The Arizona Supreme Court won’t overturn the order by Gov. Doug Ducey blocking residential evictions.
In a brief order October 7, the justices spurned a request by the Arizona Multihousing Association to review the governor’s actions and determine if he is within his legal rights in saying that landlords could not oust tenants who have not been paying their rent because of COVID-19.
The ruling does not resolve the legal claims by the landlord group about the scope of the governor’s emergency powers.
That would take a full-blown trial, something that could take weeks, if not months. In fact, that’s exactly what the order signed by Chief Justice Robert Brutinel suggested.
But it does mean that Ducey’s order, originally issued in March, will remain undisturbed through at least the end of October when it is scheduled to expire – assuming the governor does not extend it as he did in July.
Courtney Gilstrap LeVinus, president of the landlord group, pronounced herself “shocked and disappointed” that the high court won’t hear the case. She said the ruling will have consequences not only for those who own rental properties but for the whole economy.
“We can fully expect to see a rental home foreclosure avalanche in the months to come, or certainly in the beginning of 2021, LeVinus said.
The only relief, she said, could come from $100 million that is supposed to be used for eviction relief. But LeVinus said only about $18 million has actually been distributed since the pandemic began.
Attorney Kory Langhofer, who represents the landlords, said the issue goes beyond the immediate effect on his clients.
“It reflects the failure of governmental institutions,” he said.
“Our Constitution requires the legislative and judicial branches to check executive overreach,” Langhofer said. “At the moment, that’s not happening.”
But Langhofer was able to convince only Justice Clint Bolick who was the lone person on the bench wanting the Supreme Court to review Ducey’s actions.
There was no immediate comment from the governor on either the order or whether he intends to let it expire as scheduled at the end of the month.
But even if the justices had taken up the case and overruled the governor it would have had no immediate effect. Last month, the Centers for Disease Control and Prevention issued its own anti-eviction order which runs through the end of the year.
In seeking Supreme Court action, the landlords claim the governor lacks the constitutional authority to tell constables around the state not to process eviction orders, even those issued legally by judges. They also contend that the gubernatorial directive is violating both the property rights of landowners as well as their right to enter into contracts.
In seeking review, the landlords acknowledged that the governor can exercise certain powers in a public health emergency. But Langhofer said that Ducey, is unilaterally barring landlords from enforcing the terms of lawful lease agreements, created “an indefinite economic welfare and redistribution program, rather than a public health measure to contain the COVID-19 contagion.”
Langhofer also warned the justices that if the governor’s order goes unchallenged, “then there is virtually no personal or commercial transaction or conduct that would lie outside his grasp.”
The way the landlords figure it, by the time the order expires – assuming it is not renewed – it will have been 221 days that tenants have not had to pay rent.
How much is owed is unclear.
Economist Elliott Pollack, in a study done for the Arizona Multihousing Association, figures that if just 1% of the more than 919,000 Arizona households who rent did not make payments over a seven-month period that means a loss of more than $67.7 million. Take that rent-withholding figure to 15%, he said, and the foregone revenues top $1 billion.
Pollack said there also is a ripple effect as landlords cannot pay their employees, contractors and suppliers.
But the issue before the court dealt only with the legal questions.
Langhofer told the justices that the statutory provisions the governor is using for all of his executive orders allow him to exercise police powers, specifically to “alleviate actual and threatened damage due to the emergency,” and to facilitate the supply of equipment and services “to provide for the health and safety of the citizens of the affected area.”
He acknowledged the law does allow the governor to “commandeer and utilize any property.” And that, Langhofer said, could be interpreted to include a moratorium on evictions as a means to ensure that people have housing.
But he said that exists only in a “state of war emergency” – and only if the governor makes provisions for compensating the owners of the property.
Laghofer said that Ducey, in issuing his executive order, acknowledged that it had little to do with protecting public health but was “primarily an economic relief measure.” He also pointed out that tenants seeking relief need not show they are infected with COVID-19 or even that they are in a high-risk category, but only that they provide documentation of “ongoing financial hardship.”
Ducey, however, said there is a direct link between his order and public health.
“The fight against evictions is key in slowing the spread of the virus,” wrote Brett Johnson, the private attorney retained by the governor to defend him in all the litigation over the COVID-19 restrictions he has imposed. “The federal Centers for Disease Control and Prevention has warned that homeless shelters are often crowded, making social distancing difficult, and that homeless can exacerbate and amplify the spread of COVID-19.”
The advice from the justices for landlords to take their case to a trial court is interesting given that there was, in fact, a hearing earlier this year in a separate challenge to the governor’s order brought by Gregory Real Estate and Management. It owns a rental home in Surprise.
In that case, Maricopa County Superior Court Judge Christopher Coury upheld the governor’s actions. He said the evidence “demonstrates reality that Arizona leaders and the general population perceived COVID-19 to be an emergent problem and a virus to which swift and urgent attention was required.”
The lawyers in that case are seeking review by the state Court of Appeals. But they also asked the Supreme Court to bypass that step and consider the case now, something the justices refused to do.