Farhoud v. Brown

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

MOE FARHOUD, STARK FIRS LIMITED Case No. 3:20-cv-2226-JR

PARTNERSHIP, ALDER VILLAGE, INC.,

STAR KREST, NIC., ASH STREET OPINION AND ORDER

COURTYARD LLC, TYLER SHERMAN,

and CRYSTAL SHERMAN,

Plaintiffs,

v.

GOVERNOR KATE BROWN, in her official

capacity; STATE OF OREGON; CITY OF

PORTLAND, an Oregon municipal

corporation; and MULTNOMAH COUNTY

OF OREGON, an Oregon municipal

corporation,

Defendants.

John DiLorenzo, Jr., Aaron K. Stuckey, and Evan Christopher, DAVIS WRIGHT TREMAINE LLP,

1300 SW Fifth Avenue, Suite 2400, Portland, OR 97201. Of Attorneys for Plaintiffs.

Keith Ketterling, Steven C. Berman, and Megan K. Houlihan, STOLL STOLL BERNE LOKTING &

SHLACHTER PC, 209 SW Oak Street, Suite 500, Portland, OR 97204. Special Assistant Attorneys

General and of Attorneys for Defendants Governor Kate Brown and State of Oregon.

Jenny M. Madkour, County Attorney for Multnomah County, and B. Andrew Jones, Senior

Assistant County Attorney, MULTNOMAH COUNTY ATTORNEY’S OFFICE, 501 SE Hawthorne

Boulevard, Suite 500, Portland, OR 97214. Of Attorneys for Defendant Multnomah County.

Naomi Sheffield, Senior Deputy City Attorney, PORTLAND CITY ATTORNEY’S OFFICE, 1221 SW

Fourth Avenue, Room 430, Portland, OR 97204. Of Attorneys for Defendant City of Portland.

Michael H. Simon, District Judge.

United States Magistrate Judge Jolie A. Russo issued Findings and Recommendations

concluding that the Court should grant Defendants’ motions to dismiss and deny Plaintiffs’

motion for partial summary judgment. After Plaintiffs filed their objections and Defendants

responded, Plaintiffs asked the Court to postpone its ruling on those objections until after the

Supreme Court decided Whole Woman’s Health v. Jackson. Plaintiffs stated that the Supreme

Court’s decision in that case would likely inform the Court’s analysis of whether Plaintiffs have

standing to sue Governor Brown. The Court agreed and permitted supplemental briefing from the

parties on the applicability of Whole Woman’s Health after the Supreme Court issued its

decision. See Whole Woman’s Health v. Jackson, 142 S. Ct. 522 (2021).

Under the Federal Magistrates Act (Act), the Court may “accept, reject, or modify, in

whole or in part, the findings or recommendations made by the magistrate.” 28 U.S.C.

§ 636(b)(1)(c). If a party objects to a magistrate judge’s findings and recommendations, “the

court shall make a de novo determination of those portions of the report or specified proposed

findings or recommendations to which objection is made.” Id.; Fed. R. Civ. P. 72(b)(3).

For those portions of a magistrate judge’s findings and recommendations to which no

party has objected, the Act does not prescribe any standard of review. See Thomas v. Arn, 474

U.S. 140, 152 (1985) (“There is no indication that Congress, in enacting [the Act], intended to

require a district judge to review a magistrate’s report to which no objections are filed.”); United

States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (holding that the court

must review de novo magistrate judge’s findings and recommendations if objection is made, “but

not otherwise”). Although absent objections no review is required, the Act “does not preclude

further review by the district judge[] sua sponte . . . under a de novo or any other standard.”

Thomas, 474 U.S. at 154. Indeed, the Advisory Committee Notes to Fed. R. Civ. P. 72(b)

recommend that “[w]hen no timely objection is filed,” the Court reviews the magistrate judge’s

recommendations for “clear error on the face of the record.”

For those portions of the Findings and Recommendations suggesting dismissal of

Plaintiffs’ claims against the State of Oregon and the City of Portland, there are no objections.

The Court reviews those portions for clear error. Finding no such error, the Court adopts those

portions of the Findings and Recommendations. For those portions of the Findings and

Recommendations suggesting dismissal of Plaintiffs’ claims against Governor Brown and

Multnomah County, Plaintiffs objected. Plaintiffs object to the conclusion that their claims

against Multnomah County are moot and that they lack standing to sue Governor Brown.

Plaintiffs also object that the Findings and Recommendations did not address the merits of

Plaintiffs’ substantive arguments advanced in their opposition to Defendants’ motions to dismiss

and in support of Plaintiffs’ motion for partial summary judgment.

For the reasons explained below, after de novo review, the Court declines to adopt the

portion of the Findings and Recommendations concluding that Plaintiffs’ claims against the

County are moot but adopts the portion of the Findings and Recommendations concluding that

Plaintiffs lack standing to sue Governor Brown. Because the Court holds that Plaintiffs’ claims

against the County are not moot, the Court discusses the merits of the County’s motion to

dismiss Plaintiffs’ claims under Rule 12(b)(6) of the Federal Rules of Civil Procedure and

Plaintiffs’ cross-motion for partial summary judgment on the right of access to courts. For the

reasons explained below, the Court dismisses Plaintiffs’ claims under Rule 12(b)(6).

BACKGROUND

Beginning March 8, 2020, Governor Brown issued a series of executive orders in

response to the COVID-19 pandemic. Executive Orders 20-03, 20-24, 20-30, 20-38, 20-67, 21-

05, 21-10, and 21-36 declared a state of emergency and repeatedly extended that state of

emergency, with the most recent order extending the state of emergency to June 30, 2022.

Governor Brown also issued Executive Orders 20-11, 20-13, and 20-56, which imposed a

moratorium on residential evictions for nonpayment of rent between March 22, 2020 and June

30, 2020 and between September 30, 2020 and December 31, 2020.

