Eviction Moratorium Bends Both Facts and Law

 

The Centers for Disease Control and Prevention (CDC) states that it “works 24/7 to protect America from health, safety, and security threats, both foreign and in the US.” But as with other government agencies with ambitious missions, it’s not always clear whether its legitimate ends justify its choice of means. This came into stark relief last week in Alabama Association of Realtors v. HHS, in which District Court Judge Dabney Friedrich held that the CDC exceeded its statutory authority by ordering a nationwide moratorium against all evictions from residential rental properties. The Justice Department promptly announced that it would appeal her decision because “scientific evidence shows that evictions exacerbate the spread of COVID-19 . . . and the harm to the public that would result from unchecked evictions cannot be undone.”

The saga began in March 2020, when Congress passed the CARES Act at the start of the COVID pandemic. That act included a 120-day ban on evictions for the nonpayment of rent by tenants who lived in federally subsidized housing. When that prohibition expired, the CDC, acting on its own authority, extended its new “halt order” through December 31, 2020, expanding coverage to those not housed in federally financed properties. These parties were protected so long as they met at least one of several generous tests, including an anticipated income of less than $99,000, a decline in income, or a substantial loss of household income or wages and salaries. Criminal penalties for violation of the halt order could reach $100,000 if the eviction didn’t result in death, and $250,000 if it did.

The moratorium did not release tenants from obligations under the lease, but instead allowed landlords to recoup their losses, but only after the moratorium expired by “charging or collecting of fees, penalties, or interest” for nonpayment of rent. When that second moratorium expired, Congress promptly extended it for another month, until January 31, on the same terms. It wasn’t until its next expiration on February 1 that the CDC again relied on its own statutory authority to extend the moratorium further.

And therein lies the rub. The Public Health Act—which gives HHS the legal authority to respond to public health emergencies—states that the CDC “may provide for such inspection, fumigation, disinfection, sanitation, pest extermination, destruction of animals or articles found to be so infected or contaminated as to be sources of dangerous infection to human beings, and other measures, as in his judgment may be necessary.”

The purported justification for the nationwide moratorium on evictions was lodged in the final catchall phrase “other measures.” The enumerated health and safety items on the list all relate to specific, short-term measures that undoubtedly deal with preserving public health. Moreover, the harm to collateral interests from these named operations is relatively small and no targeted group of individuals is unduly impacted by the prompt response to festering health problems. The discretion reserved to the secretary of health and human services (and his delegate at the CDC) in the last clause is broad, precisely because it is difficult to anticipate the best response to public health emergencies. However, what constitutes “other measures” should remain circumscribed by the previously enumerated items.

The efficacy of a nationwide eviction moratorium on COVID prevention is suspect, as it depends on a complex set of unproven assumptions about how the virus is spread. For example, the purported justification for the halt order did not ask whether substantial loss of revenue for landlords might compromise their ability to take COVID prevention measures for their own properties. Additionally, the collateral financial effects on landlords, as a class, are more extensive than those from traditional health care precautions that improve the habitability of the properties. A deprivation of all short-term revenue makes it impossible for landlords, especially small landlords, to discharge their leasehold obligations to tenants, and to meet their own living needs. Yet many eligible tenants are well able to pay their rent and meet their other obligations. Even the right to recoup lost rents once the moratorium is lifted offers scant compensation as few landlords have the resources to chase after tenants who have already vacated the premises. The moratorium is overkill.

Turning to the original language of the Public Health Act, it’s important to note the principle of statutory construction known as ejusdem generis (literally, things of the same kind). The standard Supreme Court formulation in Circuit City Stores, Inc. v. Adams (2001) states that when “general words follow specific words in a statutory enumeration, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words.” The phrase “other measures” in the Public Health Act allows public officials to catch clever schemes that are intended to circumvent the basic statutory command: it would allow for example, a short-term quarantine when necessary. Yet, the similarity requirement blocks the risk of abuse of delegated authority. The CDC has never used eviction moratoria as a disease control tool, and the bland phrase “other measures” should not be read to authorize it. In this sense, ejusdem generis is consistent with the so-called nondelegation doctrine within administrative law, which seeks to limit how Congress cedes de facto its legislative authority to administrative bodies.

