Are the CDC’s Restrictions on Halting Residential Evictions in Michigan Constitutional?

In Michigan, residential evictions are normally handled at the local District Court pursuant to Michigan’s Summary Proceedings to Recover Possession of Premises, MCL 600.5701, et seq. However, on September 1, 2020, the Department of Health and Human Services Centers for Disease Control and Prevention (the “CDC”) issued an order (the “Order“) temporarily halting some, but not all, residential evictions throughout the country, including Michigan, to prevent the further spread of COVID-19. The Order is presently in effect through December 31, 2020, but may be extended or modified in the future. The CDC’s Order upended the normal residential eviction process and thrown interpretation of the Order to the Michigan Supreme Court Administrator’s Office (“SCAO”) and the local District Courts throughout the State of Michigan.

Given the complicated nature of the Order, the CDC has provided responses to Frequently Asked Questions (“CDC’s FAQs”) and the SCAO in Michigan has issued its own responses to Frequently Asked Questions (“SCAO’s FAQs”) as guidance to local District Courts throughout Michigan in interpreting the Order. This article provides some background of the language of the CDC’s Order, how to interpret the CDC’s Order through the CDC’s FAQs and the SCAO’s FAQs, and the constitutional questions that arise due to the Order from the federal government compelling states like Michigan to enforce the CDC’s Order.

September 1, 2020 CDC Order

According to the Order’s plain language, the purpose of the Order is a “temporary eviction moratorium to prevent the further spread of COVID–19. This Order does not relieve any individual of any obligation to pay rent, make a housing payment, or comply with any other obligation that the individual may have under a tenancy, lease, or similar contract. Nothing in this Order precludes the charging or collecting of fees, penalties, or interest as a result of the failure to pay rent or other housing payment on a timely basis, under the terms of any applicable contract.” However, the Order only applies to a “covered person” under the Order. Specifically, the Order states that “a landlord, owner of a residential property, or other person with a legal right to pursue eviction or possessory action, shall not evict any covered person from any residential property in any jurisdiction to which this Order applies during the effective period of the Order.” Thus, the question becomes who is a “covered person” that the Order applies. The Order defines a “covered person” as:

Any tenant, lessee, or resident of a residential property who provides to their landlord, the owner of the residential property, or other person with a legal right to pursue eviction or a possessory action, a declaration under penalty of perjury indicating that:

1) The individual has used best efforts to obtain all available government assistance for rent or housing;
2) The individual either (i) expects to earn no more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint return), (ii) was not required to report any income in 2019 to the U.S. Internal Revenue Service, or (iii) received an Economic Impact Payment (stimulus check) pursuant to Section 2201 of the CARES Act;
3) The individual is unable to pay the full rent or make a full housing payment due to substantial loss of household income, loss of compensable hours of work or wages, a layoff, or extraordinary out-of-pocket medical expenses;
4) The individual is using best efforts to make timely partial payments that are as close to the full payment as the individual’s circumstances may permit, taking into account other nondiscretionary expenses; and
5) Eviction would likely render the individual homeless—or force the individual to move into and live in close quarters in a new congregate or shared living setting— because the individual has no other available housing options.”

Specifically, the Order does not prevent all residential evictions in Michigan. According to the Order, a tenant even if otherwise a “covered person” under the Order can still be evicted for the following reasons:

• Engaging in criminal activity while on the premises;
• Threatening the health or safety of other residents;
• Damaging or posing an immediate and significant risk of damage to property;
• Violating any applicable building code, health ordinance, or similar regulation relating to health and safety; or
• Violating any other contractual obligation, other than the timely payment of rent or similar housing-related payment (including non-payment or late payment of fees, penalties, or interest).

For a residential tenant to invoke the protections of the CDC’s Order, the Order states that the tenant must provide an executed copy of the Declaration Form (or a similar declaration under penalty of perjury) to their “landlord, owner of the residential property where they live, or other person who has a right to have them evicted or removed from where they live.” According to Michigan Legal Help recommended by the SCAO office, a tenant should not give their landlord a Declaration Form without first applying to government agencies for help with rent including the HARA application process and the MDHHS State Emergency Relief.

