Darby Development Company, Inc. v. United States

lfn tbe Wniteb $>iates '1:ourt of jfeberal QCiaitns

No.21-1621L

(Filed: May 17, 2022)

FOR PUBLICATION

DARBY DEVELOPMENT COMPANY, INC., ET AL., )

)

Plaint!ffs, ) CDC Eviction

) Moratorium: Fifth

v. Amendment Takings &

)

Illegal Exaction

UNITED STATES,

)

)

Defendant. )

)

Creighton R. Magid, Dorsey & Whitney LLP, Washington, D.C. , and Shawn J. Larsen-Bright,

Dorsey & Whitney LLP, Seattle, Washington, for plaintiffs. With them on the briefs was

John McDermo/1, John McDermott, PLLC, Arlington, Virginia.

Nathanael B. Yale, Trial Attorney, Commercial Litigation Branch, Civil Division,

U.S. Department of Justice, Washington, D.C., for defendant. With him on the briefs

were Brian M. Boynton, Acting Assistant Attorney General, Patricia lvf McCarthy, Director,

Martin F. Hockey, Jr., Deputy Director, L. Misha Preheim, Assistant D irector,

Commercial Litigation Branch, Civil Division, U.S. Department ofJustice, Washington, D.C.,

and Mark Pacella and Ma/thew P. Rand, Trial Attorneys, Natural Resources Section,

Environmental & Natural Resources Division, U.S. Department of Justice, Washington, D.C.

OPINION AND ORDER

BONILLA, Judge.

Contemporaneous with the publication of this decision, the United States reached the

once unimaginable and grim milestone of one million deaths due to Coronavirus disease 2019

(COVID-19). During the past tlu·ee years, the executive and legislative branches of our

government (federal and state) as well as the American people in cities and towns across this

Nation have engaged in critical debates on the best ways to combat the deadly pandemic as

well as address the crippling financial fallout impacting the United States and global economies.

Passionate policy debates range from vaccines to mask mandates, social distancing to curfews,

shuttering businesses to virtual learning, and emergency financial assistance to states and local

municipalities, businesses, and individuals.

Throughout this extraordinary time, the judiciary continues to serve the critical role

of ensuring that policy decisions, once reached, are in accord with the United States Constitution

and federal and state law. Indeed, the true tests of an enduring democracy and an independent

judiciaiy come not in times of peace, tranquility, and good health, but in times of war, unrest,

and disease.

At the hea1t of this case are the decisions of the executive and legislative branches of the

federal government to institute and extend nationwide residential eviction moratoria to combat

the spread of COVID-19. These measures aimed to prevent homelessness and cohabitation by

necessity by allowing people to remain and isolate or quarantine in their homes, paiticularly

those infected or infectious and members of vulnerable populations at increased risk of

contracting the deadly virus. Designated as temporaiy measures, iterations of the residential

eviction moratoria remained in effect for seventeen months (from March 27, 2020 to August 26,

2021). Driven largely by a series of extensions issued by the Centers for Disease Control and

Prevention (CDC), the nationwide residential eviction moratorium was ultimately voided by the

judiciaiy upon the ground that the CDC lacked the requisite legal authority to take such drastic

action.

In this case, more specifically, thi1ty-eight landlords and rental prope1ty owners

(of properties ranging from single-family homes to 3,000+ unit apartment complexes located

throughout the country) filed suit in this Comt asserting that the nationwide residential

eviction moratorium effected either a compensable taking or an illegal exaction under the

Fifth Amendment. The plaintiffs aver that the government forced them to continue housing

non-rent-paying tenants rather than replace them with rent-paying tenants and subjected them

to significant fines and imprisonment if they pursued otherwise lawful evictions. Plaintiffs

maintain that they alone should not have been forced to shoulder this burden for the benefit of

the Nation. Accordingly, this Court is now called upon to assess not as a matter of public policy

or equity, but as a matter of law, whether plaintiffs are entitled to any relief under the

Constitution.

Before the Comt is defendant' s motion to dismiss plaintiffs' First Amended Complaint

for lack of subject matter jurisdiction or, in the alternative, for failure to state a claim upon

which relief can be granted under Rules 12(b)(l) or 12(b)(6), respectively, of the Rules of

the United State Comt of Federal Claims (RCFC). For the reasons set faith below, the Comt

GRANTS defendant's motion to dismiss for failure to state a claim upon which relief can be

granted.

BACKGROUND

In March 2020, Congress passed, and the President signed into law, the Coronavirus Aid,

Relief, and Economic Security Act (CARES Act), a $2.2 trillion economic stimulus bill designed

to mitigate the devastating financial impacts of the COVID-19 pandemic across the United States

and throughout the global economy. See Pub. L. No. 116-136, 134 Stat. 281 (2020). Among

the myriad relief provisions, Section 4024 of the CARES Act imposed a 120-day moratorium

(from March 27 through July 24, 2020) on judicial eviction proceedings for residential rental

2

1

units receiving federal assistance or financed through federally backed mortgage loans. Id. at

§ 4024(b)(l) (Temporary Moratorium on Eviction Filings). Congress did not renew the statutory

eviction moratorium, which expired by its own terms on July 24, 2020.

