Case No. 20-CV-2051 (NEB/BRT)
December 31, 2020
ORDER ON MOTION TO DISMISS AND MOTION FOR PRELIMINARY INJUNCTION
In response to the COVID-19 pandemic, Minnesota Governor Tim Walz (“Governor Walz“) has issued a series of executive orders designed to slow the spread of the disease. Several of these executive orders (“EOs“) limit landlords’ ability to file eviction actions against residential tenants. Plaintiffs Heights Apartments, LLC and Walnut Trails, LLLP (collectively, the “Landlords“) filed this suit against Governor Walz and Minnesota Attorney General Keith Ellison (“Attorney General Ellison“; collectively, “the Government“), seeking to vacate and enjoin enforcement of the EOs affecting landlords’ ability to remove tenants. The matter is now before the Court on the Landlords’ motion for preliminary injunction (ECF No. 5) and the Government‘s motion to dismiss (ECF No. 15). For the reasons that follow, the Court grants the Government‘s motion to dismiss, and denies the Landlords’ motion for preliminary injunction as moot.
BACKGROUND
The Court draws the following background primarily from the Complaint and exhibits attached to the Complaint, accepting the factual allegations as true and drawing all reasonable inferences in the Landlords’ favor. Topchian v. JPMorgan Chase Bank, N.A., 760 F.3d 843, 848 (8th Cir. 2014). In doing so, the Court disregards any conclusory allegations or legal conclusions. See Glick v. W. Power Sports, Inc., 944 F.3d 714, 717 (8th Cir. 2019).
I. The COVID-19 Pandemic
In December 2019, individuals in Wuhan, China identified a novel coronavirus. (ECF No. 13-6 at 1.) In the ensuing months, the disease spread across the world. (Id.) The novel coronavirus came to be known as SARS-CoV-2, and the disease that it causes is called COVID-19. (Id.) The virus is highly transmissible and is primarily spread through exchange of respiratory droplets emitted when a person talks, breathes, coughs, or sneezes. (ECF No. 13-1 at 2; ECF No. 13-2 at 1.) The virus transmits more easily indoors, especially in crowded, enclosed spaces. (ECF No. 13-3 at 1.)
Minnesota‘s first case of COVID-19 was confirmed on March 6, 2020. Health Officials Confirm First Case of Novel Coronavirus in Minnesota, Minn. Dep‘t of Health (Mar. 6, 2020), https://www.health.state.mn.us/news/pressrel/2020/covid19030620.html. As of late-December 2020, the state has confirmed more than 413,000 COVID-19 cases, and over 5,200 Minnesotans have died from the disease. Situation Update for COVID-19, Minn. Dep‘t of Health, https://www.health.state.mn.us/diseases/coronavirus/situation.html (last visited Dec. 30, 2020).
II. Eviction Moratoria
A. Walz‘s Executive Orders
On March 13, 2020, Governor Walz declared a peacetime emergency due to COVID-19. (ECF No. 1 (“Compl.“) ¶ 8); Exec. Order No. 20-01.1 Soon after, Governor Walz issued Exeсutive Orders closing schools, (Exec. Order No. 20-02), closing
Most relevant here, Governor Walz has issued several executive orders preventing landlords from evicting residential tenants except in delineated circumstances.2 The first of these was EO 20-14, instituted on March 23, 2020.3 (ECF No. 1-1 (“EO 20-14“).) EO 20-14 suspended landlords’ ability to file eviction actions and prevented landlords from terminating residential leases, with some exceptions. (EO 20-14 ¶¶ 1–2.) Under the exceptions, landlords were permitted to terminate a lease or file an eviction action when a tenant “seriously endanger[ed] the safety of other residents” or violated a state statute that prevents tenants from allowing drugs, prostitution, unlawful use of a firearm, or stolen property on the premises. (Id. ¶ 2);
The intention of EO 20-14 and the orders that followed was to allow tenants who had been affected by the pandemic to remain stably housed, thus promoting public health and safety. (EO 20-14 at 2.) The Centers for Disease Control and Prevention (“CDC“) has also issued an eviction moratorium, which further explains the rationale behind suspending evictions during the COVID-10 pandemic.4
In early June, Governor Walz issued Executive Order 20-73, which clarified EO 20-14 and expanded the circumstances under which a landlord may terminate a lease or evict a tenant. (ECF No. 1-2 (“EO 20-73“).) Specifically, EO 20-73 permits termination of a lease or eviction not only when a tenant endangers the safety of another resident, but also when a tenant seriously endangers the safety of a non-resident on the premises. (Id. ¶¶ 1–2.)
Since initially declaring a peacetime emergency in March, Governor Walz has extended it monthly. See Exec. Orders Nos. 20-35, 20-53, 20-75, 20-78, 20-83, 20-89, 20-92, 20-97, 20-100. Currently, the peacetime emergency is in effect until January 13, 2021. Exec. Order No. 20-100 ¶ 4. Governor Walz has not rescinded EO 20-79, so it remains in effect. (EO 20-79 at 3 (declaring that EO 20-79 remains in effect until the peacetime emergency is terminated or until rescinded).)
