Bldg. & Realty Inst. of Westchester & Putnam Counties, Inc. v. New York

BUILDING AND REALTY INSTITUTE OF WESTCHESTER ANDPUTNAM COUNTIES, INC., et al., Plaintiffs, v. STATE OF NEW YORK, et al., Defendants.

G-MAX MANAGEMENT, INC., et al., Plaintiffs, v. STATE OF NEW YORK, et al., Defendants.

No. 19-CV-11285 (KMK)

No. 20-CV-634 (KMK)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

September 23, 2020

OPINION AND ORDER

Appearances:

Kenneth J. Finger, Esq.

Finger & Finger, A Professional Corporation

White Plains, NY

Counsel for Plaintiffs Building and Realty Institute of Westchester and Putnam Counties, Inc.; Apartment Owners Advisory Council; Cooperative and Condominium Council; Stepping Stones Associates, L.P.; Lisa DeRosa as Principal of Stepping Stones, L.P.; Jefferson House Associates, L.P.; Shub Karman, Inc.; DiLaRe, Inc.; Property Management Associates; Nilsen Management Co., Inc.

Randy M. Mastro, Esq.

William J. Moccia, Esq.

Akiva Shapiro, Esq.

Gibson, Dunn & Crutcher, LLP

New York, NY

Counsel for Plaintiffs G-Max Management, Inc.; 1139 Longfellow, LLC; Green Valley Realty, LLC; 66 East 190 LLC; 4250 Van Cortlandt Park East Associates, LLC; 181 W. Tremont Associates, LLC; 2114 Haviland Associates, LLC; Siljay Holding LLC; 125 Holding LLC; Jane Ordway; Dexter Guerrieri; Brooklyn 637-240 LLC; 447-9 16th LLC Michael A. Berg, Esq.

Shi-Shi Wang, Esq.

New York State Office of the Attorney General

New York, NY

Counsel for Defendants State of New York; Ruthanne Visnauskas in her official capacity as Commissioner of New York State Division of Housing and Community Renewal; Division of Homes and Community Renewal; Letitia James in her official capacity as Attorney General of the State of New York; Woody Pascal in his official capacity as Deputy Commissioner of the New York State Division of Housing and Community Renewal

Rachel K. Moston, Esq.

Claudia Brodsky, Esq.

New York City Law Department

New York, NY

Counsel for Defendant City of New York

Caitlin J. Halligan, Esq.

Sean Patrick Baldwin, Esq.

Michael Duke, Esq.

Thaddeus C. Eagles, Esq.

Babak Ghafarzade, Esq.

Selendy & Gay, PLLC

New York, NY

Counsel for Proposed Intervenors Community Voices Heard and N.Y. Tenants & Neighbors

Ellen B. Davidson, Esq.

The Legal Aid Society

New York, NY

Counsel for Proposed Intervenors Community Voices Heard and N.Y. Tenants & Neighbors

KENNETH M. KARAS, United States District Judge:

On December 10, 2019, a group of 10 Plaintiffs who are landlords and organizations in Westchester County, New York filed a Complaint against the State of New York, Ruthanne Visnauskas in her official capacity as Commissioner of the New York State Division of Housing and Community Renewal ("Visnauskas"), and the Division of Homes and Community Renewal ("DHCR"; collectively, the "BRI Defendants"), alleging that recent amendments to the Emergency Tenant Protection Act of 1974 (the "ETPA") are violative of their constitutionalrights (the "BRI Action"). (See BRI Compl. (Dkt. No. 1, Case No. 19-CV-11285).)¹ Proposed Intervenor Community Voices Heard ("CVH"), a tenant advocacy group, seeks to intervene as a Defendant in the BRI Action.²

Similarly, on January 23, 2020, a group of 13 Plaintiffs who are "small landlord owners" (the "G-Max Plaintiffs") filed a Complaint against the State of New York, Visnauskas, Letitia James in her official capacity as Attorney General of New York ("James"), Woody Pascal in his official capacity as Deputy Commissioner of the New York State Division of Housing and Community Renewal ("Pascal"), and New York City (collectively, the "G-Max Defendants"), alleging violations of the Fifth and Fourteenth Amendments; the Contracts Clause, U.S. Const. art. I, § X, cl. 1; the Fair Housing Act ("FHA"), 42 U.S.C. §§ 3601 et seq.; and various provisions of the New York State Constitution (the "G-Max Action"). (See G-Max Compl. (Dkt. No. 1, Case No. 20-CV-634).)³ Proposed Intervenors CVH and New York Tenants & Neighbors ("T&N"; with CVH, the "Proposed Intervenors"), also a tenant advocacy group, seek to intervene as Defendants in the G-Max Action.

Before the Court is the Motion To Intervene by CVH and T&N in the G-Max Action (the "G-Max Motion") and the Motion To Intervene by CVH in the BRI Action (the "BRI Motion"; collectively, the "Motions"). (See Not. of Mot. (Dkt. No. 39, Case No. 19-CV-11285); Not. of Mot. (Dkt. No. 58, Case No. 20-CV-634).) For the reasons discussed below, the Motions are granted.

I. Background

Although the Court assumes the Parties' general familiarity with the factual and procedural background, the Court will briefly summarize the facts most salient to the Motions.