Two weeks later, on August 8, 2020, the President issued an Executive Order titled

Fighting the Spread of COVID-19 by Providing Assistance to Renters and Homeowners. See

Exec. Order No. 13,945, 85 Fed. Reg. 49,935 (Aug. 14, 2020). Relevant here, Section 3(a)

directed the Secretary of Health and Human Services (HHS) and the CDC Director to "consider

whether any measmes temporarily halting residential evictions of any tenants for failure to pay

rent are reasonably necessary to prevent the fmiher spread of COVID-19 from one State or

possession into any other State or possession." Id. at 49,936. In response, on September 4,

2020, the CDC issued an order titled Temporary Halt in Residential Evictions to Prevent the

Further Spread of COVID-19 (CDC Order). 85 Fed. Reg. 55,292 (Sept. 4, 2020).

Citing Section 361 of the Public Health Service Act, codified at 42 U .S.C. § 264(a),

the CDC declared a nationwide moratorium on all residential evictions within jurisdictions not

2

already covered by similar moratoria adopted by states and local municipalities. 85 Fed. Reg. at

55,292, 55,297. The CDC Order differed from the CARES Act residential eviction moratorium

in three material respects. First, the agency's eviction moratorium applied to all residential

properties nationwide without regard to whether the prope1iies received federal program benefits

or were financed through federally backed mortgage loans. Compare id. at 55,292 to 55,297

with CARES Act § 4024. Second, the CDC Order provided for the imposition of criminal

penalties (i.e., fines and imprisonment) for violations of the eviction moratorium. 3 Compare

85 Fed. Reg. at 55,296 with CARES Act§ 4024. Third, unlike the CARES Act eviction

moratorium, the CDC Order did not prohibit landlords from assessing "fees, penalties, or

interest" for the nonpayment ofrent. Compare 85 Fed. Reg. at 55,292, 55,294 with CARES Act

§ 4024. Neither the statutory nor the regulatory residential eviction moratorium waived or

otherwise excused the nonpayment ofrent; instead, they focused on temporarily halting the

1 Unlike the CDC's eviction moratorium, discussed infra, the CARES Act eviction moratorium prohibited landlords

from assessing "fees, penalties, or other charges to the tenant related to [the] nonpayment of rent." CARES Act

§ 4024(b)(2).

2 According to the CDC Order, it "d[id] not apply in any State, local, tetTitorial, or tribal area with a moratorium

on residential evictions that provide[d] the same or greater level of public-health protection than the requirements

listed in th[e] Order." 85 Fed. Reg. at 55,292, 55,294. American Samoa was also initially excluded due to the fact

that the United States tetTitory had no reported COVID-1 9 cases at that time. Id. at 55,292 to 55,294.

3 The CDC Order provided that violators of the residential eviction moratorium would be subject to fines of up to

$ 100,000 and/or one year in prison unless the violation resulted in a death; in situations involving a related death,

the maximum regulatory fine increased to $250,000, and all penalties remained subject to applicable criminal laws.

85 Fed. Reg. at 55,296. The CDC Order also highlighted the potential involvement of the United States Depaitment

of Justice. Id.

3

forcible eviction of tenants unable to make timely rent payments due to the pandemic-induced

financial crisis. 4 See 85 Fed. Reg. at 55,292, 55,294, 55,296; CARES Act § 4024(b)-(c).

To invoke the protections of the CDC Order, tenants were required to certify under

penalty of pe1jury that they: (1) attempted to secure available government assistance; (2) met

specified household income caps5; (3) were unable to pay their rent in full due to a significant

loss of household income, unemployment or underemployment, or extraordinary out-of-pocket

medical expenses; (4) continued paying as much rent as they could reasonably afford; and

(5) would be homeless or be forced to cohabitate with others if evicted because they have

no other available housing options. 85 Fed. Reg. at 55,293, 55,297. The CDC Order was

initially intended to be in effect from September 4 through December 31, 2020. Id. at 55,292,

55,297.

On December 27, 2020, four days prior to the expiration of the CDC Order, Congress

extended the residential eviction moratorium through January 31, 2021, as pait of the

Consolidated Appropriations Act, 2021. See Pub. L. 116-260, § 502, 134 Stat. 2078-79 (2021 ).

In Section 502, titled "Extension of Eviction Moratorium," Congress stated in full:

The order issued by the Centers for Disease Control and Prevention under

section 361 of the Public Health Service Act (42 U.S.C. 264), entitled

"Temporary Halt in Residential Eviction To Prevent the Fmther Spread of

COVID-19" (85 Fed. Reg. 55292 (September 4, 2020)[)] is extended through

January 31, 2021, notwithstanding the effective dates specified in such Order.

Id. In Section 501, Congress contemporaneously appropriated $25 billion in emergency

rental assistance for landlords whose tenants defaulted on rent payments during the COVID-19

pandemic. Id. § 501(a)(l) (Emergency Rental Assistance). Congress did not further extend the

CDC Order. However, on March 10, 2021, in Section 3201 of the American Rescue Plan Act

of 2021, Congress appropriated an additional $21. 5 5 billion in emergency rental assistance.

Pub. L. 117-2, § 3201, 135 Stat. 4 (2021).

