As we noted here, property owners sued the New York governor asserting that one of his emergency measures to respond to the coronavirus crisis (a suspension of eviction proceedings) is a taking.
Yesterday, the District Court denied the plaintiffs’ motion for summary judgment, and entered summary judgment in favor of the governor. Order Denying Plaintiffs’ Motion for Summary Judgment and Granting Defendant’s Motion for Summary Judgment, Elmsford Apt. Assocs., LLC v. Cuomo, No. 20-cv-4062 (CM) (June 29, 2020).
No physical take (see Yee: you invited the tenants in, owners). And no regulatory taking either because — you guessed correctly — this is “temporary” and Tahoe-Sierra. When this is all done, no-harm, no-foul. And not a Lucas taking because the restrictions left the owners with some use and value, so this is a Penn Central analysis. And you can guess where the Penn Central analysis leads, no?
The most interesting part of the opinion (in our opinion) is the Penn Central analysis (slip op. at 19-24). Not because it is objectively correct or incorrect, but because it applies some well-worn vibes about highly-regulated markets and expectations (the “reasonable” versus “distinct” problem that Bill Wade and others have pointed out). And, we note, the opinion did not simply say “this is an emergency exercise of the police power, so no taking” as we’ve seen in other cases (thank goodness for small things).
Plaintiffs object to the Order because it “has foisted exclusively upon landlords the burden of rental issues.” (See Dkt. No. 9, Lehrman Decl. ¶ 15.) But the law in this Circuit is clear: state governments may, in times of emergency or otherwise, reallocate economic hardships between private parties, including landlords and their tenants, without violating the Takings Clause. Plaintiffs’ takings claim is dismissed.
Hey, guess what: state government may — even in normal times — reallocate economic hardships between private parties … without violating the Takings Clause. Or so that’s what the courts tell us all the time.
And finally, a bit of self-promotion: this is, generally speaking, the analytic model of how we think courts should process these type of claims, as we write in “Evaluating Emergency Takings: Flattening The Economic Curve.”
PS – the court concluded no Contracts Clause violation either.