TEXAS Legal Update

CDC Eviction Moratorium Declared Unconstitutional by Texas Federal District Court.
By Mark D. Cronenwett, Esq., Director of Litigation
Mackie Wolf Zientz & Mann, PC,     
On February 25, 2021, United States District Judge J. Campbell Barker of the Eastern District of Texas struck down the eviction moratorium enacted by the Center for Disease Control (“CDC”).

The CDC argued that the federal government's broad grant of power to regulate commerce in Article I of the United States Constitution gave it the authority to impose the moratorium.
The plaintiffs, which included both corporate and individual residential landlords in East Texas, contended that the limits on federal power in the Constitution precluded the CDC from impeding their contractual rights of eviction as provided in the lease agreements they have with their tenants.
Judge Barker at the outset noted that the states, not the federal government, have the “police power” to regulate contractual rights in the interest of the public welfare, and that the states have utilized this power in the past to limit foreclosures and evictions in times of crisis.  Judge Baker referenced the enactment of these types of restrictions by the states during the Great Depression.
But for the federal government to have the power to impinge upon contractual rights, there must be a basis for it in the Constitution.  The CDC argued in favor of essentially a limitless grant of authority under the Commerce Clause as the charging of rents and the housing of citizens will necessarily impact interstate commerce at a certain level.
Judge Barker analyzed the Supreme Court precedent on the “substantial effects” doctrine to determine if the contested regulation sufficiently implicates the Commerce Clause to justify the federal government's exercise of authority.  Judge Barker considered that the eviction moratorium was directed at local housing activity and not the housing market as a whole.  As such, there was an insufficient nexus between the CDC eviction moratorium and interstate commerce to justify the CDC's actions.  Judge Barker did not issue an injunction, so it remains to be seen if the CDC will honor the Court's order immediately.  An appeal by the CDC to the Fifth Circuit Court of Appeals would be expected.