On January 29, 2021, prior to the expiration of the 31-day congressional extension,

the CDC issued a supplemental order extending its regulat01y residential eviction moratorium

through March 31, 2021. 86 Fed. Reg. 8,020 (Feb. 3, 2021). Thereafter, on March 29, June 24,

and August 3, 2021, the CDC fu1ther extended its regulat01y residential eviction moratorium

4The CDC Order did not prohibit evictions for reasons other than the non-payment of rent (e.g., criminal activity,

safety and security threats, property damage, building code and health ordinance violations). 85 Fed. Reg. at

55,294.

5The CDC Order limited coverage to individuals earning less than $99,000 and couples earning less than $198,000,

individuals "not required to report any income in 2019 to the U.S. Internal Revenue Service," and individuals

who " received an Economic Impact Payment (stimulus check) pursuant to Section 220 1 of the CARES Act."

85 Fed. Reg. at 55,293.

4

through October 3, 2021. 6 See 86 Fed. Reg. 16,73 1 (Mar. 31, 2021); 86 Fed. Reg. 34,010

(June 28, 202 1); 86 Fed. Reg. 43,244 (Aug. 6, 2021).

In the interim, residential landlords, real estate companies, and trade associations filed

a series of lawsuits throughout the United States challenging the legality and propriety of the

CDC Order. 7 In the lead case, Alabama Ass 'n ofRealtors, the United States District Court for

the District of Columbia held that the CDC Order imposing a nationwide residential eviction

moratorium exceeded the federal agency's statutory authority under the Public Health Service

Act, 42 U.S.C. § 264(a). 539 F. Supp. 3d at 36-43. The district court's ruling was then twice

appealed to the United States Supreme Court on the issue of whether the trial court's decision to

vacate the CDC Order should be stayed pending appeal. 8 See Alabama Ass 'n ofRealtors,

_ U.S. at_, 141 S. Ct. at 2320; Alabama Ass 'n ofRealtors, _ U.S. at _ , 141 S. Ct. at 2485.

In the end, the Supreme Com1 vacated the stay, noting: "careful review ofth[e] record makes

clear that the [plaintiffs] are virtually certain to succeed on the merits of their argument that the

CDC has exceeded its authority." Alabama Ass 'n ofRealtors, _ U.S. at _ , 141 S. Ct. at 2486;

accord Alabama Ass 'n ofRealtors, _U.S. at_, 141 S. Ct. at 2488 ("The [plaintiffs] not only

have a substantial likelihood of success on the merits- it is difficult to imagine them losing.").

Accordingly, the CDC Order was terminated effective August 26, 2021.

DISCUSSION

Before the Com1 is defendant's motion to dismiss plaintiffs' First Amended Complaint

for lack of subject matter jurisdiction under RCFC 12(b)(1) or, in the alternative, for failure to

state a claim upon which relief can be granted under RCFC 12(b)(6). Where, as here, plaintiffs

allege that the government's actions were not ultra vires in pleading their takings claim,

this Com1 has jurisdiction to examine issues of statuto1y authorization and construction.

6

There was a three-day gap in the continuous extensions of the CDC Order between the expiration of the June 24,

202 1 extension until July 31, 202 1, and the August 3, 202 1 extension. Compare 86 Fed. Reg. 34,010 (June 28,

202 1) with 86 Fed. Reg. 43,244 (Aug. 6, 202 1).

7 See, e.g., Alabama Ass 'n ofRealtors v. Dep 't ofHealth & Hum. Servs. , 539 F. Supp. 3d 29 (D.D.C.), stay granted,

539 F. Supp. 3d 211 (D.D.C.), motion to vacate stay denied, No. 21 -5093, 202 1 WL 222 1646 (D.C. Cir. June 2,

202 1), motion to vacate stay denied,_ U.S._, 141 S. Ct. 2320 (2021); Alabama Ass'n ofRealtors v. Dep 't of

Health & Hum. Servs., 557 F. Supp. 3d I (D.D.C.) (denying motion to vacate stay), motion to vacate stay denied,

No. 2 1-5093, 202 1 WL 3721431 (D.C. Cir. Aug. 20, 2021), stay vacated, _ U.S._, 14 1 S. Ct. 2485 (202 1),

appeal dismissed on remand, No. 2 1-5093, 2021 WL 4057718 (D.C. Cir. Sept. 3, 202 1); Tiger Lily, LLC v. US.

Dep 't Hous. & Urb. Dev., 525 F. Supp. 3d 850 (W.D. Tenn), stay pending appeal denied, 992 F.3d 518 (6th Cir.),

ajf'd, 5 F.4th 666 (6th Cir. 2021); Terkel v. Ctrs.for Disease Control & Prevention, 521 F. Supp. 3d 662

(E.D. Tex.), appeal dismissed, 15 F.4th 683 (5th Cir. 2021 ); Brown v. Dep 't ofHealth & H11111. Servs. ,

497 F. Supp. 3d 1270 (N.D. Ga. 2020), ajf'd, 4 F.4th 1220 ( I Ith Cir.), vacated, 20 F.4th 1385 (11th Cir. 202 1);

Skyworks, Ltd. v. Ctrs. for Disease Control & Prevention, 524 F. Supp. 3d 745 (N.D. Ohio), amended,

542 F. Supp. 3d 7 19 (N.D. Ohio), appeal dis111issed, No. 2 1-3563, 202 1 WL 430587 (6th Cir. Sept. 2 1, 202 1);

Chambless Enters., LLC v. Redfield, 508 F. Supp. 3d l Ol (W.D. La. 2020).