B. CDC Eviction Moratorium
Minnesota‘s eviction moratorium is not the only current restriction on a landlord‘s ability to file an eviction action. In September, the CDC issued its own eviction moratorium.
apply in jurisdictions that have a moratorium on residential evictions that offers as much or more public health protection as the CDC Moratorium). If the eviction moratorium EOs were declared invalid or rescinded before the CDC Moratorium expires, the CDC Moratorium would then apply in Minnesota. The CDC Moratorium is currently in effect until January 31, 2021.
C. Procedural History
The Landlords, both business entities, own and rent real estate. (Compl. ¶¶ 25, 35.) They own several residential rental properties in the Twin Cities metro area. (Id. ¶¶ 28–30, 32, 38.) The Landlords allege that they have troublesome tenants who they would seek to evict or whose leases they would not renew if not for the EOs at issue here. (Id. ¶¶ 30–33, 40–41.) Due to EO 20-79, the Landlords claim they are either unable to evict these tenants, or, for cases where it is unclear whether the exceptions apply, unwilling to attempt to evict the tenant for fear of facing criminal penalties if an exception does not apply. (Id. ¶¶ 31, 33, 41.)
The Landlords filed this suit in September, challenging the constitutionality of the eviction moratorium EOs under the Contracts Clause, the First Amendment, the Fifth Amendment Takings Clause, and the
The day after filing the Complaint, the Landlords filed a motion for preliminary injunction. (ECF No. 5.) Several weeks later, the Government filed a motion to dismiss. (ECF No. 15.)
ANALYSIS
The Government moves to dismiss the Complaint under
I. Rule 12(b)(1) Standard
Under
II. Rule 12(b)(6) Standard
III. Jurisdictional Issues
The Court must first address several jurisdictional issues. The Government argues that the Landlords laсk standing, Governor Walz and Attorney General Ellison are entitled to sovereign immunity, the Landlords’ ultra vires claim must be dismissed based on the Pennhurst doctrine, and the Court should abstain under either the Pullman or Colorado River abstention doctrines. (ECF No. 12 at 8–12; ECF No. 18 at 11–18; ECF No. 33 at 2–5.) Although the Government is correct that the ultra vires claim must be dismissed under Pennhurst, its other jurisdictional arguments are without merit, and the Court will not abstain or dismiss the Complaint on any of those bases.
A. Standing
The Government raised the issue of standing in response to the motion for preliminary injunction, but not in its brief in support of the motion to dismiss.6 Because standing is jurisdictional and federal courts have an independent obligation to assess it, the Court must consider whether the Landlords have standing. Int‘l Ass‘n of Fire Fighters, Local 2665 v. City of Clayton, 320 F.3d 849, 850 (8th Cir. 2003).
The jurisdiction of federal courts is limited to cases and controversies.
The Government does not contest that the Landlords suffered an injury caused by Governor Walz and Attorney General Ellisоn. Instead, it argues that the Landlords’ injury would not be redressed with a favorable ruling. The Government contends that even if the Landlords are successful here, their ability to evict tenants would still be restricted by the CDC Moratorium. (ECF No. 12 at 9.) But the CDC Moratorium offers narrower protections for tenants and provides for broader circumstances under which a landlord may evict a tenant. For instance, the CDC Moratorium
More significantly, the CDC Moratorium permits evictions when the tenant has violated аny contractual obligation other than the obligation to pay rent.
B. Sovereign Immunity
The Government argues that Governor Walz and Attorney General Ellison are entitled to sovereign immunity. (ECF No. 18 at 11–13.) Because Governor Walz and Attorney General Ellison may be proper defendants, the Court will not, at the motion to dismiss stage, conclude that they are entitled to sovereign immunity.
The
Here, drawing all reasonable inferences in favor of the Landlords, they have pled facts connecting Governor Walz and Attorney General Ellison to the EOs sufficient to trigger Ex parte Young. The Landlords have alleged that Governor Walz issued the EOs and continues to extend the peacetime emergency that keeps the EOs in effect. (Compl. ¶¶ 8, 11, 13.) Attorney General Ellison has power to enforce the EOs, and the Landlords have alleged that he has enforced them in the past. (Id. ¶¶ 19, 24.) In addition, the Landlords have alleged that Attorney General Ellison was a member of the Executive Council that approved the EOs. (Id. ¶ 14.) The Court therefore finds that Governor Walz and Attorney General Ellison are potentially proper parties and are not entitled to sovereign immunity at this stage of the proceedings.
