Court Rules Government Must Pay for Eviction Moratorium Losses. A federal court just ruled 7-3 that governments are responsible for lost rent due to eviction moratoriums. It is considered illegal taking of property which is against the 5th Amendment of the US Constitution. I feel this should also apply to some rent control measures.
Here's what this means: If you lost rental income during Los Angeles' eviction moratoriums over the past five years, you might be entitled to compensation. You'd still have to sue to be compensated. If the ruling stands I'm sure there will be class action lawsuits.
The case is Darby Development Company Inc et al v. United States, U.S. Court of Appeals for the Federal Circuit, No. 2022-1929. Those moratoriums were so unfair especially to small mom and pop landlords. Many were forced to sell their buildings because they couldn't afford to keep them. Many tenants lied about Covid affecting their income to get free rent. Some never paid back the rent. Some just left.
Based on the below actual order this will probably go to the Supreme Court. SCOTUS would then decide if the order was properly authorized or not. If they decide it was properly authorized, this may be overturned. Scroll down to see the original order which is lower on the page.
Order https://www.cafc.uscourts.gov/opinions-orders/22-1929.ORDER.6-6-2025_2526499.pdf
"This case presents the question whether the United
States can be liable for the unauthorized acts of its officials
under the Takings Clause.
On September 4, 2020, the Centers for Disease Control
and Prevention (“CDC”) promulgated an agency order that
temporarily halted residential evictions in the midst of the
COVID-19 pandemic, relying on its authority under 42
U.S.C. § 264(a). The Supreme Court held that it was “virtually certain . . . that the CDC ha[d] exceeded its authority” under that statute. Ala. Ass’n of Realtors v. Dep’t of
Health & Hum. Servs., 594 U.S. 758, 759 (2021); see also
Resp. to Pet. for En Banc Reh’g at 2, Darby Dev. Co.
v. United States, 112 F.4th 1017 (Fed. Cir. 2024) (No. 22-
1929) (conceding that “the Supreme Court ultimately expressed the view that the moratorium exceeded the CDC’s
statutory authority”). As a result, the eviction moratorium
was enjoined. See Ala. Ass’n of Realtors, 594 U.S. at 766.
Despite the lack of statutory authority, the panel majority held that the order was not unauthorized for takings
purposes because it was done “within the normal scope of
the agent’s duties,” Darby Dev. Co., Inc. v. United States,
112 F.4th 1017, 1027 (Fed. Cir. 2024), effectively importing
the scope-of-duty standard from tort law into the takings
context.
Previous ruling with issues
https://www.cafc.uscourts.gov/opinions-orders/22-1929.OPINION.8-7-2024_2363309.pdf
Appellants: 104WWB, LLC, Azure Park Apartments, LLC, Bay Bridge Properties LLC, Belhaven Residential, LLC, Bella Estates Nevada, LLC, Capital City Interior LLC, Casas Adobes Partners V LLC, Darby Development Company, Inc., Decatur Point LLC, Encantada Apartments, LLC, GG Icon LLC, Grand Channel, LLC, GWR BH Holdings, Ltd., GWR Equities LLC, GWR Management, LLC, GWR Texas SE Partners, Ltd., GWR Trails Partners, Ltd., Hesperian Falls Partners LLC, Intercoastal Yacht Club, LLC, Lake Charlotte, LLC, Las Vegas Cameron Apts LLC, Logan Ventures of California Properties LLC, Mclean Investments, LLC, Orion Properties of West Palm Beach, LLC, Joanne Panek, Richard Panek, Paradise Square, LLC, R. James Properties, Inc., Michael Rak, Redwood Garden Properties, LLC, Ridge Falls Apartments, LLC, Riverbend Village Partners LLC, Shander International, LLC, Sunset Terrace Partners LLC, Regina Tillman, TSV Crossroads at Rochelle LLC, Veritas Equity Management, LLC, Villa East Properties, LLC, Villa Monterey Properties, LLC and Mohammad Zamanian to Doc No. [92].
Court of Appeals Docket #: 22-1929 Docketed: 06/24/2022
Termed: 08/07/2024
Nature of Suit: 512 Taking - Realty
Darby Development Company, Inc. v. US
Appeal From: United States Court of Federal Claims
Fee Status: fee paid
Case Type Information:
1) Civil US
2) -
3) -
Originating Court Information:
District: --14-1 : 1:21-cv-01621-AOB
Trial Judge: Armando O. Bonilla, Judge
Date Filed: 07/27/2021
Date NOA Filed: Date Rec'd COA:
06/06/2022 06/22/2022
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