30 F.4th 720
8th Cir.2022Background:
- In March–July 2020 Minnesota Gov. Tim Walz issued executive orders (EO 20-14, EO 20-73, EO 20-79) enacting an indefinite statewide residential eviction moratorium to address COVID-19 harms; orders did not relieve rent obligations but prohibited notices of termination, nonrenewal, and most evictions and retained criminal sanctions for willful violations.
- Heights Apartments purchased three rental properties just before/after the first EO and alleges the EOs prevented enforcement of lease terms (including nonpayment, nuisance, and unauthorized business use) and deprived it of the right to exclude tenants and to collect rents.
- Heights sued Walz and others under 42 U.S.C. § 1983 asserting Contract Clause, First Amendment Petition Clause, Takings Clause, and Due Process claims; the district court dismissed and denied a preliminary injunction as moot.
- Minnesota later replaced the EOs with statutory eviction protections (Eviction Law, June 2021); the Eighth Circuit dismissed injunctive claims as moot but retained damages claims and reviewed the dismissal de novo.
- The Eighth Circuit held Heights plausibly pleaded Contract Clause and Fifth Amendment Takings Clause claims and reversed as to those claims; it affirmed dismissal of Heights’ Petition Clause and substantive due process claims and remanded for further proceedings.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Contract Clause: whether EOs substantially impaired contracts | EOs indefinitely barred landlords from excluding breaching tenants and enforcing leases, substantially impairing contract rights | EOs were valid emergency public-health measures reasonably tailored to curb COVID-19 spread | Plausibly pleaded substantial impairment and lack of reasonable tailoring; Contract Clause claim survives dismissal |
| Takings Clause — Per se physical taking | EOs compelled landlords to tolerate physical occupation by tenants without compensation, denying right to exclude | EOs merely regulated eviction timing (like rent controls), not a physical appropriation | Under Cedar Point, plausible per se physical-taking claim survives dismissal |
| Takings Clause — Regulatory taking (Penn Central) | EOs deprived Heights of economic use and investment-backed expectations (lost rent, management control) | No pleaded diminution in property value or lost-income calculation; regulation is public- welfare measure | Penn Central factors plausibly pleaded (economic impact, disrupted expectations, character analyzed); regulatory takings claim survives dismissal as alternative |
| First Amendment Petition Clause & Substantive Due Process | EOs blocked access to courts to adjudicate eviction claims; EOs deprived rights implicit in ordered liberty | Remedies (money judgments for rent) and other protections suffice; substantive due process is not the right vehicle | Petition Clause backward-looking claim fails (no unique remedy pleaded); substantive due process claim dismissed |
Key Cases Cited
- Cedar Point Nursery v. Hassid, 141 S. Ct. 2063 (2021) (regulation granting third-party access can be a per se physical taking)
- Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978) (flexible multi-factor test for regulatory takings)
- Jacobson v. Massachusetts, 197 U.S. 11 (1905) (emergency-deference principle in public-health regulation)
- Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398 (1934) (upholding temporary emergency impairment of remedies under limited conditions)
- Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) (takings analysis: government may not sever a fundamental stick from the property bundle without compensation)
- Sveen v. Melin, 138 S. Ct. 1815 (2018) (Contract Clause substantial-impairment framework)
- Alabama Ass'n of Realtors v. HHS, 141 S. Ct. 2485 (2021) (Supreme Court observations on eviction moratoria and the right to exclude)
- Murr v. Wisconsin, 137 S. Ct. 1933 (2017) (treat parcel as a whole in takings valuation)