Check this out. In Willowbrook Apts, LLC v. Mayor & City Council of Baltimore, No. 1:20-cv-01818 (July 6, 2020), the U.S. District Court for the District of Maryland denied the plaintiff/property owner's motion for a temporary restraining order, in a case challenging the COVID orders that pretty dramatically alter the landlord/tenant relationship in Maryland:
Specifically, the Baltimore City Council passed the Rent Increase Protection Act on May 19, 2020 (“Baltimore City Act”). On May 23, 2020, the Howard County Council passed the Rental Protection & Stability Act (“Howard County Act”), and the city of Salisbury followed suit one week later (on June 1, 2020) with Ordinance No. 2599, which amended chapter 15.26 of the city’s Municipal Code (“Salisbury Act”).These laws (the “Acts”), while enacted in different jurisdictions, have the same three fundamental components, which Plaintiffs contend are constitutionally infirm. First, the Acts prohibit housing providers from increasing a tenant’s rent during the Governor’s declared emergency. See Baltimore City Code, Art. 13, § 8-4 (“Rent increases barred”); Howard County Code, Title 17, § 17.1200(B)(1) (“A landlord or mobile home park owner shall not… increase the rent or mobile home park fee”); Salisbury City Code, Title 15, § 15.26.035 (“A landlord may not increase a tenant’s rental fee”). Second, the prohibitions void rent increases that have already been agreed by contract, but were scheduled to take effect during the declared emergency. See Baltimore City Code, Art. 13, § 8-4; Howard County Code, Title 17, § 17.1200(B)(1); Salisbury City Code, Title 15, § 15.26.35. Finally, each law imposes “notice” restrictions on housing providers. Under the Howard County Act, housing providers may not notify a tenant about an anticipated rent increase during the health emergency, or within a “three-month period” after the emergency declaration expires. Howard County Code, Title 17, § 17.1200(C). The Baltimore City Act and Salisbury Act have similar notice provisions, although each applies for “ninety days” instead of three months. Baltimore City Code, Art. 13, § 8-4; Salisbury City Code, Title 15, § 15.26.35(D). While the Acts’ duration is expressly predicated on the Governor’s emergency declaration related to COVID-19, the Salisbury Act also applies to future health emergencies declared by either the Governor or by the Mayor of Salisbury. Salisbury City Code, Title 15, § 15.26.35(A) (defining “Emergency” as emergencies declared by the Governor or the Mayor).
Slip op. at 3-4 (footnotes omitted).
Interestingly, the court avoided the "success on the merits" part of the TRO test. Instead, it focused on the "irreparable injury" that the plaintiff alleged is suffering and will continue to suffer if the regulations are not enjoined, at least temporarily.
Ah, the court replied, you alleged a taking! And we know what the most common remedy is for a taking, don't we? That's right, just compensation. See slip op. at 7. Okay, you TRO mavens, a question: does losing money or being damaged in a way that can be later remedied by money constitute "irreparable injury?" Generally, no:
Accordingly, monetary damages are not only adequate to compensate Plaintiffs for their alleged injuries, but are also the proper remedy in this context. Plaintiffs have not established that monetary damages would be inadequate, nor have they directed this Court to any case in which a court has remedied a Takings violation with a preliminary injunction — let alone with a TRO.
Slip op. at 8-9.
The court applied a similar rationale to the plaintiff's Maryland-law vested rights claims (the regulations apply to existing landlord/tenant contracts, for example), concluding that the movant had not met its burden of showing that post hoc damages would not be an adequate remedy.
One thing missing from the court's analysis (and this might be a function of the claims raised by the plaintiff and the relief emphasized in the complaint and motion for TRO), but what about the declaratory takings relief the plaintiff sought? In our thinking, although just compensation is the most common remedy sought for a regulatory taking, it isn't the sole remedy:
MR. JUSTICE REHNQUIST suggests that appellees' "taking" claim will not support jurisdiction under § 1331(a), but instead that such a claim can be adjudicated only in the Court of Claims under the Tucker Act, 28 U.S.C. § 1491 (1976 ed.). We disagree. Appellees are not seeking compensation for a taking, a claim properly brought in the Court of Claims, but are now requesting a declaratory judgment that, since the Price-Anderson Act does not provide advance assurance of adequate compensation in the event of a taking, it is unconstitutional. As such, appellees' claim tracks quite closely that of the petitioners in the Regional Rail Reorganization Act Cases, 419 U. S. 102 (1974), which were brought under § 1331 as well as the Declaratory Judgment Act. See App. in Regional Rail Reorganization Act Cases, O.T. 1974, Nos. 74-165, 74-166, 74-167, 74-168, p. 161. While the Declaratory Judgment Act does not expand our jurisdiction, it expands the scope of available remedies. Here, it allows individuals threatened with a taking to seek a declaration of the constitutionality of the disputed governmental action before potentially uncompensable damages are sustained.
Duke Power Co v. Carolina Env. Study Group, Inc., 438 U.S. 60, 71 n.15 (1979)
As we see it, there should be some kind of prospective equitable remedy that says "we don't want compensation yet, but prefer that the court stop the deprivation?" Maybe Lingle solves that question by making this a due process inquiry (a claim that the complaint here raised).
If you want to take a deeper dive into the takings issues, download our draft article on that topic, "Evaluating Emergency Takings: Flattening The Economic Curve."
Willowbrook Apts, LLC v. Mayor & City Council of Baltimore, No. 1:20-cv-01818 (D. Md. July 6, 2020)