The Oregon Legislature enacted similar protections for residential tenants in response to

COVID-19. The Legislature first passed House Bill (H.B.) 4213, which implemented an eviction

moratorium prohibiting landlords from evicting tenants for nonpayment of rent that accrued from

April 1, 2020 to September 30, 2020 and gave tenants a grace period until March 31, 2021 to pay

any unpaid rent that had accrued from April to September 2020. H.B. 4213 § 3. Later, the

Legislature passed H.B. 4401, which extended the moratorium period from September 30, 2020

to June 30, 2021 and extended the grace period to pay any unpaid rent accrued during that time

from March 31, 2021 to June 30, 2021. H.B. 4401 § 7(1). Further, under H.B. 4401, courts must

dismiss any complaint filed by a landlord during the grace period that seeks possession of the

property for nonpayment of rent, and landlords may not file any action during the emergency

period to recover unpaid rent. Id. §§ 7(6), 8(2)(f). H.B. 4401 also established a landlord

compensation fund. Id. § 2(1). Landlords may apply to the fund to receive 80 percent of unpaid

rent accrued after April 1, 2020, if they agree to forgive the remaining 20 percent. H.B. 4401

does not provide any state official with enforcement authority and instead is only enforced by

private rights of action. Later, the Legislature passed S.B. 282, which extended the grace period

to pay rent accrued between April 1, 2020 and June 30, 2021 to February 28, 2022. S.B. 282 § 1.

Next, the Legislature passed S.B. 278, which prohibited landlords from evicting residential

tenants for up to 60 days based on nonpayment of rent if the tenant shows the landlord

documentation that the tenant has applied for emergency rental assistance. S.B. 278 § 2. Most

recently, the Legislature passed Senate Bill 891, which extends the period to submit rental

assistance documentation to landlords until June 30, 2022 and provides that landlords may not

evict those tenants if their rental assistance applications are still pending. S.B. 891 § 2. (The

Court takes judicial notice of S.B. 891, which was not mentioned by any party in their written

submissions. See Fed. R. Evid. 201.)

Multnomah County (County) also enacted an eviction moratorium in response to

COVID-19. The County first adopted Ordinance 1282 in March 2020, which prohibited evictions

of residential tenants that had experienced a substantial loss of income due to COVID-19 and

gave those tenants a six-month grace period to pay any unpaid rent. Later, the County enacted

Ordinance 1284 to mirror the statewide eviction moratorium implemented through Governor

Brown’s Executive Orders and the County’s eviction moratorium. County Ordinance 1287 later

extended the grace period to pay unpaid rent to January 8, 2021 or the first day the County’s

declared state of emergency was no longer in effect, whichever was later. The County then

enacted Ordinance 1292, which rescinded Ordinances 1282, 1284, and 1287. The County

replaced its prior ordinances with Ordinance 1296, which adopted the statewide moratorium

enacted in S.B. 278, prohibiting the eviction of tenants who had informed their landlords of a

pending application for rental assistance. County Ordinance 1296 extends the 60-day moratorium

period in S.B. 278 to 90 days and remains in effect until March 1, 2022.

The City of Portland responded to COVID-19 with two ordinances extending the

County’s eviction moratorium to all areas within the City of Portland, some of which extends

beyond Multnomah County. City Ordinance 189890 applied Multnomah County Ordinance 1282

to all areas within the City of Portland. Ordinance 189890 expired on the repeal of County

Ordinance 1282 on September 24, 2020. The City then enacted City Ordinance 190156, which

applied Multnomah County Ordinance 1287 to all areas within the City of Portland. City

Ordinance 190156 expired on February 1, 2021 and has not been replaced.

In this lawsuit, Plaintiffs assert claims under 42 U.S.C. § 1983 against Governor Brown,

the State of Oregon, Multnomah County, and the City of Portland. In their First Amended

Complaint, Plaintiffs contend that Defendants’ eviction moratoria violate Plaintiffs’ rights under

several provisions of the United States Constitution. Plaintiffs allege violations of the Contracts

Clause in section 10 of Article I, the Takings Clause in the Fifth Amendment, the Due Process

Clause in the Fourteenth Amendment, the Unreasonable Seizure Clause in the Fourth

Amendment, and the Petition Clause in the First Amendment.

DISCUSSION

A. Governor Brown

The State argues that Plaintiffs lack standing to sue Governor Brown because she has no

enforcement authority under H.B. 4401. Plaintiffs respond that they have standing because

Governor Brown must “take care” that all laws of the state are executed. Plaintiffs also state that

the Supreme Court’s recent decision in Whole Woman’s Health did not disturb this basis for

standing. Although intertwined, standing and the exception to Eleventh Amendment immunity

under Ex parte Young are distinct doctrines. See Palomar Pomerado Health Sys. v. Belshe, 180

F.3d 1104, 1108 (9th Cir. 1999) (explaining that Ex parte Young does not provide a basis for

standing). The Court will first address whether Governor Brown is immune from suit in federal

court under the Eleventh Amendment.

“Generally, States are immune from suit under the terms of the Eleventh Amendment and

the doctrine of sovereign immunity.” Whole Woman’s Health v. Jackson, 142 S. Ct. 522, 532

(2021). Under the Eleventh Amendment, states are protected from suit in federal court. See

Savage v. Glendale Union High Sch., 343 F.3d 1036, 1040 (9th Cir. 2003). In Ex parte Young,

the Supreme Court carved out an exception to Eleventh Amendment sovereign immunity for

suits seeking prospective injunctive relief against a state official in his or her official

capacity. 209 U.S. 123, 159-60 (1908). To sue a state official under Ex parte Young, that official

“must have some connection with the enforcement” of the challenged law and that connection

must be more direct than a “generalized duty to enforce state law or general supervisory power

over the persons responsible for enforcing the challenged provision.” L.A. Cnty. B. Ass’n v.

Eu, 979 F.2d 697, 704 (9th Cir. 1992) (quoting Ex parte Young, 209 U.S. at 157). The Supreme

Court explained that to be subject to suit under Ex parte Young, the state official must possess

some enforcement authority over the challenged law. See Whole Woman’s Health, 142 S. Ct.

at 534 (dismissing the state attorney general as immune from suit because “the petitioners do not

direct this Court to any enforcement authority the attorney general possesses in connection with

S.B. 8 that a federal court might enjoin him from exercising”).

