The following information is provided by AZREIA Business Associate Zona Law Group P.C.

CDC MORATORIUM NOT IMMEDIATELY INVALIDATED

Today, the U.S. Supreme Court issued a one-page ruling denying relief in one of the cases challenging the CDC moratorium.

This is a bad ruling for property owners and managers, but it’s not the end of the issue. It’s important for readers to understand what was, and what was not, ruled upon.

PROCEDURAL HISTORY
(yes, this is actually important)

The case before the U.S. Supreme Court was brought by the Alabama Association of Realtors. They won at the trial level where the trial court ruled that the CDC moratorium was unconstitutional. Had it ended there, the CDC moratorium would have been invalid and would have ended. However, because it was a novel legal question, the trial court said it would stay its order, meaning it would delay making it law until it was reviewed by a higher court.

Immediately, the plaintiffs (realtors) appealed and sought to have the appellate court overturn the stay. The appellate court refused to overturn the stay, thus allowing the CDC order to remain in place. The plaintiffs then appealed to the U.S. Supreme Court asking the country’s highest court to overturn the stay and allow the original order (that the moratorium was unconstitutional) to go into effect. This would have invalidated the CDC moratorium.

Today, the Supreme Court issued a one-page ruling refusing to overturn the stay. It was a 5-4 decision. Justices Thomas, Alito, Gorsuch and Barrett dissented and would have voted in favor of the plaintiffs/realtors.

LEGAL TAKEAWAYS

Despite the fact that this was only a one-page ruling, there are a lot of implications that can be gleaned from the order.

1. By refusing to lift the stay, the Supreme Court allowed the moratorium to continue until its current expiration on July 31, 2021. It will likely not be extended as the CDC will not want the Supreme Court to revisit the issue, though it is legally possible.

2. The Supreme Court was only ruling on the issue of the stay; it was not addressing the merits of the case. Therefore, there is no final ruling on the validity of the CDC moratorium. The plaintiffs in the case can still proceed through the regular appellate process and seek a ruling on the constitutionality of the moratorium. However, that case may take years to go through the courts and there is no guarantee the Supreme Court will review it at that time.

3. This case only deals with the CDC’s authority and does not address the validity of eviction moratoriums in general, nor does it address whether the federal legislature can issue a moratorium. The CDC is an executive agency, not a legislative one. Therefore, even if this case does reach the merits, it will be limited to the issue of what authority the agency had–not what authority the legislature may have. Therefore, this has no impact on the constitutionality of the CARES Act. (Readers may wish to go back to youtube and watch our podcast with Constitutional Law Professor Ilan Wurman to see the full significance of these distinctions: CLICK HERE TO WATCH).

4. While the full court provided no explanation for its ruling, Justice Brett Kavanaugh wrote a concurring paragraph, effectively explaining his vote against the case. Justice Kavanaugh, a conservative justice, wrote that the CDC likely exceeded its authority, but that the CDC Order (the moratorium) was set to expire at the end of July so he chose not to intervene. In other words, he said that he believes the CDC likely acted unconstitutionally, but he would allow the order to remain for one month to provide time for rental assistance to be disbursed.

5. It appears likely that Justice Kavanaugh (and maybe others) would have voted differently if the CDC had not indicated their intent to let the Order expire at the end of July. Of course, everyone presumes this is exactly why the CDC only extended the moratorium one month: it was concerned about a negative ruling. Our readers will remember that before President Biden was sworn in, he indicated his intent that the moratoriums last through September.

While this is not the outcome the industry wanted, this is the outcome Zona Law expected as to the issue of a stay (we do think a ruling on the merits would be different). It appears that the Supreme Court took the opportunity to sidestep the issue on the premise that the moratorium is expiring in one month.

READ THE U.S. SUPREME COURT RULING

 

Zona Law Group P.C.