As we explained in our case summary, the question in this case was whether plaintiffs’ class action complaint was properly dismissed on a CPLR 3211 motion to dismiss even though plaintiffs alleged a common scheme to overcharge rents in violation of various rent regulation laws. The Court (Fahey, J.) held that dismissal pursuant to CPLR 3211 was not appropriate and reinstated the complaint.
The majority noted that class allegations were, in theory, subject to dismissal through a CPLR 3211 motion for failure to allege one of the CPLR article 9 prerequisites, i.e., numerosity, commonality, typicality, adequacy of representation or superiority. But the majority found that the complaint adequately alleged the disputed element here, commonality. It did this, the majority explained, by alleging “a clear pattern and practice of improper and illegal conduct”–namely, charging rents that were illegally inflated for one of four reasons. To be sure, there were distinctions in “how those overcharges allegedly were accomplished.” But those differences were not proper grounds to dismiss under CPLR 3211 because plaintiffs alleged that defendants “execute[d] a common method to damage in slightly different ways.” Relying heavily on its earlier decision in City of New York v Maul, 14 N.Y.3d 499 (2010), the majority concluded that CPLR 3211 dismissal was inappropriate because the complaint alleged “harm effectuated through a variety of approaches but within a common systematic plan.”
The dissent (Garcia, J.) would have affirmed dismissal on the ground that the complaint alleged no common legal or factual issue shared by the four discrete methods of illegally overcharged rents. The dissent observed that the four types of allegedly illegal inflated rents did not overlap factually or legally. And the “common systematic plan” relied on by the majority was not, in the dissent’s view, an element of proof for plaintiffs’ claims or a legal issue that could support class treatment. The dissent warned that few class actions could be dismissed under CPLR 3211 if this class action could not be, and that limiting trial courts’ ability to dismiss class actions pursuant to CPLR 3211 would result in greater costs for defendants and other adverse consequences.
Return to the case page for Maddicks v. Big City Properties.