Hogan Lovells wins key class certification ruling in NY rent case

The putative class of tenants alleged that their rents were improperly increased by inflating the cost of renovations between 2003 and 2016. The tenants sought to hold A&E responsible for the alleged overcharges despite 52 of the 55 claims predating A&E’s ownership. If certified, A&E, which began purchasing the properties in 2012, would have faced a class of thousands of current and former tenants in over 1,000 apartments across 22 buildings in New York City.

A New York state Supreme Court Judge (Commercial Division) denied class certification, reviewing the record which showed that during the time period at issue, the tenants resided in different buildings with multiple different property managers and owners that oversaw the disputed rent increases and renovations. In its February 26 ruling, the Court determined the tenants couldn’t resolve their claims on a class-wide basis because the evidence raised too many individual issues.

“We are extremely happy that the Court recognized that this case did not have the requisite commonality for class certification,” said Hogan Lovells partner James Bernard, who led the Hogan Lovells team representing A&E. “Given the number of potential class members and the lengthy timeframe at issue, there was a lot at stake.”

The decision may signal a turning of the tide for New York landlords, which have long battled the risk of class certification in landlord tenant disputes. “What the decision shows is that Courts will give these motions close scrutiny to figure out whether proceeding as a class is really helpful and efficient,” said Bernard.

“This decision may also encourage more investment in rent-stabilized buildings, which can help ensure landlords have the resources to properly maintain these buildings,” Bernard said. “The decision is important because it reflects that class certification isn’t a certainty in these cases,” Bernard added.

In addition to Bernard, the Hogan Lovells team included attorneys Nate Benfield, Danielle Flanagan, and Julie Matos. A&E was also represented by John Siegal and Erica Barrow of BakerHostetler.