C. Pennhurst Doctrine
Based on
Here, the Landlords’ ultra vires claim against Governor Walz is plainly a claim that seeks to enjoin a state official on the basis of state law. (Compl. ¶¶ 74–81.) The Landlords claim that Governor Walz acted
The Landlords’ sole argument against the application of Pennhurst is that Pennhurst does not apply when the state law claim is that a state official acted ultra vires—that is, without any power whatsoever. (ECF No. 28 at 5–6.) When a litigant claims that a state official lacks delegated power to do something, such a claim is not considered to be against a sovereign because an official acting outside his or her constitutional authority cannot be acting for the state, and the official is therefore not immune. Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 689–90 (1949); Pennhurst, 465 U.S. at 101 n.11. A state officer is only considered to have acted ultra vires if he or she lacks “any authority whatsoever.” Pennhurst, 465 U.S. at 101 n.11 (citing Fla. Dep‘t of State v. Treasure Salvors, Inc., 458 U.S. 670, 697 (1982)). The test to determine whether a state official has acted ultra vires is whether the state official had а “colorable basis for the exercise of authority.” Id. (quoting Treasure Salvors, 458 U.S. at 716 (White, J., concurring in the judgment in part and dissenting in part)).
Here, though styled as an ultra vires claim, Count VI cannot be construed to be a claim that Governor Walz acted without any authority whatsoever when he issued the EOs. Count VI itself recognizes that Governor Walz possesses authority to issue EOs in certain circumstances. (Compl. ¶ 75; see also ECF No. 28 at 5.) The Landlords make the more specific argument that Governor Walz lacked authority to act in a purely legislative or judicial capacity. (ECF No. 28 at 6.) In other words, the Landlords accept that Governor Walz had the authority to issue EOs generally but argue that he lacked authority to include specific aspects of the EOs at issue here. (Id. at 5–6.) The EOs are properly considered as a whole, rather than examined in part and in isolation. Governor Walz had a colorable basis on which to issue these EOs. Pennhurst, 465 U.S. at 101 n.11. Because the issuance of these EOs was not an ultra vires act, Pennhurst applies, and Governor Walz is entitled to sovereign immunity as to Count VI.
D. Abstention
In the Government‘s view, the Court should abstain from deciding either the whole case under Pullman, or only the ultra vires claim under Colorado River. (ECF No. 18 at 13–18.) Finding no unsettled question of statе law, the Court declines to abstain based on Pullman. And there is no parallel proceeding in state courts, so Colorado River does not apply either. These conclusions are consistent with federal courts’ “virtually unflagging obligation . . . to exercise the jurisdiction given them.” Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976).
1. Pullman Abstention
Under Pullman, a federal court should abstain from hearing a case when it presents an unsettled question of state law, and a state court‘s resolution of that question may “avoid or materially alter the need for a decision on federal constitutional grounds.” Doe v. McCulloch, 835 F.3d 785, 788 (8th Cir. 2016) (citation omitted). For an issue of state law to be unsettled, it must be “of an uncertain nature” and there must be a feasible limiting construction to the law. Haw. Hous. Auth. v. Midkiff, 467 U.S. 229, 237 (1984). The mere fact that state courts have not addressed a certain issue does not make an issue of state law unsettled and is not a sufficient reason for a federal court to invoke Pullman abstention. Wisconsin v. Constantineau, 400 U.S. 433, 439 (1971). And “the relevant inquiry is not whether there is a bare, though unlikely, possibility that state courts might render adjudication of the federal question unnecessary.” Midkiff, 467 U.S. at 237. Rather, resolution of the issue of state law must be “sufficiently likely” to modify the federal constitutional questions or to obviate the need to decide them. Lake Carriers’ Ass‘n v. MacMullan, 406 U.S. 498, 512 (1972).
The first question, then, is whether the Landlords’ claims raise an unsettled issue of state law. Typically, this inquiry focuses on the challenged law itself. See, e.g., id. at 510 (“The paradigm case for abstention arises when the challenged state statute is susceptible of a construction by the state courts that would avoid or modify the (federal) constitutional question.“) (internal quotations omitted). Here, neither party argues that the EOs, on their face, are unclear. Rather, the Government claims that the scope of the Minnesota governor‘s powers during a public health emergency, which depends on the Minnesota Constitution and the Minnesota Emergency Management Act, is unclear. (ECF No. 18 at 14–15; cf. ECF No. 33 at 3 (noting that resolution of the Landlords’ ultra vires claim would require the Court to determine the scope of the Minnesota Emergency Management Act as well as to delineate each branch‘s powers under the Minnesota Constitution).)
The Court sees no reason to believe that an unsettled issue of state law must stem from an ambiguity on the face of the challenged law. See, e.g., Beavers v. Ark. State Bd. of Dental Exam‘rs, 151 F.3d 838, 841 (8th Cir. 1998) (finding an unsettled issue оf state law in the scope of the agency‘s authority under its organic statute even though plaintiff challenged an agency regulation). The Government contends that the unsettled issue of state law here is whether Governor Walz had authority to issue these EOs, which the Landlords raised in their ultra vires claim. (ECF No. 18 at 14; Compl. ¶¶ 74–81.) The Court does not view this issue as unsettled. State law explicitly authorizes Governor Walz to issue EOs during an emergency.