The exception to Eleventh Amendment sovereign immunity under Ex parte Young does

not apply to Plaintiffs’ claims against Governor Brown because she has no enforcement authority

over H.B. 4401. In Whole Woman’s Health, the Supreme Court made clear that to sue a state

official under Ex parte Young, the plaintiff must point to some provision in the challenged law

that provides the official with enforcement authority. 142 S. Ct. at 534. The plaintiffs in Whole

Woman’s Health challenged the constitutionality of S.B. 8, a Texas law that prohibited abortions

after six weeks. S.B. 8, however, differed from other laws restricting abortion because it was

enforceable only through a private right of action and conferred no enforcement authority on any

state official. The plaintiffs sued several defendants, including the Texas Attorney General and

state licensing officials. Id. at 530. The Supreme Court held that Ex parte Young did not apply to

the plaintiffs’ claims against the state attorney general because that official had no enforcement

authority in connection with S.B. 8. Id. at 534. The Supreme Court did, however, allow the

claims against the licensing officials to proceed under Ex parte Young because those officials

needed to take certain enforcement actions related to Texas’s Health and Safety Code, which

included S.B. 8. Id. at 535.

Here, like the state attorney general in Whole Woman’s Health, Governor Brown has no

enforcement authority under the challenged law. H.B. 4401, like S.B. 8, is enforced only through

a private right of action. Thus, under Whole Woman’s Health, the Ex parte Young exception to

Eleventh Amendment immunity does not apply to Governor Brown. Plaintiffs, however, argue

that despite Whole Woman’s Health, three federal appellate court decisions remain good law and

state that a private party may sue a state official under Ex parte Young on the sole basis that the

state official has a general duty to “take care” that all laws of the state are faithfully executed.

See Or. Const. art. V, § 10. The Court is not persuaded.

Plaintiffs first cite Los Angeles County Bar Association v. Eu, 979 F.2d 697 (9th

Cir. 1992), in which the Ninth Circuit allowed claims to proceed against the Governor of

California under Ex parte Young. The plaintiff in Eu challenged a California statute that

prescribed the number of judges in Los Angeles County, arguing that the number of judges was

unconstitutionally low. Id. at 699. The Ninth Circuit explained that the plaintiff could sue the

Governor because, if the court held that the statute prescribed too few judges, the state legislature

would need to amend the statute to provide for more judges, and the Governor would be

statutorily bound to appoint judges to fill those positions. Id. at 704. Thus, the Ninth Circuit

reasoned, the Governor had an adequate connection with the challenged law.

This conclusion, however, provides no assistance to Plaintiffs where here, Governor

Brown is under no statutory obligation to carry out any part of H.B. 4401. Plaintiffs contend that

Governor Brown’s emergency powers under ORS Chapter 401 provide her with the authority to

nullify H.B. 4401. But that argument speaks to the redressability prong of standing—whether

Governor Brown is capable of redressing Plaintiffs’ injuries—not Eleventh Amendment

immunity. The fact that Governor Brown may have the ability to set aside H.B. 4401 or enact an

identical emergency order subject to criminal penalties (see ORS § 401.990) does not show that

H.B. 4401 affirmatively invests Governor Brown with any enforcement authority. Governor

Brown’s emergency powers therefore differ from the Governor of California’s statutory

obligation to appoint judges in Eu. Further, the Ninth Circuit in Eu expressly rejected the

additional argument Plaintiffs advance here, when the court held that under Ex parte Young, the

connection between the state official and challenged law “must be fairly direct” and that “a

generalized duty to enforce state law . . . will not subject an official to suit.” Id.

Plaintiffs also cite Allied Artists Picture Corp. v. Rhodes, 679 F.2d 656 (6th Cir. 1982), in

which the Sixth Circuit allowed claims against the Governor of Ohio to go forward even though

the statute at issue gave the Governor no enforcement authority. Id. at 665. The Sixth Circuit

explained that there was a “sufficient connection” between the Governor and the challenged

statute even “in the absence of specific state enforcement provisions” because there was a

“substantial public interest in enforcing the trade practices legislation.” Id. at 665 n.5. The

Supreme Court’s decision in Whole Woman’s Health, however, undermines this holding, and the

Ninth Circuit has already held that a state official may be sued under Ex parte Young only if that

official has some connection more direct than a general duty to take care that the laws of the state

are faithfully executed. See Eu, 979 F.2d at 704. The Court is bound by Ninth Circuit precedent.

Finally, Plaintiffs rely on Boler v. Earley, 865 F.3d 391 (6th Cir. 2017), in which the

Sixth Circuit concluded that Ex parte Young applied to some claims against the Governor of

Michigan. The Ex parte Young issue in Boler, however, was whether the plaintiffs sought

prospective injunctive relief or retroactive money damages and not whether the Governor had an

adequate connection with the challenged law. See id. at 412-13. Further, the plaintiffs in Boler

challenged the Governor’s direct involvement with an ongoing water crisis in Flint, Michigan,

and not the constitutionality of a statute over which the Governor had enforcement authority. See

id. at 399-400. Boler therefore carries no persuasive weight.

In sum, because H.B. 4401 invests Governor Brown with no enforcement authority, Ex

parte Young does not apply and she is immune from suit under the Eleventh Amendment. See

Whole Woman’s Health, 142 S. Ct. at 534; Eu, 979 F.2d at 704. Other courts have reached

similar conclusions. See, e.g., Ass’n des Eleveurs de Canards et d’Oies du Quebec v. Harris, 729

F.3d 937, 943 (9th Cir. 2013) (concluding that Ex parte Young did not apply to the Governor of

California because “his only connection to” the challenged law was “his general duty to enforce

California law”); Jevons v. Inslee, --- F. Supp. 3d ---, 2021 WL 4443084, at *6 (E.D. Wash.

Sept. 21, 2021), appeal docketed, No. 22-35050 (9th Cir. Jan. 18, 2022) (concluding that Ex

parte Young did not apply to the plaintiff’s claims against the Governor of Washington because

the Governor had no enforcement authority over the challenged law beyond a “duty of general

enforcement”); Axos Bank v. Rosenblum, 2020 WL 7344594, at *4 (D. Or. Dec. 14, 2020)

(concluding that Ex parte Young did not apply to the plaintiff’s claim against the Oregon

Attorney General because she lacked enforcement authority over H.B. 4204, which is

H.B. 4401’s companion statute). Because Governor Brown is immune from suit, the Court need

not address whether Plaintiffs have standing to sue Governor Brown.

