Litigation Update: Alabama Association of Realtors v. HHS

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On August 26, 2021, the Supreme Court of the United States ruled in Alabama Association of Realtors v. HHS that the Centers for Disease Control and Prevention (CDC) had exceeded its authority in issuing a nationwide ban on evictions.  Brett Shumate, counsel of record for the Alabama Association of Realtors, joins us to discuss the litigation, the implications of the Supreme Court’s decision, and other pending cases involving the CDC’s eviction moratorium.

Featuring:

  • Brett Shumate, Partner, Jones Day
  • Moderator: Daniel Suhr, Senior Attorney, Liberty Justice Center

Event Transcript

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Dean Reuter:  Welcome to Teleforum, a podcast of The Federalist Society's practice groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of practice group Teleforum calls, become a Federalist Society member today at fedsoc.org.

 

 

Guy DeSanctis:  Welcome to The Federalist Society's webinar call. Today, September 28, we discuss a litigation updateAlabama Association of Realtors v. HHS. My name is Guy DeSanctis, and I'm Assistant Director of Practice Groups at The Federalist Society. As always, please note that all expressions of opinion are those of the experts on today's call.

 

      Today, we are fortunate to have with us our moderator Daniel Suhr, Senior Attorney, Liberty Justice Center. Throughout the panel, if you have any questions, please submit them through the question-and-answer feature or the chat so that our speakers will have access to them for when we get to that portion of the webinar. With that, thank you for being with us today. Daniel, the floor is yours.

 

Daniel Suhr:  Well, thank you, Guy. And thank you, everyone, for joining us for what, I'm sure will be an enlightening conversation about, really, one of the most important cases of the Court's last year. For those of us who are Supreme Court nerds, we always look forward to the first Monday in October as the start to the Court's new term. And it's a little bit like March Madness at the end of June when the Court comes out with all of its most interesting cases from the prior term.

 

      But for Supreme Court watchers like us, and I'm sure like many of you on the call today, the summertime is a downtime for the Court. It's a chance for the justices to travel the globe, to visit their favorite law schools in Europe, to RV across America and hang out in Walmart parking lots. But whatever they do, usually they're not deciding cases. And the gentleman we have joining us today has just proven that theory, that the Supreme Court gets to take a summer break. Because this year the Supreme Court issued one of its most consequential decisions in the area of property rights. And we have the man who brought the caseargued it, litigated it all the way throughto help explain Alabama Realtors Association v. HHS.

 

      I'm pleased to be joined on today's call by Brett Shumate. He is a partner in the Washington, DC office of the Jones Day Law Firm. He is a graduate of Wake Forest College and he clerked for the Honorable Edith Jones on the Fifth Circuit. And prior to joining Jones Day, he was a senior appointee in the Trump administration, overseeing federal litigation for the Federal Programs Branch at the U.S. Department of Justice. So a man who's been on one side of the "V" on behalf of the government, now sending a great deal of business to his former colleagues at DOJ, representing the Alabama Association of Realtors.

 

      So Brett, maybe as we start today's conversation, take us back to the beginning of the case. We're in the middle of a pandemic. The government, at the timethe Trump administration, that you had once served inis issuing a lot of orders, and trying to get us through the 15 days to bend the curve and everything that comes after that. In the midst of that, we have this initial order about evictions. Why don't you start us at the beginning of the case?

 

Brett Shumate:  Sure. Thanks, Daniel. And thanks for everybody joining the call today. We're excited to talk about this topic. So I'll take you all the way back to March of 2020. That's the beginning of the pandemic. The world was falling apart. Congress passed the Cares Act, which provided a lot of relief to businesses and individuals around the country when the world was shut down. One of the measures that Congress passed was an eviction ban. And you may not even remember this, but this was a temporary, limited ban on evictions for federally-backed properties that Congress passed in March of 2020.

 

      And Congress said that this program needed to expire, and should expire, and will expire in July of 2020. And that's what happened. The federal statutory ban on evictions expired in July of 2020. And that's when the White House -- this is back last summer -- President Trump issued an executive order directing the CDC to take action to prevent evictions during the pandemic even though Congress had allowed the statutory ban on evictions to expire. And so, lo and behold, a few weeks later, the CDC issued the first iteration of the eviction moratorium in September of 2020. And we call it an eviction moratorium, but really, we should call it a rent moratorium because the federal moratorium excused property owners who meet certain criteria from paying rent. And they couldn't be evicted as a consequence of paying rent.

 

      I'm simplifying it a little bit, but it's essentially what the federal order did. If you're a property owner, the CDC directed you not to take any action to evict a tenant who provided the property owner with a certification that they couldn't afford to pay rent. If they meet certain income thresholds, if they had pursued some type of welfare relief, things like that, the property owner could not evict the tenantthe non-paying tenant. They could evict for other reasons, but not for the non-payment of rent.

