482 F.Supp.3d 337
E.D. Pa.2020Background
- Plaintiff HAPCO, a landlord association, challenged Philadelphia’s Emergency Housing Protection Act (EHPA), five temporary ordinances passed in response to COVID-19 that restrict evictions, require mediation, limit late fees/interest, and create hardship repayment plans.
- Key EHPA terms: eviction moratorium through Aug 31, 2020; eviction-diversion/mediation program through Dec 31, 2020; ban on late fees/interest (retroactive to March 1) through May 31, 2020; nine-month hardship repayment plan running into May 31, 2021.
- City relied on COVID-19 public‑health and housing‑emergency findings and overlapping state/federal foreclosure/eviction moratoria and rental‑assistance programs.
- HAPCO sought a preliminary injunction (after an earlier TRO motion was mooted by a state moratorium); Tenant groups intervened for defendants.
- District Court held a hearing and denied HAPCO’s motion for a preliminary injunction, finding HAPCO failed the gateway PI factors (likelihood of success on the merits and irreparable harm).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Contracts Clause | EHPA substantially impairs landlords’ contractual rights by postponing remedies, forcing repayment plans, banning fees, and compelling mediation. | Leases are subject to extensive regulation; EHPA is temporary, tailored to an emergency, and advances a significant public purpose (public health/housing stability). | Court: Likelihood of success low — impairment minimal/foreseeable in regulated industry and EHPA is reasonable and appropriately tailored (Blaisdell framework). |
| Due Process (substantive) | EHPA is irrational and arbitrary (extends relief retroactively, goes beyond stopping evictions, bars contractor remedies). | EHPA is rationally related to legitimate public‑health and economic objectives; provisions prevent self‑eviction and promote social distancing. | Court: Not arbitrary; HAPCO unlikely to succeed under rational‑basis review. |
| Takings Clause | EHPA effects an uncompensated taking of landlords’ property rights. | Takings claims require just‑compensation remedy; injunctive relief is not available for a takings claim. | Court: Injunctive relief barred by Knick; monetary compensation is the proper remedy, so PI denied on this ground. |
| Preemption (PA Landlord‑Tenant Act) | State Landlord‑Tenant Act preempts EHPA’s limits on interest/fees and eviction process. | Landlord‑Tenant Act governs remedies/procedure but does not preclude municipal regulation of when evictions may occur; Warren v. City of Philadelphia forecloses preemption. | Court: EHPA not preempted; it regulates the substantive right to evict, which municipalities may control. |
| Irreparable Harm (PI gateway) | Landlords will face foreclosures, credit harm, and livelihood loss that cannot be remedied by money damages. | Harm is speculative; numerous state/federal foreclosure moratoria and relief programs mitigate foreclosure risk. | Court: HAPCO failed to show likely irreparable harm to its membership — proof was speculative and insufficient to support a mass PI. |
Key Cases Cited
- Home Building & Loan Assn. v. Blaisdell, 290 U.S. 398 (1934) (upheld temporary mortgage‑relief statute as permissible emergency impairment of contracts).
- Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978) (Contracts Clause analysis; significant impairment inquiry).
- U.S. Trust Co. v. New Jersey, 431 U.S. 1 (1977) (Contracts Clause; reasonableness/deference to legislative emergency judgments).
- Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 U.S. 400 (1983) (two‑part Contracts Clause test: substantial impairment then reasonable means to legitimate public purpose).
- Knick v. Township of Scott, Pennsylvania, 139 S. Ct. 2162 (2019) (Takings Clause remedy is compensation; injunctive relief is not the proper remedy).
- Warren v. City of Philadelphia, 115 A.2d 218 (Pa. 1955) (municipal power to regulate rents and evictions not preempted by state Landlord‑Tenant Act).
- Reilly v. City of Harrisburg, 858 F.3d 173 (3d Cir. 2017) (preliminary injunction gateway factors and standard).