The government’s favorite argument when it loses in court

The government really doesn’t like losing in court. But instead of accepting and enforcing the court’s decision, it often tries to justify ignoring the broader implications of a ruling, by applying it only to the case at hand.

Back in March, Pacific Legal Foundation struck a major blow to the Centers for Disease Control and Prevention (CDC) with our win in Skyworks v. CDC—which held that CDC did not have the authority to enforce a nationwide eviction moratorium that banned landlords from evicting tenants during the pandemic.

This proved to be the first in a series of decisions in quick succession that ruled that CDC was overstepping its bounds—and ultimately culminated with the Supreme Court’s decision in August that removed all doubt as to the illegality of the eviction moratorium.

We should all breathe a sigh of relief that the eviction moratorium litigation played out this way, because if CDC had prevailed in its argument that it could impose any regulation that the CDC director thought necessary to control the spread of COVID-19, we could very well be facing federal business closure restrictions and various other mandates or prohibitions infringing our liberties.

As the Sixth Circuit Federal Court of Appeal put it, the government’s interpretation of the Public Health Service Act would have granted “the CDC Director near dictatorial powers for the duration of the pandemic, with authority to shut-down entire industries as freely as she could ban evictions.”

At last, the government has raised the white flag and is no longer enforcing the eviction moratorium. But let’s rewind back to March when we won in Skyworks, in an opinion from the Northern District of Ohio. At that time the question on everyone’s mind—indeed the very first question The Cleveland Plain Dealer asked me on hearing that we had won—was: What does this mean for landlords in Ohio?

I gave the sort of couched answer that reporters hate. They wanted the bottom line. And all I could say was: “It’s complicated. We can’t really say what it means yet because the decision simply didn’t speak to that issue.”

All that was clear was that we had obtained relief for our clients—which was, of course, our objective. But we knew very well what the Department of Justice (DOJ) would say. And in short order, DOJ issued a press release, outlining the government’s favorite argument upon losing a case like this:

“The Department of Justice respectfully disagrees with the March 10 decision of the district court in Skyworks v. CDC concluding that the moratorium exceeds CDC’s statutory authority… In any event, the decision applies only to the particular plaintiffs in that case. It does not prohibit application of the CDC’s eviction moratorium to other parties. For other landlords who rent to covered persons, the CDC’s eviction moratorium remains in effect.”

This was typical of DOJ. In fact, DOJ has a publicly available memorandum outlining their general policy of always arguing that a loss like this is limited to the parties to the case.

But the absurdity of that argument is that the government could continue enforcing patently unlawful regulation—on pain of ruinous penalties or threat of criminal conviction. So, in the government’s view, it can continue to coercively compel compliance with an unlawful regulation unless everyone under the sun brings suit and prevails—which is of course impossible for individuals (and many small businesses) of limited means.

By the time CDC renewed its eviction moratorium in early August, there were four federal district courts holding that CDC lacked statutory authority, an opinion from the Sixth Circuit Court of Appeals affirming that view, and strong signals from both the Eleventh Circuit Court of Appeals and the U.S. Supreme Court that CDC was overstepping its authority.

So the great weight of authority was at that time clearly on the side of the landlords. However, unless you were covered by an existing judgment, it was still inadvisable to violate the eviction moratorium. That is why we sought an emergency injunction on behalf of our clients in Chambless v. CDC—which was then pending on appeal before the Fifth Circuit. And if the Supreme Court had not made its views unmistakably clear in its August 26, 2021, decision, landlords would likely still be in limbo nationwide.

Needless to say, this was all very frustrating for landlords who were excitedly watching CDC lose case after case, but disheartened to see that the government was (until the end of August) unrelenting in its enforcement of this unlawful moratorium. I recall appearing on a radio segment with a host who was simply in disbelief that the government could continue to enforce the moratorium after losing case after case. She kept asking me, “How is this compatible with the rule of law?”

Again, my answer was more lawyerly than she would have liked because in truth it’s complicated.

There are bright scholars on both sides of this debate. But, for my part, I think the better view is that when a court rules that regulation is unlawful, it should be understood as “set aside” on a universal basis—not just to the parties in that suit—because if a regulation is unlawful, then it can have no legal effect against anyone.

Professor Mila Sohoni, of the University of San Diego School of Law, makes convincing arguments on this issue in her scholarship, and in her testimony before the Senate Judiciary Committee. And ultimately this is an issue that the Supreme Court will likely need to resolve—unless Congress should act to clarify the Administrative Procedure Act.

So, ultimately, we decided this was an important issue to press, and we sought clarification from the District Court in Skyworks as to whether its March 10 decision had vacated the CDC moratorium only as to our clients (as the government argued), only for landlords in the Northern District of Ohio, or universally. The court ruled that the decision only vacated the moratorium as to our clients. But if the CDC had not waved the white flag, we would have pressed this issue further on appeal because it is a hugely important open question of practical importance to anyone dealing with contested regulation. Indeed, it is an issue we will have to fight another day.

But for now, we can take pride in knowing we played an integral part in dismantling the CDC unlawful regime—and likely preempting other nationwide orders from CDC. Yet there is no rest in the ongoing fight for liberty. Indeed, we have a lot of work to do to rein in the administrative state.