The ejusdem generis canon of construction is often invoked in criminal law cases to limit prosecutorial discretion based on fanciful theories of criminal liability. Writing in Yates v. United States (2015) for a deeply divided court, Justice Ruth Bader Ginsburg (over a four-justice dissent written by Justice Elena Kagan) reasoned that ejusdem generis protected a fisherman who threw back an undersized grouper from criminal sanctions for harvesting undersized fish. The federal statute in question stated: “Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of” federal law is guilty a felony. The government’s claim that the fish counted as “a tangible object” was misplaced under a statute directed to financial irregularities: after all, no one can make a false entry in a fish. It would be better to punish the offender under some other, more appropriate statute.

At first glance, it appears the CDC’s eviction moratorium should be covered by Yates. But the moratorium presents an additional wrinkle. Yates involved only the application of a statute. In contrast, the CDC moratorium was created by an administrative agency normally entitled to judicial deference in ambiguous cases under Chevron USA v. National Resources Defense Council (1984). The government’s deference claim is buttressed by Congress’s use of that same broad account of “other measures” in its January 2021 extension of the now-expired CDC ban.

Sadly, no one has decided what statutory language is clear enough under Chevron to avoid deference to agency interpretations. I have long claimed that judges should never cede any authority on questions of law to administrative agencies, but should act as they do in criminal cases like Yates. But Judge Friedrich did not have that option, and did well in navigating a minefield by insisting that ejusdem generis would become a dead letter if an unprecedented moratorium had the requisite resemblance to fumigation or pest extermination.

And it is a good thing, too, because if the CDC did have the statutory authority, then the court would have had to face the takings issue raised in the Alabama Realtors’ complaint. It is plain that the moratorium takes cash—a form of private property—from landlords and puts it back in the pockets of their tenants. It is hard to argue that the moratorium’s delayed right to sue for damages supplies just compensation for the immediate and certain loss landlords face. Nor would it prove decisive if the scientific evidence showed that ending evictions would prevent the spread of COVID, as this case would then bear a close resemblance to the hasty decision of the Biden administration to waive patent protections on vaccines in the name of COVID protection. There is no greater reason to make landlords bear the costs of government intervention than there is to make patentees do so. In both cases, the correct solution is for the government to use tax dollars to supplement tenant rental or vaccine payments when Congress thinks it appropriate. Some may protest that putting these matters on the public budget will lead to a narrowing of the eligibility requirements, but such greater attention to actual need is a virtue and would prevent a massive dislocation in the rental markets.

The common vice with policy instruments such as eviction moratoria and patent waivers is that they let government officials overbroadly define the police power while devastating large and politically vulnerable segments of the economy. Any sensible reading of the takings clause promotes democratic accountability while preventing political favoritism. Beyond issues of dubious statutory construction, this constitutional argument should win the day.

© 2021 by the Board of Trustees of Leland Stanford Junior University.

Published in Economics, Law
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  1. Jim McConnell Member
    Jim McConnell
    @JimMcConnell

    In my humble opinion, the “rent moratoria” have been some of the more egregious policies enacted in the government’s response to the Covid virus. The policy makers act as if the “health crisis” over rules the Constitution’s prohibition against takings.  

    • #1
  2. The Reticulator Member
    The Reticulator
    @TheReticulator

    Jim McConnell (View Comment):

    In my humble opinion, the “rent moratoria” have been some of the more egregious policies enacted in the government’s response to the Covid virus. The policy makers act as if the “health crisis” over rules the Constitution’s prohibition against takings.

    Earlier in the pandemic I recommended that laws be amended so that any governors who enacted emergency measures should thereafter be prohibited from holding public office in the United States. They can retire with their pensions and the thanks of a grateful citizenry, but they have essentially been rendered unfit for further public service by what the exercise of such powers has done to their psyches. This episode makes clear that we should add administrative state policy-makers to that prohibition. 

     

    • #2
  3. DonG (2+2=5. Say it!) Coolidge
    DonG (2+2=5. Say it!)
    @DonG

    No rent, stimmy checks, and legalized weed.  Is there any wonder why there are so few job takers?    Gen-Z has become Gen-Lay-Z

    • #3