CDC and SCAO Frequently Asked Questions

In order to provide some guidance regarding how to interpret the CDC’s Order, the CDC issued FAQs. To be clear, the CDC’s FAQs are non-binding ‘guidance’ only, but could hold weight with a District Court seeking to interpret the Order’s language. According to the CDC’s FAQs, the residential properties that are covered by the CDC’s Order include:

What types of residential properties are covered by the CDC’s order?
The Order applies to any property leased for residential purposes, including any house, building, mobile home or land in a mobile home park, or similar dwelling leased for residential purposes. The Order does not apply to hotel rooms, motel rooms, or other guest house rented to a temporary guest or seasonal tenant as defined under the laws of the state, territorial, tribal, or local jurisdiction.

The CDC’s FAQs also provide additional guidance:

Do landlords have to make their tenants aware of the CDC order and Declaration?
No, landlords are not required to make their tenants aware of the Order and Declaration. But landlords must otherwise comply with all requirements of the Order.

What does it mean when a tenant has declared themselves to be a covered person under the CDC Order?
Covered persons located in jurisdictions in which this Order applies may not be evicted for non-payment of rent solely on the basis of the failure to pay rent or similar charges at any time during the effective period of the Order. You may continue to charge rent and accept partial payments from your tenant during this time. If local laws permit, you may also agree to a repayment schedule with your tenant for back rent payments that have accumulated during this time. Tenants retain all existing rights and protections against eviction under applicable state law.

What can a landlord do if a tenant has declared that they are a covered person under the CDC Order, but the landlord does not believe the tenant actually qualifies?
The Order does not preclude a landlord from challenging the truthfulness of a tenant’s declaration in any state or municipal court. The protections of the Order apply to the tenant until the court decides the issue as long as the Order remains in effect.

In addition, the SCAO FAQs state:

Can the court accept filings or can the landlord obtain a judgment to be executed when the moratorium lifts?
The order defines “evict” and “eviction” as “any action by a landlord, owner of a residential property, or other person with a legal right to pursue eviction or a possessory action, to remove or cause the removal of a covered person from a residential property.” The language in the order — “any action . . . to remove or cause the removal of” — is a matter of judicial interpretation.

Thus, even Michigan’s SCAO leaves the language of the CDC Order to the “judicial interpretation” of the District Courts throughout Michigan. Thus, this does not provide significant guidance under the circumstances because each separate District Court in Michigan is left alone in deciding what the language of the Order means and how to interpret it.

CDC’s Purported Legal Authority to Issue the Order

According to the CDC’s FAQs, the CDC issued the Order under the authority of:

Section 361 of the Public Health Service Act (42 U.S.C. § 264) and federal regulations codified at 42 C.F.R. § 70.2. Under 42 U.S.C. § 264, the HHS Secretary is authorized to take measures to prevent the entry and spread of communicable diseases from foreign countries into the United States and between U.S. states and U.S. territories. The authority for carrying out these functions has been delegated to the CDC Director. Under long-standing legal authority found at 42 C.F.R. § 70.2, the CDC Director can take public health measures to prevent the interstate spread of communicable diseases in the event of inadequate local control.”

The question becomes whether the CDC, as a federal administrative agency, has the authority to reach into the State of Michigan to compel the State of Michigan to change its normal eviction process in the event of a public health crisis or whether this decision is left to the individual state legislatures and the Governor to make sure a determination. This issue raises significant “takings clause” issues, due process concerns and implicates the Tenth Amendment to the United States Constitution, which states, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” Interestingly, the SCAO does not come right out and say “Yes” Michigan is bound by the CDC’s eviction moratorium. Instead, the SCAO’s FAQs merely states:

Does the CDC moratorium apply to Michigan?
The order “shall be enforced by Federal authorities and cooperating State and local authorities through the provisions of 18 U.S.C 3559, 3571; 42 U.S.C 243, 268, 271; and 42 CFR 70.18.”

Thus, the remaining questions become 1) what are the potential consequences of violating the Order and 2) is the Order even constitutional in the first place?

Consequences of Violating the Order

According to the CDC’s FAQs:

What are the penalties for a landlord, owner of a residential property, or other person with a legal
right to pursue an eviction or a possessory action violating this Order?

