Eviction Moratorium Compensation Class Action Lawsuit
A recent federal appeals court decision is opening the door for rental property owners to seek compensation for losses tied to the COVID-era eviction moratorium.
Rental property owners who lost money due to the 2020-2021 federal eviction moratorium had their case reenergized on June 6, 2025, when the U.S. Court of Appeals for the Federal Circuit refused to rehear the government’s motion for dismissal in Darby Development Inc. v. U.S.
While the lawsuit is still ongoing, this ruling marks a turning point. Landlords across the country may now have the right to pursue compensation for unpaid rent and lost income.
Learn what this ruling means, how class action lawsuits could help affected landlords, and what steps you can take now to explore your legal options.
Court Ruling Opens Door to Eviction Moratorium Lawsuits
A recent court ruling in the ongoing lawsuit, Darby Development Inc. v. U.S., allows landlords to sue the government over the eviction moratorium from September 2020 to August 2021. The U.S. Court of Appeals’ refusal to dismiss the case allows the landlords’ claims to proceed, setting an important precedent.
If successful, this case could lead to similar lawsuits or class actions from other affected landlords nationwide.
What Was the COVID Eviction Moratorium?
In September 2020 , the Centers for Disease Control, or CDC, issued an order preventing residential evictions for the rest of the year. The agency took this step during the COVID-19 pandemic to keep people in their homes and prevent the spread of the disease. At the end of 2020, the moratorium’s deadline was extended until January 31, 2021 .
The CDC then extended the moratorium three more times without obtaining congressional authorization. The final moratorium was set to expire on October 3, 2021 , but the Supreme Court lifted it in August of that year with a ruling in Alabama Association of Realtors v. U.S. Department of Health and Human Services.
The CDC’s moratorium affected all residential landlords in the country, from large corporations to families renting out a spare unit. Some small landlords lost thousands of dollars over those 11 months, drastically affecting their incomes.
Why Landlords Are Suing the U.S. Government
Although the U.S. approved $46.5 billion in rental assistance in 2020 and 2021 , many landlords still failed to receive the rents they were due and were prohibited from responding with eviction proceedings. The landlords in the current case are suing the government under what is known as the Takings Clause of the Fifth Amendment, which states that the government cannot take property for public use without “just compensation.”
Lawyers say that when the landlords were prevented from evicting tenants who failed to pay their rent, the government essentially took their private property for public use. Therefore, they have a right to seek compensation.
Details of the Darby Development Company Inc. Case
In July 2021, before the eviction moratorium was lifted, 39 plaintiffs filed suit in Darby Development Inc. v. U.S. The plaintiffs alleged that they were owed compensation, since the moratorium deprived them of using their private property in violation of the Fifth Amendment.
Since the Supreme Court declared the ruling unauthorized in August 2021 , the government argued that it was not obliged to provide compensation. However, compensation was provided in the form of rental assistance programs. Government lawyers requested that the court dismiss the lawsuit entirely.
On May 17, 2022, the Court of Federal Claims granted the government’s motion to dismiss the case, and the plaintiffs appealed to the U.S. Court of Appeals for the Federal Circuit. In 2024, two of the three judges on that panel agreed that the plaintiffs had a valid case and reversed the ruling. Government lawyers requested that a full Federal Circuit panel hear the appeal on the motion to dismiss, but their request was denied on June 6, 2025.
How the Appeals Court Ruling Changes Everything
Courts have yet to rule on the merits of the Darby case, but the U.S. Court of Appeals agrees that the plaintiffs have a valid suit. This opens the door for other landlords or groups of landlords to file suit under a Fifth Amendment argument, a stunning reversal from a case many thought dead.
- May 17, 2022: The Court of Federal Claims grants the U.S. government’s motion to dismiss.
- August 7, 2024: A three-judge panel of the U.S. Court of Appeals reverses the previous ruling.
- June 6, 2025: The government’s request for the entire Federal Circuit to review the motion en banc is denied.
Thanks to the latest ruling in the case, you may be eligible to file an eviction moratorium lawsuit either as an individual or as part of a class action.
Potential for a Class Action Lawsuit
This case is still developing, but there is an opening for rental property owners to pursue a class action lawsuit. This type of suit can make it much easier for landlords to receive compensation for missed rent.
Who Could Qualify for a Lawsuit?
Landlords and property managers may have a case if they were not fully compensated for rent during the eviction moratorium, but were prevented from evicting that tenant. You will need to provide proof, such as lease documents, eviction protection declarations, and records of any outstanding payments.
Why a Class Action May Be the Best Path Forward
A class action lawsuit is pursued on behalf of a large group of plaintiffs who share similar legal claims. This helps conserve the court’s resources, but it also means a faster resolution and lower legal costs for the plaintiffs.
There’s strength in numbers. If you own just one or two rental units, your claim is much smaller than those of the big landlords. You might not think it’s worth the inconvenience and expense of a legal case to pursue a potential award.
When you join or start a class action suit, however, you will receive a proportional chunk of the award if the case is won. You will not pay lawyer’s fees and will not have to wait until the big guys get paid to receive your money.
After the lawsuit is certified as a class action, it proceeds in the same manner as other lawsuits, with a discovery phase, negotiations, and a trial if a settlement is not reached.
What Rental Property Owners Can Do Now
The path forward for rental property owners remains unclear, and we may see further developments from the courts, whether in Darby or another case. However, based on the latest court ruling, landlords have a right to sue the United States for compensation related to the eviction moratorium.
Landlords can protect their legal rights by consulting with a lawyer and collecting evidence related to their losses. Missed rent notices, eviction protection declarations, and communications with the tenant can all help to bolster your claim in court. Your lawyer may have additional evidence they’d like to see.
The statute of limitations for suing the United States is six years, which means that, beginning in September 2026, your timeline to take action will diminish. Speaking to a lawyer right away is your best course of action to preserve your right to pursue justice.
Take Action: You May Be Owed Compensation From the U.S. Government
If you lost income due to the eviction moratorium, you may be eligible to take legal action. While the courts have not yet approved a class action, rulings like the Darby decision are a step in that direction.
To learn whether you qualify for a class action eviction moratorium compensation lawsuit or settlement, contact us today. Our network of experienced attorneys can review your case, answer your questions, and help you explore your legal options at no cost.
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