ARLINGTON, TEXAS — Texas landlord Matthew Haines and more than 1,500 property owners are in settlement discussions with the Justice Department after winning an appeal in their lawsuit challenging the federal eviction moratorium imposed during the coronavirus pandemic. The plaintiffs hope to recoup as much as $1.5 billion through a settlement after initially losing in the Court of Federal Claims in 2022.

The lawsuit argued that the moratorium, which lasted from September 2020 through July 2021 and barred landlords from evicting tenants who did not pay their rent, violated the Fifth Amendment by unlawfully denying property owners compensation. Plaintiffs range from those who lost thousands of dollars to one who lost over $14.5 million. The Supreme Court ruled that the Centers for Disease Control and Prevention lacked authority to impose the moratorium without congressional authorization.

Haines, owner of the Oakwood Apartments, has three rental communities with 240 units in Arlington and Irving, Texas. The moratorium cost him and his investors over $1 million. From the moment the pandemic hit, he did not require new leases and tried to be flexible with tenants who could not pay rent.

Haines said the litigation was about more than money. "It's important for us to stand up when a group like the CDC unilaterally, functionally, decides that they have a right to oversee our business," he said.

Haines also said, "What I hope that we will accomplish and, to some extent, we already have, is vindication for ourselves. But what's more important to me is that hopefully my investors will recover some of that money that they should have had coming in over the last six years."

Creighton Magid, a lawyer for the plaintiffs, framed the case as a question of who should pay for emergency policy. "Public health measures like this, they may be well intentioned. But when the government imposes this type of moratorium, the financial burden should be borne by the government, not individual property owners," Magid said.

Liz Leone, who has 52 apartments in Las Vegas and is part of the lawsuit, said she lost over $250,000 due to the moratorium and borrowed $60,000 from the federal Small Business Administration to keep her business afloat. She is still paying off the loan. Leone said some tenants who were not paying rent were spending money on other purchases. "They were doing things like buying cars," she said. "I was definitely questioning whether I would survive."

Moratoriums were also imposed in 43 states and scores of cities and lasted longer than the federal ban because states and cities have broader regulatory powers than federal agencies. Landlords say the eviction bans forced many to take on debt, lay off staff, delay repairs, and in some cases sell their property. Tenant advocates say eviction bans kept millions of tenants housed during the pandemic and helped slow the spread of the coronavirus, and that landlords received tens of billions of dollars in rental assistance.