Jenner & Block

High Court Upholds Firm-Orchestrated Landmark Settlement on Behalf of 20,000-plus NYC Tenants

A Jenner & Block team led by Partner Richard F. Levy succeeded in attaining a significant victory in a long-running and high-profile class-action lawsuit on behalf of more than 20,000 current and former New York City tenants against one of New York’s largest residential landlords, the Pinnacle Group, over allegations of harassment, overcharges and unfair evictions.  On April 28, 2014, the U.S. Supreme Court denied certiorari, leaving in place the Second Circuit decision that unanimously affirmed the Southern District of New York’s approval of a landmark settlement that it said “achieved significant benefits for the class, particularly in its injunctive aspects, against significant odds.”

Pinnacle owned many rent-controlled apartments in New York, which has a very complicated set of laws and rent-control regulations.  Low-income tenants in Pinnacle’s properties accused the company of orchestrating a harassment campaign to force them to move out so that new, non-rent controlled tenants could move in and thereby increase the value of Pinnacle’s buildings.

Jenner & Block became involved after a 2006 New York Times article detailed a New York attorney general’s investigation into the tenants’ allegations.  The New York City Public Advocate at the time approached the firm to ask if the tenants had a cause of action that could be prosecuted civilly by a private law firm on a pro bono basis.

Monday’s victory has been reported by Law360, which quotes Richard as saying, “We filed this case eight and a half years ago.  Finally, after all this time, the 22,000 class members are going to get the benefits of a great settlement.”

The settlement provides, among other elements, an independent and streamlined claims administration process; a $2.5 million legal assistance fund established by Pinnacle to assist the tenants in asserting their rights; and an audit of leases for rent overcharge.  Pinnacle also agreed to abide by a two-year injunction requiring it to honor best practices governing many aspects of its relationship with current tenants, including responding to tenant complaints, repair response times, setting initial rents, and the eviction process, among others.  The court-appointed claims administrator will monitor Pinnacle’s compliance with the injunction.  The goal of the claims administrator is to resolve all claims within six months of receipt. 

In addition to Richard, key team members included Associates Marisa K. Perry and Joshua H. Rubin.  Partners Ross B. Bricker, Matthew S. Hellman, Tarsha A. Phillibert, Paul M. Smith and Michael T. Brody and Associates Elizabeth A. Edmondson, Sabrina N. Guenther and Eddie A. Jauregui also contributed significantly during various stages of the matter.