2. Colorado River Abstention
Under Colorado River, a federal court may abstain from hearing a case when there are parallel proceedings in state court and “exceptional circumstances warrant abstention.” Fru-Con Constr. Corp. v. Controlled Air, Inc., 574 F.3d 527, 534 (8th Cir. 2009) (citing Colo. River, 424 U.S. at 817–18). In the Eighth Circuit, suits are parallel when
“substantially the same parties litigate substantially the same issues in different forums.” Lexington Ins. Co. v. Integrity Land Title Co., 721 F.3d 958, 968 (8th Cir. 2013) (citation omitted). Suits are substantially similar when “there is a substantial likelihood that the state proceeding will fully dispose of the claims presented in the federal court.” Cottrell v. Duke, 737 F.3d 1238, 1245 (8th Cir. 2013) (сitation omitted). If there is any doubt regarding whether two suits are parallel, a federal
Here, there are no ongoing state cases paralleling this suit. The Government asserts that this suit is parallel to Free Minn. Small Bus. Coal. v. Walz, No. 62-CV-20-3507 (Minn. Dist. Ct. 2020), but this argument is misplaced. (ECF No. 18 at 14.) First, the parties in that case are not “substantially the same” as the parties here. Lexington Ins., 721 F.3d at 968. The plaintiffs in Free Minnesota are a small business coalition, several state legislators, and numerous Minnesota businesses. (ECF No. 13-10 (“Goodwin Decl., Ex. 10“) at 6.) Governor Walz is the sole defendant. Heights Apartments, Walnut Trails, and Attorney General Ellison are not parties in Free Minnesota. So the parties are not substantially the same, and Free Minnesota is not parallel to this case for purposes of Colorado River.
Further, it is unlikely that resolution of the issues in Free Minnesota will fully dispose of the Landlords’ claims here. Cottrell, 737 F.3d at 1245. In Free Minnesota, plaintiffs claim that Governor Walz‘s executive orders violate the
IV. The Landlords’ Constitutional Claims
Since the Court has determined that it has jurisdiction to decide all but one of the Landlords’ claims, it needs to consider whether the Landlords have stated a claim upon which relief may be granted. First, though, the Court must determine the lens through which to view the claims; that is, which standard of constitutional analysis applies. Specifically, the question is whether the standard from Jacobson v. Massachusetts, 197 U.S. 11 (1905), which is used to determine the constitutionality of government actions in a public health crisis, applies to the Landlords’ constitutional claims.
A. Jacobson
The Jacobson standard affords a significant degree of deference to government action during a public health crisis. 197 U.S. at 11. Under Jacobson, a state law enacted during a public health crisis is not subject to constitutional challenge unless it “has no real or substantial relation” to protecting the public health or is “beyond all question[] a plain, palpable invasion” of fundamental rights. Id. at 31; In re Rutledge, 956 F.3d 1018, 1027-28 (8th Cir. 2020).
In April, approximately one month after states began to impose protective measures in response to the pandemic, the Eighth Circuit held that it was an abuse of discretion for the district court not to apply Jacobson to Arkansas‘s postponement of all non-medically necessary surgeries. Rutledge, 956 F.3d at 1028. Because the Court is bound by the Eighth Circuit‘s holding that it was an abuse of discretion for the district court not to apply Jacobson,
The Court notes, however, that although Rutledge instructs that Jacobson applies here, there are a number of factors that muddy the waters. First is timing. As noted above, Rutledge was decided relatively early in the pandemic; the directive at issue in that case was issued fewer than three weeks before the Eighth Circuit decided Rutledge, and Arkansas‘s Governor had declared a state of emergency only seven weeks prior. Rutledge, 956 F.3d at 1023; Ark. Exec. Order No. 20-03. In contrast, more than nine months have now elapsed since Governor Walz declared a peacetime emergency and issued the first eviction moratorium EO. Exec. Order Nos. 20-01, 20-14. As time goes on, the rationale for applying Jacobson—that the government has more latitude to act during a public health emergency—becomes less and less convincing.8 See Cnty. of Butler v. Wolf, No. 20-cv-677, 2020 WL 5510690, at *8-*9 (W.D. Pa. Sept. 14, 2020) (explaining how it can be problematic to continuе to afford deference to “temporary measures aimed at remedying a fleeting crisis“) (citation omitted). That so much time has passed underscores another concern here: the Minnesota Legislature has had time to craft and enact legislation on eviction standards during the pandemic, and it has not done so.
Another concern is a perceived shift in courts’ treatment of Jacobson. The Supreme Court recently considered a case challenging New York Governor Andrew Cuomo‘s Executive Order that limited attendance at religious services. Roman Cath. Diocese of Brooklyn v. Cuomo, 141 S. Ct. 63 (2020). The Supreme Court, in a per curiam opinion, eschewed Jacobson and instead applied strict scrutiny. Id. at 67. Earlier in the pandemic, the Supreme Court had been more deferential to state measures designed to protect public health. See S. Bay United Pentecostal Church v. Newsom, 140 S. Ct. 1613, 1613-14 (2020) (Roberts, J., concurring in the denial of an application for injunctive relief) (explaining that courts should not second-guess public health measures instituted by state elected officials). Roman Catholic Diocese, then, may signal an end to the viability of the Jacobson standard.