A. Factual Background

The following facts are taken largely from CVH and T&N's non-conclusory allegations, which are accepted as true for purposes of the instant Motions. See Kamdem-Ouaffo v. Pepsico, Inc., 314 F.R.D. 130, 134 (S.D.N.Y. 2016) ("While accepting as true the non-conclusory allegations of the motion, courts applying Rule 24 must be mindful that each intervention case is highly fact specific and tends to resist comparison to prior cases." (citation, alteration, and quotation marks omitted)); see also Herman v. N.Y. Metro Area Postal Union, No. 97-CV-6839, 1998 WL 214787, at *1 (S.D.N.Y. Apr. 30, 1998) ("The applicants' well pleaded allegations must be accepted as true for purposes of considering a motion to intervene, with no determination made as to the merits of the issues in dispute." (citation omitted)).

In 1969, New York City enacted the Rent Stabilization Law of 1969 "as a means to control a perceived penchant toward unreasonably high rent increases on the part of landlords." (CVH and T&N Mem. of Law in Supp. of G-Max Mot. ("CVH G-Max Mem.") 3 (quotation marks omitted) (quoting Gramercy Spire Tenants' Ass'n v. Harris, 446 F. Supp. 814, 825 (S.D.N.Y. 1977) (Dkt. No. 60, Case No. 20-CV-634).) Five years later, the Emergency TenantProtection Act of 1974 (the "ETPA") extended rent stabilization "to any Westchester, Rockland, or Nassau County municipality with a rental vacancy rate of five percent or less that opted in." (Id. (citation omitted).) Under the ETPA, a Rent Guidelines Board for New York City and the relevant counties established maximum annual rent increases for units that were regulated. (Id.) Since the Rent Stabilization Law of 1969 was enacted, the rent stabilization laws and regulations (collectively, the "RSL") have been renewed and modified several times. (Id.)

In 2019, New York State enacted the Housing Stability and Tenant Protection Act of 2019 (the "HSTPA") to address trends that included, according to CVH and T&N, low rental vacancy rates, households spending large percentages of their incomes on rent, a large number of tenants in danger of eviction, and increases in rents of rent-stabilized units. (Id. at 3-4.) The HSTPA allows municipalities throughout New York to "opt in to rent stabilization" and also "strengthened affordable-housing protections under the RSL." (Id. at 4.) For example, according to CVH and T&N, the HSTPA "modif[ied] or eliminat[ed] provisions in the RSL that provided perverse incentives for landlords to seek eviction of their tenants and fraudulently raise rents," by, for example, allowing landlords to "raise rents based on uncapped and unsupervised individual apartment upgrades." (Id. at 4-5.) The HSTPA caps such rental increases. (Id. at 5.) Additionally, prior to the HSTPA, landlords could raise rents by approximately 20 percent when vacancies occurred, which has now been repealed. (Id.) The HSTPA also requires all rent increases to be keyed off of the current rent, which prevents landlords who charge less than the maximum regulated rent from increasing the rent up to that maximum upon lease renewal. (Id.)

The Proposed Intervenors are both "prominent tenant advocacy groups" that have spent "years" organizing and lobbying for both tenants in general and rent-regulated tenants. (Id. (record citations omitted).) According to the Proposed Intervenors, their "numerous members"include those who are tenants in rent-stabilized homes in New York City and Westchester, and who have had "first-hand experience with the problems the HSTPA addressed" and "rely on the RSL to continue living in their homes and contributing to their communities." (Id. at 6 (record citations omitted).) Both Proposed Intervenors were on the steering committee of the Upstate Downstate Housing Alliance, which led lobbying efforts for the protections that were ultimately encapsulated in the HSTPA. (Id. at 5.)

T&N was founded in 1974 and represents over 2,000 tenant members, approximately 80 percent of whom are "rent-regulated tenants and tenants' associations." (Decl. of Yolanda Cadore in Supp. of G-Max Mot. ("Cadore Decl.") ¶¶ 3, 6 (Dkt. No. 59-1, Case No. 20-CV-634).) T&N has been involved with "every rent law campaign" since December 1974 and was specifically involved in lobbying for the HSTPA. (Id. ¶¶ 10, 18-21.) For example, T&N's former executive director testified at a New York State Senate Housing Committee Hearing in May 2019 and met with members of Governor Cuomo's office to discuss proposals to amend the rent stabilization laws. (Id. ¶¶ 20-21.) T&N also made "multiple trips . . . to Albany" with its members, including tenants, and watched the HSTPA pass the Senate and Assembly in Albany on June 14, 2019. (Id.)

CVH was founded in 1994 and its members are principally "women of color and low-income families in New York State." (Decl. of Afua Atta-Mensah in Supp. of CVH and T&N Mot. To Intervene ("Atta-Mensah Decl.") ¶ 2 (Dkt. No. 59-2, Case No. 20-CV-634).) CVH works with "rent-regulated tenants . . . centered in East Harlem, Westchester County[,] and the Hudson Valley," to, for example, aid them in developing tenant associations and unions. (Id. ¶ 4.) The group represents that it has worked to strengthen rent stabilization laws since 2008, (id. ¶ 5), and in 2019, took part in various initiatives and lobbying efforts to reform these laws, (id.¶ 17). Like T&N, members of CVH testified at two New York State Senate Housing...