In new lawsuit, more than 85,000 landlords challenge legitimacy of CDC eviction moratorium

When the Centres for Disease Control announced on September 1 that a nationwide eviction moratorium would keep renters in their homes until December 31, its legitimacy was immediately called into question, with some wondering when the first lawsuits challenging the order would be filed.

One such lawsuit, filed by the New Civil Liberties Alliance in Georgia’s Northern District on behalf of a collection of plaintiffs including the 85,000-member National Apartment Association, is already underway. According to NCLA litigation counsel Caleb Kruckenberg, the organization’s case against the CDC, that it is overstepping its boundaries as a federal agency and infringing on states’ rights, is particularly strong.

In light of the moratorium, Kruckenberg describes the CDC as an “agency that’s saying basically, ‘We have the unlimited power to void state law across the country under the premise that it’s somehow a reasonable action to take to mitigate disease.’ Just to say it out loud is to recognize how outrageous it is.”

Readers may be asking why the CDC is involving itself in housing legislation at all. It’s a fair question.

The 1944 Public Health Service Act granted the CDC the power to take actions it feels are necessary to stop the spread of infectious diseases across state lines. (The moratorium tries, without evidence, to make a case that evictions will lead to a spike in COVID-19 cases by forcing tenants to move into crowded homeless shelters.) But the World War Two-era law refers to impounding livestock and making decisions on imports. There is no mention of the CDC having authority over housing policy.

“The CDC is taking this statute and they’re saying, ‘So long as we can articulate a reason that something we do addresses disease, then we’re allowed to do it,’” Kruckenberg argues, calling the CDC interpretation of the Public Health Service Act “an outrageous abuse of agency authority.”

The conversation around the moratorium would be different, Kruckenberg says, if it had been passed in Congress and received presidential approval. But the current version, a blanket order that overrules the eviction laws in all 50 states, is a subversion of the entire democratic process.”

The moratorium also gets into questionable legal territory by preventing landlords from taking their individual eviction cases to court, which could be interpreted as a violation of their constitutionally guaranteed right to access courts as a means of rectifying legal grievances.

“The only way you can evict somebody legally and get them out of your house is through the courts,” Kruckenberg says. “The only way to do this has now been shut down, and it has been shut down by an administrative agency.”

Impact on landlords

Kruckenberg is sympathetic to the concerns of renters, but the discussion around evictions often leaves landlords’ struggles out of the equation.

“Nobody wants anyone to be evicted, but all my clients, they’re in a situation where they have houses that they’re renting to people and every one of them has had a tenant that has refused to pay any rent at all, for months on end,” he says, adding that many of his clients’ tenants’ refusal to pay rent pre-dates COVID-19 by several months.

One of the plaintiffs in the case is Columbia, South Carolina-based investor David Krausz, who signed on after a long-term problem tenant failed to abide by the terms of a consent agreement which stated that if she failed to pay a certain amount of back rent by a certain time she would be in line for removal from Krausz’s property. Two days before eviction was to take place, the tenant was told about the CDC moratorium by her attorney. She filled out the requisite form and handed it to the court (a copy wasn’t provided to Krausz), who told Krausz the matter would remain unresolved until January 2021.

“You can imagine how awful that was,” he says.

Krausz is one of many American landlords who self-manage a modest portfolio of low-margin properties. On a typical $700 condo property, for instance, he says his monthly condo fees are about $300 a month, with an additional $100 a month or more going toward taxes and maintenance.

“I might make a couple hundred dollars on the property a month – if nothing happens – and that’s with me doing all the work,” he says. “When somebody doesn’t pay rent, it’s not that I’m just not making money, I’m losing money.”

By ending the CDC order, Kruckenberg aims to both staunch the bleeding and help landlords regain their rights as property owners.

“There’s a reason they created eviction as a remedy,” he says. “At some point, a landlord cannot just keep housing this person who’s not paying rent, especially when the landlord has to pay. That’s why there’s eviction under all 50 states’ laws.”

For the NCLA and its clients, the ideal outcome of the case would be an order deeming the CDC eviction moratorium invalid. Until then, Kruckenberg hopes the court will issue a temporary order that prevents the CDC ban from going into effect while litigation proceeds.

“We’re legitimately concerned that if the CDC thinks they can do this for eviction law, what else could they do?” he says. “They’re making this decision for the entire country, for every state, and they don’t have the authority to do that.”