Here’s the latest in a case we’ve been following.
In this Order, the U.S. Court of Appeals for the Federal Circuit denied en banc review of a 2-1 panel opinion which concluded that a complaint challenging the CDC’s Co-10 residential eviction moratorium properly pleaded a physical takings claim even though the Supreme Court eventually invalidated the moratorium as beyond the CDC’s authority.
In that opinion, the Court also noted that preventing a property owner from “evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership–the right to exclude.” The Darby panel concluded similarly, holding that prohibiting evictions is not merely regulating the lessor-lessee relationship, but could result in a physical occupation taking. This issue is the same one we’ve been on hold waiting to see if the Supreme Court is willing to take up in GHP Management Corp. v. City of Los Angeles, No. 24-435 (a case that has been relisted a number of times).
The Darby panel also rejected the government’s argument that because the CDC’s actions were ultimately determined to be illegal, these actions could not lead to takings liability because takings must be for a public use or purpose. The two-judge majority held that the government action doesn’t need to be legally authorized, only “authorized,” meaning “chargeable to the government.” Think “apparent authority” from agency law. The “authorized” issue was the question that divided the Federal Circuit.
Several judges added additional thoughts to the court’s denial of en banc to urge the Supreme Court to take up the case:
- Concurring: “the issue in this case, which goes to the scope of the Takings Clause, would benefit from Supreme Court guidance … Only the Supreme Court can provide the needed clarity as to the meaning of ‘authorized’ in its takings jurisprudence.”
- Dissenting: “As discussed above, the Supreme Court has consistently held that government officials’ unauthorized acts cannot subject the government to takings liability. … This case is, undoubtedly, of substantial importance.”
- Dissenting: “As Judge Dyk observes: ‘This case is, undoubtedly, of substantial importance.’ Dyk Dissent at 9. I’m not sure anyone disagrees.”
Ring that cert petition bell!
Not surprisingly, after the Federal Circuit declined en banc review, the property owners in GHP sent the Court a letter letting the Justices know:
Had Petitioners’ case been heard in the Federal Circuit, consistent with Darby Development Co. v. United States, 112 F.4th 1017 (Fed. Cir. 2024), Petitioners’ case would not have been dismissed before it could even begin. Today, the Federal Circuit denied the federal government’s rehearing petition in Darby. That denial of rehearing en banc confirms that this split of authority will persist.
As we predicted in our earlier post, the Darby case is nicely teed up for the government’s cert petition, with our only question being one Question Presented or two?
Stay tuned.












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