Case Information
*0 FILED IN THE U.S. DISTRICT COURT EASTERN DISTRICT OF WASHINGTON SEAN F. M C FILED IN THE U.S. DISTRICT COURT EASTERN DISTRICT OF WASHINGTON SEAN F. M C Sep 21, 2021 Sep 21, 2021 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON ENRIQUE JEVONS, as managing member
of Jevons Properties LLC; JEVONS No. 1:20-CV-3182-SAB
PROPERTIES LLC; FREYA K.
BURGSTALLER, as trustee of the Freya ORDER GRANTING
K. Burgstaller Revocable Trust; JAY DEFENDANTS’ MOTION FOR
GLENN; and KENDRA GLENN, SUMMARY JUDGMENT AND
Plaintiffs, DENYING PLAINTIFFS’ v. MOTION FOR SUMMARY JAY INSLEE, in his official capacity as JUDGMENT
the Governor of the State of Washington;
and ROBERT FERGUSON, in his official
capacity of the Attorney General of the
State of Washington,
Defendants.
Before the Court are the parties’ cross-Motions for Summary Judgment. ECF Nos. 22, 30. The Court heard oral argument on the motions on August 24,
2021 by videoconference. Richard Stephens appeared by video on behalf of
Plaintiffs Enrique Jevons; Jevons Properties, LLC; Freya K. Burgstaller; Jay
Glenn; and Kendra Glenn. Cristina Sepe and Brian Rowe appeared by video on behalf of Defendants Washington State Governor Jay Inslee and Washington State
Attorney General Robert Ferguson.
This action concerns several constitutional challenges to Washington’s eviction moratorium enacted in response to the COVID-19 pandemic. To mitigate
the spread of COVID-19 and prevent exacerbation of homelessness in the state,
Washington State Governor Jay Inslee issued Proclamation 20-19 on March 18,
2020. The Proclamation and subsequent revisions established a moratorium on
evictions, among other protective health and safety measures. That eviction
moratorium persists—although under new conditions for when landlords and
property managers may pursue evictions and enforcement of rental debt—through
the Governor’s “Bridge Proclamation.”
After reviewing the parties’ briefing, oral argument, and the applicable caselaw, the Court denied Plaintiffs’ Motion for Summary Judgment and granted
Defendants’ Cross-Motion for Summary Judgment at the hearing. Upon reaching
the merits of Plaintiffs’ arguments, the Court held that Washington’s eviction
moratorium does not violate the Takings Clause, Contracts Clause, or Due Process
Clause of the United States Constitution. This Order memorializes the Court’s
ruling.
I. Facts [1] A. The COVID-19 Outbreak and Washington’s Eviction Moratorium On February 29, 2020, Washington State Governor Jay Inslee issued Proclamation 20-05, declaring a state of emergency in Washington from the
outbreak of novel coronavirus SARS-CoV-2. The SARS-CoV-2 virus causes
coronavirus disease 2019 (“COVID-19”), a highly contagious and potentially fatal
respiratory tract infection. The virus spreads primarily through close interactions
via respiratory droplets, and there is a lag of several days before the onset of
symptoms. Seniors and persons with preexisting medical conditions are most
vulnerable to complications and death from COVID-19, and statistics indicate that
people of color disproportionately contract and experience severe COVID-19
health outcomes. Without a vaccine or highly effective treatment for COVID-19 at
the time of the outbreak, reducing person-to-person contact through community
mitigation measures was the most effective way of combatting transmission and
ensuring Washington’s healthcare system was not overwhelmed. Accordingly,
Governor Inslee ordered Washingtonians to stay home except for participation in
essential activities and businesses.
The Governor’s Office also recognized that the COVID-19 pandemic would significantly reduce economic output and income, making many tenants unable to
afford rent from the outset of the pandemic. Prior to the outbreak, the state was
facing a homelessness and housing instability crisis. Between 2013 and 2017, over
130,000 adults in Washington faced an eviction, and by 2018, homelessness in the
state reached Great Recession levels. Without countermeasures, the Governor’s
Office anticipated that the COVID-19 pandemic’s economic dislocations would
result in mass evictions, exacerbating housing instability and homelessness in the
state. A rise in evictions, and the lifting of the eviction moratoria generally, are
associated with an increase in COVID-19 infections and deaths. Projections
performed by the University of Washington Institute for Health Metrics and
Evaluation indicated that mass evictions could have resulted in between 18,235 to
59,008 more eviction-attributable COVID-19 cases, 1,172 to 5,623 more
hospitalizations, and 191 to 621 more deaths in the state. Even under lockdown
scenarios, containment of COVID-19 was slower and less effective at reducing the
size of the pandemic when evictions were allowed to continue.
The Washington State Department of Health (“DOH”) was particularly concerned with outbreaks of COVID-19 among persons experiencing housing
insecurity and homelessness. As of April 25, 2021, the DOH identified 202
COVID-19 outbreaks in homeless services or shelters. People experiencing
homelessness are typically at increased risk of acquiring COVID-19 due to
crowded living situations. Housing insecure families may find themselves in
shared living conditions, which have been found to increase contact with people
and make compliance with public health guidance difficult. People experiencing
homelessness are also at an increased risk for severe COVID-19, due to a higher
rate of underlying medical conditions and co-morbidities.
For the foregoing reasons, Governor Inslee signed Proclamation 20-19 on March 18, 2020, establishing a temporary moratorium on evictions in Washington.
The Governor issued subsequent proclamations on April 16, 2020 (Proclamation
20-19.1), June 2, 2020 (Proclamation 20-19.2), July 24, 2020 (Proclamation 20-
19.3), October 14, 2020 (Proclamation 20.19-4), December 31, 2020 (Proclamation
20-19.5), and March 18, 2021 (Proclamation 20-19.6), refining the moratorium and
other health and safety measures with each revision. While broadly prohibiting the
commencement of eviction proceedings, the proclamations did not forgive any
debt of unpaid rent and stressed that tenants “who are not materially affected by
COVID-19 should and must continue to pay rent.” Proc. 20-19.6, ¶ 7. The
Governor’s public messaging has also expressly stated that tenants should pay rent
if able and should communicate with landlords. Beginning with Proclamation 20-
19.1, the moratoria also prohibited attempts to collect any such unpaid rent through
withholding of the tenant’s security deposit. E.g. , Proc. 20-19.1, ¶ 26. Plaintiffs in
this action primarily challenged the last rendition of the moratorium, Proclamation
20-19.6. Proclamation 20-19.6 ended by its own terms on June 30, 2021, and by
operation of subsequent legislation, which is discussed in the following section. Id.
at ¶ 26. The eviction moratorium and attendant provisions are still in effect through
a Bridge Proclamation, however, which is effective until September 30, 2021. Following input from property owners, beginning with Proclamation 29- 19.1, the Governor’s Office permitted landlords to treat unpaid rent as an
enforceable debt during the state of emergency, provided that the tenant was
offered, but refused, a reasonable payment plan based on the financial, health, or
other circumstances of the tenant. The exception expressly placed the burden of
proof to enforce rental debt on landlords and property managers. This decision was
made because, in many cases, tenants in genuine economic distress due to the
pandemic were unable to provide adequate proof of their distress. The Governor’s
Office reasoned that many tenants have informal employment or non-traditional
sources of income and that, for these tenants, proving distress is not as simple as
submitting a copy of a termination letter from an employer. A tenant who does not
lose their job could be facing pandemic-related economic or health distress
anyway, such as the burden of caring for family members who lost their jobs or
being unable to provide for themselves. The revised moratorium thus placed the
burden of proof on landlords and property managers based on the state’s belief that
not all tenants in need of protection were able to submit a declaration of hardship.
Overall, during the COVID-19 public health crisis, over 1.6 million Washingtonians have filed unemployment claims, and the state’s unemployment
rate has exceeded its Great Recession peak. Through the first four months of 2021,
over 265,000 new unemployment claims were filed, demonstrating that the job
crisis persisted over a year after COVID-19 emerged. Recent census survey data
reported that 10.7% of renters in Washington (160,342 people) were behind on
their rent, and 17.8% of renters (265,342 people) in Washington reported having
little or no confidence in their ability to pay rent. An analysis by the Aspen
Institute found that 649,000 to 789,000 people in Washington—up to 10.3% of the
state’s entire population—would be at risk of eviction without the state’s eviction
moratorium. During the pandemic, at least 18,000 more Washingtonians have
relied on cash assistance and 160,000 more on food assistance. The Court also notes that the Eastern District of Washington, which encompasses most of the
state’s landmass, faces unique and ongoing challenges from the COVID-19
pandemic. Vaccinations in eastern Washington have lagged behind the rest of the
state for numerous reasons, including misinformation and lack of accessibility. [2]
B. Senate Bill 5160 and the Housing Stability “Bridge” Proclamation In April 2021, Senate Bill 5160 (“SB 5160”) was adopted by the Washington Legislature and signed into law by Governor Inslee. Engrossed
Second Substitute S.B. 5160, 67th Leg., Reg. Sess. (Wash. 2021), enacted as 2021
Wash. Sess. Laws, ch. 115. The legislation provides tenants certain protections
during and after the public health emergency. Sections 7 and 8 of SB 5160
established an eviction resolution pilot program for nonpayment of rent and a right
to legal representation in eviction cases, respectively. Section 7 also authorized
landlord access to certain rental assistance programs. While SB 5160 became
effective on April 22, 2021, localities are still working to implement the rental
assistance and eviction resolution pilot programs in their jurisdictions. In Yakima
County, where Plaintiffs are located, both programs are fully operational.
