Consumer Finance Litigation

On September 4, 2020, the CDC issued a broad order temporarily halting evictions nationwide, citing the COVID-19 pandemic as its basis. 85 Fed. Reg. 55,292 (Sept. 4, 2020). The CDC determined that such a moratorium was necessary to encourage isolation and social distancing for individuals who might become homeless or forced to move in with a larger group upon eviction. Initially, the moratorium was set to expire on December 31, 2020, but has since been extended, currently set to expire on June 30, 2021. However, after a recent ruling from the United States District Court for the District of Columbia, this moratorium may end sooner than expected.

In Alabama Association of Realtors v. United States Dep’t of Health & Human Services, No. 20-cv-3377 (DLF) (D.D.C. May 5, 2021), Judge Friedrich issued an order vacating the CDC Order nationwide. The underlying facts of the case are straightforward and not disputed by the parties. Plaintiffs in this case include property managers and trade associations representing landlords who have been forced to refrain from evicting tenants that have not paid their rent due to hardships arising out of the COVID-19 pandemic. Plaintiffs brought the lawsuit against the U.S. Department of Health and Human Services, alleging eight different claims that the CDC Order is unlawful or unconstitutional. In its Order, the Court focused only on one: that the CDC had exceeded its statutory authority under the Public Health Service Act, 42 U.S.C. § 264(a).

Applying the two-part analysis laid out in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the Court considered whether Congress had addressed the issue of the CDC’s authority to issue the eviction moratorium in the Public Health Service Act. While the Act provides broad authority for combating a national health crisis, the Court held that the authorization to act was limited to regulations involving “inspection, fumigation, disinfection, sanitation, pest extermination, [and] destruction of [contaminated] animals or articles . . .” The catch-all phrase at the end of the statutory provision, “and other measures, as in his judgment may be necessary,” encompassed only regulations that related to those previously mentioned. Because he found that “the national eviction moratorium in the CDC Order is unambiguously foreclosed by the plain language of the Public Health Service Act,” the Court never reached the second step of the Chevron analysis. The Court vacated the CDC Order entirely, as it applies nationwide. While this was not the first court to find that the CDC’s Order exceeded statutory authority, it is the first to issue such a broad remedy.

The defendants have appealed the ruling to the U.S. Court of Appeals for the D.C. Circuit. On May 14, 2021, the district court entered a stay pending the appeal, so the CDC Order currently remains in effect. This may still change, however, as the plaintiffs filed a notice with the Court on May 17 of their intent to move the D.C. Circuit and the U.S. Supreme Court to vacate this stay.