Bldg. & Realty Inst. of Westchester v. New York

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

No. 19-CV-11285 (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.

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 Homes and Community Renewal; and the Division of Homes and Community Renewal

Mark A. Guterman, Esq.

Lehrman, Lehrman & Guterman, LLP

White Plains, NY

Counsel for Proposed Intervenor 300 Apartment Associates, Inc.

KENNETH M. KARAS, United States District Judge:

Plaintiffs, a group of landlords and organizations in Westchester County, New York ("Plaintiffs"), bring this Action against the State of New York, Ruthanne Visnauskas in her official capacity as Commissioner of the New York State Homes and Community Renewal ("Visnauskas"), and the Division of Homes and Community Renewal ("DHCR"; collectively, "Defendants"), alleging that recent amendments to the Emergency Tenant Protection Act of 1974 (the "ETPA") are violative of their constitutional rights (the "Action"). (See Compl. (Dkt. No. 1).)¹

Before the Court is a Motion To Intervene (the "Motion") by 300 Apartment Associates, Inc. ("Apartment Associates," or "Proposed Intervenor"). (See Not. of Mot. (Dkt. No. 46).)² For the reasons discussed below, the Motion is denied.

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 Motion.

A. Factual Background

The following facts are taken largely from Apartment Associates' non-conclusory allegations, which are accepted as true for purposes of the instant Motion. 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 pleadedallegations 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)).

Apartment Associates is the "proprietary lessee" of a single "cooperative apartment," number 6J, which is located at 300 Martine Avenue in White Plains, New York (the "Apartment"). (Decl. of Stephen J. Lehrman in Supp. of Mot. ("Lehrman Decl.") ¶ 3 (Dkt. No. 47).) Apartment Associates is also the "holder of the shares of stock appurtenant to [the] Apartment." (Apartment Assocs.' Mem. of Law in Supp. of Mot. ("Apartment Assocs.' Mem.") 2 (Dkt. No. 48).) Apartment Associates sublets the Apartment to a "non-purchasing tenant under the conversion Offering Plan," whose tenancy is subject to the ETPA. (Id.; Lehrman Decl. ¶ 3.)

According to Apartment Associates, in June 2019, the Housing and Stability Tenant Protection Act (the "HSTPA") was passed in New York State. (Apartment Assocs.' Mem. 2.) The HSTPA amended the ETPA and also made changes to certain provisions of New York's Real Property Law ("RPL"), Real Property Actions and Proceedings Law ("RPAPL"), and General Obligations Law ("GOL"). (Id.) The ETPA, as adopted by White Plains, applies to any building built before 1974 that contains at least six residential units. (Id.) Apartment Associates is not a member of the "representative Plaintiffs" who bring this Action, and claims that the HSTPA is "as significant to and directly affects [Apartment] Associates as fully as the HSTPA relates to each of the named owner-Plaintiffs herein." (Id.) Apartment Associates seeks to "join . . . Plaintiffs' challenge to the constitutionality of the HSTPA as [it] relates to the ETPA," and also seeks to add two additional causes of action, arguing "that the HSTPA is ineffective by virtue of the legal principle of legislative equivalency," and "that the HSTPA was not adopted in the specific method mandated by the ETPA." (Id. at 2-3.)

B. Procedural Background

Plaintiffs commenced this Action on December 10, 2019. (Compl.) On April 1, 2020, Apartment Associates sought leave to file a motion to intervene, which Plaintiffs and Defendants opposed. (Dkt. Nos. 24, 27, 30.) On April 23, 2020, the Court directed the Parties to file proposed briefing schedules for the Motion. (Dkt. No. 32.) Plaintiffs filed a proposed schedule with the Court on April 30, 2020, which the Court approved. (Dkt. Nos. 34, 37.) Pursuant to this schedule, on June 1, 2020, Apartment Associates filed the instant Motion. (Not. of Mot.; Lehrman Decl.; Apartment Assocs.' Mem.)³ Plaintiffs filed their Opposition on June 24, 2020. (Decl. of Kenneth J. Finger, Esq. in Opp'n to Mot. ("Finger Decl.") (Dkt. No. 65); Decl. of Jeremiah A. Houlihan in Opp'n to Mot. ("Houlihan Decl.") (Dkt. No. 75); Pls.' Mem. of Law in Opp'n to Mot. ("Pls.' Mem.") (Dkt. No. 67).) After receiving an extension from the Court, Defendants filed their Opposition on July 3, 2020. (Defs.' Mem. of Law in Opp'n to Mot. ("Defs.' Mem.") (Dkt. No. 72).) Apartment Associates filed a Reply on July 7, 2020. (Apartment Assocs.' Reply Mem. of Law in Further Supp. of Mot. ("Apartment Assocs.' Reply Mem.") (Dkt. No. 74).) The Parties appeared before the Court for Oral Argument on the Motion and additional Motions To Intervene filed in this case and a related case on July 8, 2020. (See Dkt. (minute entry for July 8, 2020).) The Court reserved its ruling on all of the Motions. (Id.)

