U.S. District Chief Judge Colleen McMahon of the Southern District of New York. (Photo: David Handschuh/NYLJ)

A group of Westchester County landlords cannot sue in federal court to block Gov. Andrew Cuomo's temporary moratorium on evictions in response to the COVID-19 pandemic, a judge ruled Monday.

U.S. District Chief Judge Colleen McMahon of the Southern District of New York said in a 37-page opinion that federal courts do not have jurisdiction to determine whether Cuomo violated New York state law by enacting his May 7 executive order pausing evictions through Aug. 19.

In any event, she said, the order did not constitute a physical or regulatory taking by the government that would give rise to claims under the Fifth Amendment to the U.S. Constitution.

The lawsuit, filed in White Plains, sought to undo two provisions of the order, which temporarily blocked landlords from pursuing eviction proceedings and gave renters the option to put their security deposit toward their rent payment.

"In doing so, the order has given carte blanche to tenants to withhold rent without  repercussion," attorney Mark A. Guterman of Lehrman, Lehrman & Guterman wrote in the May 27 complaint.

"Plaintiffs and all similarly situated landlords are precluded from asserting their rights and obtaining relief to protect their property, all the while remaining obligated to pay all of their own carrying costs and other expenses, including taxes to the various governmental divisions of New York state," Guterman argued.

In her ruling, McMahon noted that the U.S. death toll from the novel coronavirus had topped 120,000 as of Monday, making it the "deadliest pandemic in over a century." No country, she said, had suffered more than the U.S., and New York led all 50 states with nearly 400,000 cases and 25,000 deaths.

Cuomo's order built on a similar measure in March that barred all commercial and residential evictions through June but did not cancel rent payments altogether. Tenants are still responsible for making up any missed payments to their landlord, and the legislature has not passed any form of rent forgiveness to allay the concerns of renters when the payments come due.

The new order, however, did extend the original moratorium another two months for renters who qualified for unemployment benefits or were unable to pay rent due to economic hardships resulting from the pandemic. Under the order, landlords are also required to apply tenants' security deposits to unpaid rent at the request of renters, though the deposits must be repaid in increments starting 90 days after they are used.

McMahon ruled on cross-motions for summary judgment that federal courts do not have the power to address claims that Cuomo's order improperly and "effectively legislated new laws," in violation of the state's Executive Law and the New York Constitution.

"While it may be the case that governor has overstepped his authority under New York's Executive Law, curing those alleged harms would require this court to ignore the doctrine of state sovereign immunity and principles of federalism embodied in the Eleventh Amendment," she wrote.

With regard to the plaintiffs' takings claims, McMahon said that in times of emergency, state governments may reallocate economic hardships between private parties, like landlords and their tenants, without violating the Fifth Amendment.

The plaintiffs, she said, had failed to show that the state government had seized control of their properties, and the executive order was limited in its scope. Landlords, McMahon wrote, still had the ability to sue their tenants for back rent, and the order had neither reduced the amount owed nor had it forgiven any missed rent payments or other obligations.

"As long as the order is in place, tenants will continue to accrue arrearages, which the landlord will be able to collect with interest once the order has expired," McMahon wrote. "Furthermore, landlords will regain their ability to evict tenants once the order expires."

Reached by phone Monday evening, Guterman said McMahon's ruling missed the "practical realities" of the pandemic, where landlords were likely to end up "eating the money" that was owed to them from missed rent payments. He and his clients were still considering an appeal to the U.S. Court of Appeals for the Second Circuit or potentially bringing a separate challenge in state court.

"We respect the judge, and we appreciate the opportunities she gave us in the case to get our arguments out there," Guterman said.

"The more time that goes by, and the more money that goes by that's not paid, most tenants will probably want to walk away from it," he said. "No person, be it a landlord or anyone else, would want to be in a position of losing half of their income."

A representative from Cuomo's press shop did not respond Monday to a request for comment.

The case was captioned Elmsford Apartment Associates v. Cuomo.

 

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