 

      And the CDC order was also very clear that the order didn't excuse the paymentthe obligation to pay rent. But it just prevented the property owner from evicting the tenant for not paying rent. And essentially, what this did was allow tenants a free pass to pay rent. And as the pandemic went on and on, and as the moratorium stayed in place, you had some tenants who hadn't paid rent on their properties for over a year and landlords who were really suffering because of the CDC's moratorium.

 

      So what happened was that the Trump administration issued its eviction moratorium for four months, from September to December of 2020. At the end of December, Congress passed legislation extending the CDC's eviction moratorium for one month, into January, to allow the Biden administration, as they came into office, to make a decision about what they were going to do to combat the pandemic. And so, ultimately, what happened was that the Biden administration extended the eviction moratorium multiple times, all the way through October of this year, 2021.

 

      So that, in a nutshell, is the eviction moratorium. But there was a ton of litigation over the eviction moratorium right from the beginning -- including, Daniel, the case that you brought, which we're not going to let you off the hook here. You have to talk about your case, as well. And a lot of those cases were brought all around the country way back in September and October of 2020. And a lot of the plaintiffs sought immediate injunctions to try to stop the eviction moratorium because it was having a serious impact on property owners who couldn't evict tenants who were staying in their properties.

 

      There was a lot of fear from the landlords that -- the property owners -- that, not only were they having their properties unlawfully occupied, but also that there was no way that they were ever going to be able to recoup the rent that wasn't being paid by tenants who were losing their jobs, who were having difficulty during the pandemic, and were just not going to be able to pay the rent in a lump sum after the moratorium had expired.

 

      So a lot of plaintiffs sought preliminary injunctions. And universally, those were denied. If you can remember, this was the winter of 2020. The pandemic was, at that point, I think, coming back. The case numbers were back on the upswing. And at that point, judges were not granting preliminary injunctions. And the CDC was really, at that point, having a lot of success, and, I think, emboldening them to extend the moratorium.

 

      We filed our case for the Alabama Association of Realtors in Federal District Court in DC, in late November of 2020. And at that point, it wasn't clear whether the moratorium would be extended, whether it was going to be ending at the end of the year. You'll have to remember, at that point, we didn't know the Biden administration was going to extend it multiple times. It looked like the end of the road was going to be in December of 2020. But we filed our case late November, moved for an expedited summary judgment, in the hope that we could get a quick ruling from the District Court judge in DC and that would be the end of it. Lo and behold, circumstances take over, and the case just continues and goes on and on and on.

 

Daniel Suhr:  And that is not nearly the end of it.

 

Brett Shumate:  And it's not nearly the end. The case just continued. So in the meantime, while our case was pending, there were a lot of interesting decisions from other courts that I wanted to mention. And I have to give shout-outs to other groups who filed cases. Texas Public Policy Foundation, NCLA, PLF, they filed really -- they were really on the early side, filing really strong cases. And a lot of them had success. Two cases I'll mention. One is the Terkel case -- T-E-R-K-E-L -- filed by the Texas Public Policy Foundation in the Eastern District of Texas. I think that was the first court to favorably side with the plaintiff. And the court in Texas ruled that the CDC had not just exceeded its statutory authority, but, also, its constitutional authority in --

 

Daniel Suhr:  Love that Eastern District of Texas.

 

Brett Shumate:  -- exactly – in ruling that the federal government itself did not have the constitutional power under the commerce clause to ban evictions because this is a matter that belongs with the states. After that, there was a successful case, I believe, brought by PLF in Ohiothe Skyworks casewhere it was the first court to rule that the CDC had exceeded its statutory authority. What's important, though, is that all of those cases, the relief in those cases, was limited to the plaintiffs in the case. So even though plaintiffs were being successful in convincing federal district court judges to strike down the CDC's eviction moratorium, it didn't end. It just continued. The Biden administration extended it in January, in March, in June, and again, in July. So this thing was never going to end.

 

      So our story picks up in May, when our judge here in DC issued an opinion in early May, holding that the CDC had exceeded its statutory authority in issuing the eviction moratorium. And it's a fantastic opinion by Judge Friedrich here in DC, really walking through the statute explaining why various canons of construction, under Chevron Step One, cut against the CDC's interpretation of the statute. The Court relied on the major questions doctrine, the federalism principles, in narrowly construing the CDC's statutory authority.

 

      And what's significant about the District Court decision in DC was that the Court vacated the eviction moratorium nationwide. So that ruling had the effect, unlike the others, of actually stopping the CDC from banning evictions. So, immediately, the government moved for a stay pending appeal because the governmentthe CDCstill wanted to keep the CDC's eviction moratorium in place. So the government moved for a stay pending appeal. That was granted by the district court judge.

 

      At that point, the plaintiffs -- we moved, in the DC circuit to vacate the stay pending appeal because without vacating the stay pending appeal, the CDC's eviction moratorium would continue indefinitely because there was no order blocking the moratorium. So we moved in the DC. Circuit to lift or vacate the stay pending appeal, and the DC Circuit denied that relief. At that point, there was only one stop you could go after that, and that's to the Supreme Court. So we asked the Supreme Court, I believe in June, to -- we filed an application to vacate the stay pending appeal, on, I think, June 29. The Supreme Court issued an opinion -- actually, they issued an order denying our application to vacate the stay.

