Court Approves Settlement in Class Action Against Landlord

In 2007, rent-regulated tenants in buildings owned by Pinnacle Group sued landlord, claiming violations of the Racketeer Influenced and Corrupt Organizations law (RICO), rent-stabilization laws, and consumer protection laws. In 2010, the court declared that the case was a class action by rent-stabilized and rent-controlled tenants. Tenants claimed that landlord engaged in fraud and harassment to drive them out of their apartments, circumvent rent laws, and charge excessive rents. Among other things, tenants claimed that landlord filed more than 5,000 meritless eviction proceedings during a 29-month period and provided false information to government agencies. After landlord and tenants engaged in court-supervised settlement negotiations, some tenants objected to the settlement terms and asked the court not to approve the settlement. But the court approved the settlement, finding it fair, adequate, and reasonable. Under the terms of the agreement, a claims administrator would be assigned to address individual tenant complaints, an independent accountant would review whether rents were set legally, a tenant helpline would be set up, landlord would pay $2.5 million to legal aid services for tenants to implement the agreement, and landlord would pay tenant legal fees for the class action. The agreement provides for a swift and reliable process for thousands of tenants to resolve individual complaints against landlord.

Charron v. Pinnacle Group NY LLC: 2012 WL 2053530 (SDNY; 6/6/12; McMahon, DJ)