The Big Picture
As the industry lawsuit against the U.S. Centers for Disease Control and Prevention’s (CDC) COVID-19-era federal eviction moratorium approaches its final stage, more than 2,600 companies and housing providers nationwide joined the case ahead of the final deadline.
Deeper Dive
While in place, the CDC’s unconstitutional eviction moratorium order (September 2020 – July 2021) left the nation’s housing providers to unfairly shoulder insurmountable unpaid rent debt.
In July 2021, the National Apartment Association (NAA) and several rental housing providers sued the federal government in the United States Court of Federal Claims seeking financial compensation for damages suffered when the CDC issued the order. The complaint argued that the Order violated the Takings Clause of the Fifth Amendment, which states that “[n]or shall private property be taken for public use, without just compensation.”
The federal government motioned to dismiss the case, which the U.S. Court of Federal Claims granted in May 2022. Though they dismissed the case, the court found that the CDC lacked the authority to issue the Order, citing a U.S. Supreme Court decision in Alabama Association of Realtors. Thereafter, the case was appealed to the Court of Appeals.
In August 2024, the U.S. Court of Appeals for the Federal Circuit overturned the U.S. Court of Federal Claims’ dismissal of the case – Darby Development Company Inc. v. United States – in a 2-1 decision. Through a series of decisions, the appellate court denied the federal government’s petitions for the case to be heard again – and the U.S. Department of Justice (DOJ) eventually abandoned its efforts to reverse the industry’s historic win.
While no longer a direct party to the case, NAA has continued to support and play a pivotal role in the Darby suit over the past five years.
What’s Next
The case is back before the U.S. Court of Federal Claims where the judge is urging the parties to move forward in an efficient manner and has set a schedule for them to follow. It is anticipated that the parties will negotiate a damage calculation formula to allow an efficient review and payment process for the plaintiffs.