Several laws ( 18 U.S.C. §§ 3559 and 3571, 42 U.S.C. § 271, and 42 C.F.R. § 70.18) say that a person who violates the Order may be subject to a fine of no more than $100,000 or one year in jail, or both, if the violation does not result in death. A person violating the Order may be subject to a fine of no more than $250,000 or one year in jail, or both, if the violation results in a death or as otherwise provided by law. An organization violating the Order may be subject to a fine of no more than $200,000 per event if the violation does not result in a death or $500,000 per event if the violation results in a death or as otherwise provided by law. These are criminal penalties and are determined by a court of law. CDC has no involvement in these penalties.

According to the SCAO’s FAQs:

Is there a penalty for violating the CDC’s order?
The Order states that “a person violating this Order may be subject to a fine of no more than $100,000 if the violation does not result in a death or one year in jail, or both, or a fine of no more than $250,000 if the violation results in a death or one year in jail, or both, or as otherwise provided by law. An organization violating this Order may be subject to a fine of no more than $200,000 per event if the violation does not result in a death or $500,000 per event if the violation results in a death or as otherwise provided by law.”

Who would prosecute for violations of this order?
The U.S. Department of Justice may initiate court proceedings as appropriate seeking imposition of these criminal penalties.”

Thus, it appears that the State of Michigan has washed its hands in enforcing the CDC’s Order, but leaves it up to the United States Department of Justice to enforce the Order, if appropriate.

Is the Order Constitutional?

There are significant legal concerns regarding whether the Order is constitutional and enforceable. In Tennessee, a group of landlords filed a lawsuit challenging the constitutionality of the Order. In Tiger Lily LLC et al. v. Dep’t of Housing & Urban Devel. et al., No. 2:20-2692 (W.D. Tenn.), the plaintiffs filed a nine-count Complaint alleging that the Order is 1) a violation of the Takings Clause, 2) a violation of substantive due process, 3) a violation of procedural due process, 4) a violation of the Tenth Amendment to the United States Constitution, 5) a violation of the Supremacy Clause 6) an unlawful suspension of law, 7) a violation of Plaintiffs’ rights to access the judiciary, 8) unlawful and requires declaratory judgment and relief and 9) unlawful and requires a preliminary and permanent injunction. In essence, the landlords claim that suspending residential evictions throughout the country interferes with the landlords’ free and unrestricted use and enjoyment of their property without compensation and without due process of law.

In response, the CDC argues that without the Order, the United States would see an unprecedented wave of mass evictions, thereby destabilizing communities and impacting efforts to control COVID-19 given the mass evictions that would occur and uproot tenants from their homes. However, the CDC has argued argued in the case that the Order “does not bar a landlord from commencing a state court eviction proceeding, provided that that actual eviction does not occur while the Order remains in place.” Thus, the primary concern from the federal government is not the commencement of eviction proceedings per se, but the actual removal of a tenant and the tenant’s family from the premises during a pandemic.

While the case is still pending, supporters and opponents of the landlords have weighed in on both sides. Unfortunately, while we await the final outcome of the pending litigation in Tiger Lily, supra, landlords and tenants alike should be prepared for appeals in the case regardless of which side loses. Thus, the determination of whether the Order is legal and constitutional will likely end up taking time thereby making it difficult to advise Michigan landlords or tenants on the constitutionality of the Order presently. Michigan landlords and tenants should closely follow the pending litigation in Tiger Lily, supra, and its impact on residential evictions. In the interim, there is no clear determination that the Order is unconstitutional. Given the steep penalties for violating the Order, landlords should retain experienced real estate attorneys when navigating the Order, the CDC’s FAQs, the SCAO’s FAQs and the constitutional issues that have arisen due to the Order.

Joe Wloszek is a Member of Hirzel Law, PLC where he focuses his practice on condominium and homeowner’s association law, commercial litigation, commercial real estate, large contractual disputes, and related real estate matters. Mr. Wloszek has been a Super Lawyers Rising Star in Real Estate Law from 2013-2020, an award given to only 2.5% of the attorneys in Michigan each year.  He was also named a Top Lawyer in commercial law by DBusiness Magazine in 2014, a Michigan Top Lawyer in real estate law by Michigan Top Lawyers in 2016 and the Pro Bono Volunteer Attorney of the Year in 2014 by Michigan Community Resources.  He is a Certified Real Estate Continuing Education Instructor through the State of Michigan and the former Chair of the Oakland County Bar Association Real Estate Committee.  He can be reached at (248) 478-1800 or [email protected].