8 The first appeal to the Supreme Comt was largely decided by the fact that the CDC Order was about to expire by

its own te1ms on July 31, 202 1. See Alabama Ass'n of Realtors, _ U.S. at _ , 14 1 S. Ct. at 2320 (5-4) (Kavanaugh,

J., concurring). The CDC's Aug ust 3, 2021 decision to renew the nationwide residential eviction moratorium for a

period of 60 days, see 86 Fed. Reg. at 43,244, prompted the second appeal to the Supreme Comt.

5

See Jan's Helicopter Serv., Inc. v. Fed. Aviation Admin., 525 F.3d 1299, 1309 (Fed. Cir. 2008)

("Appellants' contentions about the lawfulness or authorization of the government's actions,

while relevant to whether appellants' takings claims will be successful on their merits, do not

affect the jurisdiction of the Court of Federal Claims to consider those claims."); cf Straw v.

United States, Nos. 2021-1600 & -1602, 2021 WL 3440773, at *3-4 (Fed. Cir. Aug. 6, 2021)

(per curiam) (Comt of Federal Claims lacks jurisdiction to consider takings claim where plaintiff

fails to concede validity of government's action). Fmther, this Comt possesses jurisdiction to

entertain plaintiffs' alternatively pleaded illegal exaction claim. See Aerolineas Argentinas v.

United States, 77 F.3d 1564, 1572-73 (Fed. Cir. 1996) (Court of Federal Claims has jurisdiction

to examine illegal exaction claim based upon plaintiffs' claim that they "'paid money over to the

Government, directly or in effect, ... in contravention of [law]."') (emphasis added) (quoting

Eastport S. C. Corp. v. United States, 372 F.2d 1002, 1007 (Ct. Cl. 1967)). Accordingly, the

Comt appropriately assesses plaintiffs' takings and illegal exaction claims under RCFC 12(b)(6).

A. Standard of Review

Claims that survive jurisdictional challenges remain subject to dismissal under

RCFC 12(b)(6) if they do not provide a basis for the comt to grant relief as a matter of law.

See Lindsay v. United States, 295 F.3d 1252, 1257 (Fed. Cir. 2002) ("A motion to dismiss ...

for failure to state a claim upon which relief can be granted is appropriate when the facts asserted

by the claimant do not entitle him to a legal remedy."). "To avoid dismissal for failure to state

a claim under RCFC 12(b)(6), 'a complaint must allege facts "plausibly suggesting (not merely

consistent with)" a showing of entitlement to relief."' Kam-Almaz v. United States, 682 F.3d

1364, 1367 (Fed. Cir. 2012) (quoting Acceptance Ins. Cos. v. United States, 583 F.3d 849,853

(Fed. Cir. 2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007))). A plaintiff

must "plead[] factual content that allows the comt to draw the reasonable inference that the

defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

(citing Twombly, 550 U.S. at 556). "At the same time, a comt is "'not bound to accept as

true a legal conclusion couched as a factual allegation."'" Kam-Almaz, 682 F.3d at 1368

(quoting Twombly, 550 U.S. at 570 (quoting Papasan v. Allain, 478 U.S. 265,286 (1986))).

B. Takings Clause

The Takings Clause of the Fifth Amendment to the United States Constitution provides:

"nor shall private property be taken for public use, without just compensation." U.S. CONST.

amend. V. In this case, plaintiffs assert that the CDC's nationwide residential eviction

moratorium effected a physical taking of their prope1ty9 ; more specifically, plaintiffs charge that

the CDC Order appropriated their right to remove and exclude non-rent-paying tenants and

replace them with rent-paying tenants. Plaintiffs seek to recover from the government, among

9 ln their response to the government's motion to dismiss, plaintiffs note that they are not alleging a regulatory

taking. See ECF 12 at 2 n.1. Accordingly, the Cou1i does not examine the CDC Order under the analytical

framework for assessing regulatory takings announced in Penn Cent. Transp. Co. v. New York, 438 U.S. 104 (1978).

6

other forms of relief, the rent tenants failed to pay while continuing to occupy the residences as a

consequence of the CDC Order. 10

As explained by the Federal Circuit:

A physical taking of land occurs when the government itself occupies the property

or requires the landowner to submit to physical occupation of its land," Yee v.

City ofEscondido, 503 U.S. 519, 527 (1992), whether by the government or a

third party, see Preseault v. United States, 100 F.3d 1525, 1551 (Fed. Cir. 1996)

(en bane).

Forest Props. , Inc. v. United States, 177 F.3d 1360, 1364 (Fed. Cir. 1999) (emphasis in original);

see also, e.g. , Cedar Point Nursery v. Hassid, _U.S._, 141 S. Ct. 2063 (2021) (government

grant of right of access to labor organizations to solicit support for unionization constituted a

per se physical taking of agricultural employer's property).

