April 3, 2023
Press Release
In a victory for Stroock client commercial landlord Elias Bochner, and his business, 287 Seventh Ave. Realty LLC, the United States District Court for the Southern District of New York granted a motion for summary judgment in a lawsuit challenging the constitutionality of a law passed by the New York City Council during the COVID-19 pandemic. The Guaranty Law (or the “Law”) had freed personal guarantors of commercial leases from all rent obligations for a 16-month period without any conditions.
The initial complaint – emphasizing two other laws passed in unison with the Guaranty Law and relying heavily on First Amendment and preemption claims – had been filed by previous counsel and dismissed by U.S. District Judge Ronnie Abrams.
Stroock was then asked to take on the case, appealing Judge Abrams’ decision to the Second Circuit, focusing on the Guaranty Law’s unconstitutionality under the Contracts Clause, resulting in a split decision reversal in favor of Stroock’s clients. The Second Circuit issued a 109-page decision finding five fundamental flaws with the Guaranty Law and remanding the case back to the District Court for discovery on whether the Law was a reasonable and appropriate measure.
On Friday, March 31, Judge Abrams found that the Guaranty Law was unconstitutional. Although the City Council identified a legitimate public good, the Law was not a "reasonable or appropriate" means of achieving the intended purpose. Judge Abrams held the City could not rectify the five fundamental flaws identified by the Second Circuit: the Law (1) was a permanent cancellation of rent; (2) did not condition relief on reopening; (3) foisted the entire economic burden of the pandemic on commercial landlords; (4) did not condition its relief on need; and (5) provided no compensation to landlords.This ruling should have a wide-reaching impact on commercial landlords city-wide seeking to enforce personal guaranties and should provide a roadmap for litigants looking to challenge New York city and state legislation under the Contracts Clause, even during periods of emergency.
The Stroock team included partner Claude Szyfer, special counsel David J. Kahne, associate Daria Anichkova, law school graduate Raman "Ramie" Kulkarni, and paralegals Christine Stygar and Nicole Cordonnier.
April 3, 2023
Press Release
In a victory for Stroock client commercial landlord Elias Bochner, and his business, 287 Seventh Ave. Realty LLC, the United States District Court for the Southern District of New York granted a motion for summary judgment in a lawsuit challenging the constitutionality of a law passed by the New York City Council during the COVID-19 pandemic. The Guaranty Law (or the “Law”) had freed personal guarantors of commercial leases from all rent obligations for a 16-month period without any conditions.
The initial complaint – emphasizing two other laws passed in unison with the Guaranty Law and relying heavily on First Amendment and preemption claims – had been filed by previous counsel and dismissed by U.S. District Judge Ronnie Abrams.
Stroock was then asked to take on the case, appealing Judge Abrams’ decision to the Second Circuit, focusing on the Guaranty Law’s unconstitutionality under the Contracts Clause, resulting in a split decision reversal in favor of Stroock’s clients. The Second Circuit issued a 109-page decision finding five fundamental flaws with the Guaranty Law and remanding the case back to the District Court for discovery on whether the Law was a reasonable and appropriate measure.
On Friday, March 31, Judge Abrams found that the Guaranty Law was unconstitutional. Although the City Council identified a legitimate public good, the Law was not a "reasonable or appropriate" means of achieving the intended purpose. Judge Abrams held the City could not rectify the five fundamental flaws identified by the Second Circuit: the Law (1) was a permanent cancellation of rent; (2) did not condition relief on reopening; (3) foisted the entire economic burden of the pandemic on commercial landlords; (4) did not condition its relief on need; and (5) provided no compensation to landlords.This ruling should have a wide-reaching impact on commercial landlords city-wide seeking to enforce personal guaranties and should provide a roadmap for litigants looking to challenge New York city and state legislation under the Contracts Clause, even during periods of emergency.
The Stroock team included partner Claude Szyfer, special counsel David J. Kahne, associate Daria Anichkova, law school graduate Raman "Ramie" Kulkarni, and paralegals Christine Stygar and Nicole Cordonnier.