Due to the delay in implementation, Governor Inslee issued a housing stability “bridge” proclamation on June 29, 2021, which was intended to “bridge
the operational gap between the eviction moratorium enacted by prior
proclamations and the protections and programs subsequently enacted by the
Legislature.” Proc. 21-09, ¶ 23. With respect to COVID-19-related rent that
accrued from February 29, 2020, the Bridge Proclamation continues to prohibit
eviction proceedings based in part on unpaid rent if the landlord has “no attempt”
to establish a “reasonable repayment plan” with a tenant, as defined by SB 5160, or
the landlord and tenant cannot agree on a plan and no local eviction resolution pilot
program exists per SB 5160. Id. at ¶ 31. Further, before a landlord may pursue
eviction proceedings, a tenant must be provided with, and must reject or fail to
respond within 14 days of receipt of, a notice of an opportunity to participate in the
rental assistance program and eviction resolution pilot programs established by
SB 5160. The programs must be operational at the time the notice is sent. Id. ; ¶ 25.
C. Plaintiffs in This Action Plaintiffs in this action are landlords and property managers in Yakima, Washington. Plaintiff Enrique Jevons is the managing member of Jevons
Properties, LLC, an entity that owns and rents several hundred residential
properties and also manages rental units for other real property owners. At the time
of Plaintiffs’ filing, Jevons Properties, LLC had 171 tenants who were not current
with their rent. The total amount of rent owed and unpaid to the entity, as of April
2021, was $266,509.98.
Plaintiff Freya K. Burgstaller is the trustee of the Freya K. Burgstaller Revocable Trust. The Trust owns twelve residential properties in Yakima. In
March 2020, Ms. Burgstaller attempted to evict a tenant who had stopped paying
rent and created enough noise in her unit that a neighboring tenant complained.
During the eviction process, the eviction moratorium came into effect and the
proceedings were halted. Since then, Ms. Burgstaller has been unable to pursue
eviction and the tenant has remained on the property, despite noise complaints.
Plaintiffs Jay and Kendra Glenn are owners of forty-six residential rental properties in Yakima. Most of the Glenns’s rental units are lower-cost units, which
cost approximately $650 and $750 per month. The average market rate for a one-
bedroom unit in Yakima for fiscal year 2020 was $769. The total amount due to
the Glenns from nonpaying tenants, at the time of filing, was $99,728.
The demand for rental housing in Yakima is high, in part from a shortage of rental properties. Throughout the moratorium, Plaintiffs have remained subject to
state and local property taxes, in addition to paying utilities, mortgages, and
maintaining and repairing their rental properties. In the personal experience of
several Plaintiffs, tenants are hesitant to provide financial information or details
regarding their health to their landlords, making it difficult to establish reasonable
payment plans for individual tenants. Plaintiffs have not availed themselves of the
SB 5160 programs now operational in Yakima County.
II. Procedural History Plaintiffs filed the above-captioned lawsuit against Defendants on October 29, 2020, ECF No. 1, and a subsequent Amended Complaint on May 3, 2021,
alleging that Washington’s eviction moratorium violated provisions of the
Washington State Constitution and United States Constitution, ECF No 27. They
claimed the moratorium offends the Contracts Clause of the U.S. Constitution;
Takings Clause of the Fifth Amendment to the U.S. Constitution; Takings Clause
of the Washington State Constitution; and Due Process Clause of the Fourteenth
Amendment to the U.S. Constitution. Id. Defendants filed an Answer to the
Amended Complaint denying all claims on May 11, 2021. ECF No. 29.
Plaintiffs filed their Motion for Summary Judgment on April 30, 2021. ECF No. 22. Defendants filed their Cross-Motion for Summary Judgment on May 21,
2021. ECF No. 30. The parties also submitted supplemental briefing on the impact
of
Cedar Park Nursery v. Hassid
, ___ U.S. ___,
48, 52, 55, 60. The Court heard oral argument on the motions by videoconference
on August 24, 2021.
//
III. Legal Standard
Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). There is no genuine issue for trial unless
there is sufficient evidence favoring the non-moving party for a jury to return a
verdict in that party’s favor.
Anderson v. Liberty Lobby, Inc
.,
(1986). The moving party has the initial burden of showing the absence of a
genuine issue of fact for trial.
Celotex Corp. v. Catrett
,
If the moving party meets its initial burden, the non-moving party must go beyond
the pleadings and “set forth specific facts showing that there is a genuine issue for
trial.”
Anderson
,
In addition to showing there are no questions of material fact, the moving party must also show it is entitled to judgment as a matter of law. Smith v. Univ. of
Wash. Law Sch.
,
to judgment as a matter of law when the non-moving party fails to make a
sufficient showing on an essential element of a claim on which the non-moving
party has the burden of proof.
Celotex Corp.
,
party cannot rely on conclusory allegations alone to create an issue of material fact.
Hansen v. United States
,
When considering a motion for summary judgment, a court may neither
weigh the evidence nor assess credibility; instead, “the evidence of the non-movant
is to be believed, and all justifiable inferences are to be drawn in his favor.”
Anderson
,
summary judgment, ‘[e]ach motion must be considered on its own merits.’” Fair
Hous. Council of Riverside Cty., Inc. v. Riverside Two
,
Cir. 2001). Accordingly, it is the district court’s duty to “review each cross-motion
separately . . . and review the evidence submitted in support of each cross-motion.”
Id.
IV. Discussion
The Court finds, and the parties appear to agree, that no material disputes of fact preclude summary judgment in this matter. The Court thus turns to the merits
of the parties’ arguments.
A. Jurisdiction
1. Whether Plaintiffs’ Claims are Moot Defendants argue that the Court lacks jurisdiction to consider Plaintiffs’ claims in this action because they are mooted by cessation of Proclamation 20-
19.6, which formally ended on June 30, 2021. Defendants also formerly contended
that Plaintiffs lacked Article III standing because their purported injuries were not
traceable to the Washington eviction moratorium, as opposed to the federal
eviction moratorium.
In contrast, Plaintiffs contend that their claims are not moot because the state eviction moratorium continues—albeit under different conditions—through the
Governor’s Bridge Proclamation. The heart of their argument is that, because “the
inability to treat rent as an enforceable debt for the time period of the [moratorium]
continues,” so does their injury and the controversy in this action. ECF No. 37 at
11. With respect to Defendants’ standing claim, Plaintiffs previously argued that
their injury was directly traceable to Washington’s eviction moratorium because
the state moratorium was more restrictive than its federal counterpart.
a. Legal Standard A case becomes moot “‘when the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome.’” Already, LLC v. Nike,
Inc.
,
A party asserting mootness “bears the heavy burden of establishing that there
remains no effective relief a court can provide.” Bayer v. Neiman Marcus Grp.,
Inc.
,
relief sought at the time the case was filed is still available,’ but ‘whether there can
be any effective relief.’”
Id.
(quoting
McCormack v. Herzog
,
(9th Cir. 2015)). Standing and mootness are similar doctrines in some respects:
“Both require some sort of interest in the case, and both go to whether there is a
case or controversy under Article III.” Jackson v. Calif. Dep’t of Mental Health ,
___,
the proceedings is ‘no longer a “Case” or “Controversy” for purposes of Article
III,’ and is outside the jurisdiction of the federal courts.”).
b. Discussion In this case, Plaintiffs’ claims are not moot. The Bridge Proclamation, which is operational until September 30, 2021, represents a continuation of several
provisions that Plaintiffs allege are unconstitutional. Under the Bridge
Proclamation, eviction proceedings based in part on rent that accrued from
February 29, 2020 are prohibited until the SB 5160 rental assistance and eviction
resolution pilot programs are operational and a landlord has attempted to establish
a reasonable repayment plan with a tenant. Proc. 21-09, ¶¶ 25, 42–45 The tenant
must also be given notice of the opportunity to participate in the programs prior to
eviction. Id. at ¶ 25. Further, for rent accruing on August 1, 2021 through
September 30, 2021, the Bridge Proclamation prohibits Plaintiffs from seeking
eviction unless they have presented a reasonable repayment plan to a tenant and
none of the following are applicable: a tenant (1) has made full payment of rent;
(2) has made partial payment of rent based on their individual economic
circumstances, as negotiated with the landlord; (3) has a pending application for
rental assistance; or (4) resides in a jurisdiction in which the rental assistance
program is anticipating receipt of additional resources but has not yet started their
program or the program is not yet accepting new applications for assistance. Id. at
¶ 35. The Bridge Proclamation also continues to limit permissible uses of security
deposits until landlords and tenants have the opportunity to resolve nonpayment through the SB 5160 programs, and it continues to prohibit the leveraging of fees
for late rent payment during the period of the emergency (from February 29, 2020
to September 30, 2021). Id. at ¶¶ 34, 39.
