The U.S. Supreme Court (SCOTUS) has again determined that the Centers for Disease Control and Prevention (CDC) lacks the authority to institute a nationwide prohibition of evictions under the guise of preventing the interstate spread of infection of COVID-19. The CDC’s prohibition relied upon §361(a) of the Public Health Service Act, but in reaching its decision the Supreme Court pointed out that this provision, originally passed in 1944, “has rarely been invoked—and never before to justify an eviction moratorium.”

In a prior decision, issued June 29, 2021, SCOTUS had opined that the CDC lacked the authority to issue an administratively-imposed nationwide ban on evictions, and that any such action would have required “clear and specific congressional legislative authorization (via new legislation) . . . to extend the moratorium past July 31.” As such, one could not be blamed for assuming that the Court’s order would have ensured that no further extensions would be issued without the necessary congressional authority – by specific legislation. Particularly, as the CDC acknowledged its lack of authority when faced with political pressure but rightly refused to extend that particular moratorium.

In a surprisingly audacious move, the CDC nonetheless issued a subsequent moratorium prohibiting certain evictions through October 3, 2021. This new moratorium was purportedly more limited and targeted, as it was restricted to areas of the country with “high or substantial” transmission of COVID-19. However, in practice this criteria made the CDC’s latest order applicable to approximately 90% of renters. This was not lost on the Court, which noted that “the new moratorium is indistinguishable from the old.”

SCOTUS issued a 16-page Per Curiam Decision reiterating its position regarding the necessity of specific Congressional action, and vacating the stay of enforcement of a judgment issued by the U. S. District Court for the District of Columbia, which had vacated the moratorium on the ground that the CDC lacked statutory authority to impose it in the first place, and it was therefore unlawful. That judgment is now enforceable and the CDC moratorium is vacated.

SCOTUS, which had previously declined to vacate the stay, reasoning that the moratorium was at the time, scheduled to expire in “only a few weeks” pointed out that:

“It would be one thing if Congress had specifically authorized the action that the CDC has taken. But that has not happened. Instead, the CDC has imposed a nationwide moratorium on evictions in reliance on a decades-old statute that authorizes it to implement measures like fumigation and pest extermination. It strains credulity to believe that this statute grants the CDC the sweeping authority that it asserts.”

In its decision, SCOTUS agreed with the District Court’s conclusion that its stay was no longer justified and that the plaintiffs, in their challenge of the CDC’s authority to issue the moratorium, “not only have a substantial likelihood of success on the merits—it is difficult to imagine them losing.”  The Court was particularly troubled by the fact that the Government had “identified no limit in §361(a) beyond the requirement that the CDC deem a measure ‘necessary’” and that such a “claim of expansive authority under §361(a) is unprecedented” as the CDC would thus be empowered to deem all manner of tangential actions “necessary” and potentially issue sweeping mandates accordingly, without meaningful controls on its means, methods or authority to do so. In fact, as to the latest CDC moratorium, the CDC went so far as to include criminal penalties and substantial fines for violators.

The Court also noted that since its enactment in 1944, “no regulation premised on [§361(a)] has even begun to approach the size or scope of the eviction moratorium. And it is further amplified by the CDC’s decision to impose criminal penalties.” Clearly, leaving such unchecked interpretive breadth to a government agency should concern us all. The proper path to authorization of such governmental action is through Congressional legislative act(s). And as SCOTUS provides, in such instances “[w]e expect Congress to speak clearly when authorizing an agency to exercise powers of “vast ‘economic and political significance’”, concluding that “[i]f a federally imposed eviction moratorium is to continue, Congress must specifically authorize it.”

New York landlords also need to consider State legislation, including the COVID Emergency Eviction and Foreclosure Prevention Act (CEEFPA) and the COVID-19 Emergency Protect Our Small Businesses Act of 2021 (EPOSBA), which, in the absence of a special legislative session to extend these, are set to expire on August 31, 2021. New York Gov. Kathy Hochul, has expressed support for the Legislature’s efforts to “strengthen the eviction moratorium legislation” and has signaled a willingness to call a special session of the Legislature to do just that.

As we have written here before, both CEEFPA and EPOSBA include uncontestable self-certifications, and SCOTUS recently struck down Part A of CEEFPA (link to decision) due to its failure to allow landlords due process to contest a tenant’s self-serving hardship declaration. However, the Court has only ruled on CEEFPA’s Part A. Presumably, a challenge of the similar provisions of EPOSBA would result in a similar ruling of unconstitutionality. However, for now, the EPOSBA self-certified hardship declarations remain effective and uncontestable, as do the remaining provisions of both Acts.

The constantly shifting landscape continues to transform the way landlords must deal with defaulting tenants.  Each situation is unique and landlords are advised to consult with a knowledgeable attorney, capable of navigating these complex and evolving enforcement requirements and to discuss options and resources that can be utilized to assist in recovering possession of their properties and collecting past due rent.

Additional reading:

Additional Eviction Obstacles For New York Landlords

New York Extends the Moratorium on COVID-related Commercial Residential Evictions and Foreclosure Proceedings Until August 31, 2021

Help or Harm? New Legislation Aimed at Helping Tenants and Borrowers Impacted by COVID Causes Concern for Landlords and Lenders

This alert does not purport to be a substitute for advice of counsel on specific matters.

Harris Beach has offices throughout New York State, including Albany, Buffalo, Ithaca, Long Island, New York City, Rochester, Saratoga Springs, Syracuse and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.