B. Multnomah County

1. Mootness

Plaintiffs argue that their claims against Multnomah County are not moot because

Multnomah County Ordinance 1296, which is in effect until March 1, 2022, is substantially

similar to the County Ordinances at issue in Plaintiffs’ Complaint. The County argues that

Plaintiffs’ claims against the County are moot because County Ordinances 1282, 1284, and 1287

have all expired and Ordinance 1296 materially differs from those expired Ordinances. For the

reasons below, the Court agrees with Plaintiffs and concludes that Plaintiffs’ claims against the

County are not moot.

“The doctrine of mootness, which is embedded in Article III’s case or controversy

requirement, requires that an actual, ongoing controversy exist at all stages of federal court

proceedings.” Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1086 (9th Cir. 2011). “A case

becomes moot ‘when the issues presented are no longer “live” or the parties lack a legally

cognizable interest in the outcome’ of the litigation.” Id. (quoting Powell v. McCormack, 395

U.S. 486, 496 (1969)). A defendant’s voluntary cessation of challenged conduct does not always

moot the case. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167,

189 (2000) (“It is well settled that a defendant’s voluntary cessation of a challenged practice

does not deprive a federal court of its power to determine the legality of the practice. If it did, the

courts would be compelled to leave the defendant . . . free to return to his old ways.” (simplified)

(quoting City of Mesquite v. Aladdin’s Castle, Inc., 455 U.S. 283, 289 (1982))).

Courts presume a claim is moot when a government actor has voluntarily ceased the

challenged conduct “unless there is a reasonable expectation that the legislative body is likely to

enact the same or substantially similar legislation in the future.” Bd. of Trustees of Glazing

Health & Welfare Tr. v. Chambers, 941 F.3d 1195, 1197 (9th Cir. 2019). If a government actor

has in fact enacted substantially similar legislation that inflicts essentially the same harm on

plaintiffs but only to a lesser degree, the case is not moot. See N.E. Fla. Chapter of Associated

Gen. Contractors of Am. v. City of Jacksonville, 508 U.S. 656, 662 (1993) (holding that the

plaintiffs’ claim challenging repealed legislation was not moot because the legislature enacted

new legislation that “disadvantaged [the plaintiffs] in the same fundamental way,” even though

to a “lesser degree”); Cuviello v. City of Vallejo, 944 F.3d 816, 824 (9th Cir. 2019) (“If the

amended ordinance threatens to harm a plaintiff in the same fundamental way—even if to a

lesser degree—the plaintiff will still have a live claim for prospective relief.”).

Plaintiffs’ claims against Multnomah County are not moot because County

Ordinance 1296 is substantially similar to the now-expired County Ordinances at issue in

Plaintiffs’ Complaint. The County Ordinances at issue in the Complaint—Ordinances 1282,

1284, and 1287—imposed a moratorium on all evictions of residential tenants for nonpayment of

rent for a six-month grace period beginning after the County’s declared emergency period ended.

County Ordinance 1296 essentially inflicts the same alleged harm to Plaintiffs but in a slightly

different way. Under County Ordinance 1296, landlords may not evict residential tenants for up

to 90 days if the tenant notifies the landlord before March 1, 2022 that he or she has applied for

rental assistance. Both the expired Ordinances and the currently effective Ordinance 1296

impose the same type of harm because they substantially restrict Plaintiffs’ ability to evict

nonpaying tenants and Ordinance 1296 is merely a continuation of the prior Ordinances but with

slightly different terms. That Ordinance 1296 prohibits evictions of a more limited group of

tenants does not alter this conclusion because Ordinance 1296 still essentially inflicts the same

alleged harm on Plaintiffs, only to a lesser degree. See N.E. Fla. Chapter of Associated Gen.

Contractors of Am., 508 U.S. at 662; Cuviello, 944 F.3d at 824; Jevons, 2021 WL 4443084, at *5

(concluding that the landlords’ challenge to the Governor of Washington’s then-expired eviction

moratoria was not moot because the Governor had imposed a substantially similar new

moratorium, even though “under different conditions”). Thus, Plaintiffs’ claims against the

County are not moot.

2. Failure to State a Claim

a. Standards

A motion to dismiss for failure to state a claim may be granted only when there is no

cognizable legal theory to support the claim or when the complaint lacks sufficient factual

allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs.,

Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint’s factual

allegations, the court must accept as true all well-pleaded material facts alleged in the complaint

and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-

Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat’l Educ. Ass’n, 629

F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint

“may not simply recite the elements of a cause of action but must contain sufficient allegations

of underlying facts to give fair notice and to enable the opposing party to defend itself

effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). The court must draw all

reasonable inferences from the factual allegations in favor of the plaintiff. Newcal Indus. v. Ikon

Off. Sol., 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit a

plaintiff’s legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556

U.S. 662, 678-79 (2009).

A complaint must contain sufficient factual allegations to “plausibly suggest an

entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the

expense of discovery and continued litigation.” Starr, 652 F.3d at 1216. “A claim has facial

plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). “The plausibility standard is not akin to a

probability requirement, but it asks for more than a sheer possibility that a defendant has acted

unlawfully.” Mashiri v. Epsten Grinnell & Howell, 845 F.3d 984, 988 (9th Cir. 2017) (quotation

marks omitted).

b. Contracts Clause

“The Contracts Clause restricts the power of States to disrupt contractual arrangements.”

Sveen v. Melin, 138 S. Ct. 1815, 1821 (2018). Courts apply a two-step test to determine whether

the challenged law violates the Contracts Clause. See id. The first question is whether the law at

issue amounts to a “substantial impairment” of the contractual relationship. Id. at 1821-22. To

determine whether the law amounts to a substantial impairment, courts consider “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.