These limitations speak to the heart of Plaintiffs’ claims that the moratorium violates their property rights, contractual rights, and due process rights. Although
the Bridge Proclamation extends the state eviction moratorium under different
conditions, the transition did not moot Plaintiffs’ claims. The precise relief sought
by Plaintiffs is different at this juncture, but the Court could still fashion effective
relief with respect to the Bridge Proclamation.
See Bayer
,
the Bridge Proclamation extends several actions challenged by Plaintiffs as
unconstitutional, the Court is unable to find that Plaintiffs’ claims are moot by
cessation of Proclamation 20-19.6. Plaintiffs have demonstrated that their claims
are not moot, and the Court has jurisdiction to consider them.
In addition, since the parties filed briefs in this matter, the federal eviction moratorium ended pursuant to the U.S. Supreme Court’s decision to vacate a stay
of enforcement in Ala. Ass’n of Realtors v. Dep’t of Health and Human Servs. , 594
U.S. ____,
inoperative, it cannot be the source of Plaintiffs’ injuries in this case and
Defendants’ argument that Plaintiffs lack standing is unpersuasive. For this reason,
Plaintiffs’ purported injury is traceable to the state eviction moratorium and
Plaintiffs have standing.
2. Whether Plaintiffs’ Claims Against the Governor are Barred by the Eleventh Amendment
Defendants maintain that the doctrine of sovereign immunity acts as a jurisdictional bar to Plaintiffs’ claims against Washington State Governor Jay
Inslee. They contend that Governor Inslee does not have a “fairly direct”
connection to enforcement of the eviction moratorium. In contrast, Plaintiffs argue
that Governor Inslee’s enforcement connection is sufficiently direct to overcome sovereign immunity, in part because the Washington State Constitution expressly
provides that the governor “shall see that the laws are faithfully executed.” Wash.
Const. art. III, § 5.
a. Legal Standard The Eleventh Amendment to the U.S. Constitution acts as a jurisdictional bar to lawsuits brought by private citizens against state governments absent the
state’s consent. U.S. Const. amend. XI; Seminole Tribe of Fla. v. Florida , 517 U.S.
44, 73 (1996);
Sofamor Danek Grp., Inc. v. Brown
,
1997). In the seminal case
Ex Parte Young
,
Court permitted an action for prospective injunctive relief against state officials
who had a proven connection to enforcing the challenged under the legal “fiction”
that a suit against the individual was not a suit against the state. Idaho v. Coeur
d’Alene Tribe of Idaho
,
and Hosp. v. Halderman
,
protections of sovereign immunity to sue a state official, a plaintiff must
demonstrate that the official “[has] some connection with the enforcement of the
act[.]”
Ex Parte Young
,
enforcement connection “must be fairly direct,” and a “generalized duty to enforce
state law or general supervisory powers over the person responsible for enforcing
the challenged provision” does not suffice. Los Angeles Cnty. Bar Ass’n v. Eu , 979
F.2d 697, 704 (9th Cir. 1992).
b. Discussion In this case, sovereign immunity bars the present suit against Governor Inslee. Ninth Circuit precedent makes clear that—although a state governor may be
ultimately responsible for executing and enforcing the laws of a state—the duty of
general enforcement does not establish the “requisite enforcement connection” to
overcome sovereign immunity. Ass’n des Eleveurs de Canards et d’Oies du
Quebec v. Harris
,
because “his only connection to [the relevant statute] [was] his general duty to
enforce California law”),
cert. denied
,
Inc. v. Davis
,
against the Governor . . . as there is no showing that they have the requisite
enforcement connection”),
opinion amended on denial of reh’g
,
Cir. 2002);
Los Angeles Cnty. Bar Ass’n
,
Kamp
,
fairly direct; a generalized duty to enforce state law or general supervisory power
over the persons responsible for enforcing the challenged provision will not subject
an official to suit”); see also Nat’l Conf. of Pers. Managers, Inc. v. Brown , 690 F.
App’x 461, 463 (9th Cir. 2017). “Were the law otherwise, the exception would
always apply[ ]” and “[g]overnors who influence state executive branch policies
(which virtually all governors do) would always be subject to suit under Ex Parte
Young.
”
Tohono O’Odham Nation v. Ducey
,
2015). In short, a more direct connection to enforcement of the law is required, and
the Eleventh Amendment bars suit against Governor Inslee. Accordingly,
Governor Inslee is dismissed from this action.
Defendants do not appear to challenge whether Attorney General Ferguson is properly named in this suit, and the Court agrees sovereign immunity is not a
jurisdictional bar as to the Attorney General. Cf. Planned Parenthood of Idaho,
Inc. v. Wasden
,
General was properly named under Ex Parte Young because, unless the county
prosecutor objected, the Attorney General had power to perform every act the
county attorney could perform);
Bolbol v. Brown
,
(N.D. Cal. 2015) (holding that the California Attorney General was not entitled to
Eleventh Amendment immunity because under the state constitution the Attorney
General not only has “direct supervision over every district attorney” but also has the duty to “prosecute any violations of the law … [and] shall have all the powers
of a district attorney”).
3. Whether the Court Has Jurisdiction to Enjoin Purported Violations of the Washington Constitution The parties now agree that the Court lacks jurisdiction to enjoin purported violations of the Washington Constitution. See ECF No. 37 at 14. As a result, the
Court dismisses Plaintiffs’ Third Claim for Relief on the grounds of state sovereign
immunity and federalism, as embodied in the Eleventh Amendment.
B. First Cause of Action: Contracts Clause of Article I, § 10 of the U.S. Constitution
1. Whether the Eviction Moratorium Violates the Contracts Clause Of their substantive claims, Plaintiffs first argue that Washington’s eviction moratorium violates the Contracts Clause of Article I, § 10 of the U.S.
Constitution. Plaintiffs argue that the eviction moratorium violates the Contracts
Clause because it substantially impairs their landlord-tenant contracts. They
contend that the ability to evict is the “cornerstone” of their contractual bargain and
the moratorium eliminates all practical remedies for contractual violations. ECF
No. 22 at 23. Plaintiffs cite mostly pre- Blaisdell decisions, including Bronson v.
Kinzie
,
substantial even when remedies for contractual breaches are merely delayed. ECF
No. 22 at 24; see generally Home Building & Loan Association v. Blaisdell , 290
U.S. 398 (1934). Plaintiffs further assert that the moratorium is not a reasonable
and necessary means to address Washington’s stated interest. ECF No. 22 at 27.
Their primary contention is that, because the moratorium protects all renters and
there is no requirement that a renter attest to loss of income or health impacts from
the COVID-19 pandemic, the moratorium is not sufficiently tailored to
Defendants’ purpose. Id. at 24–25. In contrast, Defendants argue that the moratorium does not impose a substantial, unforeseeable impairment on Plaintiffs’ rental agreements. ECF No. 30
at 43–48. Specifically, Defendants claim that the eviction moratorium does not
undermine Plaintiffs’ contractual bargain or impair Plaintiffs’ reasonable
expectations, and also that Plaintiffs may safeguard or reinstate their contractual
rights. Id. Defendants respond that the means of the moratorium is appropriate
because it was intended to have broad public benefits, including protection of the
state’s economy and public health. ECF No. 30 at 50–51, 53. Defendants chiefly
cite Blaisdell in support of the contention that the moratorium fits the Supreme
Court’s standard for a reasonable and appropriate law, especially during a period of
emergency. See id. at 53.
a. Legal Standard The Contracts Clause provides that “[n]o State shall . . . pass any . . . Law impairing the Obligation of Contracts.” U.S. Const. art. I, § 10, cl. 1. Yet, the
Contracts Clause is not “the Draconian provision that its words might seem to
imply.”
Allied Structural Steel Co. v. Spannaus
,
Contracts Clause jurisprudence is based on the “watershed decision” of Home
Building & Loan Association v. Blaisdell
,
Los Angeles Cnty., Inc. v. City of Los Angeles , __ F.4th __, No. 20-56251, 2021
WL 3745777, at *5 (9th Cir. Aug. 25, 2021). In the case of Blaisdell , the U.S.
Supreme Court “upheld Minnesota’s statutory moratorium against home
foreclosures, in part, because the legislation was addressed to the ‘legitimate end’
of protecting ‘a basic interest of society.’” Keystone Bituminous Coal Ass’n v.
