'Brooklyn Rent Is Lower, But Still Too Damn High!' A 'Lookback' at a Decade of Second Department Rent Overcharge Decisions

This is a continuation of a series of articles about recent developments in rent overcharge litigation. It reviews the opinions rendered by the Appellate Division, Second Department in the 10 years since the Court of Appeals upheld the decision of the Appellate Division, First Department, in Roberts v. Tishman Speyer Props., L.P., 62 A.D.3d 71 (1st Dept. 2009), aff’d 13 N.Y.3d 270 (2009). A notable difference between the First and Second Departments is that the former has issued many rulings on rent overcharge claims that were originally filed in Supreme Court, while the latter has mainly reviewed Article 78 petitions that challenged claims initially submitted to the New York State Division of Housing and Community Renewal (DHCR). As a result, the cases discussed herein consist of rulings on: (1) Article 78 petitions; and (2) related legal issues.

Article 78/DHCR Cases

The Second Department has generally disfavored judicial review of rent overcharge claims. Wilcox v. Pinewood Apt. Assoc., 100 A.D.3d 873 (2d Dept. 2012) acknowledged that Supreme Court and the DHCR have concurrent jurisdiction over rent overcharge claims, but nevertheless held that it is appropriate for the court to transfer such claims to the agency pursuant to the doctrine of primary jurisdiction. See also Matneja v. Zito, 163 A.D.3d 802, 803 (2d Dept. 2018), citing Matter of Rockaway One Co. v. Wiggins, 35 A.D.3d 36, 39 (2006). This is not to say that the Second Department is completely uncritical of the DHCR. Its recent decision in Matter of London Leasing L.P. v. DHCR, 153 A.D.3d 709 (2d Dept. 2017), which upheld an agency order, nevertheless stressed the Court of Appeals observation that “[a] decision of an administrative agency which neither adheres to its own prior precedent nor indicates its reason for reaching a different result on essentially the same facts is arbitrary and capricious. Further, its more recent decision in Matter of Jourdain v. DHCR, 159 A.D.3d 41 (2d Dept. 2018), a succession rights case, acknowledged the general rule that a court reviewing an Article 78 petition should normally defer to “an agency’s interpretation of its own regulations … if that interpretation is not irrational or unreasonable,” yet reversed the DHCR’s order because it was based on a misinterpretation of controlling case law. This is at least a tacit recognition that questions of statutory interpretation and legal analysis are the province courts, and not the agency.