 

      But what's unusual about that is that four justices noted that they dissented. In other words, they would have granted the application. And Justice Kavanaugh wrote, separately, a concurring opinion that you may have heard about at the end of June that said, "Look, I agree with the plaintiffs and the district court that the CDC exceeded its statutory authority. It doesn't have the authority to regulate evictions." But the moratorium, at that point, was scheduled to expire at the end of July. And in the meantime, Congress had passed billions of dollars in rental assistance that was intended to go to landlords and tenants that would hopefully pay off some of these debts and allow people to stay in their homes and not get evicted. So Justice Kavanaugh said, "As a matter of equity, the stay should stay in place until the end of July. And at that point, I would switch my vote if the moratorium were extended and end the moratorium."

 

      So that seemed to be the end of the story, right Daniel?

 

Daniel Suhr:  It should be.

 

Brett Shumate:  It should be. So that was the end of June. At the end of July, you know, kind of crickets. You don't really hear anything. I think everybody kind of accepted that the case was over. The moratorium --.

 

Daniel Suhr:  The White House came out several times and told the American people that they lacked the statutory authority to do something more. And yet, that was not the end of the story.

 

Brett Shumate:  Surprisingly, that was not the end of the story. Right. As we approached the end of July, I think it was, when the moratorium was supposed to expire -- as you said, the White House made a number of statements saying, "We don't have the authority to extend the moratorium. The Supreme Court has already spoken." As you'll recall, there was a political explosion in Washington DC at the time. Capitol Hill -- Congress tried to pass a bill extending the moratorium legislatively. That failed. At that point, all of the pressure was put back on the White House to take some action to extend the moratorium. And, ultimately, what happened was that they did extend it on August 3.

 

      They issued a fourth extension of the moratorium after they said they weren't going to extend the moratorium. And this moratorium was the same as the old moratorium, but they claimed it was a more limited moratorium that was only going to apply in certain counties -- namely 99 percent of the country, rather than 100 percent of the country. And so then, at that point, the case was not over. We had to reactivate the team and we filed back in the district court to block the new moratorium, which was the same as the old moratorium. At that point, the district court issued -- at a hearing, issued an opinion saying, "Look the DC Circuit had already ruled on the stay," which we had filed in the stay motion we filed earlier in the summer." Law of the case, you know, my hands are tied.

 

      So we went back up to the DC Circuit. Same thing, hands are tied. So then things were poised to go back to the Supreme Court, which we did, I think, early August. We filed another -- our second application to lift the stay with the Supreme Court. And that was on a Friday, I believe, we filed. And by the next Thursday, the Supreme Court had issued an opinion on August 26 vacating the stay pending appeal.

 

      It was quite remarkable, Daniel. Not only were they on their summer recess, but it was an eight-page opinion that they cranked out. Typically, cases on the orders list, you know, typically are one-line orders granting or denying relief. This was an eight-page per curium opinion over a three-justice dissent. And I'll briefly walk through that. It's a great opinion. But the Court walks through the four factors on a stay pending appeal.

 

      The government had the burden in this case to prove or establish that they're entitled to a stay pending appeal. So number one, they had to show a likelihood of success on the merits. The Supreme Court said they don't. In fact, the plaintiffs have an overwhelming likelihood of success on the merits. They are almost certain to win on the merits because the CDC plainly lacks authority to issue an eviction moratorium. And the Court walked through the statute. They applied the major questions canon. They applied this canon about federalism principles. And they concluded the CDC does not have statutory authority.

 

      Next, the Court evaluated the equities, which is also a factor in seeking a stay pending appeal. And the Court said the plaintiffs here, represented by us, the Alabama Association of Realtors, were suffering two forms of irreparable harm. Number one was financial, that property owners had been without rent for over a year. And there was no guarantee that they were ever going to be able to recover that unpaid rent, either through rental assistance or from their tenants. And the Court also pointed to the impact on property rights. I think a significant feature of the opinion is that the Court cited to the seminal Takings opinion, Loretto, from 1980s -- a case involving Fifth Amendment Takings -- and said property owners are being deprived of the right to exclude others from their own properties. That is irreparable harm.

 

      The Court also, I'd say, kind of balanced the equities, and concluded as a matter of the public interest. Public interest weighs in favor of ending unlawful agency action and not extending it even when we're dealing with something as important as public health. And significantly, the Court cited Youngstown Steel, the seminal case you'll read in law school about President Truman's seizure of the steel mills during the war. And in that case, the Court ruled against President Truman, notwithstanding the national security implications. And the Court, in this case, said likewise. "Even though there may be a pandemic, you can't put away the Constitution or the APA during the pandemic."