DeBenedictis
,
of Blaisdell and its progeny, which conceptualize a radically different idea of the
Clause than in pre- Blaisdell jurisprudence. Post- Blaisdell , “the Supreme Court has
construed [the Contracts Clause] prohibition narrowly in order to ensure that local
governments retain the flexibility to exercise their police powers effectively.”
Matsuda v. Cty. & Cnty. of Honolulu
,
Structural Steel Co.
,
of the sovereign right of the Government to protect the lives, health, morals,
comfort and general welfare of the people, and is paramount to any rights under
contracts between individuals.”) (quoting
Manigault v. Springs
,
(1905)).
To determine whether legislation violates the Contracts Clause, federal
courts deploy a “two-step test.”
Sveen v. Melin
, __ U.S. __,
22 (2018). First, “[t]he threshold issue is whether the state law has ‘operated as a
substantial impairment of a contractual relationship.’” Id. (quoting Allied
Structural Steel Co.
,
“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. Second, if the law constitutes a substantial
impairment of a contractual relationship, the court must turn to the “means and
ends of the legislation.” Id. The court should determine whether the legislation is
drawn in an “‘appropriate’ and ‘reasonable’ way to advance ‘a significant and
legitimate public purpose.’” Id. (quoting Energy Reserves Grp., Inc. v. Kansas
Power & Light Co.
,
apply a heightened level of scrutiny when the government is a contracting party.
U.S. Trust Co. of N.Y. v. New Jersey
,
government is not party to the contract being impaired, as is here, “courts properly
defer to legislative judgment as to the necessity and reasonableness of a particular
measure.”
Energy Reserves
,
Keystone Bituminous
,
//
//
b. Discussion
In this case, there is no dispute that Plaintiffs have valid landlord-tenant agreements that are subject to the Contracts Clause. Accordingly, the Court turns
to the two-step test re-articulated in Sveen .
i. Substantial Impairment The Court finds that Washington’s eviction moratorium does not substantially impair Plaintiffs’ lease agreements for three reasons. First, the
moratorium does not undermine Plaintiffs’ contractual bargain with their tenants.
The moratorium delays the ability of Plaintiffs to exercise certain statutory
remedies. Mere delay is insufficient to materially alter the lease agreements in a
manner that violates the Contracts Clause. Blaisdell is a strikingly similar case that
is directly applicable.
upheld a Depression-era mortgage moratorium law extending mortgagors’
redemption period for up to two years. Id. at 439. It reasoned that while contractual
obligations may be “impaired by a law which renders them invalid , or releases or
extinguishes them[,]” such as a “state insolvent law” that wholly “discharge[s] the
debtor from liability” for preexisting debts, the mortgage moratorium did not
impose an impairment on the plaintiffs’ contractual rights. Id. at 439 (emphasis
added). In that case, the U.S. Supreme Court also distinguished the case cited by
Plaintiffs, reasoning that the Court in Bronson did not consider states’ interests in
exercising police powers to “safeguard the vital interests of its people.” Id. at 434.
Indeed, the Blaisdell Court made clear that changing socioeconomic circumstances
may alter the boundaries of the state’s police power. Id. at 442.
In this case, the eviction moratorium does not extinguish the contractual obligations of tenants to landlords, but temporarily restrains enforcement through
eviction and debt collection during a period of “great public calamity.” Id. The
moratorium is only a “temporary restraint of enforcement . . . to protect the vital
interests of the community”—that is, protecting the public from a homelessness epidemic unseen since the Great Recession and preventing further transmission of
COVID-19. See id. at 439. The moratorium’s plain language does not extinguish or
release tenants’ obligations to pay past-due rent. The moratorium delays the
remedy of eviction for failure of a tenant to pay timely rent during the period of the
health-emergency-based restriction. It is also significant to note that Proclamation
20-19.6 expressly provided that landlords and property managers had the right to
treat unpaid rent as enforceable debt immediately if they “demonstrate[d] . . . to a
court that the resident was offered, and refused or failed to comply with” a
reasonable payment plan. Proc. 20-19.6, ¶ 35. Under the active Bridge
Proclamation, past-due rent may be treated as an enforceable debt once a
repayment plan has been offered, the SB 5160 programs are implemented, and a
tenant has been offered, and rejected or failed to respond to, an opportunity to
participate in the programs. In Yakima, the SB 5160 programs are fully operational
and Plaintiffs may treat unpaid rent or other charges as an enforceable debt that is
owing and collectible after following these procedures. In either scenario, as a
matter of law, Plaintiffs are incorrect in their assertion that the moratorium
prohibits them “from treating unpaid rent as an enforceable debt and bringing a
breach-of-contract action.” ECF No. 22 at 28.
Second, the eviction moratorium does not impair reasonable expectations of Plaintiffs in their contracts. Under this factor, courts consider “whether the industry
the complaining party has entered has been regulated in the past.” Energy Rsrvs.
Grp., Inc.
,
industry generally, is heavily regulated in Washington. The Residential Landlord-
Tenant Act, Chapter 59.18 RCW, regulates the relationship by, inter alia ,
establishing a duty to keep the premises fit for human habitation, Wash. Rev. Code
§ 59.18.060; requiring notice of rent increases, id. § 59.18.140, and termination, id.
§ 59.18.200; and regulating late fees, id. § 59.18.170, tenant screenings, id.
§ 59.18.257, and security deposits, id. § 59.18.260–.280. Significantly, Chapter 59.12 RCW (Forcible Entry and Forcible and Unlawful Detainer), and the
Residential Landlord-Tenant Act, both regulate when eviction of tenants is
permissible. Wash. Rev. Code §§ 59.12, 59.18.365–.410. In this case, the State’s
pervasive regulation in this field has placed Plaintiffs on notice that they may face
further government intervention. That is particularly true where, as here, the
eviction moratorium regulates the same industry topics (permissible use of
unlawful detainer proceedings, late fees, and security deposits) and shares the same
legislative intent to protect the rights of tenants in the rental relationship.
Consequently, this factor also indicates that the eviction moratorium does not
violate the Contracts Clause.
Third, Plaintiffs may safeguard and reinstate their contractual rights during and subsequent to the eviction moratorium. A law altering contractual remedies
without nullifying them does not “prevent[] the party from safeguarding or
reinstating [their] rights.”
Sveen
,
eviction moratorium did not extinguish Plaintiffs’ contractual rights. Put bluntly,
the moratorium delays the use of particular tools to enforce certain contractual
obligations for the time of the state of emergency. The eviction moratorium does
not eliminate tenants’ obligations to pay rent or Plaintiffs’ rights to collect past-due
rent. And contrary to Plaintiffs’ representations, Plaintiffs may treat unpaid rent as
an enforceable debt during the moratorium after following the above-noted
procedures. Because the moratorium does not nullify contractual remedies, the
eviction moratorium does not impair Plaintiffs’ ability to safeguard their
contractual rights in their rental agreements.
Due to the foregoing, the Court finds that the eviction moratorium does not substantially impair Plaintiffs’ lease agreements. Even if the Court were to find
that the moratorium operated to substantially impair Plaintiffs’ contractual rights,
Plaintiffs’ Contracts Clause claim fails because the eviction moratorium advances a significant and legitimate public purpose in an appropriate and reasonable way.
Each element is discussed in turn.
ii. Significant and Legitimate Purpose Public Each of Washington’s proffered reasons for the eviction moratorium are significant and legitimate public objectives. On its face, Proclamation 20-19.6
states that its purpose is to “reduce economic hardship” of those “unable to pay
rent as a result of the COVID-19 pandemic” and “promote public health and safety
by reducing the progression of COVID-19 in Washington State.” Proc. 20-19.6, ¶¶
13, 15. The Bridge Proclamation extends this purpose with the goal of “reduc[ing]
uncertainty” as the state implements a long-term post-COVID-19 housing recovery
strategy. Proc. 21-09, ¶ 23.
Here, the state’s purpose of preventing transmission of COVID-19 is not only significant and legitimate, but compelling. See, e.g. , Roman Catholic Diocese
of Brooklyn v. Cuomo
, __ U.S. __,
(“Stemming the spread of COVID–19 is unquestionably a compelling
interest . . . .”);
Workman v. Mingo Cnty. Bd. of Educ.
,
Cir. 2011) (“[T]he state’s wish to prevent the spread of communicable diseases
clearly constitutes a compelling interest.”). The eviction moratorium also seeks to
address the economic and social fallout from the gravest public health crisis in a
century. The Governor’s Office was particularly concerned with the impact of
COVID-19, and all its economic consequences, on housing and the homelessness
crisis. It cannot seriously be argued that these objectives do not serve the public
and that they do not constitute significant and legitimate purposes of the state.
