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Court of Appeals Reverses Dismissal of NAA Eviction Moratorium Lawsuit

August 8, 2024 0 Comment Category: Uncategorized

On August 7th, 2024, the U.S. Court of Appeals for the Federal Circuit overturned the U.S. Court of Federal Claims’ dismissal of Darby Development Company, Inc. v. United States in a 2-1 decision. This pivotal case will determine if the U.S. Centers for Disease Control and Prevention’s (CDC) federal moratorium constitutes an illegal taking under the Fifth Amendment of the U.S. Constitution. If ruled a taking, compensation must be paid to those affected by the government action.

Background

In 2021, housing providers sued the federal government in the U.S. Court of Federal Claims, arguing that the CDC’s order amounted to physically taking their property for public use, necessitating just compensation under the Fifth Amendment’s Takings Clause.

In 2022, the Court of Federal Claims dismissed the housing providers’ complaint for failing to state a claim upon which relief could be granted.

What’s Next

The Court of Appeals ruled that the housing providers’ complaint did state a claim for physical taking requiring just compensation. The dismissal was reversed, sending the case back to the lower court for further proceedings. The Court of Appeals determined that the CDC’s moratorium was “authorized” under takings law, acting within its normal scope and not violating explicit prohibitions or congressional intent. The court found the housing providers’ complaint similar to the Cedar Point case, which also involved physical taking.

The Court addressed the government’s concern that allowing this claim could imply any law preventing immediate evictions would constitute a physical taking. The Court stated this situation was unique and unprecedented, directly preventing evictions for nonpayment of rent.

The National Apartment Association (NAA) and Dorsey & Whitney LLP thank the amici supporting this case: the National Association of Home Builders, the National Association of Realtors, and the New Civil Liberties Alliance. Special thanks to John McDermott for his counsel throughout these legal proceedings.

NAA will continue to monitor the Court’s ruling and update the industry on the next steps.

Stay Informed and Protected

Davidovich Stein Law Group is here to provide legal insights and guidance for housing providers navigating these complex legal waters. Our experienced team is ready to assist you with understanding the implications of this ruling and ensuring your interests are protected. Contact us for a consultation today.

 

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