 

      So, at bottom, the Court lifted the stay pending appeal, which had the effect of, importantly, allowing the district court's final judgment to take effect. Which meant that the CDC could no longer enforce the moratorium after the Supreme Court's decision. So one P.S. on that is that that was just on a stay pending appeal. That was not on the merits of the appeal itself, which was still pending in the DC Circuit. After the Supreme Court ruled, the government dismissed their appeal in the DC Circuit. So this case is over and final, and the district court's final judgment is now final and will no longer be litigated.

 

      So, that, in a nutshell, Daniel, is the case and the litigation update.

 

Daniel Suhr:  Well, so, thank you. Obviously, Brett, it has been a saga. One of the things that's amazing about this case is that it moved so quickly, that you were able to get this done in a year, or a little more, rather than the three to four years it often takes to get a case to the Supreme Court. On the other hand, it was quite a saga, right? It took a year and more to get this case finally resolved.

 

      And I heard you talk a little bit about the merits. But maybe it would be worth, just for a moment, to illustrate what I would, at least, perceive to be the incredible power grab that the federal government attempted here. Could you walk us through -- what does the CDC's statutory text say that they're relying on? And impress us with your Latin, as you talk about canons of construction and just how big a grab the CDC attempted here.

 

Brett Shumate:  Yeah. Great question. This statute, the Public Health Service Act -- if they granted the power that the CDC was claiming, they could do anything they wanted, regulate any aspect of human interaction, behavior, business, not just during a pandemic, but to prevent the spread of any communicable disease, which could be the common cold. So the statute itself said that the Public Health Service Act authorized the CDC to take measures to prevent the spread of communicable disease. That was the first sentence.

 

      The second sentence of the statute provided examples of the types of measures that the CDC could take to prevent the spread of a communicable disease, things like fumigation, destroying property or animals. And we found very few cases where the CDC had ever relied on this authority in the past. And the seminal example was preventing the sale of baby turtles that would spread salmonella. And that was the only case that we could find where this authority had been relied on in the past.

 

      And so our argument was you have to read the two sentences together. The first sentence had a broad delegation of rule-making authority. The second had a description of the specific measures that the CDC could take in support of that delegation of authority. The CDC's view was the first sentence is all that matters, the second sentence really is irrelevant. So the CDC had the authority to adopt rules and regulations that would prevent the spread of communicable disease. That includes an eviction moratorium. That includes worship limits, business closures, school closures. Why not anything? Because anything can spread a disease whenever two people are in a room. And that's all human activity, all business activity.

 

      So our argument was, as a matter of just the pure plain text, that cannot be right because you have to read the two sentences in pari materia and that the second sentence clarifies and modifies the first sentence of the statute. And the statute has a list of measures. And one of the canons of construction is ejusdem generis, which we all love. These items in a list have meaning. And the thing that the government is trying to do needs to fit within the list or be like the things in the list. And a number of courts said, "Well, an eviction moratorium is not like fumigating property or destroying baby turtles or preventing the sale of baby turtles."

 

      So, as a matter of statutory construction, what the Supreme Court said was that, "No, this is not within the plain language of the statute." And even if the statute were ambiguous, we wouldn't side for the CDC for a couple of reasons. Number one is a major questions doctrine, which I think gets undersold. But it's a significant kind of limitation on government power. And it says that when the federal government asserts extraordinary power to make a decision of major economic or political significance, the government needs to point to some clear and expressed delegation of authority. And that was the principle that the Supreme Court applied in the Alabama case. And the CDC could not point to a clear and expressed delegation of authority in the Public Health Service Act, which does not mention evictions. It does not grant the CDC plenary authority to regulate landlord-tenant relationships.

 

      So, those are just a few of the canons that were discussed, but that was the statute.

 

Daniel Suhr:  I am impressed by your Latin in all of them. I lovingly refer to it as the "Sesame Street canon," that one of these things is not like the others. Fumigation, inspection, destruction of livestock, national eviction moratorium -- one of these things is not like the others. Right?

 

Brett Shumate:  That's close. Close enough for government.

 

Daniel Suhr:  And I think one of the things that's so important about this case, too, is just the reality of the backdropthat we're coming through this pandemic where we've seen states take the lead on all these public health issues, right? States have been the ones issuing the stay-at-home orders. States have been the ones shutting down businesses or places of worship. But if the CDC had this power, they could have done the whole thing the whole time. And it was only because the Court, sort of, put them back in their box.

 

      Well, the one thing that I think is interesting about that is the fact that the Court didn't give a lot of deference to the CDC in interpreting its statute. Could you talk a little bit about how traditional doctrines like Chevron and administrative deference kind of play into this decision? And can we extrapolate from this anything about the Court's future acceptance or skepticism of agency-power assertions?

 

Brett Shumate:  Yeah. Great question. And tellingly, Chevron was, like, absent from the fight. The government wasn't relying on Chevron deference. We weren't really talking about Chevron. What we and the government were doing -- we’re just arguing about the best interpretation of the statute. And we thought we had the better reading, in light of the canons of construction, in light of these major questions doctrine, the federalism canon that you mentioned. And the government was arguing they had the better reading of the statute. They were arguing the stay should remain in place, the Court should defer to their decision and not disrupt the status quo.

