The US Court of Appeals for the Federal Circuit has reinstated a compensation claim brought by landlords challenging the Centre for Disease Control and Prevention’s (CDC) nationwide eviction moratorium during the COVID-19 pandemic. The landlords assert that the moratorium constituted a “taking” under the Fifth Amendment, thus entitling them to compensation (Federal Circuit Opinion). The decision reverses a prior ruling from the US Court of Federal Claims in Darby Development Company v US that dismissed the lawsuit.
The case hinges on the Fifth Amendment, specifically its Takings Clause, which prohibits the government from taking private property for public use without just compensation. The CDC had issued the eviction moratorium as a public health measure to mitigate the spread of COVID-19, aiming to keep tenants housed. Landlords, however, contended that it imposed substantial financial burdens by preventing them from evicting non-paying tenants.
The court’s recent decision allows the landlords’ claim to proceed, but it does not guarantee compensation. Instead, it signifies that the landlords should be given a chance to present their case. The Federal Circuit’s opinion recognized the extraordinary circumstances posed by the pandemic while emphasizing the constitutional protections for property owners under the Fifth Amendment.
Earlier legal challenges also questioned the validity of the moratorium. In February 2021, the US District Court for the Eastern District of Texas found the CDC moratorium unconstitutional (Texas Ruling). Subsequently, the US Supreme Court ruled in August 2021 that the CDC had exceeded its authority in issuing the moratorium (Supreme Court Ruling).
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