Wednesday, March 14, 2007

Challenging demolitions, renters’ lawyer faces a skeptical judge

It was an uphill battle in state Supreme Court yesterday for George Locker, the attorney for 13 rent-stabilized tenants challenging the demolition of their buildings by the Empire State Development Corporation (ESDC), as state Supreme Court Justice Walter B. Tolub seemed skeptical that the case belonged in his Manhattan court.

The plaintiffs, who live in two buildings in the planned Atlantic Yards footprint--624 Pacific is four-story building at right--claim that their landlord, Forest City Ratner, should be subject to the tougher regulations of the New York State Division of Housing and Community Renewal (DHCR), rather than be able to convey the buildings to ESDC for “friendly condemnations.”

Locker also argues that the creation of private roads for the project requires a jury trial--a case never tested in court. The ESDC disagrees with those arguments, but also argues that the case belongs in the Appellate Division, designated to hear cases challenging eminent domain, not the lower trial court. In that lower court, the Supreme Court, the plaintiffs would have more of an opportunity, via discovery, to extract documents bolstering their case.

The federal eminent domain challenge to Atlantic Yards also has so far also turned on procedural grounds, and procedural issues occupied most of the hour-long argument yesterday.

Locker appeared solo, with three ESDC attorneys facing him at the lawyers' table. Watching in the audience were a cluster of lawyers associated with the defense case, as well as a few plaintiffs. Only this reporter and a reporter for the Brooklyn Daily Eagle represented the press.

Plaintiffs first

Hearing ESDC’s motion to dismiss the case, Tolub took the unusual step of asking Locker, rather than the defendants, to argue first. “He’s arguing what I regard as an interesting and novel and new cause of action,” Tolub explained.

Locker acknowledged that there was little case law to back—or oppose—his claims. Residential tenants, he said, almost never challenge condemnations, he pointed out. However, he said, “It’s black-letter law that noncondemnees cannot challenge condemnations” in the Appellate Division.

Then he got in some political licks. “That’s probably why former Empire State Development Corporation Chairman Charles Gargano repeatedly told the press that the condemnations would be ‘friendly,’” he said.

“Perhaps that is why Forest City Ratner misled—and I would say lied—to City Council” in 2005 when it said it had “substantially reduced the need for condemnations.” The developer’s reward, he said, was $205 million from City Council, a reference to the city’s contribution to the project.

While Locker argued that the State Supreme Court always has jurisdiction to her claims against a state agency, the judge interrupted him, asking if the case shouldn’t have been brought under the Eminent Domain Procedure Law (EDPL), in the Appellate Division. On behalf of the same plaintiffs, Locker in January filed a separate case challenging the state’s relocation offer because it doesn’t provide comparable housing as required by the law.

Correct court?

“If my clients were property owners,” Locker replied, it would be appropriate. His clients, he said, lack standing to bring the case. Tolub asked if the defendants had raised the standing issue in the Appellate Division. Locker said no.

Tolub observed, “The only authority you’ve cited is a very uncertain and murky case." (In it, the plaintiffs were not located in the project site.) "The defendants have not raised a challenge to standing [in the Appellate Division]. Would you agree that, if the Appellate Division does say you do have standing, then whatever I do is moot?” He continued, “Remember, they’re the Appellate Division and I’m just a trial judge.”

Locker pointed out that the Legislature could’ve directed cases like this one to the Appellate Division but didn’t. He described the “very narrow” relocation case brought in that court, saying that, by offering tenants--whose average rent “is in the neighborhood of $850”--“essentially the services of a real estate broker… is tantamount to offering them nothing.”

He pointed out that Forest City Ratner executive Jim Stuckey had said in a press interview that no one suing the company—which includes Locker’s clients—would get relocation help. “So the Appellate Division will have to deal with a sham relocation offer.”

“Illusory landlord”

Tolub suggested he bring the instant case to that court, as well. Locker repeated that he didn’t believe the tenants had standing, and suggested that Forest City is using the ESDC as an “illusory landlord” to accomplish eminent domain.

“ESDC says DHCR doesn’t have to give its blessing” to the demolition, Locker stated, pointing out that DHCR “is a creation of the legislature.”

“But eminent domain is a creation of the sovereign,” Tolub responded.

Locker countered that it was limited by the Legislature.

Tolub replied it was limited by the New York State Constitution.

Locker, with the trump card in this exchange, responded that EDPL was a statute, not a constitutional provision.

Then, he noted that the defendants take no issue with his strongest case, Sohn v. Calderon, which said DHCR had “exclusive and original jurisction over demolition of a rent-regulated building.” (The ESDC, in legal papers, said the case applies to a private landlord, not a public one.)

At that point, Tolub asked Locker to “wrap it up.”

“You made it hard for me,” Locker observed, by requiring him to go first.

“You have a tougher row to hoe,” Tolub replied.

“The word ‘exclusive’ means ‘exclusive,’” Locker said, citing Sohn. He repeated the reference to the “illusory landlord,” and Tolub said, a bit impatiently, “I get your point, Mr. Locker.”

Locker closed by noting that the ESDC not only wants to take away his clients’ homes, but to “take away their voice.”

Defense case

ESDC defense attorney Charles Webb focused on the procedural issue. He argued that, as lessees, “There’s no question [plaintiffs] have standing in the Appellate Division.” He noted that a plaintiffs’ memorandum of law acknowledged the tenants had both a “property interest” and “significant property rights.”

Webb, piling on to the judge's comment, also noted that a case Locker cited was off-point because those objecting lived outside the project footprint.

Tolub played devil’s advocate. If the Appellate Division says the case doesn’t belong there; would it belong in his court? Webb responded that the statute was “so clear” that result wouldn’t occur.

(The defendants' memorandum noted that the EDPL allows any persons "aggrieved by the condemnor's determination and findings" to file a challenge in the Appellate Division.)

When, inquired the judge, would the parallel case on relocation be argued in the Appellate Division? Probably not before June, Webb replied. That led Tolub to muse that such a schedule precluded “any hope of a decision that will free me” from having to decide.

He asked Locker if the Appellate Division also would be asked to decide whether the DHCR demolition process trumps the ESDC’s exercise of eminent domain, a central claim in the case before him. “I put it in the petition,” Locker replied, “so the Appellate Division would know what I was pleading (in Supreme Court).”

Property vs. ownership

Given two minutes for a final statement, Locker tried to distinguish the notion of “property interest" from “ownership.” He said, “There’s a plethora of cases that say some kind of ownership is required to be considered a condemnee.”

Tolub responded, benignly, “Everyone but you can see you have proprietary rights”—a reference to ownership.

He called that a “major concession” for the ESDC to make. Locker wasn’t buying it. “It’s to their advantage that we go to the Appellate Division,” he said.

Indeed, Locker's memorandum of law cited a case that states, "In order to have any standing in a condemnation proceeding, one must show an ownership interest in the property." Then again, Webb's response memorandum argued that lessees fit the definition of condemnees because they hold "any right, title, interest.... in real property subject to an acqusition."

Tolub, in closing, said he didn’t know when he’d have a decision, but clearly it would precede any decision on the parallel case in the Appellate Division. “Given the nature of the novelty,” he informed the attorneys, “you’d better expect the full 60 days.”

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