Consequently, the Court finds that Defendants have articulated a significant and
legitimate public purpose for the eviction moratorium.
iii. Appropriate and Reasonable Means The eviction moratorium is also an appropriate and reasonable measure to address the state’s objectives. Since Washington is not a party to the contracts
under review, the Court must “defer” to the government’s “judgment as to the
necessity and reasonableness of a particular measure.” Energy Rsrvs. Grp. , 459
U.S. at 412–13. Such “latitude ‘must be especially broad” where “officials
‘undertake to act in areas fraught with medical and scientific uncertainties,” such
as responding to the COVID-19 pandemic. S. Bay United Pentecostal Church v.
Newsom
, __ U.S. __,
(quoting
Marshall v. United States
,
limits of the Contracts Clause are not exceeded, the Court should decline to engage
in second-guessing, as the “unelected federal judiciary” lacks the “background,
competence, and expertise to assess public health.” Id. (quoting Garcia v. San
Antonio Metro. Transit Auth.
,
On this point, Plaintiffs argue that the moratorium is not reasonable and appropriate because it applies “regardless of a tenant’s employment or ability to
pay.” ECF No. 22 at 18. This argument misses the forest for the trees. Regardless
of the pandemic’s impact on any specific individual’s financial or health
circumstances, one of the moratorium’s express intentions is to reduce person-to-
person contact to mitigate transmission of COVID-19. At least one study’s
projections indicated that mass evictions could have resulted in up to 59,008 more
eviction-attributable COVID-19 cases, 5,623 more hospitalizations, and 621 more
deaths in Washington. ECF No. 35-1 at 64–65. Further, the reasonableness of the
state’s public purpose of preventing homelessness during the pandemic is directly
supported by Blaisdell , where the Supreme Court upheld a similar law enacted
during an “emergency” that “threaten[ed] the loss of homes.”
Plaintiffs also maintain that the eviction moratorium places an unreasonable burden of its public benefit on landlords and property managers. But virtually
every law “regulating commercial and other human affairs . . . creates burdens for
some that directly benefit others.” Connolly v. Pension Benefit Guar. Corp. , 475
U.S. 211, 223 (1986). Simply because the moratorium “requires one person to use his or her assets for the benefit of another” does not raise the eviction moratorium
to a level of unconstitutionality under the Contracts Clause. Id. It does not serve
special interests but seeks to protect the basic interest of society in preventing mass
evictions and housing instability, id. , and preventing the further spread of COVID-
19.
For all these reasons, and in accordance with the numerous other district courts that have considered constitutional challenges to state eviction moratoria,
the Court finds that Washington’s moratorium is an appropriate and reasonable
response to the state’s significant and legitimate public purpose of preventing
spread of COVID-19 and exacerbation of the homelessness crisis. See, e.g. ,
HAPCO v. City of Philadelphia
,
that “as in Blaisdell , where temporary measures enacted in response to emergency
conditions to allow people to remain in their homes under certain conditions was
upheld in response to a Contracts Clause challenge, [plaintiff’s] Contracts Clause
challenge to the City’s temporary legislation, enacted in response the COVID-19
pandemic and designed to allow residents to remain in their homes, is unlikely to
succeed on the merits”); El Papel LLC v. Inslee , No. 2:20-CV-01323-RAJ-JRC,
adopted
, No. 2:20-CV-01323-RAJ-JRC,
2021) (“ Blaisdell supports the reasonableness of [Washington’s Moratorium].”).
The Court declines to second-guess the expertise of the state in formulating an
appropriate response to the present public health emergency, which is fraught with
medical and scientific uncertainties. Accordingly, Defendants are entitled to
judgment as a matter of law and the Court grants summary judgment in favor of
Defendants on the Contracts Clause claim.
//
//
// C. Second Cause of Action: Takings Clause of the Fifth Amendment to the U.S. Constitution Plaintiffs’ next cause of action contends that the eviction moratorium constitutes a per se physical taking of their property rights under the Fifth
Amendment to the U.S. Constitution. Plaintiffs do not request monetary damages
in this action. Instead, they request the Court grant declaratory relief that a “taking”
has occurred, so that they may begin the process to acquire “just compensation.”
Their core Takings Clause claim is that the eviction moratorium leads to a physical
invasion of private property and thereby “takes” Plaintiffs’ right to exclude. ECF
No. 22 at 6–11. They cite Cedar Point Nursery v. Hassid , ___ U.S. ___, 141 S. Ct.
2063 (2021) to support their assertion that the moratorium constitutes a physical
taking. ECF No. 48 at 2–9. Plaintiffs also argue that the eviction moratorium
amounts to a per se taking because it appropriates their property rights in their
rental contracts and security deposits. Id. at 11–12.
Defendants argue that the eviction moratorium is not a per se taking because the state has not physically invaded Plaintiffs’ properties or otherwise appropriated
their property rights. They contend that Cedar Point Nursery is factually and
legally distinguishable and the case actually reaffirms the U.S. Supreme Court’s
prior holdings that regulations restricting the use of property without a physical
invasion of land, particularly when the use is premised on the owner’s voluntary
invitation to an occupant, are not per se takings. ECF No. 56 at 2–5. Defendants
also claim that the U.S. Supreme Court’s per se takings jurisprudence does not
apply to property interests in contracts, and nonetheless, the eviction moratorium
appropriated neither Plaintiffs’ contractual rights nor security deposits. ECF No. 30
at 36–38.
//
//
// 1. Whether Declaratory Relief is Available to Plaintiffs
a. Legal Standard
The Takings Clause prohibits a state from taking private property for public use “without just compensation.” U.S. Const. amend. V. Accordingly, “[e]quitable
relief is not available to enjoin an alleged taking of private property for public
use . . . when a suit for compensation can be brought against the sovereign
subsequent to the taking.”
Ruckelshaus v. Monsanto Co.
,
(1984) (citing
Larson v. Domestic & Foreign Commerce Corp.
,
(1949)); accord Stop the Beach Renourishment, Inc. v. Fla. Dep’t of Env’t Prot. ,
reasoned in
Knick v. Township of Scott, Pa.
,
that, “[t]oday, because the federal and nearly all state governments provide just
compensation remedies to property owners who have suffered a taking, equitable
relief is generally unavailable. As long as an adequate provision for obtaining just
compensation exists, there is no basis to enjoin the government’s action effecting a
taking.” Id. at 2176–77. The Court concluded that “a government violates the
Takings Clause when it takes property without compensation, and that a property
owner may bring a Fifth Amendment claim under [42 U.S.C.] § 1983 at that time.”
Id. at 2177.
b. Discussion The Court first considers whether the declaratory relief sought is available to Plaintiffs. In this case, Plaintiffs do not seek proper relief for a Fifth Amendment
taking. Plaintiffs seek declaratory relief that a taking has occurred, not monetary
damages. As other federal district courts have found, such relief is inappropriate
because it would be the functional equivalent of an injunction against enforcement
of the moratorium.
See, e.g.
,
Baptise v. Kennealy
,
Mass. 2020);
County of Butler v. Wolf
, No. 2:20-cv-677,
(W.D. Pa. May 28, 2020);
HAPCO
,
remedy.
Apache Survival Coalition v. United States
,
Cir. 1994). Accordingly, the relief sought by Plaintiffs is foreclosed by the
Supreme Court’s decision in
Knick
,
under the Fifth Amendment is damages, not equitable relief. [3] For this reason, the
Court is unable to grant the relief sought by Plaintiffs.
2. Whether the Eviction Moratorium Constitutes a Per Se Physical Taking
a. Legal Standard
The Fifth Amendment’s Takings Clause applies to the states through the
Fourteenth Amendment.
Murr v. Wisconsin
, __ U.S. __,
(2017);
Lingle v. Chevron U.S.A. Inc.
,
stated, the Fifth Amendment provides that private property shall not “be taken for
public use, without just compensation.” U.S. Const. amend. V. Under the Takings
Clause, there are traditionally two categories of takings, (1) per se physical takings,
and (2) regulatory takings. To summarize:
Our jurisprudence involving condemnations and physical takings is as old as the Republic and, for the most part, involves the straightforward application of per se rules. Our regulatory takings jurisprudence, in contrast, is of more recent vintage and is characterized by ‘essentially ad hoc, factual inquiries,’ designed to allow ‘careful examination and weighing of all the relevant circumstances.’”
Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency
,
321 (2002) (internal citations omitted). “The first category of cases requires courts
to apply a clear rule; the second necessarily entails complex factual assessments of
the purposes and economic effects of government actions.” Yee v. Escondido , 503
U.S. 519, 523 (1992). “This longstanding distinction between acquisitions of
property for public use, on the one hand, and regulations prohibiting private uses,
on the other, makes it inappropriate to treat cases involving physical takings as
controlling precedents for the evaluation of a claim that there has been a
‘regulatory taking,’ and vice versa.” Tahoe-Sierra Pres. Council, Inc. , 535 U.S. at
322.
Under the first category of per se physical takings, “[w]hen the government physically takes possession of an interest in property for some public purpose, it
has a categorical duty to compensate the former owner, regardless of whether the
interest that is taken constitutes an entire parcel or merely a part thereof. Thus,
compensation is mandated when a leasehold is taken and the government occupies
the property for its own purposes, even though that use is temporary.” Id. The U.S.
