A Manhattan Supreme Court judge voiced ample doubt in a recent decision that a class action lawsuit, let alone the Supreme Court Civil Division, was the appropriate avenue in which tenants could seek rent abatement claims in the wake of Hurricane Sandy.
In her Dec. 11 decision in Adler v. Ogden Cap Properties, 650292/2013, Justice Shirley Kornreich of the Commercial Division significantly scaled back a lawsuit that sought to represent all Sandy-affected tenants in New York against their landlords for inhabitable conditions in the city’s myriad rental residences due to the Oct. 29, 2012, superstorm.
The Jan. 25 complaint sought unspecified damages for breach of warranty of habitability pursuant to New York’s real property law and unjust enrichment, naming three class representatives, all but one of whom the judge dismissed from the suit.
Kornreich concluded that the two dismissed plaintiffs were “not typical of the proposed class since, unlike those that suffered through harsh conditions during and after the storm, they were somewhere else,” pointing out that the tenants left their units before the storm hit and stayed with family and friends.
“A rent rebate would be a windfall, not compensation for lacking a habitable residence,” the judge stated.
Kornreich also held that damages in this suit would vary significantly depending on landlords’ mixed efforts to mitigate the effect of services lost, differing features of each apartment building or whether, for instance, a tenant had “a rent-regulated or market lease.”
“Consequently, at most, the court will consider a plaintiff class limited to specific buildings where it can be demonstrated that the tenants of such buildings endured similar conditions and received similar mitigation,” the judge stated.
As this was a bilateral class action suit, Kornreich also found the defendant class defective for due process and logistical reasons, pointing out that the determination of damages would require piecemeal “building-by-building, and perhaps tenant-by-tenant discovery” that would be impractical in this context.
“It is well known that New York’s residential tenants are provided significant statutory protections from landlord abuse and this city’s Housing Court is duly equipped to mete out justice to pro se tenants who come forward with meritorious claims,” the judge stated.
While dismissing two plaintiffs from the suit, the judge granted plaintiff Briana Adler leave to file an amended complaint naming her landlord Mastic Associates of New York as a defendant.
The defendants’ counsel, Mara Levin, a partner at Herrick, Feinstein, said in an interview that she had “no interest in engaging in settlement discussions” with class action counsel at this stage and is futhermore considering a motion against plaintiffs’ counsel for attorney fees.
“I think the court was quite clear that these types of claims should be handled differently in a different forum,” she told CLI.
“The takeaway from this decision is really the court’s message that class action litigation in the context of a 235(b) claim may never be sustainable and that this court has given very clear restrictions as to what would need to be demonstrated in the event that there’s a particular tenant in a building that has a legitimate claim to advance on behalf of all tenants in that building,” she added.
Plaintiffs’ counsel at Lowey Dannenberg Cohen & Hart did not return calls for comment. Co-counsel Harold Hoffman told CLI on Monday he had not yet read the decision.