To asse1t a viable takings claim against the United States, the government action in

issue must be duly authorized by Congress. See Del-Rio Drilling Programs, Inc. v. United

States, 146 F.3d 1358, 1362-63 (Fed. Cir. 1998) (citing United States v. N Am. Transp. &

Trading Co., 253 U.S. 330, 333 (1920)); NBH Land Co. v. United States, 576 F.2d 317, 319-20

(Ct. Cl. 1978) ("a [T]ucker Act suit does not lie for an executive taking not authorized by

Congress, expressly or by implication") (citing Hooe v. United States, 218 U.S. 322,335

(1910)), quoted in Tabb Lakes, Ltd. v. United States, 10 F.3d 796,803 (Fed. Cir. 1993).

Where, as here, a federal agency's actions are not authorized, the actions "may be enjoinable,

but they do not constitute [a] taking effective to vest some kind of title in the government and

entitlement to just compensation in the owner or former owner." Del-Rio, 146 F.3d at 1362

(quoting Armijo v. United States, 663 F.2d 90, 95 (Ct. Cl. 1981)) (citing Florida Rock Indus.,

Inc. v. United States, 791 F.2d 893, 898 (Fed. Cir. 1986)); Tabb Lakes, 10 F .3d at 803

(quoting Armijo, 663 F.2d at 95).

1. Statutory Authority

Section 361 of the Public Health Service Act empowers the HHS Secretaiy or their

authorized designee "to make and enforce such regulations as in his judgment are necessary

to prevent the introduction, transmission, or spread of communicable diseases from foreign

countries into the States or possessions, or from one State or possession into any other State or

possession." 42 U.S.C. § 264(a). Relevant here, the ensuing sentence cabins this seemingly

broad statutmy authority:

For purposes of can-ying out and enforcing such regulations, the [Secretary or

their duly authorized designee] may provide for such inspection, fumigation,

disinfection, sanitation, pest extermination, destruction of animals or articles

10In addition to rent arrears, plaintiffs seek to recover pre- and post-judgment interest as well as attorneys' fees and

costs. See ECF 10 at 20.

7

found to be so infected or contaminated as to be sources of dangerous infection to

human beings, and other measures, as in his judgment may be necessary.

Id. 11 ; see Alabama Ass 'n of Realtors, _ U.S. at _, 141 S. Ct. at 2488 ("[T]he second sentence

[of§ 361(a)] informs the grant of authority by illustrating the kinds of measures that could be

necessary: inspection, fumigation, disinfection, sanitation, pest extermination, and destruction of

contaminated animals and articles."). The HHS Secretary formally delegated these authorities to

the CDC Director. See 42 C.F.R. § 70.2.

Addressing the CDC's reliance upon the Public Health Service Act to supp01t the

nationwide residential eviction moratorium at issue in this case, the Supreme Court characterized

the government' s arguments as "breathtaking" and "unprecedented," explaining: "It strains

credulity to believe that this statute grants the CDC the sweeping authority that it asse1ts."

Alabama Ass 'n ofRealtors,_ U.S. at _ , 141 S. Ct. at 2486, 2489; accord Alabama Ass 'n of

Realtors,_ U.S. at_, 141 S. Ct. at 2489 ("Section 361(a) is a wafer-thin reed on which to rest

such sweeping power."). Vacating the stay of the district comt' s ruling that the CDC lacked

congressional authority to issue the eviction moratorium, the Supreme Court concluded: " If a

federally imposed eviction moratorium is to continue, Congress must specifically authorize it."

Alabama Ass'n ofRealtors, _ U.S. at_, 141 S. Ct. at 2491.

In response to the Supreme Comt's pronouncements in Alabama Ass 'n ofRealtors,

plaintiffs argue that the Supreme Comt' s opinion was limited to the issue of vacatur of the stay

pending appeal and, thus, does not constitute a final decision of the Supreme Court on the merits

of the statuto1y authority issue presented here. Whatever the procedural posture of the Alabama

Ass 'n ofRealtors appeal, the imp01t of the Supreme Comt's opinion is clear and binding on this

Court: the CDC lacked the requisite congressional authority to issue the nationwide residential

eviction moratorium at the heart of this case. See Dellew Corp. v. Unites States, 855 F.3d 1375,

1382 (Fed. Cir. 2017) (" We reaffirm a well-known principle that the Court of Federal Claims

failed to follow here: the Court of Federal Claims must follow relevant decisions of the Supreme

Comt and the Federal Circuit, not the other way around.") (citing Coltec Indus., Inc. v. United

States, 454 F.3d 1340, 1353 (Fed. Cir. 2006)).

Plaintiffs' reliance on the Federal Circuit's decision in Del-Rio is similarly unavailing.

In Del-Rio, officials from the Department of the Interior "required owners of mining leases on

federal land to secure special permits before drilling or surveying on the land covered by the

leases." 146 F.3d at 1360. Government officials thereafter conditioned the approval of the

special permits upon the owners securing easements over the trust lands from the Ute Indian

Tribe for whom the United States held the surface estate in trust. Id. Distinguishing between

an unauthorized government act for which a takings claim cannot lie as a matter of law, and an

authorized government act ultimately found unlawful which may constitute a compensable

taking, the Federal Circuit explained:

11 The statute also provides the Secretary with limited authority to promulgate regulations to temporarily apprehend,

detain, examine, or conditionally release "any individual reasonably believed to be infected with a communicable

disease" either entering the United States or engaged in interstate travel. Id. § 264(b)-(d).

