Decision Incorporates New Holdings from Court of Appeals Regarding Housing Stability and Tenant Protection Act of 2019

Rosenberg & Estis, P.C. successfully represented a New York City property owner in New York State Supreme Court, preventing certification of a class-action lawsuit that relied on elements of the Housing Stability and Tenant Protection Act of 2019. The decision incorporates new holdings from the Court of Appeals ruling on Regina Metropolitan Co. v. Division of Housing and Community Renewal and the HSTPA.

Rosenberg & Estis’ Neil C. Dwork, member, and Devin P. Kosar, of counsel, represented Remik Holdings LLC before the Honorable Lynn R. Kotler, J.S.C., in New York Supreme Court in a class-action lawsuit filed by certain tenants of 230 West 147th Street.

The plaintiffs claimed alleged rent overcharges, or alternatively, sought an adjournment of the deadline to move for class certification in order to conduct additional pre-class discovery, in accordance with the increased lookback period from the HSTPA. Justice Kotler denied the motion in its entirety, ruling that the plaintiff failed to meet the requirements of class certification under CPLR 901(a) and CPLR 902, despite the argument that CPLR 901(a) and CPLR 902 should be liberally interpreted.

The Rosenberg & Estis team argued that the plaintiff made conclusory statements to meet the CPLR 901(a) and CPLR 902 requirements without submitting factual evidence or affidavits from tenants to support the claim. The team also argued that plaintiffs could not rely on the allegations of the adjusted complaint, as it was only verified by two of the five named case plaintiffs.

The Supreme Court agreed, holding that plaintiffs’ motion was not substantiated by affidavits from someone with personal knowledge and that “after years of pre-class discovery, all plaintiffs’ counsel can do is point to defendant’s ‘tax bills,’ which had not even been provided to the court, as so-called proof that a vast majority of the subject building’s apartments have been unlawfully deregulated during the J-51 period. This was insufficient to demonstrate numerosity.

Relatedly, absent any facts, plaintiffs speculate that the named plaintiffs’ claims are typical to those of the class. Mere supposition cannot satisfy plaintiffs’ burden on a motion for class certification.”

The Court also rejected Plaintiffs’ application of HSTPA to support their claim for numerosity, citing the Court of Appeals recent holding in Regina, that “retroactive application of that statute is unconstitutional.”

“During initial strategy discussions we considered whether it made sense to spend time opposing the motion, since many certification motions are routinely granted, or whether it was best to focus on negotiating a settlement,” said Dwork. “We chose to force tenant counsel to respond to advance our negotiating position. Now that the claims have been dismissed, opposing counsel must spend additional resources to bring a new motion or even recommence a new action, placing us in a better negotiating position. This decision further establishes the significance of the Court of Appeals’ ruling while also demonstrating the benefits of a vigorous defense.”

“We were pleased with the Court’s decision and believe it was a highly positive outcome for the client,” Kosar said.“This sends a powerful message that the Court will not rubber stamp motions for class-certificationin the post-HSTPA environment, in which tenants are commencing rent overcharge class-action law suits against landlordswith increasing frequency.”

About Rosenberg & Estis, P.C.

Founded in 1975, Rosenberg & Estis, P.C. is widely recognized as one of New York City’s pre-eminent real estate law firms. R&E provides full-service representation and advice in every aspect of real estate, from performing due diligence and evaluating financing, to handling joint ventures, acquisitions and leasing, construction and design team agreements, property tax exemptions and abatements, land use and zoning matters, Real Property Income & Expense (RPIE) filings, co-op and condo offering plan filings, distressed situations and bankruptcies, as well as the litigations and negotiations which sometimes ensue when deal-making. R&E’s wealth of experience in New York real estate makes it the ideal thought partner for owners, developers, not-for-profit corporations, educational institutions, sponsors, equity investors and lenders in both real estate transactions and in all court venues.