In a major development for property rights advocates, a new court ruling reaffirms that landlords have the right to pursue compensation claims for losses suffered during the U.S. Centers for Disease Control and Prevention eviction moratorium.
On June 6, the U.S. Court of Appeals for the Federal Circuit denied the federal government’s petition for a rehearing in Darby v. United States, a case claiming the CDC’s eviction moratorium was unconstitutional under the Fifth Amendment.
The decision marks a significant victory for property owners. By upholding the Darby ruling, the court maintains the legal framework that protects housing providers against uncompensated government takings.
Darby v. United States
The roots of the case trace back to September 2020, when the CDC, in response to the COVID-19 pandemic, imposed a nationwide moratorium on residential evictions. While intended to curb the spread of the virus, the order placed significant financial strain on many mom-and-pop housing providers, who were left without income.
The case was brought by the Georgia and Alabama Associations of REALTORS® and other property providers, with legal advocacy support from the National Association of REALTORS®. In July 2021, the Darby plaintiffs sued the U.S. government, claiming the CDC’s eviction moratorium was an unconstitutional taking of property without compensation.
Although the Supreme Court later ruled the CDC had exceeded its authority, the government argued claims couldn’t arise from unauthorized actions. The Federal Circuit disagreed, holding that the moratorium could still be considered authorized for takings analysis, allowing housing providers to pursue compensation.
NAR’s Legal Advocacy at Work
NAR played a critical role in this case, filing an amicus brief in support of the plaintiffs and forcefully arguing that the CDC moratorium constituted a per se taking. NAR made clear that the eviction ban had widespread, devastating financial consequences for housing providers, especially independent owners of small rental properties.
When the CDC’s moratorium was originally struck down, NAR issued a statement: “No federal agency should have the authority to override property rights and create sweeping policy without Congressional action.”
What Comes Next?
While the Federal Circuit’s decision is a meaningful win for property owners, the legal battle may not be over. The denial of the government’s rehearing request was not unanimous, and the government may still petition the U.S. Supreme Court to review the case.
Regardless of the final outcome, this ruling ensures that property owners will have their day in court—and underscores the enduring importance of protecting constitutional property rights.
“NAR is the largest private property rights organization in America, and this mission remains a cornerstone of our legal advocacy efforts. As this case develops, NAR will continue to monitor proceedings closely and advocate on behalf of its members and property owners across the country,” says Shannon McGahn, NAR executive vice president and chief advocacy officer.
“The Federal Circuit’s decision underscores an essential principle: even in times of crisis, the constitutional rights of property owners must be respected,” McGahn says. “That’s why NAR strongly advocated for more than $50 billion in rental assistance payments during the pandemic. This solution helped those tenants truly in need while also protecting the rights and livelihoods of mom-and-pop housing providers.”
