suspend tenant evictions on a nationwide basis.
The Commerce Clause of the U.S. Constitution states that Congress has the power “to regulate commerce with foreign nations, and among the several states and with the Indian tribes,” and allows Congress to broadly legislate interstate commerce. The U.S. Supreme Court in United States v. Lopez defined interstate commerce to include only the “use of the channels of interstate commerce,” the “instrumentalities of interstate commerce” and “those activities that substantially affect interstate commerce.” The court stated that if the CDC Order is constitutionally valid, it must fall under the substantial effects on interstate commerce category. Under this factor, the court stated it must assess “the nexus between the local activity and interstate commerce or federal regulation thereof” and that “[h]ere, 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 real property—specifically, whether an owner may regain possession of the property from an inhabitant.” As such, the nature of possessory interests in real estate is inherently local, and the economic relationship between landlords and tenants is beyond the “expressly regulated activity” that courts may examine when determining whether such activity substantially affects interstate commerce. The court also found that the relationship between interstate commerce and the regulated activity, i.e., the moratoria on evictions, is too “attenuated in several dimensions,” failing to preserve the necessary distinction between “what is national and what is local in the activities of commerce.” Without such distinctions, the court wrote, the government’s arguments threaten “breakdown in the demarcation of traditional areas of state concern” of intrastate commerce and state police powers. To this end, the court observed, [a]lthough the COVID-19 pandemic persists, so does the Constitution,” granting summary judgment in favor of the plaintiffs challenging the Order.
While the U.S. Department of Justice has yet to comment on the case, the decision is likely to be appealed to the Fifth Circuit Court of Appeals. Some in the legal community have already criticized the decision as contrary to Supreme Court precedent holding that the rental market for real estate includes the power to regulate individual activities. In the interim, there is no nationwide bar on residential evictions. However, many states and localities have enacted separate eviction relief measures that remain in effect. The next Congressional COVID-19 relief package, the American Rescue Plan Act, will also likely contain up to $45 billion in rental and utility assistance, eviction prevention measures, and emergency housing vouchers. However, neither the House nor Senate versions contains a specific eviction moratorium that could replace the CDC Order if it is ultimately withdrawn.
The COVID-19 pandemic continues to upend the American housing system, with significant effects on tenants and landlords alike. Potentially 10 million Americans, and 18 percent of all renters, are currently behind on rent. Now that the largest federal halt to evictions has—at least temporarily—been struck down, evictions for nonpayment of rent due to pandemic-related causes may begin where not otherwise prohibited by state or municipal law. Housing insecurity and homelessness are on an upward trend throughout the country, as is the inventory of distressed real estate in some areas and sectors. While the Biden Administration has indicated a commitment to addressing these issues, few concrete nationwide measures have been adopted to date. For now, landlords and tenants must continue to navigate rapidly changing federal and local laws pertaining to residential evictions during the pandemic.