The Circuit Split on Takings Claims: Eighth Circuit vs. Ninth Circuit Approaches to Covid Rent Eviction Moratoriums

A Nation Divided: When Geography Determines Constitutional Rights

In a stark example of how federal law can vary dramatically depending on where you live, property owners facing identical government actions—COVID-19 eviction moratoriums—have received opposite answers from federal courts about whether the government violated their constitutional rights. The Eighth Circuit and Federal Circuit say yes, eviction moratoria constitute compensable physical takings. The Ninth Circuit says no.^1^3^5

This circuit split means that a landlord in Minnesota or before the Federal Circuit can recover just compensation for government-mandated housing of non-paying tenants, while a landlord in California cannot—even though both suffered the identical constitutional injury.^2^4

This article examines the contrasting approaches taken by these circuits and explains why this split demands Supreme Court resolution.

The Eighth Circuit: Heights Apartments v. Walz (2022)

The Facts:

In March 2020, Minnesota Governor Tim Walz issued an executive order imposing a statewide eviction moratorium in response to COVID-19. The moratorium prohibited landlords from evicting tenants for nonpayment of rent or terminating leases except in extreme circumstances: when tenants “seriously endangered the safety of other residents,” “significantly damaged property,” or engaged in certain criminal activities.^1

Heights Apartments, LLC, a property owner, challenged the moratorium as an unconstitutional taking. The district court dismissed the claim under Rule 12(b)(6), and Heights appealed.^2

The Eighth Circuit’s Holding:

The Eighth Circuit reversed, holding that Heights Apartments stated a valid claim for a per se physical taking.^1

The court’s reasoning was straightforward and grounded in Cedar Point Nursery:

“Cedar Point Nursery controls here and Yee . . . is distinguishable.“^3^2

Why Cedar Point Applied:

The court emphasized that Minnesota’s moratorium “forbade the nonrenewal and termination of ongoing leases, even after they had been materially violated.” This appropriated landlords’ fundamental right to exclude—the same right protected in Cedar Point.^3^1

“Heights Apartments sufficiently alleged that the [moratorium] deprived them of their right to exclude existing tenants without compensation.”^2

Why Yee Didn’t Apply:

The Eighth Circuit distinguished Yee on critical factual grounds:^3^2

• The rent control in Yee “neither deprived landlords of their right to evict nor compelled landlords to continue leasing the property past the lease’s termination.”^1^3
• Minnesota’s moratorium, by contrast, prohibited eviction for nonpayment and forced continued occupation.^2

The court concluded: “Such allegations give rise to a plausible per se physical takings claim under Cedar Point Nursery.”^2

Significance:

The Eighth Circuit’s decision recognized that eviction moratoria are fundamentally different from rent control. Rent control regulates price; eviction bans appropriate possession. The former may be a regulatory taking requiring Penn Central analysis; the latter is a per se physical taking requiring automatic compensation.^3^2

The Federal Circuit: Darby Development v. United States (2024)

The Facts:

Multiple landlords challenged the CDC’s federal eviction moratorium, which prohibited evictions for nonpayment of rent from September 2020 through August 2021. The Court of Federal Claims dismissed their takings claims, and the landlords appealed to the Federal Circuit.^6^1

The Federal Circuit’s Holding:

In August 2024, the Federal Circuit reversed, holding that landlords stated a valid claim for a per se physical taking under Cedar Point Nursery.^7^1

The court’s analysis mirrored—and expressly endorsed—the Eighth Circuit’s reasoning in Heights Apartments:^6

“At a fundamental level, we cannot reconcile how forcing property owners to occasionally let union organizers on their property infringes their right to exclude [Cedar Point], while forcing them to house non-rent-paying tenants by removing their ability to evict would not.”^5^1

The Court’s Key Findings:

1. Cedar Point Controls

Just as Cedar Point involved government authorization of third-party occupation (union organizers), the CDC moratorium authorized third-party occupation (non-paying tenants).^7^1