Next, if the law is a substantial impairment to the contractual relationship, the second question is

whether the law was “drawn in an appropriate and reasonable way to advance a significant and

legitimate public purpose.” Id. (simplified) (quoting Energy Reserves Grp., Inc. v. Kan. Power &

Light Co., 459 U.S. 400, 411-12 (1983)).

i. Substantial Impairment

Here, the County’s eviction moratoria (collectively, the Eviction Moratorium)

substantially impair Plaintiffs’ contractual relationships. First, the Eviction Moratorium

significantly undermines the parties’ contractual bargain. Although the County argues that the

Eviction Moratorium does not permanently forgive tenants’ obligation to pay back unpaid rent,

Plaintiffs allege many of their tenants will never pay back the accrued rent and simply find

housing elsewhere at the end of the moratorium period. See ECF 17, ¶ 3 (“[E]ven with regard to

the rent and other expenses Plaintiffs could, eventually, sue to recover, the practical reality is that

the tenants who cannot afford to pay one month’s rent now will be highly unlikely to afford the

total of past-due rent that will continue to accumulate each month until the State declares the

‘end’ of the statewide emergency. Plaintiffs’ ‘right’ to unpaid rent is little more than an

illusion.”); ECF 17, ¶ 33 (“[T]he cost of the governments’ failure to act has continued to fall on

Plaintiffs’ shoulders, all of whom have been left to their own devices. On the other hand,

Defendants have continued to subsidize other, more politically favored, segments of society that

have also been impacted by Defendants’ responses to the pandemic.”); see also Melendez v. City

of New York, 16 F.4th 992, 1033 (2d Cir. 2021) (reversing the district court’s dismissal of the

plaintiffs’ Contracts Clause challenge to New York’s prohibition on enforcement of personal

guarantees on commercial leases for a 16-month period during the COVID-19 pandemic and

stating, “the practical likelihood of landlords” recovering the unpaid rent “appears speculative at

best”). The Eviction Moratorium by its terms extinguished a tenant’s obligation to pay rent

during the moratorium period, which Plaintiffs allege effectively extinguished Plaintiffs’

prospect of ever recovering that unpaid rent. And under the current terms of the Eviction

Moratorium, that grace period is extended by an additional 90 days so long as the tenant attests

to the landlord that he or she has submitted a pending application rental assistance.

The second factor, whether the Eviction Moratorium interferes with Plaintiffs’ reasonable

expectations, also tips in Plaintiffs’ favor. Laws that interfere with contracts of highly regulated

industries are less likely to substantially impair those contracts. See Energy Reserves Grp., 459

U.S. at 411 (“In determining the extent of the impairment, we are to consider whether the

industry the complaining party has entered has been regulated in the past.”). Even assuming that

residential tenant leasing is a heavily regulated industry, the nature of the Eviction Moratorium

differs in a material way from prior government regulation of residential tenant leasing and

therefore still interferes with Plaintiffs’ reasonable expectations. Oregon law regulates many

aspects of the landlord-tenant relationship, such as the types of payment the landlord may

require, the imposition of late fees, the landlord’s duty to maintain the property in a habitable

condition, rent increases, and utility and service charges, among others. See generally ORS

Ch. 90. No part of ORS Chapter 90, however, before the State’s COVID-19 legislation,

prohibited landlords from evicting non-paying tenants. Thus, even though state law regulates

many aspects of the landlord-tenant relationship, Plaintiffs had no reasonable expectation that

their ability to collect rent or otherwise initiate eviction proceedings for nonpayment of rent

would be impaired.

Third, the moratorium prevents Plaintiffs from safeguarding their contractual rights.

Plaintiffs allege their contractual rights include the ability to receive the agreed-upon rent

monthly. See ECF 17, ¶ 3. Plaintiffs also allege that as landlords, they incur regular expenses

such as payment on the mortgage for the rental property, utility charges, repair and maintenance

costs, property taxes, and property management fees. ECF 17, ¶ 52. The Eviction Moratorium by

its terms does not safeguard Plaintiffs’ contractual right to receive rent monthly because

Plaintiffs may not evict tenants who have not paid rent for months at a time. Further, although

the Eviction Moratorium allows Plaintiffs to seek repayment of unpaid rent after the moratorium

and grace period expires, this does little to safeguard Plaintiffs’ rights. Plaintiffs allege that the

“tenants who cannot afford to pay one month’s rent now will be highly unlikely to afford the

total of past-due rent” that accrues during a period which now approaches two years. ECF 17,

¶ 3. The moratorium therefore differs from other laws found to safeguard contractual rights, such

as recording statutes, because it does more than impose “minimal paperwork burdens” in order to

receive monthly rent. See Sveen, 138 S. Ct. at 1823. Thus, the Eviction Moratorium substantially

impairs Plaintiffs’ contractual relationships.

Moreover, the Eviction Moratorium mirrors the foreclosure moratorium struck down by

the Supreme Court in W.B. Worthen Co. ex rel. Board of Commissioners of Street Improvement

District No. 513 of Little Rock v. Kavanaugh, 295 U.S. 56 (1935). The foreclosure moratorium in

Worthen, enacted during a state of emergency following the Great Depression, extended the

period between default and foreclosure from 65 days to two and a half years. Id. at 61. The

moratorium also permitted the debtor to remain in “undisturbed possession” of the property

“without a dollar for the creditor” during that time without “even a requirement that the debtor []

satisfy the court of his inability to pay.” Id. The Supreme Court explained that the moratorium,

which removed “nearly all the incidents that give attractiveness and value to collateral security,”

differed from the foreclosure moratorium upheld in Home Building & Loan Association v.

Blaisdell, 290 U.S. 398 (1934). Id. at 62. The Supreme Court in Worthen explained that the

moratorium in Blaisdell did not violate the Contracts Clause because it retained some benefits to

the creditor during the moratorium period and restricted the debtor’s ability to benefit from the

moratorium. Id. at 63. In Blaisdell, the foreclosure moratorium only empowered a court to stay

foreclosure if the debtor could show his or her necessity and required the debtor to pay the fair

rental value for the property if he or she remained in possession before foreclosure. Id.

