Lately, we've been zeroing in on one of the lesser known parts of the Supreme Court's takings canon, Yee v. City of Escondido, 503 U.S. 519 (1992), where the Court concluded that a city ordinance that limited the amount a property owner could charge a tenant for rent was not a physical invasion taking.
In Yee, the Court held that the ordinance did not intrude on the owner's right to exclude because the owners had invited their tenants to intrude on their property when they let them become tenants. Yeah, that invitation and resulting intrusion was conditioned on the tenant paying each month a specific amount of rent and the ordinance effectively rewrote that agreement, but the plaintiff raised only a facial categorical takings claim (and thus the question of whether the city-mandated lower rent prohibited a fair return to the owner was an issue that the owners could challenge in as as-applied claim (employing a Lucas or more likely, a Penn Central theory)). And Yee was limited to a government-mandated reduction in rent, and the Court recognized that an owner could still recover possession if the tenant didn't pay at all).
We were never that down with the Court's rationale, because allowing someone to intrude conditioned on their payment of a certain amount of rent each month does become an infringement on the owner's right to exclude if the city prohibits them from doing so after the city uses the law to alter the agreed-upon conditions for the tenant remaining on the property. But hey, that's just us.
But beyond that criticism, we have another that has little to do with the Supreme Court's rationale. Yee has always struck as as being leveraged to do a whole lot more than what the actual ruling in the case said.
The latest example of that is the Court of Appeals of Washington's opinion in Gonzales v. Inslee, No. 55915-3-II (Feb. 23, 2022), where the court affirmed summary judgment in favor of the State, rejecting several property owners' constitutional challenges to the State's residential eviction moratorium, including a takings challenge.
After Co-19 bore down, the governor declared an emergency (dig into those more here) and imposed a seemingly-endless continuation of a moratorium on property owners from evicting, and "prohibited landlords from treating unpaid rent resulting from COVID-19 as an enforceable debt, unless the landlord offered and the tenant refused a reasonable repayment plan." Slip op. at 4. Lawsuit ensued, including the above-mentioned takings claim.
Trial court: summary judgment. Court of appeals: affirmed.
You can read the stuff about whether the appeal was moot (no), whether the governor has the authority under Washington law to do what he did (yes), whether there was a problem with separation of powers (no), or a denial of the right to court access (no) on your own. Naturally, we skipped ahead to the takings part (starting on page 20 of the slip opinion).
The plaintiffs alleged a physical invasion taking. The State interfered with their right to exclude their nonpaying tenants. And there, on page 23, the inevitable reliance on Yee.
As in Yee, the eviction moratorium did not require the appellants to submit to the physical occupation of their property. Instead, the appellants were the ones who invited their tenants to occupy their rental property. And unlike in Cedar Point Nursery, the moratorium did not require that the appellants allow third parties to enter and take access to their property. The proclamations merely operated to “regulate [appellants’] use of their land by regulating the relationship between landlord and tenant.” Yee, 503 U.S. at 528. Therefore, we conclude that the eviction moratorium did not constitute a physical per se taking.
Slip op. at 23. No interference with the right to exclude, so no taking.
In other words, if you let someone on your property subject to agreed-upon conditions (I'll let you stay as long as you pay rent), the government may fundamentally rewrite those conditions (you can stay even if you are not paying rent) and it has not, according to this court and others, interfered with your right to exclude them. That not only seems wrong, but not something that even the actual rationale of Yee would support.
Let's see where this goes.
Gonzales v. Inslee, No. 55915-3-II (Wash. App. Feb. 23, 2022)