Supreme Court acknowledged that the same was true when the government
physically appropriated part of a rooftop to provide cable TV access for apartment
tenants in
Loretto v. Teleprompter Manhattan CATV Corp.
,
and where the government used its planes in private airspace to approach a
government airport in
United States v. Causby
,
Pres. Council, Inc.
,
Under the second category of regulatory takings, which contrasts with the categorical per se takings rule, courts consider complex factual assessments of the
purposes and economic effects of governmental actions. Id. at 323 (quoting Yee ,
v. City of New York
,
moratorium as a regulatory taking and, for this reason, the Court does not
extrapolate the
Penn Central
standard here.
Accord Yee
,
In Loretto , a per se takings case, the U.S. Supreme Court considered a challenge to a New York statute requiring that landlords permit a cable television
company to install television facilities on their properties, and which prohibited demands for payment from the company in excess of an amount determined
reasonable by the state commission.
Loretto
,
brought a class action for damages, alleging that the statute constituted a taking. Id.
The question for the U.S. Supreme Court was “whether an otherwise valid
regulation so frustrates property rights that compensation must be paid.” Id. at
425–26 (citing
Penn. Central Transp. Co.
,
Court’s decision hinged firmly on its interpretation of the third Penn Central
factor, which considers the “character” of the governmental action. Id. at 429–430.
The Court concluded that “a permanent physical occupation authorized by
government is a taking without regard to the public interests that it may serve,” id.
at 426, and that there was invariably a taking because the statute mandated the
permanent physical occupation of real property, id. at 427. The Court’s reasoning
relied heavily on the distinction between a permanent occupation and temporary
physical invasion. Id. at 434 (citing PruneYard Shopping Center v. Robins , 447
U.S. 74 (1980)). While a temporary physical invasion is subject to a balancing
process under the three Penn Central factors, “when the ‘character of the
governmental action[ ]’ is a permanent physical occupation of property, our cases
uniformly have found a taking to the extent of the occupation, without regard to
whether the action achieves an important public benefit or has only minimal
economic impact on the owner.” Id. at 434–35 (internal citation omitted). Thus, the
Court held in Loretto that “permanent physical invasions” are not subject to
balancing under the remaining Penn Central factors and are instead per se takings.
Subsequent to
Loretto
, the U.S. Supreme Court decided
Yee v. City of
Escondido, California
,
home park owners in Escondido, California, who rented pads of land to mobile
homeowners. Id. at 523. California’s Mobilehome Residency Law limited the
reasons that a park owner could terminate a mobile homeowner’s tenancy to (1)
nonpayment of rent; and (2) the park owner’s desire to change the use of his or her land. Id. at 524. The City also had a rental control ordinance that prohibited rent
increases absent the City Council’s approval. Id. at 524–25. Petitioners argued that
the local rent ordinance, in conjunction with the Mobilehome Residency Law,
amounted to a per se physical taking. Id. at 523–24. The U.S. Supreme Court held
that the rent control ordinance did not authorize an unwanted physical occupation
of petitioners’ property and therefore did not amount to a per se taking. Id. at 532.
The Court rejected petitioners’ argument that the rental control ordinance
authorized a physical taking because the law, in conjunction with the state law’s
restrictions, granted a homeowner a right to occupy the pad indefinitely at a
submarket rent. In rejecting this argument, the Court reasoned that a physical
taking occurs “only when [the government] requires the landowner to submit to
physical occupation of his land.” Id. at 527 (emphasis in original). The petitioners
were not compelled by the city or state to continue renting their properties. Id. The
Court determined that, because the laws merely regulated petitioners’ use of their
land by regulating the relationship between landlord and tenant, they could not be
squared with the Court’s physical takings cases. Id. at 527–28. The U.S. Supreme
Court concluded: “This Court has consistently affirmed that States have broad
power to regulate housing conditions in general and the landlord-tenant
relationship in particular without paying compensation for all economic injuries
that such regulation entails.”
Id.
at 528–29 (quoting
Loretto
,
Florida Power Corp.
,
relations of landlords and tenants are not per se takings.”).
The U.S. Supreme Court issued a more recent decision concerning the
Takings Clause in
Cedar Point Nursery v. Hassid
, ___ U.S. ___,
(2021). In Cedar Point Nursery , the Court held that a California access regulation
that gave outside labor organizers a right to “take access” to agricultural
employers’ property was a per se physical taking because it appropriated property
owners’ “right to exclude,” both for the government itself and for third parties. Id. at 2072 (quoting Cal. Code. Regs., tit. 8, § 20900(e)(1)(C) (2020)). The regulation
required agricultural employers to permit union organizers on their property for
three hours a day, 120 days per year, for the purpose of soliciting employees to join
or form a union. Id. at 2069. The Court reasoned that the occupation was a physical
taking because it impacted the right to exclude, which is the “sine qua non” of
property. Id. at 2072–73. The Court rejected the notion that the failure of the
regulation to invade the property right “around the clock” made the taking any less
a taking under the Fifth Amendment. Id. at 2075. Through Cedar Point Nursery , it
appears the Court implicitly overruled its previous rationale under per se
jurisprudence that distinguished between “permanent physical occupations” and
“temporary physical invasions.”
See Loretto
,
Shopping Center
,
b. Discussion Even if the Court were to find that declaratory relief was available to Plaintiffs, the Court finds that Washington’s eviction moratorium does not
constitute a per se physical taking under the Takings Clause. With respect to
Plaintiffs’ assertion regarding physical occupation, the moratorium does not
constitute a per se taking because the moratorium did not require Plaintiffs to
submit to physical occupation or invasion of their land and did not appropriate
Plaintiffs’ right to exclude. The U.S. Supreme Court has made clear that “statutes
regulating the economic relations of landlords and tenants are not per se takings.”
Florida Power Corp.
,
that agreed to by Plaintiffs in renting their properties as residential homes, which is
naturally subject to regulation by the state. Like traditional regulatory takings
cases, the moratorium “transfers wealth from the landlord to the tenants by
reducing the landlords’ income and the tenants’ monthly payments.” Yee , 503 U.S.
at 529. But, as the Supreme Court stated in Yee , the existence of the wealth transfer
“in itself does not convert regulation into physical invasion.” Id. at 530. To find that the eviction moratorium is a per se physical taking would require the Court to
disregard the U.S. Supreme Court’s holdings and rationale in both Loretto and Yee ;
it would essentially require the Court to eliminate the line between the U.S.
Supreme Court’s per se takings and regulatory takings jurisprudence. Such
activism is not the occupation of this Court.
Plaintiffs’ attempt to distinguish Yee from this case fails, as the plaintiffs in Yee similarly argued that the ordinance required them to lease to tenants beyond
their original lease terms.
Mobilehome Residency Law the park owner cannot evict a mobile home owner or
easily convert the property to other uses, the argument goes, the mobile home
owner is effectively a perpetual tenant of the park. . . .”). In this case, just as in Yee ,
Plaintiffs voluntarily invited tenants to occupy their properties as residential
homes. The state has not required any physical invasion and their tenants were “not
forced upon them by the government.” Id. at 528. Plaintiffs’ right to exclude has
not been taken because the moratorium compelled no physical invasion or
occupation that Plaintiffs would have forfeited in the first place. See id. at 532–33.
Instead, the eviction moratorium regulates the landlord-tenant relationship once it
is already established.
Cedar Point Nursery also does not disturb the Court’s analysis. The California access regulation challenged in Cedar Point Nursery is distinguishable
from the eviction moratorium in this case. Unlike the physical appropriation of the
right to exclude in Cedar Point Nursery , the moratorium regulates the landlords
“use of their land by regulating the relationship between landlord and tenant.” Yee ,
landlord may treat tenants—which they have voluntarily invited onto their
properties by renting to them—and enforce their contractual rights (for a temporary
period) are readily distinguishable from regulations granting a separate right to
invade property closed to the public or most individuals. Id. at 527–28, 531. Second, central to the U.S. Supreme Court’s decision in Yee and as already noted,
Plaintiffs voluntarily invited tenants onto their properties. Id. at 531 (“Because they
voluntarily open their property to occupation by others, petitioners cannot assert a
per se right to compensation based on their inability to exclude particular
individuals.), 527 (“Petitioners voluntarily rented their land to mobile home
owners.”), 528 (“Petitioners’ tenants were invited by petitioners, not forced upon
them by the government.”). Plaintiffs’ tenants were invited by themselves, not
forced upon them by the government. Id. at 528. Cedar Point Nursery does not
overrule Yee or undermine the legal underpinnings of Yee . Indeed, in Cedar Point
Nursery , the Court cited Yee for general takings principles, and Yee ’s holding is
still binding law on this Court.