2. Yee Is Distinguishable

“Unlike here, the laws at issue in Yee expressly permitted eviction for nonpayment of rent. … Indeed, Yee was fundamentally a rent-control case. … The Court simply was not presented with something akin to what has been challenged here: an outright prohibition on evictions for nonpayment of rent.“^6

3. Duration Is Irrelevant

Following Cedar Point, the Federal Circuit emphasized that even temporary physical appropriations are physical takings. Duration affects compensation, not liability.^6

4. The “Voluntary Invitation” Argument Fails

The government argued that because landlords “voluntarily invited” tenants by executing leases, no taking occurred. The Federal Circuit rejected this:^6

“That essentially would mean that all government actions implicating the landlord-tenant relationship are immune from being treated as physical takings because just about every landlord-tenant relationship stems from a voluntary invitation from the landlord to a tenant.”^5

The Ninth Circuit: GHP Management v. City of Los Angeles (2024)

The Facts:

GHP Management Corporation and other landlords challenged the Los Angeles eviction moratorium, which prevented evictions for nonpayment of rent from March 2020 through January 2024—nearly four years. By August 2021, landlords alleged over $20 million in unpaid back rent.^4

The district court dismissed their takings claims, relying on Yee. Landlords appealed, arguing Cedar Point should control.^1

The Ninth Circuit’s Holding:

In May 2024, the Ninth Circuit affirmed dismissal, holding that the moratorium did not constitute a physical taking.^4

The court’s reasoning relied entirely on Yee:^1

“Under the Supreme Court’s current jurisprudence, a statute that merely adjusts the existing relationship between landlord and tenant, including adjusting rental amount, terms of eviction, and even the identity of the tenant, does not effect a taking.“^1

The “Voluntary Invitation” Principle:

The Ninth Circuit emphasized:

“The Eviction Moratorium does not effect a physical taking because the Landlords voluntarily opened their property to occupation by tenants.“^1

The court distinguished Cedar Point on the ground that Cedar Point involved “government-authorized invasions” by union organizers, whereas the Los Angeles moratorium merely “adjust[ed] the existing relationship between landlord and tenant.”^1

Footnote 2: Rejecting the Eighth Circuit

In a footnote, the Ninth Circuit acknowledged—but declined to follow—Heights Apartments:^1

“Because we are bound by Yee, we decline to follow Heights Apartments, LLC v. Walz … which ruled that an eviction ordinance that prohibited the nonrenewal or termination of a lease absent specified circumstances constituted a per se physical taking.”^1

Comparing the Two Approaches: A Tale of Two Frameworks

Issue	Eighth/Federal Circuits	Ninth Circuit
Controlling Precedent	Cedar Point Nursery controls126	Yee controls1
Analysis of Yee	Distinguishable—Yee permitted eviction for nonpayment126	Governs all landlord-tenant regulations1
“Voluntary Invitation”	Doesn’t defeat takings claim; invitations are conditional65	Defeats takings claim automatically1
Nature of Moratorium	Appropriation of right to exclude (per se taking)126	Mere “adjustment” of relationship (no taking)1
Duration	Irrelevant to liability (affects compensation)6	Relevant—”temporary” nature matters1
Result	Landlords state valid takings claim126	Landlords cannot state takings claim1

Why the Circuits Disagree: Fundamentally Different Readings of Yee

The circuit split stems from radically different interpretations of Yee v. City of Escondido:^4^2^1

The Eighth/Federal Circuits’ Reading:

Yee is a narrow rent control case that does not apply when government prohibits eviction for nonpayment. Key facts make Yee distinguishable:^2^1

• Yee landlords retained the right to evict for nonpayment^6^1
• Yee involved rent control (price regulation), not eviction bans (possession appropriation)^2^1
• Yee landlords could exit the rental market entirely^6

The Ninth Circuit’s Reading:

Yee establishes a broad principle that any regulation “adjusting the landlord-tenant relationship” is immune from physical taking claims if landlords “voluntarily invited” tenants.^4