II. Discussion

A. Standard of Review

Federal Rule of Civil Procedure 24 permits a party to intervene in ongoing litigation as of right or by permission of the court. In seeking intervention under this Rule, the proposedintervenor bears the burden of demonstrating that it meets the requirements for intervention. See Seils v. Rochester City Sch. Dist., 199 F.R.D. 506, 509 (W.D.N.Y. 2001) ("The moving party has the burden of demonstrating its entitlement to intervene." (citation omitted)). 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." Aristocrat Leisure Ltd. v. Deutsche Bank Tr. Co. Ams., 262 F.R.D. 348, 352 (S.D.N.Y. 2009) (citation and quotation marks omitted).

Apartment Associates moves for intervention as of right under Rule 24(a)(2) or, in the alternative, permissive intervention under Rule 24(b). The Second Circuit has instructed that "[t]o be granted intervention as of right or by permission, 'an applicant must (1) timely file an application, (2) show an interest in the action, (3) demonstrate that the interest may be impaired by the disposition of the action, and (4) show that the interest is not protected adequately by the parties to the action.'" Floyd v. City of New York, 770 F.3d 1051, 1057 (2d Cir. 2014) (per curiam) (quoting R Best Produce, Inc. v. Shulman-Rabin Mktg. Corp., 467 F.3d 238, 240 (2d Cir. 2006)). As such, "court[s] consider[] substantially the same factors whether the claim for intervention is 'of right' under [Rule 24(a)(2)], or 'permissive' under [Rule 24(b)(1)(B)]." R Best Produce, 467 F.3d at 240 (citation omitted); see also Kamdem-Ouaffo, 314 F.R.D. at 134 n.4 (same). The Second Circuit has "underscored that a 'failure to satisfy any one of these four requirements is a sufficient ground to deny the application.'" Floyd, 770 F.3d at 1057 (emphasis in original) (footnote and alteration omitted) (quoting R Best Produce, 467 F.3d at 241).

With respect to permissive intervention, a court may permit a timely application to intervene where the moving party "has a claim or defense that shares with the main action a common question of law or fact." Fed. R. Civ. P. 24(b)(1)(B). "Permissive intervention iswholly discretionary with the trial court." Rosado v. Pruitt, No. 17-CV-4843, 2018 WL 262835, at *3 (E.D.N.Y. Jan. 2, 2018) (quotation marks omitted) (quoting U.S. Postal Serv. v. Brennan, 579 F.2d 188, 191 (2d Cir. 1978)). Although the Second Circuit has instructed that in order to gain permissive intervention, a party must generally satisfy the four aforementioned factors, Floyd, 770 F.3d at 1057, "the principal guide in deciding whether to grant permissive intervention is whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties," Olin Corp. v. Lamorak Ins. Co., 325 F.R.D. 85, 87 (S.D.N.Y. 2018) (alteration and quotation marks omitted) (quoting United States v. Pitney Bowes, Inc., 25 F.3d 66, 73 (2d Cir. 1994)). As such, district courts in the Second Circuit have recognized that the four factors should be considered "as a whole[,] rather than focusing narrowly on any one of the criteria," and that application of the factors is "flexible and discretionary." Grewal v. Cuneo, No. 13-CV-6836, 2014 WL 2095166, at *3 (S.D.N.Y. May 20, 2014) (citation and quotation marks omitted). Other relevant factors in deciding whether to grant permissive intervention include "the nature and extent of the intervenors' interests," and "whether [the] parties seeking intervention will significantly contribute to full development...