APARTMENT ADVOCATE
Federal Judge Grants Motion To Dismiss NAA ’ s Lawsuit ; NAA Files Appeal
LAWMAKERS RELEASE FEDERAL DATA PRIVACY BILL
Bipartisan Bill Will Have An Impact On Multifamily Data Practices .
For the past several years , Congress has continued to debate a federal consumer data privacy standard , but disagreements on federal preemption and private right of action have prevented meaningful progress . But in a significant step forward in the debate , House Commerce Committee Chair Frank Pallone ( D-N . J . -6 ), Ranking Member Cathy McMorris Rodgers ( R-Wash . -5 ) and Senate Commerce Chair Roger Wicker ( R-Miss .) released a discussion draft in early June that establishes a federal data privacy standard that preempts most state laws , with some exceptions .
WHY THIS IS CRITICAL FOR OUR INDUSTRY
This bill has been years in the making and includes several key provisions that will have direct impact on industry operations , including a :
On May 17 , 2022 , Judge Armando Bonilla granted the U . S . government ’ s motion to dismiss the National Apartment Association ’ s ( NAA ) lawsuit seeking financial compensation for damages suffered under the U . S . Centers for Disease Control and Prevention ’ s ( CDC ) eviction moratorium .
NAA strongly disagrees with Judge Bonilla ’ s decision and is filing an appeal with the U . S . Court of Appeals for the Federal Circuit . It is fact that rental housing providers were subjected to an unlawful federal eviction moratorium which directly led to financial losses totaling $ 26.6 billion , loss of access to the courts and infringement on the freedom to contract with others absent government interference .
Judge Bonilla ’ s decision cited cases that concluded that a takings claim must result from “ lawful ” government action . Since the U . S . Supreme Court observed that the CDC ’ s actions exceeded its authority , the moratorium was not a lawful action so that damages are not compensable under the takings clause . Essentially , a loss due to illegal government activity will not be compensated but a loss due to legal misconduct can be compensated .
“ The Court ’ s decision was consistent with legal precedent before the Supreme Court ’ s 2021 decision in Cedar Point Nursery v . Hassid ,” said John McDermott , co-counsel for the plaintiffs and former general counsel for NAA . “ NAA undertook this lawsuit with the full knowledge that a final decision might not be available until there is a ruling from the U . S . Supreme Court . This is only round one of a three round fight .”
NAA is disappointed but not surprised by this ruling and will continue to fight on the industry ’ s behalf . Further , this decision will further fuel our advocacy against adverse housing policy at all levels and branches of government .
• Requirement that groups minimize the data they collect from consumers ;
• Prohibition of the transfer of sensitive data to third parties ; and
• Limited private right of action allowing individuals to sue for privacy violations .
WHERE THIS BILL IS HEADED
The bill reenergizes the debate and provides a framework for ongoing negotiations . But progress is unlikely until it gains the support of Senate Commerce Chair Maria Cantwell ( D-Wash .), who is notably not a sponsor . Sen . Cantwell wants to see stronger consumer protections and will be unlikely to move the bill without changes . The congressional calendar also poses a challenge , as it ’ s an election year and there is not much time left before August break .
OUR TAKE
NAA and NMHC are encouraged by this breakthrough legislation , which provides a framework for ongoing negotiations . Given the burden placed on rental housing firms by the growing patchwork of state data privacy standards , we continue to push for a national data privacy standard that preempts state data privacy laws and allow for flexibility and scalability . NAA and NMHC stress the need for any federal standard to clearly assign legal liability for data privacy and data security , given the industry ’ s reliance on third-party suppliers .
42 | TRENDS JULY 2022 www . aamdhq . org