 

      But as a matter of statutory construction, they were not relying on Chevron, which was, I think telling, not just for this case, but also for future cases that, yes, Chevron remains binding. It's a framework through which courts are supposed to review an agency's construction of the statute. But in this case, the agency had not interpreted the statute. They just issued an orderan eviction ban. They had not interpreted the statute in any way. There was nothing for the Court to defer to. And I think when you get to the Supreme Court, I don't think the Supreme Court is interested in really deferring to the agency. I think they want to reach the best interpretation of the statute in light of canons of construction.

 

      So I think the world we're living in, I would say is really a Chevron Step One world, where we, as lawyers who represent plaintiffs challenging government regulation -- really, I think courts, and particularly the Supreme Court, want to know what is the best reading of the statute. And that's where Chevron Step One comes in, is you ask whether the statute is silent, whether it's ambiguous, has Congress spoken to this question. And you use the canons of constructionthe ones that the Supreme Court used, and other courts have usedto arrive at an answer about whether Congress has spoken to the question at hand. And I think that's where this case was ultimately resolved, was that the Supreme Court determined that Congress had spoken clearly to this question of a national eviction moratorium and withheld that power from the CDC.

 

      So, interesting that Chevron was not cited in the opinion. The government wasn't pressing Chevron deference. The Court just arrived at the best interpretation of the statute.

 

Daniel Suhr:  Which is nice to see. It would be nice if the Court could do that more often, I think. So, similar to Chevron, one other thing that we don't see featured a lot in the argument are these constitutional questions around the Takings Clause. Right? I think we generally expected that those questions will come up through the Court of Federal Claims. Yet, the Court, in its preliminary injunction discussion, as you mentioned with Loretto, does give at least a hint of where it's thinking about how these Takings Clause questions should be resolved.

 

      So my question to you is, does this represent a holding on the Takings Clause? Does it suggest anything about how a court should look at, say, a state or municipal eviction moratorium, or other uses of the Takings Clause in the context of a pandemic? And as you look to some of the Court of Federal Claims cases that are making their way through now on behalf of landlords, do you think that this is going to resolve that question? Or are we still going to see a fight over it?

 

Brett Shumate:  Great question. Litigating against the government, Daniel, as you know, everything is going to be a fight and contested. So I expect the government's position would be that the Supreme Court did not resolve anything against their favor. But you raise a great question, which is, in the preliminary injunction discussion, the Supreme Court said, property owners are suffering irreparable harm because they're deprived of the right to exclude unwanted tenants from their properties. And they cited Loretto, a seminal Fifth Amendment Takings decision. So I think there's a great argument. The Supreme Court has already determined that the eviction moratorium is a taking, compensable by the federal government.

 

      So I think we’ll have to wait and see what happens in the Court of Federal Claims. As you mentioned, just to give a little bit more background, you know, this caseour case, and most caseswere challenges to the CDC's authority to issue the eviction moratorium. And the relief that we were seeking was not money damages, but an injunction or a vacatur order under the APA stopping the eviction moratorium.

 

      Now there's a number of property owners seeking money damages from the United States government in the Court of Federal Claims in DC. And to win the money damages, they need to show that the CDC's eviction moratorium is a taking in violation of the Fifth Amendment and that they are entitled to just compensation. So I know the just compensation issue will be something the government litigates strongly. In that case, it will be interesting to see what arguments they can make on the Takings front. But it was quite significant to see the Court say, "Look, plaintiffs are suffering irreparable harm because they're the victims of a Fifth Amendment taking."

 

Daniel Suhr:  So, I should mention, I don't get credit for that being a great question. That was actually a question from our audience. If you've got a great question, or even a question you think is great -- and we’ll decide later -- nonetheless, please ask it. We would welcome your question. So you can either use the chat function or the Q&A function to ask those questions. But perhaps, Brett, as our listeners are entering their questions in the chat and Q&A functions -- we're talking about preliminary injunctions, right? And one of the things that I think is interesting about this case is, traditionally, when we see PIs issued on constitutional violations, they're issued on First Amendment grounds, right? We're all familiar with Robert S. Burns and this kind of classic formulation that any violation of the First Amendment rights is, per se, a constitutional violation. Is there anything we should take, though, from this case as conservative public interest litigators, or as advocates for the business community, about other opportunities to aggressively use preliminary injunctions as a tool to fight back against some of these administrative state overreaches?

 

Brett Shumate:  Yes, absolutely. You know, the Court's opinion, I think, gives a lot of ammunition to businesses and individuals who are thinking about challenging government regulation and overreach and don't want to wait a year or more to litigate a challenge to an executive ordera regulation that is impacting them now. You know, Daniel, like me, you've talked to a lot of plaintiffs. They want to know how long is this going take? Is it worth it? Litigation takes a long time. But if you can get a preliminary injunction, you can get a ruling from a court in a matter of weeks. And it's high risk, but it's also high reward.

