Supreme Court Refuses to Consider Eviction Moratorium Takings Case

It wasn’t a great Supreme Court term for property rights advocates. In March, the Supreme Court refused to hear Bowers v. Oneida County Industrial Development Agency, which I and many others thought would have been a great opportunity to overturn or at least limit Kelo v. City of New London. On June 30, the Court similarly denied cert in GHP Management Corp. v. Los Angeles, a Ninth Circuit case that would have been a great opportunity to address the issue of whether eviction moratoria qualify as takings – and rule that they do!

But Justice Clarence Thomas wrote a strong dissent to the denial, joined by Justice Gorsuch. Here is an excerpt:

I would grant review of the question whether a policy barring landlords from evicting tenants for the nonpayment of rent effects a physical taking under the Takings Clause.

This question is the subject of an acknowledged Circuit split. The Eighth and Federal Circuits have held that a bar on evictions for the nonpayment of rent qualifies as a physical taking, while the Ninth Circuit has held that it does not….

This Circuit split stems from confusion about how to reconcile two of our precedents. The Ninth Circuit treated as controlling this Court’s decision in Yee v. Escondido, 503 U. S. 519 (1992), which held that a statute did not effect a physical taking when it allowed mobile home owners to evict tenants only after an onerous delay….

By contrast, the Eighth and Federal Circuits looked to our more recent decision in Cedar Point Nursery v. Hassid, 594 U. S. 139 (2021). There, we held that a law requiring
agricultural employers to allow labor organizers onto their property constituted a physical taking because it “appropriate[d] for the enjoyment of third parties the owners’ right to exclude.” Id., at 149. And, the Eighth and Federal Circuits reasoned, if “forcing property owners to occasionally let union organizers on their property infringes their right to exclude,” it follows that “forcing them to house non-rent-paying tenants (by removing their ability to evict)” does too….

Because “[w]e created this confusion,” we have an obligation to fix it. Gee v. Planned Parenthood of Gulf Coast, Inc., 586 U. S. 1057, 1059 (2018) (THOMAS, J., dissenting from denial of certiorari). That obligation is particularly strong here, as there is good reason to think that the Ninth Circuit erred. Under the logic of Cedar Point, and our Takings Clause doctrine more generally, an eviction moratorium would plainly seem to interfere with a landlord’s right to exclude. See Alabama Assn. of Realtors v. Department of Health and Human Servs., 594 U. S. 758, 765 (2021) (per curiam) (“[P]reventing [landlords] from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership—the right to exclude”). Nor does Yee dictate otherwise: Although the statute there constrained landlords’ right to evict, it was not “an outright prohibition on evictions for nonpayment of rent.” Darby, 112 F. 4th, at 1035…

Finally, this issue is important and recurring. Given the sheer number of landlords and tenants, any eviction-moratorium statute stands to affect countless parties. And,
the end of the COVID–19 pandemic has not diminished the importance of this issue. Municipalities continue to enact eviction moratoria in the wake of other emergencies.

I think Thomas is right on virtually all points here.  I would add the split in the lower courts extends not only to federal circuit courts, but also to state supreme courts. In 2023, the Washington Supreme Court upheld an eviction moratorium in Gonzales v. Inslee. While the ruling was based on the state constitution, the court also held there was no taking under the federal standard for physical takings. I criticized the Washington ruling in my contribution to a December 2023 Brennan Center symposium:

In Cedar Point Nursery v. Hassid, the U.S. Supreme Court ruled in 2021 that even temporary mandated physical occupations of privately owned land qualify as “per se” (automatic) takings under the Takings Clause of the Fifth Amendment. Gonzales only addresses claims under Article I, Section 16 of the Washington Constitution. But the state supreme court ruled that eviction moratoriums are not covered by the per se rule, even assuming it applies to Section 16. The justices reasoned the eviction moratorium was merely a “regulation” of a preexisting “voluntary relationship” between tenants and owners. They ignored the obvious point that, in the absence of the “regulation,” the tenants would have no right to remain on the owners’ land. Thus, an eviction moratorium undeniably does mandate a physical occupation of property.

The court’s reasoning — which may be copied by other state and federal courts — has implications that go beyond eviction moratoriums (though those are significant in themselves). If there is no takings liability for physical occupations linked to “voluntary relationships,” then there is no taking when conservative states require businesses and employers to allow employees and customers to bring guns onto their property, or when they enact laws barring employers from excluding workers who refuse to get vaccinated for Covid-19 or other contagious diseases.

While eviction moratoriums may seem like beneficial regulations, their effect is to raise the cost of housing and reduce its availability. Evidence indicates they did little to help the poor or to curb the spread of Covid during the pandemic.

See also my analysis of last year’s Federal Circuit decision in Darby Development Co. v. United States, which went the other way. Thomas cites Darby in his discussion of the circuit split, quoted above.

I have my issues with Thomas’s jurisprudence on a number of other fronts. But he is one of the best current justices on takings issues. I hope the Court eventually listens to him on this one. Eviction moratoria are clearly takings, and jurisdictions that impose them must pay compensation.

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