Justice Gorsuch, in a concurring opinion in Roman Catholic Diocese, explicitly criticized
Justice Gorsuch‘s concurrence expressly criticizes Chief Justice Robert‘s perceived reliance on Jacobson in the Chief Justice‘s concurrence in South Bay. Id. at 71. In response, Chief Justice Roberts distanced himself from his citation to Jacobson, claiming he only cited it for a narrow, uncontroversial proposition. Id. at 75-76 (Roberts, C.J., dissenting). Thus, in light of Roman Catholic Diocese, the Court harbors doubts about how much of the Jacobson standard is left to apply today.
Another federal district court, when considering whether to apply Jacobson, noted that “[i]n the eleven decades since Jacobson, the Supreme Court refined its approach for the review of state action that burdens constitutional rights.” Bayley‘s Campground Inc. v. Mills, 463 F. Supp. 3d 22, 31 (D. Me. 2020). Based, in part, on the establishment of traditional tiers of constitutional scrutiny, the court refused to apply the Jacobson standard. Id. at 32. Scholars, too, have criticized the Jacobson standard. See Lindsay F. Wiley & Stephen I. Vladeck, Coronavirus, Civil Liberties, and the Courts: The Case Against “Suspending” Judicial Review, 133 Harv. L. Rev. F. 179 (2020) (arguing against the application of more deferential standards, such as Jacobson, during emergencies).
So, in sum, the Court will apply Jacobson, but it does so bearing in mind the many arguments against doing so. And ultimately, whether the Court аpplies Jacobson is not outcome-determinative; the Court finds that the Landlords’ claims fail as a matter of law under either Jacobson or the ordinary analysis that would apply absent a pandemic. For the sake of completeness, the Court will analyze each of the Landlords’ claims under both Jacobson and ordinary constitutional analysis.
B. Contracts Clause Claim
The Landlords assert that the eviction moratorium EOs violate the Contracts Clause. (Compl. ¶¶ 44-50.) By issuing the EOs, the Landlords argue, Governor Walz has impaired their ability to enforce their contracts with tenants. (Id.) This claim fails both under Jacobson and ordinary Contracts Clause analysis.
1. Contracts Clause Analysis
The Landlords’ Contract Clause claim must be dismissed. The first question for a Contracts Clause claim is whether the state law has substantially impaired a contractual relationship. Sveen v. Melin, 138 S. Ct. 1815, 1821-22 (2018). To assess whether an impairment is substantial, the Court considers “the extent to which the law undermines the contractual bargain, interferes with a party‘s reasonable expectations, and prevents the party from safeguarding or reinstating his rights.” Id. at 1822. The EOs here do not substantially impair the Landlords’ contracts. That is not to say that the Landlords have suffered no impairment of their contractual rights.9 By being unable to terminate tenants’
But the fundamental nature of a lease of a residential unit is that the landlord provides the tenant a place to live; the tenant, in turn, pays the landlord rent. The landlord‘s end of the contractual bargain is receiving rent payments. Nothing in the EOs interferes with that right, and each of the eviction moratoria clearly states that it does not affect a tenant‘s obligation to pay rent. (E.g., EO 20-79 ¶ 2.) And although, under the EOs, a landlord cannot enforce its contractual right to rent through an eviction proceeding, it can still sue tenants for rent owed.
Even if the EOs did substantially impair the Landlords’ contractual rights, their claim would also fail the second prong of Contracts Clause analysis, because the EOs reasonably and appropriately advance “a significant and legitimate public purpose.” Sveen, 138 S. Ct. at 1822 (citation omitted). This prong ensures that the government is exercising its police power to address a social or economic problem, rather than benefitting a special interest. Energy Reserves Grp., Inc. v. Kan. Power & Light Co., 459 U.S. 400, 412 (1983). As the Landlоrds acknowledge, the EOs advance an important and legitimate state interest—preventing the spread of COVID-19. (ECF No. 28 at 1.) The closer question is whether the EOs appropriately and reasonably advance that interest, and they do. Although the earlier eviction moratorium EOs only permitted eviction in narrow circumstances, as Minnesota eased other restrictions, Governor Walz broadened the circumstances under which landlords may evict tenants. (EO 20-79 ¶ 2.) EO 20-79 reasonably balances protection of public health (by keeping people in their homes and preventing the spread of COVID-19) with a landlord‘s legitimate need, in some circumstances, to evict a tenant. To completely prohibit evictions would not reasonably advance the state‘s interest in protecting public health. But EO 20-79 is a far cry from a total prohibition on evictions; landlords are permitted to evict tenants in instances where tenants pose the greatest risk, such as to other residents or by engaging in dangerous criminal activity. (Id.)
