Second Circuit Affirmed District Court’s Approval of Class Action Settlement—Overcharge and RICO Claims—General Business Law §349 Claim—Settlement Involved Maintenance of “Best Practices,” Audit of Leases, Claims Process for Damages, Supervision by a Court Appointee, $25 Million Payment to Non-Profits for Tenant Assistance Services, $1.25 Million in Attorney Fees and $200,000 in Expenses

This appeal involved the issue of “when a class-action settlement requires subclassing of the plaintiff class to ensure adequacy of representation pursuant to Federal Rules of Civil Procedure [FRCP] 23(e) and (a)(4).” The district court had certified the plaintiff classes, which included “more than 20,000 current and former occupants” of New York City rent-regulated apartments. The settlement that had been approved by the district court “provides no damages relief for claims that tenants were overcharged rent by prior landlords, rather than by defendants, or for claims for rent overcharges that predate July 11, 2004″ (excluded claims). The appellant objectors to the settlement, asserted that “the lack of separate representation for tenants with Excluded…Claims during settlement negotiations violated Rule 23 and constitutional due process….” The U.S. Court of Appeals for the Second Circuit (court) held that the settlement was “fair, reasonable, and adequate, as required by Rule 23(e)(2),” and affirmed.

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