While Cedar Point Nursery announced that a non-continuous, intermittent easement created by California’s access regulation affected a per se physical
taking, it did not undermine or disturb the long-standing principle that “[t]he
government effects a physical taking only where it requires the landowner to
submit to the physical occupation of his land.”
Yee
,
moratorium does not commit a physical appropriation of Plaintiffs’ land beyond
that consented by Plaintiffs in renting their units as residential properties—an
industry heavily regulated by the State of Washington—the eviction moratorium
does not constitute a per se taking under the Fifth Amendment. See S. Cal. Rental
Housing Ass’n v. Cnty. of San Diego , No. 3:21-CV-912-L-DEB, 2021 WL
3171919, at *8 (S.D. Cal. July 26, 2021) (distinguishing Cedar Point Nursery and
holding that plaintiff failed to show a likelihood of success on the merits on its
Takings Clause claim challenging California’s eviction moratorium).
Plaintiffs’ argument that the eviction moratorium effects a taking in their rental contracts also fails. Plaintiffs cite regulatory takings case Cienega Gardens
v. United States , (Fed. Cir. 2003) for their contention that the moratorium’s impact
on their contracts constitutes a per se taking. Such is an inapplicable framework for Plaintiffs’ physical takings claim, as it is inappropriate for this Court to “treat cases
involving physical takings as controlling precedents for the evaluation of a claim
that there has been a ‘regulatory taking,’ and vice versa.” Tahoe-Sierra Pres.
Council, Inc.
,
States v. Petty Motor Company
,
unpersuasive because it is not factually analogous and involves physical
occupation. In that case, the United States physically appropriated a property
owner and tenant’s leaseholds, requiring that the defendants submit their real
property to the government’s immediate possession. Id. at 374–75. Here, the
eviction moratorium does not eliminate or relinquish a contractual right of
Plaintiffs; indeed, the moratorium did not diminish a single tenant’s debt obligation
to Plaintiffs by even a penny. Plaintiffs’ arguments on this point are not supported
by law and are of no avail.
For a similar reason, the eviction moratorium does not take Plaintiffs’ property interests in security deposits. Plaintiffs claim that by limiting available
uses of the security deposit during the period of emergency to prevent deductions
for past-due rent, Washington has committed a per se taking of its property interest
in their tenants’ security deposits. See ECF No. 22 at 12 (also arguing that the
purpose of a security deposit is to reimburse landlords for unpaid rent at end of
tenancy). The cases cited by Plaintiffs on this point concern actual confiscation of
property by the government and are inapposite. See, e.g. , Brown v. Legal Found. of
Wash.
,
exacted by the government could be a per se taking); Webb’s Fabulous
Pharmacies, Inc. v. Beckwith
,
confiscation of interest on client funds deposited into lawyers’ trust accounts was a
per se taking). As previously stated, the eviction moratorium does not extinguish
Plaintiffs’ property interest in collecting unpaid rent whatsoever. Plaintiffs also
remain able to deduct charges from security deposits for other tenant violations of the Residential Landlord-Tenant Act, subject to state’s accounting requirements.
Wash. Rev. Code § 59.18.280. This contention is particularly unpersuasive because
Plaintiffs can recover any amount they would otherwise deduct from a tenant’s
security deposit for unpaid rent by pursuing debt enforcement in accordance with
the terms of the Bridge Proclamation and SB 5160. Washington is permitted to
modify permissible uses of security deposits under its regulatory scheme, as it has
done here, and it does not amount to a per se taking under the Fifth Amendment.
For the foregoing reasons, Plaintiffs’ Fifth Amendment claim fails as a matter of law. The Court grants summary judgment in favor of Defendants.
D. Fourth Cause of Action: Due Process Clause of the Fourteenth Amendment to the U.S. Constitution Plaintiffs’ final claim asserts two distinct arguments under the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution. Plaintiffs contend
that the eviction moratorium violates the Due Process Clause because it is (1)
unconstitutionally vague; and (2) “unduly oppressive” and thereby violative of
substantive due process. ECF No. 22 at 32.
First, Plaintiffs argue that the eviction moratorium is impermissibly vague because it does not provide guidance as to how a landlord or property manager
may construct a “reasonable payment plan” that is based on a tenant’s individual
financial, health, or other circumstances. Plaintiffs Jay Glenn and Enrique Jevons
submitted declarations indicating that they have managed to create repayment
plans with several tenants. ECF No. 37-1 at 3–4; ECF No. 37-2 at 2–3. Plaintiff
Jevons stated that, previously, he had not attempted to even inquire about
individual tenants’ circumstances because it seemed “devious” on his part. ECF
No. 37-2 at 2. The core of Plaintiffs’ vagueness grievance is that they experience
difficulty ascertaining individual tenants’ financial or health circumstances, in part
because tenants are not required to communicate with them. Id. at 2–3. Defendants assert that the void for vagueness doctrine does not apply because due process only prohibits impermissibly vague laws with civil and
criminal penalties. See ECF No. 30 at 59. Nonetheless, they further argue that the
eviction moratorium’s repayment plan provision provides constitutionally
permissible “flexibility and reasonable breadth” to courts, and that its terms
provide “fair notice” of what is expected of Plaintiffs. Id. at 60 (citations omitted).
Second, Plaintiffs assert that that the eviction moratorium is unduly oppressive of “Plaintiffs’ right to determine the conditions upon which a person
may continue to occupy the owner’s property.” ECF No. 22 at 34–35. They
contend that they are “unjustifiably prevented from being able to rightfully use
their properties and mitigate damages where tenants fail to pay rent.” Id. at 37.
Defendants respond that Plaintiffs are barred from repackaging their Takings Clause and Contracts Clause claims into a substantive Due Process Clause claim
because the former provide explicit textual sources of constitutional protection of
the asserted rights. ECF No. 30 at 60–61. In addition, Defendants claim that
Plaintiffs’ substantive due process claim should not be analyzed under a
heightened standard of scrutiny, as the challenge is based on Plaintiffs’ economic
interests. See ECF No. 30 at 57. Under the appropriate standard, they argue, the
moratorium is not arbitrary or irrational for the same reasons it furthers a
significant and legitimate public purpose. Id. at 58.
1. Whether the Eviction Moratorium is Unconstitutionally Vague
a. Legal Standard
The Due Process Clause of the Fourteenth Amendment provides that “[n]o State shall . . . deprive any person of life, liberty, or property, without due process
of law[.]” U.S. Const. amend XIV. “‘It is a basic principle of due process that an
enactment is void for vagueness if its prohibitions are not clearly defined.’” City of
Mesquite v. Aladdin’s Castle
,
Inc.,
v. City of Rockford
,
obtained “fails to provide a person of ordinary intelligence fair notice of what is
prohibited , or is so standardless that it authorizes or encourages seriously
discriminatory enforcement.”
United States v. Williams
,
(citing
Hill v. Colorado
,
law “implicates First Amendment rights, . . . a ‘more demanding’ standard of
scrutiny applies.”
Hunt v. City of Los Angeles
,
(quoting
Grayned
,
never been required even of regulations that restrict expressive activity.” Id.
(quoting
Ward v. Rock Against Racism
,
A statute may be challenged as unconstitutionally vague on its face or as
applied to a particular party.
See United States v. Kilbride
,
(9th Cir. 2009). “Outside the First Amendment context, a plaintiff alleging facial
vagueness must show that the enactment is impermissibly vague in all its
applications.”
Humanitarian Law Project v. U.S. Treasury Dep’t
,
1146 (9th Cir. 2009);
see also United States v. Salerno
,
(holding that a plaintiff mounting a facial challenge must establish that “no set of
circumstances exists under [ ] the Act [that] would be valid”). Since a plaintiff
mounting a facial attack to a statute must show that the law is impermissible in all
its applications, a plaintiff must first show that the law is unconstitutionally vague
as applied to them.
Castro v. Terhune
,
b. Discussion Under the Bridge Proclamation, for rent owed that accrued on or after February 29, 2020 through September 30, 2021, a landlord is prohibited from
treating unpaid rent as an enforceable debt if the landlord “has made no attempt to
establish a reasonable repayment plan with the tenant per E2SSB 5160, or if they
cannot agree on a plan and no local eviction resolution pilot program per E2SSB
5160 exists.” Proc. 21-09, ¶ 42. Further, a landlord is required to offer a tenant a “reasonable repayment plan” for rent accrued between August 1, 2021 and
September 30, 2021 prior to enforcing any eviction notice pursuant to the order
and Section 4 of SB 5160. Id. at ¶ 37. The Bridge Proclamation states that a
“reasonable repayment plan” has the same meaning as “reasonable schedule for
repayment” as defined under Section 4 of SB 5160. Id. at 43. More specifically, it
refers to a “repayment plan or schedule for unpaid rent that does not exceed
monthly payments equal to one-third of the monthly rental charges during the
period of accrued debt.” Id.
Under the previously effective Proclamation 20-19.6, the eviction moratorium applied for all unpaid rent accruing on or after February 29, 2020.