The Landlords point to the CDC Moratorium to highlight how the EOs аre not drawn reasonably and appropriately to promote public health. (ECF No. 28 at 22.) In their view, the CDC Moratorium, compared to the EOs, more appropriately balances the interests of landlords and tenants.
2. Jacobson Analysis
Under Jacobson, the first question is whether the EOs have a “real or substantial relation” to the pandemic. Rutledge, 956 F.3d at 1028. Here, the eviction moratorium EOs do have a real and substantial relationship to the dangers posed by COVID-19. As EO 20-79 notes, the protections offered by the previous eviction moratorium EOs were “crucial” to protecting the public health. (EO 20-79 at 1.) As research shows, limiting evictions contributes to a decrease in COVID-19 infections and deaths. (ECF No. 35.)
The second question is whether the eviction moratorium EOs are “beyond all question, a plain, palpable invasion” of the Landlords’ Contract Clause rights. Rutledge, 956 F.3d at 1028-29. Because the Court concludes that the Landlords’ Contracts Clause claim fails under the traditional analysis, the Court also finds that they do not plainly or palpably infringe on the Landlords’ Contracts Clause rights. As such, under Jacobson, the EOs do not violate the Contracts Clause.
C. First Amendment Petition Clause Claim
The Landlords’ next claim is that the EOs violate the
1. Petition Clause Analysis
The exact provenance of the constitutional right of access to the courts is unclear. Christopher v. Harbury, 536 U.S. 403, 415 n.12 (2002) (noting that the right of access to courts has been founded in
Because the EOs foreclose the Landlords’ ability to obtain only one kind of relief and only does so temporarily, the EOs do not violate the Petition Clause. The courthouse doors remain open to the Landlords. First, the EOs do not prohibit the Landlords from bringing a breach of contract claim and obtaining a money judgment in cases where tenants are not paying rent. Second, the Landlords’ ability to file an eviction action is not totally foreclosed—EO 20-79 has several exceptions where a landlord may evict a tenant. Also, to the extent that the EOs do prevent the Landlords from bringing an eviction action, that delay is, at this point, best characterized as a constitutionally-permissible delay in the Landlords’ ability to evict, not a constitutionally-impermissible “total deprivation.”11 Sosna, 419 U.S. at 410.
This conclusion is in step with other courts that have analyzed this exact issue. See Elmsford, 469 F. Supp. 3d at 173-75 (concluding that New York‘s eviction moratorium did not violate the Petition Clause because the moratorium was a mere delay, and landlords had other avenues of redress available); Baptiste, 2020 WL 5751572, at *25-*26 (applying Due Process analysis to plaintiffs’ Petition Clause claim and finding that the eviction moratorium satisfied rational basis review); Brown v. Azar, 2020 WL 6364310, at *14-*17 (upholding the CDC Moratоrium because plaintiffs could bring a breach of contract claim and because the moratorium was a mere delay). Because the Landlords still have the ability to evict tenants in some cases and to bring breach of contract claims, and because the Landlords’ ability to file eviction actions generally is merely delayed, the Landlords’ Petition Clause claim fails.
2. Jacobson Analysis
As discussed above, the EOs have a real and substantial relation to the pandemic. See supra Analysis IV.B.2. Because the EOs do not infringe on the Landlords’ Petition Clause rights under the ordinary analysis, they similarly do not plainly and palpably infringe on the Landlords’ rights.
D. Takings Clause Claim
The Landlords argue that the EOs violate the Takings Clause because the EOs constitute a taking for which compensation has not been paid. (Compl. ¶¶ 57-63.) Because the EOs are neither a physical nor a regulatory taking, this claim fails under Jacobson and traditional Takings Clause analysis.
1. Takings Clause Analysis
To sustain a Takings Clause claim, the plaintiff must first demonstrate that they have a property interest that the Takings Clause protects. Hawkeye Commodity Promotions, Inc. v. Vilsack, 486 F.3d 430, 439 (8th Cir. 2007). Here, the Landlords have alleged they have property
The next question is whether the Landlords have suffered a taking. Hawkeye, 486 F.3d at 440. A taking may be a physical taking—where the government directly appropriates private property or forces a physical invasion of it—or a regulatory taking—“where a regulation affecting private property ‘goes too far.‘” Id. (citation omitted). The EOs constitute neither a physical nor a regulatory taking.
a. Physical Taking
A physical taking occurs when the government subjects a property owner to a “permanent physical occupation” of the owner‘s property. Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 434-35 (1982). “The government effects a physical taking only where it requires the landowner to submit to the physical occupation of his land.” Yee v. City of Escondido, 503 U.S. 519, 527 (1992) (emphasis in original). The EOs do not constitute a physical taking. As in Yee, where the Supreme Court held there was no taking, the Landlords voluntarily rented units in their buildings to their tenants. Id. Because the “tenants were invited by [the Landlords], not forced upon them by the government,” there has been no physical taking. Id. at 528.
