The recent temporary halt on residential evictions by the Centers for Disease Control (CDC) raises a number of legal and logistical questions. Jackson Walker partner Brad Nitschke, who leads the Firm’s COVID-19 Task Force, and governmental affairs consultant Kate Goodrich discuss how these issues affect both landlords and tenants and what the order does and does not cover. In this episode, Kate explains how this is not an automatic protection for tenants, and that this is not a waiver on rent or fees owed, while Brad discusses three legal arguments that landlords may bring against the federal government challenging the CDC director’s authorization to issue such a moratorium.

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Greg Lambert: Hi, everyone. I’m Greg Lambert, it’s September 10th, and this is Jackson Walker Fast Takes.
Last week, the Trump administration passed an order that will delay evictions through the end of the year. Jackson Walker attorneys Kate Goodrich and Brad Nitschke join me to discuss the repercussions of this order.
So Kate, let’s start off this conversation. Is there anything specific that interested listeners should know about this order?

Kate Goodrich: Well, Greg, many listeners might be surprised to learn that it was actually the CDC who is using its statutory authority to prevent landlords from evicting residential tenants. This is a pretty novel use of statutory authority. Brad’s going to talk more about that unique legal situation here in a little bit.

Greg Lambert: So, with this eviction moratorium—now, I know that Congress had passed the CARES Act earlier in the year, which automatically entitled protections to many Americans—what is going on here with the CDC’s order?

Kate Goodrich: So, this is not like in the sense that in the CARES Act, the stimulus package automatically came to recipients. In this case, tenants actually have to apply. There’s a form on the CDC website that they need to fill out, and in that form, they have to actually certify – meaning swear under threat of perjury – that they fit all five various criteria. Some of those criteria include not earning more than $99,000 a year or ensuring that they’ve utilized their “best efforts” to obtain reasonable other rental assistances. So, each tenant in the residence must fill out their own form, which is interesting because the order does not specifically address the situation of roommates, which many Americans are going to find themselves in. Under the language of the order, each tenant must fill out their own form, and if that tenant meets all five of the necessary criteria – at least in theory – they may not be evicted for the rest of the year.

Greg Lambert: Okay, so is there anything else that tenants should know about this order?

Kate Goodrich: Yeah. The most intense interesting and the most important thing for tenants to know about this is that this does not preclude or mean that tenants do not need to pay rent for the rest of the year. This order actually specifically does not preclude landlords from charging late fees that may have accrued for the last for these months. This means that all of the unpaid rent that may still be required in full can be required by landlords as soon as the order runs out, so it could be a huge lump sum that’s required. However, this order should help evictions that are already in process, and it will prevent any further actions from being brought forward. One other note is that all the other usual rules about criminal behavior or disruptions or destruction of property, they all still apply. So, this is not a total get-out-of-free card for all residential evictions. Only evictions because of nonpayment due to financial hardship, specifically caused by the coronavirus will qualify for these protections.

Greg Lambert: Brad, let’s bring you in on the conversation here. So, it seems curious that it’s the CDC who authorized that. Does the CDC have the authority to authorize something like this?

Brad Nitschke: Yes, it was interesting, Greg. Of course, the CDC is not generally in the business of regulating local landlord-tenant relationships except with respect to, like, federally funded housing and compliance with federal fair housing laws. Typically, landlord-tenant law is primarily a state law concern. Leases are governed by state law principles and enforced in state court generally. Many landlords were surprised to see the federal public health agency weighing in here and doing so in such a sweeping way. You know, the general rule is that federal government can’t act unless the Constitution and/or Congress gives an authority to do so, and even then a federal agency like the CDC can only act within the parameters of the authority that it’s been given. The CDC’s order suspending evictions to the end of the year, it says that it’s rooted in Section 361 of the Public Health Service Act and an implementing regulation 42 CFR § 70.2. Together, that statute and the implementing regulation allowed the CDC director to “take such measures to prevent spread of diseases as he or she deems reasonably necessary” if state measures to control a communicable disease are insufficient.
On a first read, it’s a pretty broad grant of authority, which seems to be. But it doesn’t mean as some landlords, I think, will contend that the CDC can essentially amend state law residential leases to revoke a landlord’s power to evict a nonpaying tenant for a period of time. And the answer to that question right now is nobody knows because this is a brand new order for the CDC, and as far as we can tell, no court has ruled on the validity of the order as of today. But I think there are a few issues that we’ll see addressed in lawsuits that I expect we’ll be coming from landlords and landlord groups around the country challenging the order.
The first is the question: Is this an instance of a federal agency overstepping its authority under the statute, has the CDC gone beyond what Congress intended to allow to do here? You know, it makes it makes sense that there’s got to be some limit to the CDC director’s ability to take measures as he deems reasonably necessary, or the language in the underlying statute itself, take measures as in his judgment are necessary. You know, wherever that limit is, some limit exists to that authority. Generally, that limit turns on what Congress intended as expressed in the language of the statute. And so, did Congress intend this section of the Public Health Service Act to mean that the CDC director could interrupt state landlord-tenant law for a period of time? We’ll see what courts decide the answer to that question is.
I think the second question this raises: Is this even an area where the federal government can act? I mentioned that typically residential landlord-tenant relationships are governed by state law, and generally protecting the health, safety, and welfare of people is a state responsibility. It’s not a federal responsibility unless it affects interstate commerce or the U.S. borders. Now here, sort of tying into that interstate commerce principle, the CDC order cites evidence that people who get evicted from their homes of course have to move, and some people when they have to move, choose to move or are forced to move interstate. So, from one state to another. That’s sort of the tie in the CDC is using to Congress’s power to govern interstate commerce here through the Public Health Service Act. Is that enough of a tie in? You know, this is always a hotly contested issue when a federal agency is regulating and somebody doesn’t like what they’ve done. So, I think we’ll see courts have to weigh in on that.
The third issue, the final issue that I think we may see raised in litigation challenging the border is, you know, whether the CDC can sort of wall off the landlords’ residential property and prevent the landlord from using it to generate income in effect, right? If you have a nonpaying tenant in the space and you can’t evict them, then I would expect landlords to argue their property has been temporarily taken by the CDC. You know, as we know, typically when the government takes your property, they owe you either due process and/or some kind of compensation for your property. And the CDC order, at least on the first read, doesn’t seem to create a mechanism for landlords to avail themselves of some kind of due process to challenge this order, or at least I think that’s what we’ll see landlords contend. So, you know, is the CDC eviction moratorium an unconstitutional taking of landlords’ rental property? I would expect that we’ll have to wait for courts to weigh in on that.

Greg Lambert: Well, Brad Nitschke and Kate Goodrich, I appreciate you both coming on and talking about this. We’ll follow this through the end of the year.

Brad Nitschke: Thanks, Greg.

Kate Goodrich: Thank you, Greg.

Greg Lambert: Thanks again to Kate Goodrich and Brad Nitschke for joining me today.

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