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As expected, one of AY rental tenants' legal cases dismissed

As expected, one of the two lawsuits filed by 13 renters in the Atlantic Yards footprint has been dismissed by a state appellate court. During oral arguments on September 26, a panel of five judges in the First Department was steadily skeptical of attorney George Locker's argument that the tenants are not actually condemnees, with an ownership interest in their leases.

Courts had previously not decided that issue; however, state law defines a condemnee as “the holder of any right, title, interest, lien, charge or encumbrance in real property subject to an acquisition or proposed acquisition.”

Supreme Court Justice Walter Tolub had dismissed Locker's challenge in May, saying his clients did not have standing in trial court and instead should have gone to a separate appeals court, the Second Department, which has exclusive jurisdiction over the Eminent Domain Procedure Law, or EDPL, and would not hold a trial to hear a broader array of evidence.

"Friendly condemnations" coming?

The court's brief ruling yesterday would seem to open the door to planned "friendly condemnations," in which Forest City Ratner-owned buildings are transferred to ownership by the Empire State Development Corporation. That would end the leases far more speedily than the process would occur under New York State Division of Housing and Community Renewal (DHCR), which oversees rent-regulated buildings.

However, those same tenants have filed another challenge in the Second Department and, during oral arguments on October 5, some judges seemed sympathetic to the argument that the state had not provided a "feasible plan" to find them new housing.

"I think they’re going to send this back," Locker said yesterday. "The determinations and findings will be annulled, it will be returned to ESDC to do what it feels is appropriate to conform with the decision."

(Two other cases, organized by Develop Don't Destroy Brooklyn, are pending; one, in federal court, challenges the use of eminent domain, while the other, in state court, challenges the environmental review of the project.)

A brief ruling

The court order was circulated yesterday by a Forest City Ratner spokesman under the somewhat misleading subject line "NY State Court Unanimously Rejects AY Opponents' Appeal." (These tenants may oppose the project, but the DDDB-organized cases more clearly represent community opposition.)

The court order stated:
Order, Supreme Court, New York County (Walter B. Tolub, J.), entered on or about May 22, 2007, which, in a declaratory judgment action challenging defendant's authority to condemn multiple dwellings in which plaintiffs reside as rent stabilized tenants, granted defendant's motion to dismiss the complaint for lack of subject matter jurisdiction, unanimously affirmed, with costs. Since the condemned buildings are located in Kings County, the Appellate Division, Second Department has exclusive jurisdiction over plaintiffs' challenges herein to defendants' constitutional and statutory authority to condemn their rent stabilized leasehold interests (EDPL 207). We reject plaintiffs' argument that they are not "condemnees" within the meaning of EDPL 103(C), and therefore lack standing to seek relief under EDPL 207 (see Matter of City of New York, 306 NY 278, 282 [1954]). Any lingering concern that plaintiffs may have in this regard ought to have been allayed by defendant's main argument herein that plaintiffs do have standing (see Gale P. Elston, P.C. v Dubois, 18 AD3d 301, 303 [2005] [doctrine of judicial estoppel]).

The last sentence indicates that the court believes Locker's clients could still raise their claims--that DHCR should have oversight and that the creation of private roads for the project requires a jury trial--in the Second Department of the appellate court.

Locker had said in court that it's too late. Yesterday, he said, "I believe this means that, because ESDC said in the Tolub case that we had standing to raise constitutional and statutory claims in an EDPL proceeding, ergo, we had such standing. In my own view, ESDC is not free to bestow rent-regulated tenants with a status that the legislature did not intend them to have."

Looking at the precedent

The court order cited p. 282 of a case called Matter of City of New York (or In re City of New York). While that previous court opinion is not available on the web, another case, regarding TransGas Energy Systems, cites the very same page.

It states:
In discussing the question of who was an "owner" who had some form of recognizable interest in the real property involved in a condemnation proceeding, the Court of Appeals stated that: "With the passage of years, the statutes have been renumbered, revised and amended but it has not been made to appear that the interests cognizable by the Supreme Court sitting in condemnation proceedings have been limited thereby. Rather it would appear that, by the very language used in defining the interests which make one an owner' of real property', the Legislature intended to include as many of those different interests in real property affected by the condemnation proceedings as possible." (In re New York, 306 N.Y. 278, 282 [1954] ). Accordingly, the court held that the vendee under an executory contract to purchase land was an owner.

That leads to some murkiness. Yes, the language of the law--"any right, title, etc."--leads to the conclusion that renters could be considered "owners," and the case cited concludes that the Legislature intended a broad reading of the law. However, the case cited doesn't directly address the current case; a contract to purchase land is not the same thing as a rent-regulated lease.

More rights for tenants?

No previous case had stated that rent-regulated tenants have the rights and remedies available to condemnees. "The change of the law comes about in amazing ways," observed Locker, who suggested that if lawyers like him who represent tenants had asked for that principle to be established, they would not have been successful. "I’d be willing to guess that, in the past, the ESDC has not treated rent-regulated tenants as condemnees."