8

In a case such as this one, in which the alleged taking consists of regulatory action

that deprives a property-holder of the enjoyment of prope1ty, government agents

have the requisite authorization if they act within the general scope of their duties,

i.e., if their actions are a " natural consequence of Congressionally approved

measures," or are pursuant to "the good faith implementation of a Congressional

Act[.]" The principle underlying this rule is that when a government official

engages in ultra vires conduct, the official "will not, in any legal or constitutional

sense, represent the United States, and what he does or omits to do, without the

authority of Congress, cannot create a claim against the Government 'founded

upon the Constitution."'

In holding that ultra vires conduct cannot give rise to a Fifth Amendment

taking, the comts have drawn an impo1tant distinction between conduct that is

"unauthorized" and conduct that is authorized but nonetheless unlawful. Merely

because a government agent's conduct is unlawful does not mean that it is

unauthorized; a government official may act within his authority even if his

conduct is later determined to have been contrary to law.

Id. at 1362 (internal citations omitted) (first quoting NBH Land Co., 576 F.2d at 319; then

quoting S. Cal. Fin. Corp. v. United States, 634 F.2d 521,525 (Ct. Cl. 1980); and then quoting

Hooe, 218 U.S. at 322) (citing Larson v. Domestic & Foreign Com. Corp., 337 U.S. 682,695

(1949)). Fmther defining ultra vires conduct, the Federal Circuit explained that such

government actions must be "either explicitly prohibited or .. . outside the nmmal scope of the

government officials' duties." Id. at 1363 (emphasis added). The Del-Rio comt ultimately

concluded that the officials within the Depaitment of the Interior "were acting within the scope

of their statutorily authorized duties," even if their actions were ultimately deemed unlawful. Id.

at 1362, 1363.

In this case, in contradistinction, although not "explicitly prohibited" by Congress,

the CDC Director's issuance and series of extensions of the nationwide residential eviction

moratorium was clearly "outside the nmmal scope of the government official' s duties."

Indeed, as noted by the Supreme Comt in Alabama Ass 'n of Realtors:

Originally passed in 1944, this provision has rarely been invoked- and never

before to justify an eviction moratorium. Regulations under this authority have

generally been limited to quarantining infected individuals and prohibiting the

import or sale of animals known to transmit disease. See, e.g., 40 Fed. Reg.

22,543 (1975) (banning small tmtles known to be carriers of salmonella).

U.S. at _ , 141 S. Ct. at 2487. As such, consistent with the Federal Circuit's decision

in Del-Rio, the CDC Order was unauthorized and, thus, ultra vires.

2. Congressional Ratification

As an initial matter, during oral argument, the Court inquired sua sponte whether any

of the plaintiffs wished to pmsue a takings claim based solely upon Congress' initial 120-day

9

residential eviction moratorium (from March 27 through July 24, 2020), codified in Section 4024

of the CARES Act, and/or Congress' 31-day extension of the CDC Order (from January 1-31 ,

2021 ), codified in Section 502 of the Consolidated Appropriations Act, 2021. See Tr. at 52-53

(Apr. 19, 2022) (ECF 22). The Comt explained that reliance solely upon congressional action

would moot the CDC authority issue. Id. at 53. Plaintiffs' counsel declined to pmsue an action

based solely upon the CARES Act, explaining that none of the plaintiffs' properties were

impacted by the legislation because the initial eviction moratorium was limited to rental

prope1ties receiving federal program benefits or financed through federally backed m01tgage

loans. Id. at 52. Thereafter, on May 2, 2022, counsel represented to the Court that "plaintiffs

will not be pursuing a stand-alone claim based on the Consolidated Appropriations Act of 2021."

ECF 25 at 1. Instead, plaintiffs rely upon the acts of Congress in extending the CDC's

moratorium in an effort to demonsh·ate congressional ratification.

Although the Supreme Comt did not address congressional ratification in Alabama Ass 'n

ofRealtors, both the District Comt for the District of Columbia and the United States Comt of

Appeals for the District of Columbia Circuit addressed the issue. See 539 F. Supp. 3d at 42-43;

2021 WL 2221646, at *2. The dish·ict comt and appellate court issued contrary rulings regarding

the import of the Consolidated Appropriations Act, and whether Congress' 31-day extension of

the CDC Order (from Januaiy 1-31 , 2021) ratified or confirmed the federal agency's statut01y

authority under the Public Health Service Act. Compare 539 F. Supp. 3d at 42-43 (Congress

did not expressly approve the CDC's interpretation of its authority under § 264(a) or provide

the agency with additional statut01y authority) with 2021 WL 2221646, at *2 ("Congress has

expressly recognized that the agency had the authority to issue its nairnwly crafted moratorium

under Section 264"). Suffice it to say, had the Supreme Court agreed with the District of

Columbia Circuit's assessment of the CDC's statutory authority, the dish·ict comt's order would

not have been vacated. See Alabama Ass 'n ofRealtors, _ U.S. at_, 141 S. Ct. at 2488 ("The

District Comt concluded that its stay is no longer justified under the governing four-factor test.

