On August 7, a federal appeals court ruled that a lawsuit by landlords over the CDC’s federal eviction moratorium can proceed, seeking compensation under the Constitution’s Takings Clause. It overturned a contrary ruling by the Court of Claims, which a law professor criticized at this link.
During the Covid pandemic, the Centers for Disease Control (CDC) imposed a nationwide eviction moratorium, claiming it would reduce the spread of the disease. The Biden Administration extended the moratorium multiple times. In August 2021, the eviction moratorium was struck down by the Supreme Court because the CDC lacked proper statutory authority to impose it. But, in the meantime, many landlords lost a lot of money, because they could not evict tenants who weren’t paying rent.
Some of the landlords filed a lawsuit contending that the eviction moratorium triggered the Takings Clause of the Fifth Amendment, which mandates that the government pay “just compensation” whenever it takes private property. At least one law professor agreed with their position, since the Supreme Court in 2021 ruled that even temporary physical occupations of property can qualify as “per se” (automatic) takings requiring compensation, in its decision in Cedar Point Nursery v. Hassid.
As a law professor notes, “In May 2022, the US Court of Claims dismissed the takings lawsuit against the CDC moratorium on the perverse ground that there was no taking because the CDC’s eviction moratorium was never properly ‘authorized.’ In other words, the government could escape takings liability because its actions were illegal!”
But Wednesday’s decision by the Federal Circuit Court of Appeals rejected that logic, and reversed that ruling. As the appeals court’s majority explains, an unlawful seizure of property can nevertheless qualify as an “authorized” taking if it is “chargeable” to the government:
An action will normally be deemed authorized if it was done by government agents “within the general scope of their duties”—i.e., if it was “a natural consequence of congressionally approved measures” or “pursuant to the good faith implementation of a congressional act.” Del-Rio, 146 F.3d at 1362 (cleaned up); see also Ramirez, 724 F.2d at 152 (“[O]n numerous occasions when the government agent was acting within the ordinary scope of responsibilities conferred on him by Congress, and took private property without express statutory authority or prohibition, the Tucker Act remedy was held to lie.”)…..
To summarize: even if an action by a government agent is unlawful, it will likely be deemed authorized for takings claim purposes if it was done within the normal scope of the agent’s duties—for example, if it was done “pursuant to the good faith implementation of a congressional act.” Del- Rio, 146 F.3d at 1362 (cleaned up). If instead the action was outside the normal scope of the government agent’s duties— or, despite being within that scope, it contravened an explicit prohibition or other positively expressed congressional intent—it will likely be deemed unauthorized. See id. at 1363; Ramirez, 724 F.2d at 151. The ultimate inquiry is whether the government agent’s action is “chargeable to the government.” Del-Rio, 146 F.3d at 1362.
As a law professor notes,
The majority opinion engages in a long and detailed debate with Judge Dyk’s dissent over the issue of whether the above approach is the best interpretation of relevant Supreme Court and Federal Circuit precedent. I won’t try to assess that debate here.
To me, the decisive factor should be that the Takings Clause nowhere says that compensation is only required for legal government actions or for those specifically authorized by statute. Rather, the Clause imposes a general rule that compensation must be paid whenever the government takes private property for “public use.” That, of course, can happen even without proper legislative authorization. I can understand if takings liability is nonetheless denied when rogue low-level officials seize property without any plausible justification. But that isn’t what happened here.
As the appeals court explained:
Finer legal points aside, the implications of the dissent and government’s position illustrate its weakness. Taken to its logical conclusion, their position is that government agents can physically occupy private property for public use, resist for months the owner’s legal attempts to make them leave, and then, when finally made to leave, say they need not pay for their stay because they had no business being there in the first place. It would be one thing for this to be the result when government agents are clearly acting apart from Congress’s will; in such a case, requiring just compensation would encroach too much on Congress’s power of the purse….. But there is no sound reason for such a result in a case like this, where (1) the government agent, after receiving a directive from the President, acted in good faith pursuant to a good-faith understanding of its congressionally conferred authority, (2) there was no explicit congressional prohibition foreclosing that understanding….. and (3) the government vehemently pressed that understanding in litigation so as to seriously impede the property owners’ efforts to end the alleged occupation. Depriving property owners of a potential Fifth Amendment remedy in this case would deprive them of any meaningful remedy at all.
