Court of Appeals Holds Class Certification Should Be Denied on Certification Motion and Not a Motion To Dismiss
What is remarkable about 'Maddicks' is that the Court of Appeals and a panel of the First Department mustered only bare majorities to reach this unremarkable conclusion.
November 25, 2019 at 11:45 AM
13 minute read
The Court of Appeals recently stated a general rule that class certification should be denied only after a motion to certify is made with supporting affidavits, and not on a motion to dismiss on the pleadings. Maddicks v. Big City Props., 2019 WL 5353010 (Ct. App. 2019). What is remarkable about Maddicks is that the Court of Appeals and a panel of the First Department mustered only bare majorities to reach this unremarkable conclusion. The fact that three out of seven judges on the Court of Appeals and two out of five judges on the Appellate Division panel opposed this common sense reading of the CPLR's class action rules suggests that the legislative goal in 1975, "to provide a flexible, functional scheme wider and more welcoming than 'the narrow class action legislation which preceded it,'" is still sailing into strong judicial headwinds. Id. at *4.
Let's look at the facts, and then the takeaways.
Facts and Procedural Posture. As summarized by the trial court (New York County Supreme), plaintiffs alleged that defendants or their corporate predecessors owned or operated over 20 apartment buildings and engaged in a common scheme to inflate rents in violation of New York's rent stabilization laws. Defendants were alleged to have used various methods to impose illegal overcharges, including: (1) failing to provide rent-stabilized leases as required in order for the defendants to receive tax incentives under the J-51 program, (2) misrepresenting the value of improvements made to the apartments in order to obtain unwarranted rent increases, (3) failing to register rental information in order to collect more than the correct permissible rent, and (4) inflating the fair market rent on apartments and deregulating such apartments. Maddicks v. Big City Props., 2017 WL 5499213 (Sup. Ct., N.Y. Co., 2017) (Edwards, J.).
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