469 F.Supp.3d 148
S.D.N.Y.2020Background
- Plaintiffs are three residential landlords who challenged New York Governor Andrew Cuomo’s Executive Order 202.28 (May 7, 2020), which (a) temporarily allows tenants to apply security deposits to rent (with required replenishment) and (b) imposes a temporary moratorium on initiating evictions for nonpayment by tenants suffering COVID-19–related hardship.
- Plaintiffs brought a facial constitutional challenge seeking to enjoin EO 202.28, asserting violations of the Contracts Clause, Takings Clause, Due Process Clause, and the Petition Clause; the parties submitted cross-motions for summary judgment on purely legal questions.
- The State invoked its emergency authority under N.Y. Exec. Law § 29‑a and argued the Order is a temporary exercise of the police power to address a public‑health crisis.
- The Court treated the case as a facial challenge (no discovery) and found it lacked jurisdiction to adjudicate alleged breaches of state law by the Governor under Pennhurst.
- On the merits the Court rejected all constitutional claims, holding EO 202.28 is not a physical or regulatory taking, does not substantially impair contracts, and does not violate procedural due process or the Petition Clause; summary judgment for Defendant was granted.
Issues
| Issue | Plaintiffs' Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction over state-law claims | Cuomo exceeded Executive Law powers (acted beyond 30‑day limit) | Federal courts cannot adjudicate alleged violations of state law by state officials | Court lacks jurisdiction to resolve state‑law/NYC. constitutional claims (Pennhurst) |
| Takings Clause | Moratorium and deposit rule effectuate uncompensated use of landlords’ property (physical or regulatory taking) | Measures are temporary, preserve landlord control and remedies; not a physical occupation and not a taking under Penn Central | No taking: not a physical taking; not a categorical regulatory taking; Penn Central factors do not show compensable taking |
| Contracts Clause — security deposit rule | Order permits tenants to use deposits contrary to lease terms, impairing contracts | Security‑regulated industry, tenants own deposits, replenishment and remedies preserved; temporary and foreseeable regulation | No substantial impairment: predictable regulation in a heavily regulated field; landlords’ remedies preserved |
| Contracts Clause — eviction moratorium | Moratorium strips landlords’ implied contractual enforcement (eviction) rights | Moratorium only postpones, does not extinguish remedies; landlords may obtain judgments later or sue for breach | No substantial impairment: remedies postponed but not eliminated |
| Due Process | Deprivation of property and meaningful hearing by suspending evictions and deposit remedies | No property deprivation; only delay; opportunity to be heard remains after emergency | Due process claim fails: no distinct property right shown and no denial of meaningful hearing |
| Petition Clause / Access to Courts | EO 202.28 prevents landlords from filing eviction actions and accessing courts | Plaintiffs can sue for breach in Supreme Court and can file evictions after the moratorium; only temporary delay | No Petition‑Clause violation: remedies not foreclosed; delay alone insufficient (distinguished from ACA Intl. type rule) |
Key Cases Cited
- Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89 (1984) (federal courts may not enjoin state officials for alleged violations of state law)
- United States v. Salerno, 481 U.S. 739 (1987) (standard for facial challenges)
- Yee v. City of Escondido, 503 U.S. 519 (1992) (rent regulation not a physical taking absent government‑authorized physical occupation)
- Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005) (distinguishing regulatory takings analysis)
- Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978) (multi‑factor test for regulatory takings)
- Tahoe‑Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency, 535 U.S. 302 (2002) (categorical taking standard)
- Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211 (1986) (regulation and burden‑shifting not automatically takings)
- Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470 (1987) (limits of facial takings challenges)
- Sveen v. Melin, 138 S. Ct. 1815 (2018) (tests for substantial impairment under Contracts Clause)
- U.S. Trust Co. of N.Y. v. New Jersey, 431 U.S. 1 (1977) (state police power can justify impairment of contracts)
- Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398 (1934) (emergency powers and contract impairment)
- Buffalo Teachers Fed’n v. Tobe, 464 F.3d 362 (2d Cir. 2006) (contracts and takings principles in regulated context)
- Fed. Home Loan Mtge. Corp. v. N.Y.S. Div. of Hous. & Cmty. Renewal, 83 F.3d 45 (2d Cir. 1996) (rent regulation not a regulatory taking)