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CLASS ACTION CLAIM BY TENANTS ALLEGING VARIOUS FORMS OF RENT OVERCHARGES PROPERLY SURVIVED A PRE-ANSWER MOTION TO DISMISS AND SHOULD PROCEED TO THE CERTIFICATION STAGE PURSUANT TO CPLR 902 (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Fahey, over a three-judge dissent, determined the pre-answer motion to dismiss a class action claim by tenants alleging various forms of rent overcharges was properly denied and the matter should move on for a ruling on whether the prerequisites for a class action under CPLR 902 are met:

… [T]here is an element of truth to defendants’ suggestion that the class claims — particularly those based on the alleged misrepresentation and inflation of the costs of IAIs [individual apartment improvements]— may require separate proof with respect to each plaintiff. Along those lines, defendants note that the operative complaint “alleges overcharges for inflated IAI increases of [various] amounts” — 136%, 97%, 82%, 104%, 113%, 33%, or 254% for various apartments — which they contend supports the idea that the alleged overcharges are separate wrongs to separate persons that do not form the basis for a class action … .

That leads to the friction point on this appeal: are we to look at the common basis for a damages claim or the degree of damage alleged? On the one hand, if, as defendants suggest, the differences in the specific means of harm is considered — that is, if at this stage the Court contemplates nuances of how those overcharges allegedly were accomplished — then plaintiffs may struggle to satisfy the factual component of CPLR 901 (a) (2). On the other hand, as plaintiffs note, to focus on potential idiosyncrasies within the class claims — distinctions that speak to damages, not to liability — at this juncture would potentially be to reward bad actors who execute a common method to damage in slightly different ways. * * *

Here the complaint addresses harm effectuated through a variety of approaches but within a common systematic plan … , and its class claims should not be dismissed at this juncture. Maddicks v Big City Props., LLC, 2019 NY Slip Op 07519, CtApp 10-22-19

 

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