Under this reading, the landlord-tenant relationship is categorically exempt from Cedar Point analysis.^1

The Real-World Consequences of the Split

This circuit split has profound practical consequences:

1. Geographic Lottery

A landlord’s constitutional rights depend entirely on geography:^4^1

• Minnesota landlord: Can pursue takings claim and recover compensation^2
• California landlord: Cannot state a claim; dismissed at pleading stage^1

2. Incentivizing Forum Shopping

Landlords with claims against the federal government (like the CDC moratorium) will forum shop to the Federal Circuit rather than risk assignment to the Ninth Circuit.^6

3. Emboldening Local Governments

The Ninth Circuit’s approach emboldens state and local governments in the Ninth Circuit’s jurisdiction (covering California, Oregon, Washington, Arizona, Nevada, Idaho, Montana, Alaska, Hawaii, Guam, and the Northern Mariana Islands) to impose eviction moratoria without compensation.^4

As amicus briefs note, jurisdictions are already expanding beyond COVID-19:^4

• San Diego County enacted an eviction moratorium in response to flooding (2024)^4
• Los Angeles adopted a six-month moratorium for renters with pending assistance applications (2024)^4
• Cities are declaring states of emergency for homelessness and contemplating moratoria^4

4. Eroding Property Rights

The Ninth Circuit’s “voluntary invitation” principle means that entering the rental market forfeits constitutional protections. Once a landlord leases property, the government can:^5^1

• Prohibit eviction indefinitely
• Eliminate rent collection remedies
• Authorize non-paying occupation
• Convert temporary leases into indefinite tenancies^5

All without compensation—simply because the landlord “chose” to rent.^6

Why the Eighth/Federal Circuits Have the Better Argument

Multiple factors favor the Eighth and Federal Circuits’ approach:

1. Fidelity to Cedar Point Nursery

Cedar Point held that government-authorized third-party occupation is a per se physical taking. Eviction moratoria authorize precisely such occupation—tenants physically occupy property without the owner’s consent, under government authorization.^5^1

2. Proper Distinction Between Price and Possession

The Eighth and Federal Circuits recognize the critical distinction:^2^1

• Rent control regulates price → Penn Central balancing
• Eviction bans appropriate possession → Cedar Point per se taking

3. Faithful Application of Yee

Yee explicitly distinguished cases where government “compel[s] a landowner over objection to rent his property or to refrain in perpetuity from terminating a tenancy.” Eviction moratoria do exactly that.^2^1

4. Consistency with Supreme Court Statements

In Alabama Association of Realtors (2021), the Supreme Court stated:

“Preventing landlords from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership—the right to exclude.“^2^1

This language strongly suggests the Court views eviction bans as takings.^4^1

Conclusion: A Split Demanding Resolution

The circuit split on eviction moratorium takings claims represents a fundamental disagreement about the scope of constitutional property protections. The Eighth and Federal Circuits apply Cedar Point Nursery to hold that government-authorized occupation of property by non-paying tenants constitutes a per se physical taking. The Ninth Circuit applies Yee v. City of Escondido to hold that landlords who “voluntarily” enter the rental market forfeit protection against such takings.^3^6^4

This split cannot stand. It creates a geographic lottery for constitutional rights, encourages government overreach, and threatens to erode fundamental property protections for millions of landlords nationwide.

The Supreme Court must grant certiorari to resolve this conflict and clarify that:

1. Cedar Point Nursery, not Yee, governs eviction moratoria
2. Yee is limited to rent control cases where eviction rights remain intact
3. The “voluntary invitation” principle does not immunize government appropriation of the right to exclude
4. Landlords are entitled to just compensation when government forces them to house non-paying tenants

Until the Supreme Court intervenes, property owners’ constitutional rights will continue to depend on the happenstance of geography—an intolerable state of affairs inconsistent with the Fifth Amendment’s promise of just compensation.

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This article is for informational purposes only and does not constitute legal advice. Property owners with questions about takings claims should consult qualified legal counsel.