 

      And so, representing plaintiffs on our side, it's often been a high-risk situation because it's oftentimes difficult for businesses and individuals to argue that regulations that impose costs on them are causing irreparable harm. A lot of courts say, "Well it's not irreparable. You can always recover the money later." There's some case law that says if you're not going out of business, it's not irreparable. Whereas, if the tables are turned, when you have, for example, a Republican president that is pulling back on regulations or limiting regulations, reversing policies that have been put in place, it's very easy for individuals to go into court, seek an injunction -- a preliminary injunction -- and show irreparable harm because something's being taken from them. But it's often harder on the business side, on the individual side, when costs are being imposed on you. But what's significant about the Supreme Court's decision is that they said property owners are facing irreparable harm from the inability to obtain a guaranteed recovery of the rent that they weren't paid.

 

      So I think the phrase the Supreme Court used is that there's no guarantee of financial recovery of the unpaid rent caused by the eviction moratorium. And the reason why that's so is because of the federal government's sovereign immunity. You can't sue the federal government for damages -- unless it's a taking -- just because they exceed their statutory authority. You have to go to the Court of Federal Claims if there's a taking. And here, there's no guarantee that property owners will be made whole, either through a breach of contract action against their tenant or through the rental assistance passed by Congress.

 

      So I thought it was quite significant that the Supreme Court said businesses facing economic costs of a new regulation for which there is no guaranteed recovery, can obtain, essentially, preliminary injunctive relief. So I think this is a significant boon for businesses and individuals and folks in your shoes, Daniel, in public interest law firms, looking at challenging the Biden administration and seeking preliminary injunctive relief. I think this opinion gives some ammunition that would support those efforts.

 

Daniel Suhr:  Absolutely agree. And so, thank you for getting us the precedent we need to do our jobs well. Part of what I would follow up, though, on that, is not just preliminary relief, but you, in this case, were seeking nationwide relief. Obviously, we, as a kind of conservative legal community -- conservative-libertarian legal community -- have been going through an internal dialogue the past few years, about nationwide injunctions. And the appropriateness of, say, a federal district court judge sitting in a place like the Eastern District of Texas or in Washington DC issuing nationwide relief. You used to work in the Trump administration. Obviously, we had a few attorneys general who had very strong views on that. What do you think this case portends for the use of nationwide injunctive relief, and do you think that the fact that it came up in an Administrative Procedure Act posture makes a difference in the appropriateness of issuing a nationwide order?

 

Brett Shumate:  Great question. The short answer is, courts are viewing nationwide injunctions differently than nationwide vacatur under the APA. And I'll explain. So, during the Trump administration, there was dozens of nationwide injunctions against Trump administration policies. Mainly, those cases arose in the preliminary injunction posture where you have a plaintiff files a lawsuit, and goes to court to say, "I'm going to be irreparably harmed if this policy goes into effect," and a court enters a preliminary injunction. And in a lot of cases, the Trump administration fought back against those and argued to higher courts that these nationwide injunctions are inappropriate because a lower court should only award the relief to the plaintiffs in the case because that's only what's necessary to remedy the injury from the plaintiff in the case as a matter of both Article III standing and courts' inherent equitable power to grant equitable relief. And so that got the attention of a number of Supreme Court justices who have written on this issue. It never has been resolved by the Supreme Court.

 

      But what's interesting is -- if you take the DACA rescission case, for example, that went up to the Supreme Court, the Regents case, that case had a number of preliminary injunctions that were affirmed by the Ninth Circuit and the Fourth Circuit. But the case that actually got resolved by the Supreme Court was out of DC. The DC District Court, in that case, held that -- like the other courts -- that the DACA rescission was unlawful under the APA. But rather than grant a preliminary injunction, or a permanent injunction, the court vacated the rescission under the APA. APA 5 U.S.C. § 706 says that a court reviewing agency action shall set aside agency action that's found to be arbitrary and capricious or in excess of statutory authority. And that was the remedy that the district court granted.

 

      That was the case that was ultimately affirmed by the Supreme Court in the Regents case, written by the Chief Justice. And there was an interesting footnote at the end of the opinion where he says -- the court says, "Look, we're affirming the vacatur from the DC decision. That means we're not taking on the question of the appropriateness of the nationwide injunctions granted in the other cases." So the Supreme Court has drawn a distinction between nationwide vacatur and nationwide injunctions. And we took advantage of that in our case. In our case, we asked the Court -- the DC District Court -- to vacate the CDC's eviction moratorium nationwide. And the DC Circuit, unlike a lot of other courts, has great case law that says, "When a plaintiff succeeds in an APA challenge, the court should vacate the rule across the board for everybody, not just for the plaintiffs in that particular case."

 

      And so that was controlling and binding precedent in the DC Circuit. That was the precedent that was applied by the district court. And the Supreme Court affirmed that decision in our case by allowing the stay to be lifted and allowing the final judgment to be -- to take force without limiting that relief to the plaintiffs in the case. So bottom line is there seems to be a distinction that courts are drawing between nationwide vacatur under the APA and nationwide injunctions under the court's inherent equitable power.

