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Tenant eviction moratoria are more than unconstitutional; they’re insurrectionary

Tenant eviction moratoria are more than unconstitutional; they’re insurrectionary

This essay first appeared in the August 6, 2021 Epoch Times.

Note: Since this essay was published, the Supreme Court struck down the CDC’s extension of the national moratorium on the grounds that it exceeded the CDC’s statutory power. Unfortunately, the court failed to address the severe underlying constitutional questions regarding federal intervention in the landlord-tenant market and the “anti-constitutional” nature of debt moratorium laws. Rather the court suggested that Congress could extend the moratorium by legislation.

State and federal tenant eviction moratoria go beyond “unconstitutional.” They’re a direct assault on the constitutional order itself. They represent insurrection from above.

I’m not prone to overstatement. Read on.

Surf the web, and you’ll find many critics of the moratoria—even in the establishment media. Under special fire is President Joe Biden’s purported extension of the Centers for Disease Control and Prevention (CDC) federal moratorium. Critics note that Biden has been able to cite no legal support for his action.

Critics also argue that the CDC’s order exceeds the scope of Congress’s authorizing statute and of the regulation issued under it. A majority of the Supreme Court agrees with this position (pdf).

Critics further claim that if we do read Congress’s statute broadly enough to authorize the CDC’s order, then Congress exceeded its power to delegate to an executive agency. While they acknowledge that the modern Supreme Court has expanded greatly the scope of Congress’s power under the Constitution’s Commerce and the Necessary and Proper Clauses, they contend that the order exceeds the scope of this expansion.

All of these are sound arguments. But in my view, they miss the nub.

These orders, federal and state, and not merely unconstitutional. They are fundamentally anti-constitutional. They are at war with a fundamental reason the Constitution was adopted. The framers never would have drafted a constitution permitting eviction moratoria. And if they had, the American people never would have ratified it.

Soon after the Revolutionary War (1775–83) the United States fell into economic recession. Many people found it difficult to pay their debts. Creditors found it hard to collect.

The law of the 1780s, like the law today, was not heartless. When honest debtors could not pay honest debts, there were several options. One was to resort to bankruptcy law, where debts were structured in an orderly way. Under the Articles of Confederation, bankruptcy was an area of state responsibility. Another option was to petition a court of equity, which, depending on circumstances, could relieve debtors from some kinds of contracts. A third option was voluntary debt restructuring by the parties themselves. There were many reasons people might want to restructure the debt themselves, including the cost, delay, and uncertainty of taking the matter to court.

In all these proceedings, the judge or the parties could tailor the solution to the individual circumstances of the debtor and creditor. They could consider the needs of justice in each case and try to minimize harm to all concerned.

However, during the 1780s more voters were debtors than creditors, so demagogues persuaded state legislatures to adopt sweeping laws excusing debts without regard to justice or individual circumstances. These laws essentially confiscated existing debts, in whole or in part. Most people seem to have thought these measures were wrong, but desperation and political dynamics forced their passage anyway.

Tender laws, for example, required creditors to accept payment in severely depreciated currency. A creditor owed $100 might have to settle for paper money worth $10, although the debtor was fully able to pay. Pine-barren laws and some tender laws forced creditors to accept nearly worthless assets in full “payment.” Installment laws and stay laws—such as the current eviction moratoria—postponed debt collection.

The Constitution’s framers considered these laws profoundly immoral. This was because they robbed one class of people to benefit another, irrespective of the justice of each individual case. Moreover, the framers knew that many creditors and landlords were far from rich: Then as now, landlords and other real estate investors often were eking out a living from their returns.

The framers discovered that these laws were aggravating and prolonging the recession. They increased uncertainty, raised interest rates, caused capital to disappear, and discouraged new investment.

They also fostered social unrest. For example, many Rhode Islanders owed money to Connecticut creditors. The Rhode Island legislature—widely considered the most irresponsible in the country—enacted laws to benefit Rhode Island debtors by cheating Connecticut creditors. If the situation had continued, the two states might have gone to war.

The framers had learned their lesson. They were determined that “stay laws” and their ilk would never again plague American society, and they drafted the Constitution to block them.

First, they drew the line between state and federal jurisdiction so that the landlord-tenant relationship and most debts were subject to state authority alone. Congress and executive branch agencies would have no general power to meddle with real estate, including landlord-tenant law. The federal government would have some power over debts, but this would be limited to transactions in foreign or interstate commerce—such as credit extended by Philadelphia merchants for goods shipped to England or Virginia. The framers did permit Congress to issue paper currency (pdf), but principally because it might be necessary to finance a war.

During the debates over the Constitution’s ratification, the Constitution’s advocates represented repeatedly—as I have documented in several scholarly articles (pdf) (pdf) (pdf)—that the states alone would control real estate and local debts within their borders. Without representations such as these, the Constitution might never have been adopted.

As for Congress’s power to “make all Laws which shall be necessary and proper” for carrying out other powers, the Constitution’s advocates pointed out that this clause (1) covered only incidental transactions and (2) was merely a clarifying provision that granted the federal government no additional authority.

As further protection, the Founders adopted the Fifth Amendment, which banned federal seizure of property (both real and personal) without due process or just compensation.

The Founders left in place debtors’ traditional remedies: The states could adopt their own bankruptcy laws until Congress superseded them. Courts of equity still could grant relief against what Alexander Hamilton called “hard bargains.”

In addition to banning unjust federal measures, the framers inserted specific prohibitions on unjust state laws. Article I, Section 10 provides that no state may “make anything but gold and silver coin a tender in payment of debts; pass any …  ex post facto law, or law impairing the obligation of contracts.” The ban on laws impairing the obligation of contracts (called the “Contracts Clause”) was targeted directly at stay laws, such as the current moratoria.

Law school constitutional law case books—most of which are biased to the left—create the impression the Supreme Court largely eviscerated the Contracts Clause in Home Building & Loan Assn v. Blaisdell (pdf), decided in 1934. They create this impression by omitting three Supreme Court decisions issued shortly thereafter in which the court retreated substantially from the anti-Contracts Clause stance in Blaisdell. Eviction moratoria, however, often are insufficiently targeted to satisfy even the weak requirements of Blaisdell. In other words, modern judicial interpretations do not justify eviction moratoria.

Eviction moratoria stab at the essence of the Constitution itself. Officials adopting them have repudiated the very document by which they claim power and legitimacy: Ipsi dixerunt:* They have declared themselves usurpers. Even at the risk of punishment, landlords, tenants, and judges should treat their decrees with contempt.

Robert G. Natelson, a former constitutional law professor, is senior fellow in constitutional jurisprudence at the Independence Institute in Denver. He is the author of “The Original Constitution: What It Actually Said and Meant” (3rd edition, 2014) and of extensive scholarship on federalism and the Constitution’s Commerce and Necessary and Proper Clauses. He is not a landlord.

* “They themselves have said it.” The plural of the more common, “ipse dixit.”

Rob Natelson