Banking and Finance Law Daily CDC overreached; was not authorized to issue eviction moratorium order
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Monday, July 26, 2021

CDC overreached; was not authorized to issue eviction moratorium order

By Ursula Furi-Perry, J.D.

In a case brought by a group of landlords against government agencies, the U.S. Court of Appeals for the Sixth Circuit held that the Centers for Disease Control overstepped its rulemaking authority in issuing an eviction moratorium order, as it was not authorized to do so by statutory language.

During the COVID-19 pandemic, the Centers for Disease Control (CDC) issued an order halting residential evictions. The CDC claimed it was authorized to issue this order under the Public Health Act of 1944, as a necessary regulation to prevent the spread and transmission of disease. A group of landlords sued several government agencies, arguing that the provision did not grant the CDC the sweeping authority it claimed. The district court found in the landlords’ favor and granted them declaratory relief. On appeal, the Sixth Circuit affirmed, holding that the CDC overstepped its rulemaking authority and was not authorized by explicit language in the statute to issue an eviction moratorium order (Tiger Lily, LLC v. U.S. Dept. of Housing and Urban Development, July 23, 2021, Bush, J.).

Background. In March of 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act, which imposed a 120-day moratorium on evictions from rental properties that participated in federal assistance programs or had federally backed loans. When the congressionally enacted moratorium ended, the CDC stepped in and issued an order halting residential evictions. The CDC explained that the order was a necessary measure to facilitate self-isolation, support state lockdown orders, and prevent congregation in settings like homeless shelters. In December 2021, Congress passed an appropriations act that contained a provision extending the expiration date of the CDC’s halt order.

A group of owners and managers of rental properties filed suit in the federal court in Memphis, seeking declaratory judgment and a preliminary injunction. The landlords claimed that the CDC’s order exceeded the government’s statutory grant of power and violated the Constitution and the Administrative Procedures Act. The district court in Memphis ruled in favor of the landlords on the declaratory judgment claim, and the government appealed. On March 29, 2021, the Sixth Circuit denied the government’s emergency motion to stay the federal trial court’s order denying injunctive relief pending appeal of the CDC’s eviction moratorium extension, as the government was unlikely to succeed on the merits (see Banking and Finance Law Daily, April 2, 2021). On July 23, 2021, the Sixth Circuit addressed the claims on the merits.

Analysis. The government argued that the Public Health Act of 1944 authorized the halt order by the CDC. The section it relied on, 42 U.S.C. § 264(a), allows the Surgeon General, with the approval of the Secretary, to enforce such regulations as are "necessary to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions, or from one State or possession into any other State or possession."

As the federal court noted, "[t]hat text does not grant the CDC the power it claims." While the statute granted the Secretary rulemaking authority, that authority was not as capacious as the government contended. The court looked to the next sentence of the statute, which allows the Secretary to "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 court explained that this second sentence narrowed the scope of the first—while the first sentence authorized action, the second sentence dictated what actions may be taken. An eviction moratorium, the court reasoned, does not fit the mold of the actions allowed under this statute.

Even if the court construed the language of the statute more expansively, it could not grant to the CDC the power to insert itself into landlord-tenant relationships without express language from Congress’s intent to do so. "Agencies cannot discover in a broadly worded statute authority to supersede state landlord-tenant law," the court stated. Moreover, the court held that the government’s interpretation of the statute presented a nondelegation issue. "Under that interpretation, the CDC can do anything it can conceive of to prevent the spread of disease," the federal court explained. "That reading would grant the CDC director near-dictatorial power for the duration of the pandemic, with authority to shut down entire industries as freely as she could ban evictions."

Lastly, the court addressed the government’s argument that even if the CDC initially lacked the power to impose the eviction moratorium, that changed in December 2021 when Congress passed the appropriations act that contained a provision extending the expiration date of the CDC’s halt order. The court noted that it must exercise "extreme care" in determining that Congress has authoritatively agreed with an agency’s interpretation of a statute. Here, any potential ratification by Congress did not purport to alter the meaning of § 264(a), so it did not grant the CDC the power to extend the order further than Congress had authorized.

Conclusion. As 42 U.S.C. § 264(a) did not authorize the CDC to implement a nationwide eviction moratorium, the lower court’s decision was affirmed.

The case is No. 21-5256.

Attorneys: S. Joshua Kahane (Glankler Brown, PLLC) for Tiger Lily, LLC. Alisa B. Klein, U.S. Department of Justice, for U.S. Department of Housing and Urban Development.

Companies: Tiger Lily, LLC

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