By Sabina Mollot
On Tuesday morning, a State Supreme Court judge said he’d approve a $68.75 million settlement that was reached in the “Roberts v. Tishman Speyer” lawsuit last fall, ending litigation and negotiations that had stretched on for over six years.
The settlement came after a 2009 Court of Appeals ruling establishing that apartments in Stuyvesant Town and Peter Cooper Village had been wrongly deregulated, with thousands of tenants getting overcharged as result.
During the lively hearing, Justice Richard B. Lowe congratulated attorneys for both sides, the tenants as well as CWCapital, the special servicer of the property, for eventually turning what has been a drawn out battle into a landmark settlement.
“What started as a slug fest has emerged into a love fest,” joked Lowe. “There was contentious discussion to the extent that I pulled people back to the table. That’s my job, but the fact is that everybody stayed in.”
Lowe, the first presiding justice of the Appellate Term, First Division of the State Supreme Court, added that it was the longest running litigation he’s been involved with.
“And those who know me know that I do not permit litigation to drag on, but… if this wasn’t settled, we would have major obstacles to overcome.”
What the justice said also factored into his decision to agree with the terms was knowing that the state housing agency was okay with the deal. Speaking at the hearing was an attorney from the Division of Housing and Community Renewal, Gary Connor, who confirmed, “The division is on board. (The settlement) is fair and reasonable.”
The DHCR, which once famously erred in its opinion that landlords could deregulate properties receiving J-51 tax breaks, like Stuyvesant Town, is now part of an umbrella agency called Homes and Community Renewal (HCR).
If the housing agency had to individually litigate each tenant’s case, “It would be in litigation for the next 15 years,” said Lowe.
The settlement, which was first announced last November, means that 21,250 current and former market rate tenants will get a total of $68.75 million in damages, which when combined with savings from already made rent reductions that also came as a result of “Roberts,” brings the total take to $146.85 million. On Wednesday, tenants’ attorney Alex Schmidt said the total amount with rent savings is now even higher, an estimated $173.25 million since over 6,000 more class members have since been discovered.
Since the settlement was made, tenants have been mixed on the deal, since rents could go up as a result and many tenants thought their individual payouts were going to be higher. The average check is said to be $3,200. Schmidt has told Town & Village that after legal fees, tenants should see 70 percent of the damages, though it could be higher if fewer people file claims. Of the 30 percent in legal fees, 27.5 percent is attorney compensation. That issue was also the subject of some debate in the courtroom, with Lowe questioning certain expenses like computer research, secretarial overtime and attorneys who charged as much as $890 an hour.
“I would just like to know if any of you guys know what my hourly rate is,” the justice asked the plaintiffs. “I don’t know if it’s $100 an hour.”
Lowe added that he would have capped the hourly rate at $700, but ultimately decided he didn’t want to “nickel and dime” anyone. Lowe said he’d leave the decision on whether to consider any reductions in fees up to the attorneys.
“The bench believes all of you have earned your compensation,” he said.
In response, one of the tenants’ attorneys defended the fees as a necessity to keep top talent away from competing firms, but he said his own rate was lower.
Following the judge’s decision, Greg Cross, an attorney for CWCapital said he was relieved by it.
“We have no interest in litigating with the tenants,” he said.
Schmidt said he was also relieved it was over, noting, “All the cells in my body are breathing a sigh of relief.”
He also said he hoped it would lead to a future for the tenants in which they can buy the property. Meanwhile, he said, the judge’s order on the decision was expected to happen this week, and tenants would have until May 15 to file their claims.
“It feels good to have some finality,” said Schmidt. “It was a tremendous service for the community and the city. Now everyone can get on with their lives.”
Council Member Dan Garodnick, who along with the ST-PCV Tenants Association has held off from completely endorsing the settlement due to concerns of rent hikes, nevertheless called the case “a historic win.”
He also noted that the settlement was what CW has said needed to happen before there could be any talk of a tenant-led purchase and that it has resulted in some rent protections along with the cash payouts.
“This case has always been about protecting rent stabilized units from abuses,” said Garodnick. “The victory in Roberts sends a clear message to landlords across the city that the rent stabilization law cannot and will not be circumvented.”
All members of the class action suit need to sign on to the claim if they want to receive their damages, Schmidt has said. Anyone who needs claim paperwork should contact the Berdon Claims Administration at (800) 766-3330.