The Landlords seek to distinguish this case from Yee on the basis that the Supreme Court held there was no taking based, in part, on the fact that mobile home park owners were permitted to evict tenants. (ECF No. 28 at 24.) Although the Supreme Court relied on this as evidence that the regulatory scheme at issue did nоt compel the mobile home park owners to continue renting to tenants, the factual distinction the Landlords advance is not persuasive. In Yee, the California Mobilehome Residency Law only permitted the park owner to evict a tenant in a narrow circumstance—when the park owner wanted to change the use of his or her land. 503 U.S. at 528. Even then, the park owner was required to give six or twelve months’ notice. Id. The Landlords claim that the situation here is different, since, under the EOs, they “are indefinitely prevented from evicting their tenants.” (ECF No. 28 at 24.) Not so. EO 20-79 permits a landlord to evict a tenant in a number of circumstances. (EO 20-79 ¶ 2(a)–(d).) Additionally, landlords may terminate or decline to renew leases when they wish to occupy the units themselves or have their families occupy them. (Id. ¶ 4.) The Landlords’ effort to distinguish this case from Yee fails, and the Court finds the EOs are not a physical taking.12
b. Regulatory Taking
Regulatory takings come in two types: categorical and non-categorical. A categorical regulatory taking occurs when the government regulation “denies all economically beneficial or productive use of land.” Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1015 (1992). That is not the case here—among other feasible, economically beneficial uses of their properties, the Landlords are still collecting rent from some tenants. (Compl. ¶¶ 29 (noting Heights Apartments “has had no issues” with tenants in Building A), 30 (explaining that two units in Building B have paid rent regularly since EO 20-14 went into effect); 32 (stating that three units in Building C
The other kind of regulatory taking is non-categorical. To determine whether a non-categorical regulatory taking has occurred, courts engage in an “essentially ad hoc, factual inquir[y].” Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Plan. Agency, 535 U.S. 302, 326 (2002) (citing Lucas, 505 U.S. at 1015). This inquiry is guided by Penn Central‘s framework: “three factors [] have ‘particular significance‘: (1) ‘the economic impact of the regulation on the claimant‘; (2) ‘the extent to which the regulation has interfered with distinct investment-backed expectations‘; and (3) ‘the character of the governmental action.‘” Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 224-25 (1986) (quoting Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978)).
To assess the economic impact of the regulation on the Landlords, the Court must “compare the value that has been taken from the property with the value that remains in the property” by considering “the parcel as a whole.” Keystone Bituminous Coal Ass‘n v. DeBenedictis, 480 U.S. 470, 497 (1987) (citing Penn Cent., 438 U.S. at 130-31). The degree to which a government regulation has economically impacted a plaintiff is not well-suited to resolution on a motion to dismiss, especially without an evidentiary hearing. See Naegele Outdoor Advert., Inc. v. City of Durham, 844 F.2d 172, 176-77 (4th Cir. 1988) (“Resolution of the dispute by plenary hearing rather than by summary judgment is particularly important in cases involving claims of regulatory taking.“). As such, the Court will assume, at this stage, that the EOs have sufficiently economically impacted the Landlords to meet Penn Central‘s first factor.
The next consideration is whether the EOs have interfered with the Landlords’ reasonable investment-backed expectations. Penn Cent., 438 U.S. at 124. Some courts have found that COVID-19-era eviction moratoria have not interfered with landlords’ investment-backed expectations because, in most states, the business of renting residential property is heavily-regulated, and thus landlords could have expected additional regulation. E.g., Elmsford, 469 F. Supp. 3d at 166-68; Auracle Home, 2020 WL 4558682, at *15-*16. Another сourt, however, concluded that, although landlords could expect some degree of regulation, no reasonable landlord could have expected a once-in-a-century pandemic and the ensuing restrictions on evictions. Baptiste, 2020 WL 5751572, at *22. The Court finds the latter approach more persuasive. Making all reasonable inferences in favor of the Landlords, it is fair to say that, although they understood that they were entering a regulated industry, neither Landlord could have expected regulations of the duration and on the scale of the EOs.13 As such, at this stage, the Court
But even assuming that point, the Landlords’ claim fails on the third Penn Central factor. A regulation which “arises from a public program that adjusts the benefits and burdens of economic life to promote the common good . . . does not constitute a taking requiring Government compensation.” Connolly, 475 U.S. at 225 (citations omitted). Additionally, even when a regulation circumscribes the most immediately profitable use of certain property, there is no taking. Hawkeye, 486 F.3d at 442. In other wоrds, a property owner generally “possesses a full bundle of property rights, [and] the destruction of one strand of the bundle is not a taking.” Andrus v. Allard, 444 U.S. 51, 65-66 (1979) (internal quotations omitted).
