There's not a lot of direct takings love in the U.S. Court of Appeals for the Second Circuit's opinion in Melendez v. City of New York, No. 20-4238 (Oct. 28, 2021), but there's enough there that you might want to read it anyway.
Because the opinion resurrected the plaintiffs' Contracts Clause claim. You heard that right, their Contracts Clause claim. The plaintiffs asserted that New York City's ordinance that prohibiting "threatening" a tenant due to their Co-19 status violated free speech and due process rights, and the city's ordinance voiding personal guarantees for commercial leases impaired their lease contracts. The district court dismissed the case for failure to state a claim, concluding that the guaranty ordinance served a legitimate public purpose and did not favor any class.
The Second Circuit affirmed dismissal of the free speech and due process claims, but also concluded that the complaint alleged a plausible Contracts Clause claim because an ordinance that renders unenforceable personal guaranties for rent obligations could result in a "substantial" impairment of that contract. The opinion is long on this (and other) points -- it is a whopping 109 pages, with 83 (83!) footnotes, with a 37-page dissent -- but we recommend you try and slog through it. Any time a court even hints that a Contracts Clause claim could be successful, we pay attention.
And what of the takings crumbs? They are there, but you have to hunt. The most interesting is footnote 81 on page 106. In noting that Contracts Clause analysis turns in part on compensation (but does not require it), the court contrasted takings analysis which naturally requires compensation if there's been a taking:
Compensation is a factor in Contracts Clause analysis; it is a requirement under the Takings Clause. See generally Apartment Ass’n of L.A. Cnty. v. City of Los Angeles, 10 F.4th at 915 (acknowledging that reasonable rent has been a “relevant consideration” in Contracts Clause challenges to eviction moratoria, but not a “constitutional floor”). While plaintiffs have not here pleaded a Takings Clause claim, nothing in this opinion is intended to preclude the parties or the district court from considering how these two constitutional protections might overlap in the circumstances of this case.
Slip op. at 106 n.81.
Has the Second Circuit picked up the Supreme Court's big hint in the recent CDC moratorium case about takings? Enquiring minds want to know!
Melendez v. City of New York, No. 20-4238 (2d Cir. Oct. 28, 2021)