The U.S. Court of Federal Claims recently ruled on a significant case involving landlords who sought compensation from the federal government due to the Centers for Disease Control and Prevention’s (CDC) eviction moratorium. The court's decision affects residential rental property owners who claim they suffered financial losses because they were unable to evict tenants who did not pay rent during the COVID-19 pandemic. This ruling highlights the ongoing legal debates surrounding property rights and government regulations during public health emergencies.
The case, titled ONNI UNION LOFTS LP v. United States (Docket No. 26-482), was filed on July 22, 2026. The plaintiffs, ONNI UNION LOFTS LP and other residential rental property owners in California, argued that the CDC's eviction moratorium constituted a compensable taking of their property without just compensation, violating the Fifth Amendment. They also claimed that the moratorium represented an illegal exaction that unjustly enriched the government at their expense.
The dispute arose from the CDC's 2020 eviction moratorium, which was implemented to prevent the spread of COVID-19. The plaintiffs contended that the moratorium prohibited them from evicting tenants who were not paying rent, causing them financial harm. The government, represented by the Department of Justice, filed a motion to dismiss the plaintiffs' complaint, arguing that the claims did not meet the legal requirements to proceed.
In its ruling, the court addressed the government's motion to dismiss the case. Judge Carolyn N. Lerner noted that the plaintiffs' claims regarding physical takings could move forward, as the government acknowledged that its arguments against the takings claim were foreclosed by recent precedents set by the Federal Circuit. The court stated, "The Government has not raised [any] argument to distinguish this case from [Darby II], and the Court finds no such distinction, this Court is bound by [Darby II]." This means that the court recognized the precedent established in a related case where the Federal Circuit found that the CDC Order could constitute a physical taking of property.
However, the court also ruled that the plaintiffs failed to establish a claim for illegal exaction. The judge explained that the CDC Order did not direct landlords to waive or defer rental payments. Instead, the order allowed landlords to collect fees and penalties for nonpayment of rent. As a result, the court granted the government's motion to dismiss the illegal exaction claim while allowing the takings claim to proceed.
The impact of this ruling is significant for landlords and property owners across the country. It establishes that while landlords may pursue claims for compensation due to the CDC's eviction moratorium, they must clearly demonstrate that their property rights were taken without just compensation. The ruling also clarifies the legal standards for illegal exaction claims, indicating that landlords cannot claim compensation for losses that do not involve direct payments to the government.
This case could set a precedent for similar claims by landlords affected by the eviction moratorium. As the legal landscape surrounding property rights and government regulations continues to evolve, this ruling may influence future cases involving government actions during public health emergencies.
Looking ahead, the plaintiffs in this case can continue to pursue their takings claim in court. The government has until September 22, 2026, to respond to the plaintiffs' complaint regarding the takings claim. Meanwhile, there may be related cases pending that could further clarify the legal implications of the CDC's eviction moratorium and its impact on property rights.