Here, unlike the moratorium in Blaisdell, tenants need not show to a court during eviction

proceedings that he or she has in fact experienced financial hardship as a result of the COVID-19

pandemic. Like the moratorium in Worthen, the Eviction Moratorium removes nearly all benefits

of the contractual bargain that benefit the landlord during the moratorium period. A tenant may

remain in possession of the property with no payment to the landlord, and since the enactment of

County Ordinance 1296, to remain in possession, tenants need only attest to their landlords that

they have applied for rental assistance. Because the Eviction Moratorium substantially impairs

Plaintiffs’ contractual relationships, the Court now considers whether it is a reasonable way to

advance a significant and legitimate public purpose. See Sveen, 138 S. Ct. at 1822.

ii. Appropriate and Reasonable Way to Advance Significant and

Legitimate Public Purpose

The Ninth Circuit recently addressed a Contracts Clause challenge to a nearly identical

eviction moratorium in California. In Apartment Association of Los Angeles County, Inc. v. City

of Los Angeles, 10 F.4th 905 (9th Cir. 2021), the Ninth Circuit affirmed the district court’s denial

of the plaintiff’s motion for a preliminary injunction, concluding that the plaintiff was not likely

to succeed on the merits of its Contracts Clause claim. Id. at 908. The Ninth Circuit concluded

that the eviction moratorium did not violate the Contracts Clause because even if it amounted to

a substantial impairment of the plaintiff’s contracts, it still was an “appropriate and reasonable

way to advance a significant and legitimate public purpose.” Id. at 913 (quoting Sveen, 138 S. Ct.

at 1822). In reaching that conclusion, the court examined the history of Contracts Clause

jurisprudence, noting that the Supreme Court has over the last century “significantly curtail[ed]

the Contracts Clause’s prohibitive force.” See id. at 912-13. The Ninth Circuit explained that the

defendant had “fairly tie[d] the moratorium to its stated goal of preventing displacement from

homes, which the City reasonably explain[ed] can exacerbate the public health-related problems

stemming from the COVID-19 pandemic.” Id. at 914.

Like the plaintiff in Apartment Association, Plaintiffs here do not challenge that the

Eviction Moratorium’s purpose is a significant and legitimate public purpose. Instead, Plaintiffs

argue that the Eviction Moratorium is an unreasonable means to reach the County’s legitimate

end. The Eviction Moratorium states that the moratorium is “necessary to avoid mass evictions

for non-payment of rent directly attributed to the lingering impacts of [the] COVID-19

pandemic, promote housing stability, and protect the health and safety of community members in

Multnomah County.” County Ordinance 1296. The County, like the defendant in Apartment

Association, reasonably ties the eviction moratorium to its stated end of preventing mass-

evictions and protecting Multnomah County residents’ health and safety. See Apartment

Association, 10 F.4th at 914. Thus, even if the Eviction Moratorium substantially impairs

Plaintiffs’ contractual relationships, it still is an appropriate and reasonable way to advance the

County’s legitimate public purpose.

c. Takings Clause

Plaintiffs assert a claim under the Takings Clause, alleging that the Eviction Moratorium

constitutes a per se taking without just compensation. The County argues that the moratorium is

not a per se taking because it only regulates the economic relationship between landlord and

tenant and does not authorize unwanted physical occupation of the landlord’s property. The

County also contends the moratorium only imposes a temporary limitation on Plaintiffs’ rights

and is therefore not a per se taking under Loretto v. Teleprompter Manhattan CATV Corp., 458

U.S. 419, 440 (1982). The County also argues that Plaintiffs may not seek injunctive relief for

their Takings Claim under Knick v. Township, 139 S. Ct. 2162 (2019).

i. Whether the County Moratorium Constitutes a Per Se Taking

The Fifth Amendment provides: “Nor shall private property be taken for public use,

without just compensation.” U.S. Const. amend. V. The Supreme Court recognizes two types of

takings under the Fifth Amendment: physical, or per se, takings and regulatory takings. See

Cedar Point Nursery v. Hassid, 141 S. Ct. 2063, 2071-72 (2021) (explaining the standards for

determining whether government action is a physical or regulatory taking). A physical taking

occurs when the government condemns property by eminent domain, takes possession of

property for itself or someone else, or occupies property. Id. Regulatory takings, on the other

hand, occur when the government “imposes regulations that restrict an owner’s ability to use his

own property.”1 Id.

Last term, in Cedar Point, the Supreme Court addressed whether a California law

requiring agricultural employers to open their property to union organizers for up to three hours

per day, 120 days per year amounted to a physical taking. Id. at 2069. The Supreme Court held

that it did. Id. at 2077. Under the challenged law, after filing the proper notice with the state

Agricultural Labor Relations Board, union organizations gained the right to “take access” to an

agricultural employer’s property and were “free to meet and talk with employees as they

wish[ed].” Id. at 2069. The law required agricultural employers to open their property to these

organizers, no matter if their employees lived on the property. See id. The Supreme Court

explained that the California law constituted a physical taking because it nullified the agricultural

employer’s right to exclude union organizers from their property. Cedar Point, 141 S. Ct.

at 2076. The right to exclude, the Supreme Court explained, is one of the most “treasured,”

“fundamental,” and “essential” rights of property ownership. Id. at 2072. By temporarily

extinguishing the property owner’s right to exclude, the Court held, the government must

provide just compensation. Id. at 2073.

The County argues that the Supreme Court’s decision in Yee v. City of Escondido, 503

U.S. 519 (1992), governs Plaintiffs’ takings claim, not Cedar Point. The Court agrees. The

plaintiffs in Yee challenged a mobile home rent control ordinance, arguing that the inability to

increase rent at the rate they desired permitted existing tenants to remain on their property

1 Plaintiffs do not argue that the Eviction Moratorium is a regulatory taking, so the Court

will not address that issue.

indefinitely and later realize more profit when those tenants later sold their mobile homes. Id.

at 525. The Supreme Court held that the rent control ordinance was not a physical taking. Id.

at 527. The Court explained that the rent control ordinance only regulated the economic

relationship between landlord and tenant but did not compel the mobile home park owners to

continue renting to their tenants and could still evict those tenants. Id. at 527-28. The Court also

noted that a “different case would be presented were the statute, on its face or as applied, to

compel a landowner over objection to rent his property or to refrain in perpetuity from

terminating a tenancy.” Id. at 528.

