D.C. Federal Court vacates CDC’s eviction moratorium

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…. then temporarily stays its ruling

This blog reported in early April that the Centers for Disease Control and Prevention (CDC) had extended the national moratorium on residential evictions through June 30. The U.S. District Court for the District of Columbia issued an order on May 5 vacating the moratorium, but later in the day temporarily stayed its own ruling to give the Court time to consider the merits of the arguments on both sides. The result of the stay is that the eviction moratorium remains in place for the time being.

The suit* resulting in these remarkable rulings was brought on November 30 by two trade associations, the Alabama and Georgia Associations of Realtors, and by individuals who manage rental properties. The complaint raised several statutory and constitutional challenges to the CDC order. Both parties filed motions for summary judgment. The plaintiffs’ motion was granted on the grounds that the CDC had exceeded its authority by issuing the broad moratorium. The Department of Justice filed an emergency appeal within hours.

The Court asked for a defense response this week and a reply from the government by May 16, so it is likely that a new order will be issued soon. But with the moratorium’s expiration date of June 30, a new ruling will have little, if any, effect. 

In addition to the national moratorium, some state and local laws restricting evictions remain in place.

The Court’s order vacating the moratorium pointed to the unprecedented challenges for public health officials and the nation caused by the COVID-19 pandemic. The difficult policy decisions, like the decision to impose the moratorium, have real-world consequences, according to the Court. The Court stated that it is the role of the political branches, not the courts, to assess the merits of such policy decisions. The Court perceived the question before it to be very narrow:  does the Public Health Service Act grant the CDC the legal authority to impost a nationwide eviction moratorium? The Court held that it does not.

*Alabama Association of Realtors v. United States Department of Health and Human Services, United States District Court for the District of Columbia, No. 20-cv-3377 (DLF).

A scary Halloween story to keep real estate attorneys up at night!

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This South Carolina man’s criminal conviction will stop you in your tracks!

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BOO!

A South Carolina man made a name for himself this year in Washington, DC, and not in a good way. Robert McCloud, a 39-year old former resident of Warrenville, in Aiken County, was sentenced in federal court in Washington, DC, to 18 months in prison followed by three years of supervised release including six months of home confinement. He also forfeited almost $60,000 and will be required to pay restitution in an amount to be determined later. Finally, he will be required to perform 150 hours of community service.

The charges were based on wire fraud statutes and involved real estate transactions. McCloud pled guilty in June in the U.S. District Court for the District of Columbia. His sentence was imposed October 19.

McCloud and co-conspirators identified residential properties that appeared to be vacant and abandoned. They prepared and recorded fake deeds into fictitious names and later fraudulently sold the properties, using fake drivers’ licenses, to legitimate purchasers. McCloud and his co-conspirators involved unsuspecting title and escrow companies in the subsequent closings.

In his guilty plea in June, McCloud admitted to participating in two of these fraudulent transactions in 2015, which generated a total of around $580,000.  Of that total, law enforcement officials were able to seize almost $370,000 in administrative forfeiture proceedings. In both cases, the properties were unencumbered. The true owners of both properties are elderly owners and have been involved in difficult proceedings to have the properties re-titled in their names.

The harm caused to the true owners and the legitimate buyers was covered by title insurance, and the restitution represents funds owing to the title insurance companies. Dirt lawyers, when you need an example of why your clients should be protected by title insurance, you can use this story! And I have many others if you need them.