We agree. ") (internal citation omitted). Neve1theless, the Comt will examine the question of

ratification under the law of this Circuit.

"Congress may ratify agency conduct 'giv[ing] the force of law to official action

unauthorized when taken."' Schism v. United States, 316 F.3d 1259, 1289 (Fed. Cir. 2002)

(quoting Swayne & Hoyt v. United States, 300 U.S. 297, 302 (1937)). To establish congressional

ratification, a pruty must first demonsh·ate that Congress was actually awru·e of the otherwise

unauthorized act. Id. (first citing United States v. Beebe, 180 U.S. 343,345 (1901); and then

citing Brooks v. Dewar, 313 U.S. 354, 360-61 (1941)). Such knowledge is readily established

here. In Section 502 of the Consolidated Appropriations Act, Congress specifically extended the

CDC' s residential eviction moratorium for a period of 31 days, acknowledging that the CDC

Order was "issued ... under section 361 of the Public Health Service Act (42 U.S.C. 264)."

See Pub. L. 116-260, § 502, 134 Stat. 2078-79 (2021 ).

The second inqui1y is a bit more vexing. Where, as here, the alleged congressional

ratification is supposedly codified in an appropriation act, "the appropriation must plainly show

a purpose to bestow the precise authority which is claimed." Sch;sm, 316 F.3d at 1289 (quoting

Ex parte Endo, 323 U.S. 283, 303 n.24 (1944)); accord United States v. Heinszen, 206 U.S. 370,

390 (1907) (congressional ratification requires an explicit declru·ation). On the one hand, as

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detailed above, in extending the CDC Order for an additional 31 days, Congress concomitantly

appropriated $25 billion in emergency rental assistance for landlords whose tenants defaulted on

rent payments during the COVID-19 pandemic. See Pub. L. 116-260, § 501, 134 Stat. 2078-79

(2021 ). The following month, Congress appropriated an additional $21.55 billion in emergency

rental assistance through the American Rescue Plan Act, Pub. L. 117-2, § 3201, 135 Stat. 4

(2021). These fund allocations plausibly suppmt a finding that Congress sanctioned the specific

CDC Order. See Schism, 316 F.3d at 1289-90 ("[R]atification ordinarily cannot occur in the

appropriations context unless the appropriations bill itself expressly allocates funds for a specific

agency or activity."). On the other hand, the nearly $50 billion appropriation may equally

demonstrate Congress' effort to obviate the need for the nationwide residential eviction

moratorium by allocating funds to avoid or repay rent arrearages. A third possibility, posited

in Skyworks, is that Congress was simply seeking to maintain the status quo during the Januaiy

2021 change in presidential administrations in extending the CDC Order. See 524 F. Supp. 3d

at 761.

At bottom, Congress' single sentence in the Consolidated Appropriations Act stating

that the CDC Order "is extended through January 31, 2021," is insufficient to "explicitly" and

"plainly show a purpose to bestow" the requisite statutory authority on the CDC to enact a

nationwide residential eviction moratorium under the Public Health Service Act. As necessarily

implied in the Supreme Court's opinion in Alabama Ass 'n ofRealtors, and consistent with the

law of the Federal Circuit, this Court concludes that Congress did not approve, retroactively or

prospectively, the CDC's interpretation of 42 U.S .C. § 264(a); nor did Congress provide the

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CDC with additional statutory authority to enact a nationwide residential eviction moratorium.

C. Illegal Exaction

Plaintiffs alternatively claim that, if the CDC lacked the requisite statutory authority

under the Public Health Service Act, 42 U.S.C. § 264(a), to impose a nationwide residential

eviction moratorium, the federal agency's action constituted an illegal exaction. More

specifically, plaintiffs assert:

The CDC Order has enriched the Government at Plaintiffs' expense, directly or

in effect, by illegally imposing costs and expenses on Plaintiffs that Plaintiffs

should not have to bear and that the Government otherwise would bear, including

without limitation the cost of housing delinquent or non-rent paying individuals.

ECF 10 at ,r 42. The Comt finds plaintiffs' illegal exaction claim factually and legally infirm.

As explained by the Federal Circuit in Aerolineas Argentinas:

12 Considering the unprecedented nature and scope of the CDC Order, there is no basis upon which to conclude

that the federal agency's nationwide residential eviction moratorium fares any better under the congressional

acquiescence doctrine. See Schism, 316 F.3d at 1294-99 (discussing limited applicability of congressional

acquiescence doctrine even where Congress is aware of an agency's longstanding statutmy interpretation and

practice).

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An illegal exaction claim may be maintained when the plaintiff has paid money

over to the Government, directly or in effect, and seeks return of all or part

of that sum that was improperly paid, exacted, or taken from the claimant in

contravention of the Constitution, a statute, or a regulation. The Tucker Act

provides jurisdiction to recover an illegal exaction by government officials

when the exaction is based on an asserted statutory power.

