HOWARD ITEN V. COUNTY OF LOS ANGELES, No. 22-55480 (9th Cir. 2023)
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In early 2020, following the outbreak of COVID-19, Los Angeles County passed the “Resolution of the Board of Supervisors of the County of Los Angeles Further Amending and Restating the Executive Order for an Eviction Moratorium During Existence of a Local Health Emergency Regarding Novel Coronavirus (COVID-19)” (the “Moratorium”). The Moratorium imposed temporary restrictions on certain residential and commercial tenant evictions. It provided tenants with new affirmative defenses to eviction based on nonpayment of rent, prohibited landlords from charging late fees and interest, and imposed civil and criminal penalties to landlords who violate the Moratorium. Id. Section V (July 14, 2021). Plaintiff, a commercial landlord, sued the County, arguing that the Moratorium impaired his lease, in violation of the Contracts Clause of the U.S. Constitution. The district court found that Plaintiff had not alleged an injury in fact and dismissed his complaint for lack of standing.
The Ninth Circuit reversed the district court’s dismissal. The panel held that Plaintiff had standing to bring his Contracts Clause claim. Plaintiff’s injury for Article III purposes did not depend on whether Plaintiff’s tenant provided notice or was otherwise excused from doing so. Those questions went to the merits of the claim rather than Plaintiff’s standing to bring suit. Plaintiff alleged that the moratorium impaired his contract with his tenant because it altered the remedies the parties had agreed to at the time they entered into the lease. The panel held that these allegations were sufficient to plead an injury in fact and to state a claim under the Contracts Clause, and remanded to the district court.
Court Description: Standing/Contracts Clause The panel reversed the district court’s dismissal for lack of standing of commercial property landlord Howard Iten’s complaint alleging that the County of Los Angeles’ 2020 eviction moratorium, enacted following the outbreak of COVID-19, violated his rights under the Contracts Clause of the United States Constitution.
The moratorium provided tenants with an affirmative defense against eviction if they gave monthly notice to the landlord that they were unable to pay rent. The district court found that because Iten’s tenant did not provide the required monthly notice or offer extenuating circumstances for failing to do so, Iten was free to evict his tenant and did not suffer an injury traceable to the moratorium.
The panel held that Iten had standing to bring his Contracts Clause claim. Iten’s injury for Article III purposes did not depend on whether Iten’s tenant provided notice or was otherwise excused from doing so. Those questions went to the merits of the claim rather than Iten’s standing to bring suit. Iten alleged that the moratorium impaired his contract with his tenant because it altered the remedies the parties had agreed to at the time they entered into the lease. The panel held that these allegations were sufficient to plead an injury in fact and to state a claim under the Contracts Clause, and remanded to the district court for further proceedings. Concurring in part, Judge Gordon disagreed that Iten plausibly alleged an injury-in-fact simply because the moratorium imposed additional terms. Moreover, there were factual questions about the lease that made remanding with a direction that Iten had standing premature. Because the district court raised the issue of standing sua sponte and the parties did not fully brief the issue, Judge Gordon would reverse the district court’s order dismissing the case with prejudice and remand for further development of the standing issue.
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