Like the park owners in Yee, Plaintiffs here voluntarily invited their tenants onto their

property. This fact draws a critical distinction from Cedar Point, which conferred a unilateral

right on third parties to take access of an employer’s property. The Eviction Moratorium here

grants no right to third parties to access Plaintiffs’ properties. Instead, only those tenants to

whom Plaintiffs have already granted possession may remain on Plaintiffs’ property. Moreover,

Plaintiffs may still evict tenants for reasons other than nonpayment of rent and thus retain their

right to exclude. In other words, the moratorium does not compel Plaintiffs “over objection to

rent [their] property” or prohibit them “in perpetuity from terminating a tenancy.” Id; see also

Ballinger v. City of Oakland, --- F.4th ---, 2022 WL 289180, at *3-4 (9th Cir. 2022) (holding that

an ordinance requiring landlords to pay tenants’ relocation costs was not a physical taking and

stating, “‘[w]hen a person voluntarily surrenders liberty or property,’ like when the Ballingers

chose to rent their property causing them to pay the relocation fee when they caused the tenants

to relocate, ‘the State has not deprived the person of a constitutionally protected

interest’” (emphasis in original) (quoting L.L. Nelson Enters., Inc. v. County of St. Louis, 673

F.3d 799, 806 (8th Cir. 2012))). Plaintiffs, therefore, fail to allege a physical, or per se, taking.

ii. Injunctive Relief

Plaintiffs’ takings claim also fails because they only seek declaratory and injunctive

relief, which is generally unavailable under the Takings Clause. See Knick v. Township of

Scott, 139 S. Ct. 2162, 2176 (2019). Plaintiffs argue that courts may enjoin a taking when the

government has taken the property not for “public use,” citing Ross v. City of Berkeley, 655 F.

Supp. 820, 839-40 (N.D. Cal. 1987). Ross, however, does not address injunctive relief. Instead, it

considers what standard courts should apply when assessing whether the government had taken

property for public use. Id. The court explained that to show there was no “public use” under

Hall v. City of Santa Barbara, 833 F.2d 1270 (9th Cir. 1986), a plaintiff need only show that the

government took the property not for a “legitimate state interest” (rather than with no rational

basis) if the government had accomplished the taking through means other than intentional

eminent domain. Ross, 655 F. Supp. at 839-40. The authority on which the Ninth Circuit relied

on in Hall, however, was later abrogated by the Supreme Court in Lingle v. Chevron U.S.A.

Inc., 544 U.S. 528, 540 (2005) (overruling the “legitimate state interest” requirement in Agins v.

City of Tiburon, 447 U.S. 255 (1980)).

Plaintiffs also draw the Court’s attention to an additional nuance in the analysis of the

general prohibition against injunctive relief for takings claims discussed in Knick. In Cedar

Point, which was decided two years after Knick, the Supreme Court reversed the dismissal of the

plaintiffs’ takings claim, which only sought declaratory and injunctive relief. Cedar Point, 141 S.

Ct. at 2070. On remand, the district court entered a judgment declaring the access regulation

unconstitutional and enjoining enforcement of the regulation against the plaintiffs. Cedar Point

Nursery v. Hassid, 1:16-cv-185-JLT-BAM, ECF 39.

Plaintiffs here argue that the relief awarded in Cedar Point may conflict with the

Supreme Court’s prior statement in Knick that injunctive relief is generally not available under

the Takings Clause and that “governments need not fear that courts will enjoin their activities.”

See Knick, 139 S. Ct. at 2168.

Cedar Point, however, is consistent with Knick because Knick provides only that

injunctive relief is not available under the Takings Clause if there are adequate means to obtain

“just compensation.” See id. at 2168 (“So long as the property owner has some way to obtain

compensation after the fact, governments need not fear that courts will enjoin their activities.”);

id. at 2176 (“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 2177 (“Given the availability

of post-taking compensation, barring the government from acting will ordinarily not be

appropriate.”). The Supreme Court in Cedar Point did not address whether just compensation

was available, either because the parties did not raise that issue or because the Supreme Court

was satisfied that there was no adequate means to obtain just compensation for a temporary but

recurring physical taking of the plaintiffs’ property under the specific facts presented in that case.

In other words, the Supreme Court in Cedar Point effectively applied the exception to the

general rule stated in Knick.

Here, Plaintiffs have alleged no facts showing that even if the Eviction Moratorium did

amount to a physical taking, they have no access to adequate means of obtaining just

compensation. Plaintiffs’ Takings Clause claim, therefore, fails because it only seeks injunctive

relief. See Or. Rest. & Lodging Ass’n v. Brown, 2020 WL 6905319, at *6 (D. Or. Nov. 24, 2020)

(dismissing Takings Clause claim challenging Governor Brown’s eviction moratorium because

the plaintiffs only sought injunctive relief).

d. Arbitrary and Confiscatory Price Controls

Plaintiffs also bring a claim under the Fourteenth Amendment, alleging that the Eviction

Moratorium amounts to a confiscatory price control in violation of their due process rights. A

price control law violates the Fourteenth Amendment if it is “arbitrary, discriminatory, or

demonstrably irrelevant to the policy the Legislature is free to adopt.” Nebbia v. People of New

York, 291 U.S. 502, 539 (1934). Rent control is a form is price control. See Chevron USA, Inc. v.

Cayetano, 224 F.3d 1030, 1043 (9th Cir. 2000) (Fletcher, J., concurring) (“An ordinary rent

control law is constitutionally indistinguishable from a price control law.”); Adamson Cos. v.

City of Malibu, 854 F. Supp. 1476, 1485 (C.D. Cal. 1994) (“Rent control is a form of price-

control regulation.”). Plaintiffs’ price control claim fails because the Eviction Moratorium does

not impose rent control or other form of price control. The moratorium prohibits eviction for

nonpayment of rent while in effect but does not regulate the price of rent that Plaintiffs and their

tenants may negotiate.

e. Unreasonable Seizures

Plaintiffs also bring a claim under the Fourth Amendment, alleging the County

unreasonably seized their property. To state a claim under the Fourth Amendment, Plaintiffs

must allege that “a seizure occurred and that it was unreasonable.” Cedar Point Nursery v.