 

Daniel Suhr:  And that line of precedent makes me want to litigate in the DC Circuit. But then I remember everything else about the DC Circuit, like your decision in the middle of this case, and then I decide not to. So, speaking of circuits, though, we've got a question coming in from our audience. I'll remind you, if you're a part of our audience and you have a question, you can either send us a chat or raise your hand through the Q&A function.

 

      But our friend Brayden wanted to ask about the Terkel case. We were talking about Terkel earlier in our discussion. It's the case coming out of Texas that has the Commerce Clause holding. And the question to you is just, "Are we going to be able to reach the constitutional issues around Commerce Clause that Terkel raises? Or have we just reached the point where this issue is moot, the case is essentially decided, the order is vacated, and we're going to have to wait for, you know, Elizabeth Warren and company to enact something on a statutory basis or go after something like that, some future order, in order to make that out.

 

Brett Shumate:  It's a great question. And we'll know the answer, I think, pretty soon. Just a little bit more background. Daniel’s questions is about the Terkel case in the Fifth Circuit, so this is the case I mentioned earlier. The district court held that the CDC didn't have the constitutional authority to regulate evictions. So, not just that they exceeded their statutory authority, but they exceeded their constitutional authority. The government appealed that decision to the Fifth Circuit. That's been pending there for nine months or so. After we won our case, in the Alabama case, the government dismissed its appeal in the DC Circuit, which means that the CDC's eviction moratorium is vacated nationwide by the district court's judgment. That will no longer be set aside. There's no risk that would ever be set aside. That is a final, final judgment.

 

      So the government has argued, not just in the Terkel case, but in a few other cases, that those cases are now moot because the plaintiffs are no longer injured by the CDC's eviction moratorium. It's been vacated as a result of the District Court judgment in DC. The government is no longer contesting that judgment. It is a final judgment. There's no risk to the plaintiff that that judgment will be overturned by the DC Circuit. So as a result, the government is arguing these other cases challenging the moratorium are moot. The plaintiffs are contesting that and arguing that it's not moot. There's still a live case for controversy. Whatever the government did in some case over in DC is not binding on them.

 

      The CDC could still try to issue a new moratorium in the future. The Congress could issue a moratorium. What's interesting is that the government filed a motion to dismiss the Fifth Circuit Terkel case. They actually tried to dismiss their appeal. And then the Fifth Circuit hasn't let them do that. The plaintiffs opposed. They said that there's still a live controversy, not just over the government's constitutional authority to issue the eviction moratorium, but also whether the plaintiffs in that case are successful, whether they're entitled to fees. The government suggested they wanted to go back to the district court and try to vacate that decision as moot. And so the plaintiffs in the Terkel case are having none of that.

 

      And what's interesting is that oral argument is in the Fifth Circuit on, I think, October 6. So I think that's -- what, next week, or the week after? So we'll have a hearing from the Fifth Circuit. This is really, I think, a novel situation. It didn't come up in my time when I was at DOJ and fed programs, where you had the government essentially acquiesce to a final judgment and then argue that the other cases are moot, but then the plaintiffs don't give up. And so what do you do in that situation? It's an interesting question. My personal hope is that the Fifth Circuit rules on the ultimate constitutional question, which I think is important because not only did CDC issue an eviction moratorium, but Congress had issued an eviction moratorium in the Cares Act. So I think there is a controversy about whether Congress could come back and do it again because they did in the past.

 

Daniel Suhr:  Yeah, the Voluntary Cessation Doctrine is, I think, pretty good on questions like that. So I'll issue one -- as we're coming up on our hour here, I'll issue one last invitation to take questions from the audience. But in the meantime, I'll ask my final question, which is to forecast the future a little bit. I'll put you on the spot, Brett. Obviously, the new topic of federal overreach on everybody's mind is the president's vaccination mandate and the emergency temporary standard from the US Department of Labor -- and that we are still anxiously all waking up at 6:00 a.m. to read the Federal Register and find out if today is the day that we all get to sue OSHA.

 

      So, some folks have said that this case is a great foundation for the OSHA challenge because of the principles the court laid down and the skepticism that the court showed. But other folks have said that ETS really is a different beast and that OSHA has a separate set of statutory authorities and that it's just trying to fit a square peg in a round hole, to analogize the two. So, given your experience on the CDC, what do you expect to see in terms of its application on the emergency temporary standards question?

 

Brett Shumate:  So, great question. I'm not going to be definitive, but I'll make two predictions.

 

Daniel Suhr:  Excellent.

 

Brett Shumate:  One, you'll see a lot of litigation, a lot of lawsuits. And number two, I think you'll see this case cited a lot in that litigation because there are a lot of parallels. Again, you have -- well, just to start from surface-level similarities -- in both cases, the administration said they don't have the authority to do it. And now they say they do. In both cases, the government is using its public health authority in novel ways that had never been tried before. I think both cases will be litigated in an emergency posture, where people are going to be seeking preliminary injunctions or stays pending appeal.