77 F .3d at 1572-73 (cleaned up). Accordingly, to asse1t a viable illegal exaction claim, plaintiffs

must show: ( 1) money was paid to the government at its direction or was paid to a third party

"at the direction of the government to meet a governmental obligation"; and (2) the

government's payment directive was contrary to law. Id. at 1573.

In this case, plaintiffs concede that they did not make any direct payments to the

government. See ECF 12 at 3 7 ("That Plaintiffs did not make payments to the Government is of

no consequence; the Government in effect required owners of rental properties to issue credits

(or rental defenals) to tenants for the full amount of rent owed in fu1therance of a government

' public health' program."). Indeed, as discussed during oral argument, this case does not involve

the imposition of a fine or other criminal penalty under the now-vacated CDC Order. Compare

85 Fed. Reg. at 55,296 with Tr. at 64-65 (Apr. 19, 2022) (ECF 22). Instead, plaintiffs' illegal

exaction claim is based upon an asse1tion that, by operation of the CDC's nationwide residential

eviction moratorium, the government "in effect" directed plaintiffs "to issue credits (or rental

defenals)" to their tenants for rent owed to satisfy an obligation otherwise falling upon the

government. ECF 12 at 37.

Contrary to plaintiffs ' assertion, the government did not direct plaintiffs to waive or defer

rental payments otherwise due them. In fact, unlike the CARES Act, the CDC Order specifically

allowed landlords to assess and collect "fees, penalties, or interest" for the nonpayment of rent.

Compare 85 Fed. Reg. at 55,292, 55,294, 55,296, 55,297 with CARES Act § 4024. The CDC

Order further permitted landlords to initiate and prosecute judicial eviction proceedings. The

sole limitation on landlords was the physical removal of tenants in arears following the issuance

of a judicially sanctioned eviction order. See 85 Fed. Reg. at 55,293 (defining "Evict" and

"Eviction" as any act "to remove or cause the removal of a covered person from a residential

propeity."). 13 To be clear, although this limitation does not equate to the exaction or payment

of money directed by the government, it is a significant limitation on-and perhaps the most

effective enforcement mechanism within-a landlord's leverage to enforce their lease or rental

agreement. Nevertheless, the fact that the entry of a monetary judgment for back rent plus

interest, fees, and penalties against a tenant following a judicial eviction proceeding may

thereafter prove uncollectable does not conve11 the landlord's account receivable from a cmTent

or former tenant into an account payable to the government ab initio.

13 In response to Frequently Asked Questions (FAQ) regarding " What does CDC mean by 'eviction' ?" the federal

agency explained: "The [CDC] Order is not intended to tenninate or suspend the operations of any state or local

court. Nor is it intended to prevent landlords from staiting eviction proceedings, provided that the actual physical

removal of a covered person for non-payment of rent does NOT take place during the period of the Order." See

https ://web.archive. org/web/20210726203 824/https ://www.cdc.gov/coronav irus/20 19-ncov/downloads/Eviction-

Moratoria-Order-FAOs-0201202 1-508.pdf (last visited May 16, 2022).

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Further, although not dispositive, it is notable that contemporaneous with the passage of

the initial residential eviction moratorium through the CARES Act, and thereafter through the

American Rescue Plan while the CDC Order remained in effect, Congress appropriated nearly

$50 billion in emergency rental assistance for landlords and tenants. See Pub. L. 116-260, § 501,

134 Stat. 2078-79 (2021 ); Pub. L. 117-2, § 3201, 135 Stat. 4 (2021 ). The allocation of such

government funds- targeted to address the monetary claims asse1ted by plaintiffs in this case-

undermines the argument that the government was shifting its purpo1ted financial burden to the

plaintiffs. Moreover, plaintiffs fail to demonstrate that they were forced to incur a government

obligation or debt. Put simply, the federal government is not generally responsible for providing

housing to individuals evicted from their private residences due to their failure to pay rent.

To these points, Aerolineas Argentinas is instrnctive. In Aerolineas Argentinas, the

government "required ... airlines to pay to house, sustain, and guard aliens who, having anived

in the United States on plaintiffs' airlines without entry documents, sought political asylum."

77 F.3d at 1568. This practice continued even after Congress enacted the 1986 User Fee Statute,

Pub. L. No. 99-591, § 205, 100 Stat. 3341-53 (1986) (codified as amended at Immigration and

Nationality Act (INA)§ 286, 8 U.S.C. § 1356), shifting the financial burden from the airlines to

the federal government. 77 F.3d at 1568-71. In contrast to Aerolineas Argentinas, the landlords

in this case were not required to bear costs or expenses imposed by statute on the United States.

Because the government does not have "'the citizen's money in its pocket,"' no suit lies in this

Court under the Tucker Act to recover the money (illegally) exacted. See id.at 1573 (quoting

Clapp v. United States, 117 F. Supp. 576, 580 (Ct. Cl. 1954)).

CONCLUSION

For the reasons stated above, defendant' s motion to dismiss for failure to state a claim

upon which relief can be granted under RCFC 12(6)(6) (ECF 11) is GRANTED. The

Clerk' s Office is directed to ENTER judgment accordingly. No costs.

IT IS SO ORDERED.

·mando O. Bonilla

Judge

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