Proc. 20-19.6, ¶ 35. A landlord or property manager could not treat any unpaid rent
as an enforceable debt if it accrued after this point as a result of the COVID-19
pandemic. Id. That prohibition was caveated with the following provision:
This prohibition does not apply to a landlord, property owner, or property manager who demonstrates by a preponderance of the evidence to a court that the resident was offered, and refused or failed to comply with, a re-payment plan that was reasonable based on the individual financial, health, and other circumstances of that resident ; failure to provide a reasonable repayment plan shall be a defense to any lawsuit or other attempts to collect.
Id. (emphasis added). At the time, the Washington State Attorney General’s Office
prepared assistive materials, including an unpaid rent repayment plan worksheet, to
assist landlords and property managers in communicating with tenants to establish
such repayment plans.
In this case, the Court finds the eviction moratorium is not impermissibly vague and does not violate the void for vagueness doctrine. Plaintiffs’ due process
claim fails outright because the contested provision is not a prohibition and does
not require them to do anything.
See Grayned
,
principle of due process that an enactment is void for vagueness if its prohibitions
are not clearly defined.”) (emphasis added). The moratorium’s actual prohibition is indisputably clear: landlords and property managers may not treat unpaid rent
stemming from the COVID-19 pandemic as an enforceable debt during the state of
emergency. Plaintiffs’ complaint concerns the exception to the prohibition, which
the state constructed to permit enforcement proceedings in narrow circumstances:
that is, where a landlord and tenant have established a repayment plan that was
“reasonable based on the individual financial, health, and other circumstances of
that resident.” Proc. 20-19.6, ¶ 35; see also Proc. 21-09, ¶¶ 42–45. This provision,
which permits rather than prohibits a particular remedy, is not properly challenged
under the vagueness doctrine.
Further, even if this exception constituted a “prohibition” and fell within the scope of the vagueness doctrine, the moratorium is not vague as applied to
Plaintiffs. Plaintiffs have failed to demonstrate that the eviction moratorium in
either its previous or current form is impermissibly vague as applied to them. [4]
Plaintiffs’ vagueness claim is directly undermined by the fact that at least two
Plaintiffs have managed to create repayment plans with tenants. During
implementation of the former moratoria, which provides slightly less substantive
guidance on establishing repayment plans, Plaintiff Jay Glenn attested that, for
example, one tenant owed $3,000 in past-due rent and offered to pay $120 per
month after moveout, which he accepted as reasonable. And under the operative
Bridge Proclamation, such a plan is plainly reasonable if the schedule does not
“exceed monthly payments equal to one-third of the monthly rental charges during
the period of accrued debt.” Proc. 21-09, ¶ 43. Provided that a devised schedule
does not exceed this threshold, landlord and property managers may seek
reimbursement if a tenant defaults under the repayment plan. Because of this, the
Court cannot find that the repayment plan provision does not provide a person of
ordinary intelligence fair notice of what is permitted (or prohibited) or that it
encourages seriously discriminatory enforcement.
See Williams
,
Plaintiffs have failed to demonstrate that there is no set of circumstances where the
law as applied would be valid, and their facial attack is unsuccessful. See Salerno ,
eviction moratorium is unconstitutionally vague fails as a matter of law, and
summary judgment on this claim is granted to Defendants.
2. Whether the Eviction Moratorium Violates Plaintiffs’ Substantive Due Process Rights
a. Legal Standard
The right to use property as one wishes is not a fundamental right under substantive due process, as it is economic in nature. Slidewaters LLC v.
Washington State Dep’t of Lab. & Indus.
,
v. Whitman
,
constitutionality of statutes regulating economic activity . . . is whether the
legislation bears a rational relationship to a legitimate state interest.” Jackson
Water Works, Inc. v. Pub. Util. Comm’n of Cal.
,
1986). “Legislative acts that do not impinge on fundamental rights or employ
suspect classifications are presumed valid, and this presumption is overcome only
by a ‘clear showing of arbitrariness and irrationality.’” Slidewaters LLC , F.4th at
758 (quoting
Kawaoka v. City of Arroyo Grande
,
1994)). The U.S. Supreme Court has “long eschewed” a heightened standard of
scrutiny when addressing substantive due process challenges by government
regulation.
Lingle
,
730 (1963) (“We have returned to the original constitutional proposition [pre-
Lochner ] that courts do not substitute their social and economic beliefs for the
judgment of legislative bodies, who are elected to pass laws.”). Instead, federal courts must defer “to legislative judgments about the need for, and likely
effectiveness of, regulatory actions.”
Lingle
,
Accordingly, to determine whether the eviction moratorium violates Plaintiffs’ substantive due process rights, the Court must first determine whether
the law could advance any legitimate government purpose. Kawaoka v. City of
Arroyo Grande
,
determine whether the law is arbitrary and irrational.
See Lingle
,
Slidewaters LLC
,
see Exxon Corp. v. Governor of Md.
,
searching” standard than that utilized in a constitutional challenge under the
Contracts Clause,
Pension Ben. Guar. Corp. v. R.A. Gray & Co.
,
733 (1984).
Furthermore, the U.S. Supreme Court has made clear that a substantive due process claim must give way to a claim based on identical facts that is derived
from “an explicit textual source of constitutional protection.” Graham v. Connor ,
Justice plurality), id. at 281 (Kennedy, J., concurring); Stop the Beach
Renourishment, Inc.
,
b. Discussion In this case, the Court finds that Plaintiffs’ Contracts Clause claim supersedes their substantive Due Process Clause claim. Plaintiffs’ substantive due
process claim is identical to their cause of action under the Contracts Clause,
which the Court has already adjudicated. The Contracts Clause provides “an
explicit textual source of constitutional protection” and Plaintiffs may not
repackage their identical argument into an independent due process claim. See
Graham
,
Further, Plaintiffs’ property-based substantive due process claim employs a lower standard of scrutiny than that employed under their Contracts Clause claim.
The Court already determined that, under Contracts Clause analysis, the eviction
moratorium is an appropriate and reasonable fit to a significant and legitimate
purpose of the state. The moratorium is not unduly oppressive to Plaintiffs’ due
process rights or arbitrary and irrational for the same reasons it is an “appropriate”
and “reasonable” regulation under the Contracts Clause. Accord Blaisdell , 290
U.S. at 448. As a result, the Court grants summary judgment to Defendants on
Plaintiffs’ substantive due process claim.
V. Conclusion For the foregoing reasons, this Court holds that the Washington’s eviction moratorium does not violate the Takings Clause, Contracts Clause, or Due Process
Clause of the U.S. Constitution. The state government can, should, and must
protect the public’s health and safety during a pandemic to mitigate transmission of
a novel and potentially fatal pathogen, as the State of Washington has done in the
past nineteen months to combat the COVID-19 pandemic. The people of
Washington, all of us collectively, can, should, and must protect ourselves, but also
one another, during the pandemic. This worthy objective includes protecting the
most vulnerable individuals in our state. The eviction moratorium is part of the
emergency efforts implemented by the duly elected governor of the State of
Washington, whose role is to exercise his powers and responsibilities to protect the
people from the COVID-19 pandemic and protect the economy of the state. These
aims were appropriately realized through implementation of Washington’s eviction
moratorium.
//
//
//
//
//
// Accordingly, IT IS HEREBY ORDERED :
1. Defendants’ Cross-Motion for Summary Judgment, ECF No. 30, is GRANTED .
2. Plaintiffs’ Motion for Summary Judgment, ECF No. 22, is DENIED . 3. The District Court Executive is directed to enter judgment in favor of Defendants and against Plaintiffs.
IT IS SO ORDERED . The District Court Clerk is hereby directed to enter this Order, provide copies to counsel, and CLOSE the file.
DATED this 20th day of September 2021.
S tanley A. B astian Chief United States District Judge
Notes
[1] The following facts are taken from the parties’ respective statements of material facts and responses thereto. See ECF Nos. 23, 31, 38, 41.
[2] Annette Cary, Tri-Citians Slower Than Others to Get the COVID Vaccine. What’s the Holdup? , T RI -C ITY H ERALD (Apr. 14, 2021 07:43 P.M.), https://www.tri-cityherald.com/news/coronavirus/article250299784.html (last accessed Sept. 20, 2021); Danny Westneat, The Political Vaccine Divide in Washington State Is Widening—And COVID Rushes In , T HE S EATTLE T IMES (May 2, 2021, 1:17 P.M.), https://www.seattletimes.com/seattle-news/politics/the- political-vaccine-divide-in-washington-state-is-widening-and-covid-rushes-in/ (last accessed Sept. 20, 2021).
[3] It is worth noting that the Washington State Constitution provides an avenue for obtaining compensation via damages for the alleged taking of property. Wash. Const. art. I, § 16. Plaintiffs have not attempted to acquire just compensation for the purported taking through available state procedures.
[4] Plaintiffs do not contend that their First Amendment rights are implicated, and therefore heightened scrutiny does not apply.