The EOs here are precisely the kind of public program benefitting the common good that is not a compensable taking. Connolly, 475 U.S. at 225. Even assuming that the EOs have affected the Landlords’ property rights, they have affected only one stick in the Landlords’ bundle of property rights—the ability to enforce their rights under the lease through lease termination or eviction. Even in light of the EOs, the Landlords’ bundles abound with other property right “sticks“: the Landlords still own their properties; they can occupy their properties; they can evict, terminate, or non-renew a tenant‘s lease in certain circumstances; the Landlords can still lease vacant units and collect rent; if tenants do not pay rent, the Landlords retain the right to sue tenants for rent owed; the Landlords can borrow against their properties, and they can sell their properties if they wish. And, although the EOs affect one of the Landlords’ property rights, this incursion on their rights is merely temporary. Considering these factors, the Landlords’ Takings Clause claim fails on the third Penn Central factor—the nature of the regulation.
The Landlords, quoting a 1960 Supreme Court case, contend that the EOs are a taking because they force some individuals to “bear public burdens” which, “in all fairness and justice, should be borne by the public as a whole.” (ECF No. 28 at 25 (citing Armstrong v. United States, 364 U.S. 40, 49 (1960).) Although this is a correct statement of the general purpose of the Takings Clause, relying on this principle to establish that the EOs constitute a taking is flawed in two ways. First, the Armstrong principle is already reflected in the three-factor Penn Central analysis. PruneYard Shopping Ctr. v. Robins, 447 U.S. 74, 82-83 (1980) (explaining that courts must look to the three-factor analysis to determine whether a restriction on private property has forced some people to bear a burden that should be borne by the public as a whole). Second, Armstrong is somewhat in tension with Connolly‘s statement that public programs that “adjust[] the benefits and burdens of economic life to promote the common good” are not takings. Connolly, 475 U.S. at 225. The Connolly Court was well aware of Armstrong—the Court cited Armstrong later in the opinion but held that Armstrong did not apply because the burdens in that case were more appropriately borne by the plaintiffs. Id. at 227. Because the EOs promote the common good and adjust the benefits and burdens of the Landlords and society at large, Connolly is more relevant here.
In sum, even though the Court assumes that the EOs economically impacted the Landlords and interfered with their investment-backed expectations, the Court finds
2. Jacobson Analysis
As discussed above, the EOs have a real and substantial relation to the pandemic. See supra Analysis IV.B.2. Since the Court concludes that the EOs do not constitute a taking under the traditional analysis, the EOs do not plainly and palpably infringe on the Landlords’ Takings Clause rights.
E. Due Process Claim
The Landlords argue that, aside from their claims discussed above, the whole of the Constitutional violations caused by the EOs is greater than the sum of their parts, and this amalgamation of constitutional violations constitutes a separate violation of the Landlords’ substantive due process rights. (Compl. ¶¶ 64-69; ECF No. 28 at 26-27.) The Landlords, despite arguing multiple discrete Constitutional violations, claim that “the EOs here cannot be reduced down to their component violations and argued as separate and discrete infringements.” (ECF No. 28 at 26.) Because substantive due process cannot be made to do the work of other parts of the Constitution, the Landlords’ substantive due process claim fails. Stop the Beach Renourishment, Inc. v. Fla. Dep’t of Env’t Prot., 560 U.S. 702, 721 (2010).
Claims of constitutional violations cannot be aggregated and re-packaged into a separate substantive due process claim. “Where a particular Amendment provides an explicit textual source of constitutional protection against a particular sort of government behavior, that Amendment, not the more generalized notion of substantive due process, must be the guide for analyzing these claims.” Stop the Beach Renourishment, 560 U.S. at 721 (internal quotations and citation omitted); see Mendoza v. U.S. Immigr. & Customs Enf’t, 849 F.3d 408, 420-21 (8th Cir. 2017) (same). The Landlords have brought colorable—though ultimately unsuccessful—claims that the EOs violate the Contracts Clause, the Petition Clause, and the Takings Clause. Since the Landlords’ claims can be analyzed under these constitutional provisions, the Landlords may not bring a separate substantive due process claim.
F. Section 1983 Claim
The Landlords bring a separate Section 1983 claim, based on same constitutional violations they separately alleged. (Comрl. ¶¶ 70-73.) But because the Landlords failed to state a claim under the Contract Clause, Petition Clause, Taking Clause, and substantive due process, their separate section 1983 claim must also be dismissed. DuBose v. Kelly, 187 F.3d 999, 1002 (8th Cir. 1999) (listing violation of a constitutional right as an essential element of a § 1983 claim).
The Landlords have failed to state a claim under the Contract Clause, Petition Clause, Takings Clause, and the Due Process Clauses. Therefore, the Court grants the Government‘s motion to dismiss and denies the Landlords’ motion for preliminary injunction as moot.
CONCLUSION
Based on the foregoing and on all the files, records, and proceedings herein, IT IS HEREBY ORDERED THAT:
- The Government‘s motion to dismiss (ECF No. 15) is GRANTED;
- The Landlords’ Complaint (ECF No. 1) is DISMISSED WITHOUT PREJUDICE; and
-
The Landlords’ motion for preliminary injunction (ECF No. 5) is DENIED AS MOOT.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: December 31, 2020
BY THE COURT:
s/Nancy E. Brasel
Nancy E. Brasel
United States District Judge