Two federal courts recently weighed in on the legitimacy of the CDC’s September 4, 2020 Agency Orderi which imposed a nationwide moratorium on evictions. Terkel v. Centers for Disease Control & Preventionii, 6:20-CV-00564, 2021 WL 742877 (E.D. Tex. Feb. 25, 2021); Skyworks, Ltd. v. Centers for Disease Control & Preventioniii, 5:20-CV-2407, 2021 WL 911720 (N.D. Ohio Mar. 10, 2021). Although both federal courts concluded the CDC lacked authority to impose the eviction moratorium, each court reached that conclusion on different legal grounds.
In Terkel, owners of residential property (“the Property Owners”) sued the United States, the CDC, HHSiv, and three HHS officials (collectively, “the Government”) for their involvement in the issuance of the Agency Order which imposed the eviction moratorium.v The Property Owners sought an injunction preventing enforcement of the Order and a declaration that the Agency Order exceeded the federal government’s authority under Article I, section 8, clause 3 of the United States Constitution (referred to as the Commerce Clause).vi The Government argued the “nationwide eviction moratorium [was] within Article I’s grant of federal authority to regulate commerce among the States.”vii
The Texas court explained that Article I’s “…commerce power allows regulation of three categories of activity…” one of which is “…activities having a substantial relation to [or having a substantial effect on] interstate commerce.”viii To determine whether the prohibited evictions “substantial[ly] effect[ed] interstate commerce” the court evaluated four factors:
the economic character of the intrastate activity; (2) whether the regulation contains a ‘jurisdictional element’ that may ‘establish whether the enactment is in pursuance of Congress’ regulation of interstate commerce’; (3) any congressional findings regarding the effect of the regulated activity on commerce among the States; and (4) attenuation in the link between the regulated intrastate activity and commerce among the States.ix
The court’s detailed discussion of these factors is beyond the scope of this article; however, the court concluded the Agency Order regulated “property rights in buildings” which was “inherently local” and not of an economic character.x The court also explained the Agency Order had no “jurisdictional elementxi” because it did not limit its application to activity that had “an explicit connection with or effect on interstate commerce.” Combining the third and fourth factors, the court also concluded there were no congressional findings which established the existence of a sufficient nexus between preventing evictions and a “broader regulation of commerce.”xii The court elaborated the fact “homelessness may strain healthcare systems” or that “housing stability helps protect public health” did not render the prohibition on evictions “essential” to ensuring a broader federal regulation was not undercut.
Lastly, the court explained “the attenuation analysis” must differentiate between national and local “activities of commerce.”xiii The court concluded: “The order itself criminalizes the use of state legal proceedings to vindicate property rights. That scope alone treads into an area of traditional state concern: remedies protecting property rights.”xiv Based on the four factors the court concluded evictions did not have a substantial effect on interstate commerce. The Court entered a declaratory judgment in favor of the Property Owners explaining: “Although the COVID-19 pandemic persists, so does the Constitution.” The court declaredxv the Agency order unlawful finding it exceeded “the power granted to the federal government to regulate commerce.”xvi
The Ohio court reached the same conclusion for different reasons in Skyworks, declaring the Agency Order invalid because it exceeded “the agency’s statutory authority provided in Section 361 of the Public Health Service Act…”xvii Section 361 authorizes the CDC to promulgate and enforce “regulations to protect the public health against the interstate spread of communicable diseases.”xviii In carrying out and enforcing those regulations the statute specifies:
…[T]he [Secretary] may provide for such inspection, fumigation, disinfection, sanitation, pest extermination, destruction of animals or articles found to be so infected or contaminated as to be sources of dangerous infection to human beings, and other measures, as in his judgment may be necessary.
The CDC argued the final phrase above, “and other measures as…may be necessary”, provided the agency with the statutory authority to impose the eviction moratorium.xix The Ohio court disagreed based on the plain language of Section 361 concluding that “‘other measures’ must be reasonably of the type Congress contemplated in the statutory text—fumigation, disinfection, destruction of animals or things, or other measures reasonably of this type.” Second, the court explained that measures taken by the CDC are to be directed to “specific targets found to be sources of infection [e.g., infected animals]—not to amorphous disease spread…” Third, as used in the statute the word “article” means an “object or item.” It does not “extend the [CDC’s] reach to an action such as evictions.” The court concluded that based on the “natural and logical reading of the statute as a whole…” the CDC exceeded its statutory authority by imposing the moratorium. The court elaborated, citing Terkel, that the CDC’s broad reading of the statute would be “tantamount to creating a general federal police power” – a power exclusively retained by the States – implicating “serious constitutional concerns…”
Finally, the Ohio court also rejected the CDC’s argument that even if the Agency Order was not authorized by Section 361, Congress ratified the Order by extending the date on which the CDC’s first order expired.xx The court explained ratification of the CDC Order must be clear and explicit – “more than mere acquiescence to the action.” The court elaborated that “[a]ll Congress did was change the expiration date of the first order” to facilitate “the transition between presidential administrations…” The court concluded that action did not amount to a ratification “in any sense in which Congress has historically ratified prior actions.” The court declared the Agency Order invalid and entered judgment accordingly.
i Our January 2021 eBlast on Spicliff, Inc. v. Cowley, Escambia County, Florida Case No. 2020-CC-03778, addressed the origins and details of the CDC Agency Order. The moratorium imposed by the Order was extended a couple times and is scheduled to expire on March 31, 2021. Terkel, at 2.
ii For ease of reference, this case and court will be referred to herein as “Terkel” or “the Texas case” and “the Texas court.” Citation format will be as follows: Terkel, at *[insert page number].
iii For ease of reference, this case and court will be referred to herein as “Skyworks” or “the Ohio case” and “the Ohio court.” Citation format will be as follows: Skyworks, at *[insert page number].
v Terkel, at 4.
vi Terkel, at 2.
vii Terkel, at 1.
viii Terkel, at 4.
ix Terkel, at 5.
x Terkel, at 6.
xi The court provided a helpful example: “A jurisdictional element of a federal crime, for instance, might limit the crime to instances where certain materials are transported in interstate or foreign commerce.” Terkel, at 6 (citation and quotation omitted).
xii Terkel, at 7-8.
xiii Terkel, at 9.
xiv Terkel, at 9.
xv An appeal of this declaratory judgment is currently pending in the Fifth Federal Circuit under Case No. 21-40137.
xvi Terkel, at 10 (internal quotation marks omitted).
xviii Skyworks, at 9. All future quotations or citations to Skyworks are to this same cite until indicated otherwise.
xix Skyworks, at 10. All future quotations or citations to Skyworks are to this same cite until indicated otherwise.
xx Skyworks, at 12. All future quotations or citations to Skyworks are to this same cite until indicated otherwise.