In Darby Development Co. v. United States, the US Court of Appeals for the Federal Circuit ruled that a takings lawsuit against the 2020-21 federal eviction moratorium can proceed, overturning a previous decision by the Court of Claims. This decision could set an important takings precedent. The eviction moratorium was imposed by the CDC during the Covid pandemic in September 2020, and was extended multiple times by the Biden Administration. The Supreme Court invalidated the moratorium in August 2021, stating that the CDC lacked proper statutory authority to implement it. Despite this, many landlords suffered financial losses as they were unable to evict non-paying tenants. Some property owners filed a lawsuit claiming that the eviction moratorium violated the Takings Clause of the Fifth Amendment, which requires just compensation for the government taking private property. The Court of Claims initially dismissed the lawsuit on the grounds that the CDC’s actions were not properly authorized. However, the recent Federal Circuit decision overturned this ruling.
The majority opinion in the Federal Circuit case stated that even if a government action is illegal, it can still be considered an “authorized” taking if it was within the agent’s duties or done in good faith pursuant to congressional authority. The dissenting opinion raised concerns about the implications of this ruling, suggesting that it could lead to increased takings liability for the government. However, the majority argued that denying property owners a Fifth Amendment remedy in this case would be unjust, especially considering the government’s vigorous defense of the moratorium in court.
Overall, the decision in Darby Development Co. v. United States highlights the complexities of takings claims and the importance of ensuring fair compensation for property owners when the government takes their property for public use. The decision of the majority in this case could bring about significant changes in our takings jurisprudence, potentially holding agencies liable for unauthorized acts and discouraging the implementation of legitimate government programs due to the fear of takings liability. While historically unauthorized programs were simply enjoined, now there is the added concern of facing takings liability. However, this “specter of takings liability” could be seen as a positive deterrent against government misconduct and could provide compensation to victims when necessary.
The debate between the majority and dissent centers around whether the CDC was acting within the scope of its normal duties when enacting the eviction moratorium. While the dissent argues that the moratorium was broader than previous policies, the majority contends that the abnormal circumstances of the COVID-19 pandemic justified the CDC’s actions. Despite potential political motivations behind the moratorium, its public health rationale still made it “normal” enough to be considered authorized but unlawful.
Furthermore, the majority correctly identifies an eviction moratorium as a “physical taking” under Cedar Point, distinguishing it from mere regulations of the landlord-tenant relationship. The argument that government actions involving this relationship should be immune from being considered a physical taking is rejected, as the forced occupation of property by tenants against the owner’s will constitutes a per se taking.
This case may undergo further review by higher courts, potentially setting a precedent on the concept of authorization for takings and the treatment of eviction moratoria. State courts have also tackled this issue, with most ruling against considering eviction moratoria as takings. Overall, this case highlights the complexities of takings law and the implications of government actions on property rights.
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