HOW CONSTITUTIONAL IS CUOMO'S MORATORIUM?

ANOTHER FEDERAL CASE BROUGHT BY OWNERS IS THROWN OUT

Last week, a federal court dismissed yet another lawsuit which sought to overturn Governor Andrew Cuomo’s Executive Order -- which prevents tenants from being evicted during the course of the coronavirus pandemic (1:20-cv-04277). The landlords claimed that the Governor’s moratorium violated the Due Process Clause and the “Takings” Clause of the United States Constitution. (The “due process” doctrine prohibits governmental actors from frustrating the fairness of proceedings, while the “takings” clause limits the state’s ability to acquire private property for public use, without offering just compensation.)

The property owners alleged that the Governor’s order interfered with their contractual remedies against defaulting tenants and violated their constitutional rights by depriving them of income. The complaint also sought a permanent injunction blocking the collection of property taxes owed by landlords. U.S. District Judge P. Kevin Castel disagreed with the owners, and aligned with an earlier ruling by his colleague, Judge Colleen McMahon. In June, McMahon had awarded a summary judgment to the Governor and dismissed a complaint brought by three Westchester County apartment-building owners (1:20-cv-04062). She rejected arguments that the executive orders violated the Constitution, noting, “[t]he Supreme Court has ruled that a state does not commit a physical taking when it restricts the circumstances in which tenants may be evicted . . . Nothing in the order diminishes the tenant's ultimate responsibility to pay the entire amount of rent due and owing under the lease."

Judge Castel concurred with Judge McMahon, adding that, in this case, the landlords had missed an August deadline for objecting to defendants’ request to dismiss the case. “The plaintiffs have not come forward despite an opportunity to do so with any argument or reason why the court ought not to grant [defendants’] motions . . . [therefore], the clerk shall enter judgment for the defendants and close the case,” wrote Judge Castel.

That decision comes on the heels of a class-action lawsuit brought by over 300 NYC restaurants seeking over $2 billion in damages. The restaurant owners claim that Governor Cuomo, New York City Mayor Bill de Blasio, and the NY Attorney General’s office, have violated the restaurant owners’ constitutional rights by placing restrictions on indoor dining and putting their businesses in jeopardy. Shortly after the filing of that class-action complaint, Governor Cuomo announced that restaurants in the city could open for indoor service at 25% percent capacity, starting September 30, 2020.

Unlike the recent change of heart with regards to indoor dining, Cuomo’s eviction moratorium continues in effect, and is set to expire in October 2020. Additionally, as we previously reported, the Center for Disease Control and Prevention announced a federal moratorium, imposing a nationwide ban on the eviction of any COVID-impacted tenants, until December 31, 2020. So, while some tenants facing COVID-related hardships can expect a modicum of relief (albeit temporarily), these protective measures do not extend to eviction cases commenced prior to March 20, 2020. Those eviction proceedings may continue, although New York’s chief administrative judge, Lawrence Marks, ordered state courts to not issue any residential eviction warrants at least until October 1, 2020.

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