Pinnacle RICO Settlement Upheld by Federal Appeals Court

Published: October 1, 2013 in the New York Times

Court Upholds a Settlement Affecting 20,000 City Renters

A federal appeals court has upheld a settlement affecting more than 20,000 rent-regulated tenants in New York City, clearing the way for them to seek individual compensation from their landlord for rent overcharges and other complaints.

In its decision on Monday, the United States Court of Appeals for the Second Circuit ruled that the 2011 settlement of the tenants’ class-action lawsuit against the Pinnacle Group, a large New York landlord, was “fair, reasonable and adequate.”

Under the Pinnacle settlement, the court concluded, all class members benefited from new procedures and “best practices” that the company agreed to follow in carrying out rent increases and evictions. The company also agreed to have a court-appointed administrator hear the tenants’ individual complaints of illegal rents and harassment and determine compensation.

The amount could reach more than $10 million, depending on how many tenants make claims, said Richard F. Levy of Jenner & Block L.L.P. who negotiated the settlement on behalf of the tenants and who said he was “exhilarated” by the court decision.

“These people have been waiting for a long time,” he said.

The tenants’ suit against Pinnacle, filed in 2007, made novel use of a law typically associated with the Mafia and other organized crime groups, the Racketeer Influenced and Corrupt Organizations Act, known as RICO. The tenants accused the company of engaging in a conspiracy to fraudulently increase rents in more than 400 buildings that it owned in the city. The appeals court called the tenants’ original racketeering case “a daring and unconventional effort” that achieved important benefits for the tenants under the settlement “against significant odds.”

Crooked Man

There was a crooked man, and he walked a crooked mile.
He found a crooked sixpence upon a crooked stile.
He bought a crooked cat, which caught a crooked mouse,
And they all lived together in a little crooked house,
His crooked cronies he would meet, not that far from crooked creek.