Elmsford Apartment Associates, LLC v. Cuomo

Background

Three residential landlords challenged Executive Order 202.28, issued by Governor Andrew Cuomo on May 7, 2020, during the COVID-19 emergency. The order temporarily suspended parts of New York’s security-deposit laws so that tenants or licensees facing pandemic-related financial hardship could use security deposits to pay rent, subject to later replenishment. It also temporarily barred landlords from initiating eviction proceedings for nonpayment of rent against tenants eligible for unemployment benefits or otherwise facing pandemic-related financial hardship.

The landlords initially sought emergency injunctive relief, but the parties agreed that the dispute presented legal questions requiring no discovery. The court treated the matter as cross-motions for summary judgment. Because the landlords did not allege imminent or actual harm to a particular property interest or contractual relationship, the court considered their challenge to be a facial challenge to the order.

Claims and Jurisdiction

The landlords argued that Executive Order 202.28 violated the Contracts Clause, Takings Clause, Due Process Clause, and Petition Clause of the United States Constitution. They also argued that the Governor exceeded his authority under New York law and the New York Constitution.

The court held that it lacked jurisdiction to decide whether the Governor violated New York law. Under principles of state sovereign immunity and federalism, a federal court generally cannot order a state official to comply with state law. The court explained that the landlords challenged the Governor’s alleged misuse of authority, not the constitutionality of the statute granting him emergency powers. The court therefore did not reach the merits of the state-law claims.

Takings Clause

The court rejected the landlords’ claim that the order caused either a physical taking or a regulatory taking. A physical taking generally requires a government-authorized physical occupation of property. The court found no such occupation because the landlords voluntarily rented the apartments, retained control of the properties, continued to collect rent, and could later pursue eviction or claims for unpaid rent.

The court also found no regulatory taking. The order was temporary, did not forgive tenants’ rental obligations, and did not eliminate the landlords’ ability to obtain unpaid rent or regain the ability to evict after the order expired. Applying the factors used for non-categorical regulatory takings, the court found that the landlords had offered insufficient evidence of economic harm, had no reasonable expectation of freedom from additional regulation in a heavily regulated rental industry, and were subject to a temporary public-health regulation rather than an affirmative appropriation of their property. The court stated that the takings claim was dismissed.

Contracts Clause

The court ruled that the security-deposit provisions did not substantially impair the landlords’ contract rights. Residential leases operate within a heavily regulated system, making additional regulation more foreseeable. The order also required tenants to replenish security deposits and did not eliminate their obligation to pay rent or the landlords’ ability to recover amounts owed later.

The court likewise rejected the challenge to the eviction moratorium. Even assuming the leases included an implied right to use eviction proceedings, the order postponed that remedy rather than eliminating it. The landlords could still pursue other legal remedies, including breach-of-contract actions for unpaid rent, and could pursue eviction proceedings after the temporary restriction ended. The court granted the defendant’s summary judgment motion on the Contracts Clause claim.

Due Process Clause

The court rejected the procedural due process claim because the landlords did not identify a separate property interest beyond the interests covered by their takings and contract claims. The court also found no deprivation of property and no denial of a meaningful opportunity to be heard. The landlords could still bring certain eviction proceedings, pursue breach-of-contract claims, and initiate nonpayment proceedings after the order expired.

Petition Clause

The court rejected the claim that the order violated the First Amendment right to petition the government through the courts. The moratorium temporarily suspended one form of eviction proceeding but did not completely eliminate the landlords’ legal remedies. They could sue for rent arrears and later pursue eviction proceedings. The court treated the delay as insufficient to establish a Petition Clause violation.

The court also concluded that the Governor was not responsible for the broader suspension of eviction proceedings, including proceedings based on grounds other than nonpayment, because that suspension came from an order issued by New York’s Chief Administrative Judge rather than Executive Order 202.28.

Disposition

The court denied the plaintiffs’ motion for summary judgment in full and granted the defendant’s motion for summary judgment in full. It directed the Clerk of Court to close the motion at Docket Number 7 and close the case. Judge Colleen McMahon signed the order.