 

      So, what is interesting is that, I think, 24 states sent a letter to the Biden administration arguing -- laying out the case why OSHA does not have the authority to issue a vaccine mandate. And I think they were, like, reading from the script. And they cited the Alabama case multiple times or -- obviously, the statutes are different. OSHA has different authority. It's not the Public Health Service Act. But the principles, the kind of interpretive methods that the Supreme Court used in the Alabama case, I think will be a roadmap for the litigation challenging the vaccine mandate. In particular, is this a major question? Probably so. Does OSHA have clear authority to regulate vaccines or mandate vaccines? Probably not. Is this an area of traditional state regulation? Yes. Is this something that the federal government doesn't normally do? Yes. So I think it will be very interesting litigation and there will be lots of it, Daniel. So, maybe one last question for you, Daniel.

 

Daniel Suhr:  I plan to bring some of it, right?

 

Brett Shumate:  Yeah. Well, tell us some about your case that you brought challenging the eviction moratorium. You know, I think you probably brought that because you thought we were going to lose in our Alabama case. But tell me --.

 

Daniel Suhr:  Well, we didn't think you were going to lose. We thought the DC Circuit was going to screw you up. So, you're kind to ask, Brett. My firm, the Liberty Justice Center, represented a different group of rental property owners. And I think one of the things that's so important, Brett, about the litigation you brought and the Supreme Court's holding, was its recognition that a lot of this order's impact falls on what the Court called "mom and pop landlords," that often, in litigating this case, there was this sentiment that it was tenants versus landlords.

 

      And really, what the Supreme Court recognized, and what we were trying to highlight in our case, was that there are a lot of smaller operators, people who are just renting out the other half of a duplex, who rely on rent in order to pay the mortgage. Right? You mentioned the rent moratorium, the reality of what this is. There was no mortgage moratorium. There was no maintenance cost moratorium. This was hitting real people in their pocketbooks. And it was just shifting the pain of this pandemic from one group of Americans onto another rather than solving the underlying problem.

 

      I think you're right about the vaccine mandate, as well. One of the things I'll be curious about is the extent to which the government feels like it's learned a lesson and goes to Chevron in a lot more definitive way. Having not really relied on Chevron last time around, does the government try to put weight on Chevron this time around?

 

      And then I think the other lesson, maybe for us is as conservative or libertarian litigators, is that we've always had this frustration that the Tenth Amendment just doesn't get us very far. Or  Commerce Clause -- interstate commerce claims after Raich, they just don't get us very far. And maybe the solution is rather than looking at those as stand-alone constitutional claims, we should, instead, look at them primarily as canons of interpretation that will force the government and the administrative state back into its box by going into a strong six-justice majority that’s maybe not willing to use them as a stand-alone constitutional decision, but is willing to use them to rule against the federal government and reinvigorate some of those Federalist principles that those of us in this call share.

 

Brett Shumate:  Yeah, I think that's right, Daniel. Just to echo that, in the Alabama case, our primary argument was the CDC exceeded its statutory authority. But we also felt it was important to have constitutional claims that would, hopefully, push the Court to resolving the case on narrower statutory grounds. So we argued the Takings arguments. We argued Federalism principles. We argued the non-delegation doctrine, which we haven't talked about here. But those are all aggressive constitutional claims on their own, but when you package them in support of a statutory argument, they do have a lot of force. And you can't have constitutional avoidance. Courts are supposed to avoid these major constitutional rulings. One way to do that is to narrowly construe the statute. And that's ultimately what we saw happen in the Alabama case.

 

Daniel Suhr:  Well, Brett, it's an important case. It is a case, I think, that many of us will look to in the future. It's an interesting case, in that it comes on the orders list. Right? I think a lot of us are used to full merits briefing, and we're used to having amicus briefs of our own in cases like this. And so, we might feel more familiarity or ownership in a so-called landmark case because it's something that we saw argument on, you know, C-Span -- or heard argument on C-Span.

 

      Unfortunately, there's no quill for you in this case. But it is, nonetheless, a landmark case. I think it's one that -- for property rights, for statutory interpretation -- is going to be one that we all rely on for a while. We're grateful for you in your work to bring it and win it. I think I can say that, at least for those of us in the conservative public interest legal community. And we're thankful for you joining us today.

 

      So, Guy, thanks for having us both on the podcast. And thanks to The Federalist Society for providing a forum to talk about these important legal issues.

 

Guy DeSanctis:  Thank you. On behalf of The Federalist Society, I want to thank our experts for the benefit of their valuable time and expertise today. And I want to thank our audience for joining and participating. We also welcome listener feedback by email at info@fed-soc.org. As always, keep an eye on our website and your emails for announcements about upcoming Teleforum calls and virtual events. Thank you all for joining us today. We are adjourned.

 

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Dean Reuter:  Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s practice groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at fedsoc.org.