Shiroma, 923 F.3d 524, 534 (9th Cir. 2019), rev’d on other grounds, 141 S. Ct. 2063 (2021). “A

‘seizure’ of property occurs when there is some meaningful interference with an individual’s

possessory interests in that property.” United States v. Jacobsen, 466 U.S. 109, 113 (1984). The

Ninth Circuit has explained that the Fourth Amendment applies only to government conduct

carried out in an investigatory capacity:

The phrase “searches and seizures” connotes that the type of

conduct regulated by the fourth amendment must be somehow

designed to elicit a benefit for the government in an investigatory

or, more broadly, an administrative capacity. Thus, unlike the

“state actor” requirement of the fourteenth amendment, the fourth

amendment cannot be triggered simply because a person is acting

on behalf of the government. Instead, the fourth amendment will

only apply to governmental conduct that can reasonably be

characterized as a “search” or a “seizure.”

United States v. Attson, 900 F.2d 1427, 1429 (9th Cir. 1990). The Ninth Circuit emphasized the

limited applicability of the Fourth Amendment to conduct not related to a criminal investigation:

“Only rarely . . . has the [Supreme] Court considered the nature of

fourth amendment restrictions on the conduct of government

officials in noncriminal investigations.” The Supreme Court, 1986

Term-Leading Cases, 101 Harv. L. Rev. 119, 230 (1987). Even

rarer are the instances in which the Court has considered the

application of the fourth amendment to noncriminal

noninvestigatory governmental conduct. Yet, when the Court has

considered the application of the fourth amendment to

governmental conduct in a noncriminal context, it has been careful

to observe that the application of the amendment is limited.

Id. at 1430 (emphasis in original). To be subject to the Fourth Amendment, the government must

intend for its conduct to be a “search or seizure, be it in the context of a criminal investigation or

an administrative inspection.” Id. at 1431. The Ninth Circuit has continued to apply the rule laid

out in Attson to determine whether non-law enforcement government conduct is subject to the

Fourth Amendment. See Mann v. County of San Diego, 907 F.3d 1154, 1164 (9th Cir. 2018)

(citing Attson and concluding that the Fourth Amendment applied to medical examinations

because they were “at least partially investigatory”); Arpin v. Santa Clara Valley Transp.

Agency, 261 F.3d 912, 924 (9th Cir. 2001) (“[F]or the conduct of a non-law enforcement

governmental party, such as Ruiz, to be subject to the Fourth Amendment, Arpin must show that

Ruiz acted ‘with the intent to assist the government in its investigatory or administrative

purposes, and not for an independent purpose.’” (quoting Attson, 900 F.2d at 1433)).

Plaintiffs have alleged no facts showing that the County enacted the moratorium to act in

an investigatory capacity related to any criminal or administrative investigation. Plaintiffs,

therefore, fail to state a claim under the Fourth Amendment. See id.

f. Right of Access to the Courts

Plaintiffs also bring a claim for a violation of the right to access the courts under the

Petition Clause of the First Amendment and the Due Process Clause of the Fourteenth

Amendment. Although the source of the right to access the courts remains “unsettled,” to state a

right of access claim, the plaintiff must allege facts showing “official action is presently denying

an opportunity to litigate for some class of potential plaintiffs” and he or she has a nonfrivolous

underlying claim. Christopher v. Harbury, 536 U.S. 403, 413, 415 (2002). A delayed ability to

litigate, rather than an outright prohibition, does not violate the Constitution. See Sosna v.

Iowa, 419 U.S. 393, 410 (1975) (distinguishing between “total deprivation” of access to divorce

courts due to a filing fee and delay in access to divorce courts due to one-year residency

requirement); Eu, 979 F.2d at 706 (stating that “we can find no basis in the Constitution for a

rigid right to resolution of all civil claims” within a certain time).

Plaintiffs argue the Eviction Moratorium violates their right to access the courts because

it prohibits landlords from initiating eviction proceedings for nonpayment of rent. The

moratorium, however, does not permanently remove Plaintiffs’ ability to access the courts for all

purposes. Plaintiffs may initiate eviction proceedings for reasons other than nonpayment of rent

and may file breach of contract actions against tenants.2 The moratorium therefore does not

violate Plaintiffs’ right to access the courts under the First or Fourteenth Amendments. See

Heights Apartments, LLC v. Walz, 510 F. Supp. 3d 789, 811 (D. Minn. 2020) (“Because the

[Executive Orders] foreclose the Landlords’ ability to obtain only one kind of relief and only

2 Plaintiffs argue that H.B. 4401 and the later local moratoria that adopted H.B. 4401

preclude them from filing breach of contract lawsuits against nonpaying tenants. The County

responds that no provision in the operative County ordinance (Ordinance 1296), which refers to

S.B. 278, bars any landlord from suing and alleging breach of contract by nonpayment. The

Court has identified no provision of County Ordinance 1296 that prohibits any landlord from

bringing such a lawsuit.

does so temporarily, the EOs do not violate the Petition Clause.”); Elmsford Apartment Assocs.,

LLC v. Cuomo, 469 F. Supp. 3d 148, 174 (S.D.N.Y. 2020) (“Although nonpayment proceedings

have been suspended, Plaintiffs can still sue their tenants for arrearages through a breach of

contract action in the New York Supreme Court – and the fact that is not their preferred remedy

is of no moment. They will also have the opportunity to bring eviction proceedings for reason of

nonpayment once the order expires, a right preserved by the portion of EO 202.28 that extends

relevant statutes of limitation for the duration of court closures.”).

CONCLUSION

The Court ADOPTS IN PART the Findings and Recommendation (ECF 54). The Court

GRANTS all pending Motions to Dismiss (ECF 18, 19, 21) and DENIES Plaintiffs’ Partial

Motion for Summary Judgment (ECF 33). If Plaintiffs believe that they can cure the deficiencies

identified in this Opinion and Order, Plaintiffs may file a Second Amended Complaint within

two weeks from the date of this decision.

IT IS SO ORDERED.

DATED this 3rd day of February, 2022.

/s/ Michael H. Simon

Michael H. Simon

United States District Judge