On Wednesday, in Darby Development Co. v. United States, the US Court of Appeals for the Federal Circuit (which reviews takings claims against the federal government ruled that a takings lawsuit against the 2020-21 federal eviction moratorium can proceed. In so doing, it overruled a trial court decision by the Court of Claims, which I criticized here. The decision could well end up setting an important takings precedent.
In September 2020, during the Covid pandemic, the Trump Administration Centers for Disease Control (CDC) imposed a nationwide eviction moratorium, claiming that it would reduce the spread of the disease. The Biden Administration extended the moratorium multiple times. In August 2021, the eviction moratorium was invalidated by the Supreme Court because the CDC lacked proper statutory authority to institute it. But, in the meantime, numerous landlords suffered financial losses, because they could not evict tenants who weren’t paying rent.
Some of the property owners filed a lawsuit arguing that the eviction moratorium violated the Takings Clause of the Fifth Amendment, which requires the government to pay “just compensation” whenever it takes private property. As I explained at the time, their position was backed by the Supreme Court’s 2021 ruling in Cedar Point Nursery v. Hassid, which held that even temporary physical occupations of property qualify as “per se” (automatic) takings requiring compensation.