Concord Realty Co. v. City of New York

• Decision Date: 03 May 1972
• Citation: 30 N.Y.2d 308,333 N.Y.S.2d 161,284 N.E.2d 148
• Parties: , 284 N.E.2d 148 In the Matter of CONCORD REALTY Co. et al., Appellants, v. CITY OF NEW YORK et al., Respondents. In the Matter of BOZART REALTY CORP. et al., Petitioners, v. CITY OF NEW YORK et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 161

333 N.Y.S.2d 161

30 N.Y.2d 308, 284 N.E.2d 148

In the Matter of CONCORD REALTY Co. et al., Appellants, v. CITY OF NEW YORK et al., Respondents.

In the Matter of BOZART REALTY CORP. et al., Petitioners, v. CITY OF NEW YORK et al., Respondents.

Court of Appeals of New York.

May 3, 1972.

Richard Wilsker and Leonard Rovins, New York City, for appellants.

J. Lee Rankin, Corporation Counsel (Alfred Weinstein, Stanley Buchsbaum, Israel Rubin and Joseph Halpern, New York City, of counsel), for respondents.

BREITEL, Judge.

Two proceedings were originally brought under CPLR (art. 78). In the Concord proceeding, on behalf of landlords of rent-controlled buildings, to prevent the New York City Department of Rent and Housing Maintenance from reducing maximum rents because of decrease in essential services during a labor strike, petitioners appeal. Of the two, this is the only proceeding before the court. The underlying contention is that the city agency's threat to reduce rents undermined the bargaining position of the employer landlords. The narrow issue is whether the Appellate Division properly dismissed petitioners' appeal after the strike settlement mooted the substantive issues.

Special Term dismissed the petition seeking to declare the city agency without authority to reduce rents and for an injunction. It found that the city agency was empowered to reduce rents if essential services were decreased as a result of a labor strike, and that any attack on the procedures employed or the extent of proposed rent reductions was premature since no maximum rents had yet been reduced. The Appellate Division unanimously dismissed the appeal on the ground that since the strike was over the controversy had become moot, noting, however, that it did not necessarily agree with Special Term on the merits.

The companion Bozart proceeding, not now before this court, attacked the city agency's practice of hiring striking union employees at wages they were demanding to perform essential services, and then charging the landlords for the wages paid. In the Bozart proceeding Special Term prohibited the city from taking over and managing landlords' properties, and in particular from hiring striking union members and charging petitioners. Special Term found that the agency had not complied with certain procedural requirements, and, without statutory authority, had in effect taken private property and interfered with a lawful labor dispute. The city did not appeal, and the Bozart proceeding, although included in the caption, was not before the Appellate Division and is not before this court.

In the Concord proceeding there should be a reversal. The substantive issue is important, and is likely to recur as similar labor disputes arise. The Appellate Division, therefore, should have entertained the appeal rather than dismissing it as academic.

Petitioners are members of the Bronx Realty Advisory Board, the employer bargaining agent in negotiations with Local 32E Building Service Employees International Union. On September 14, 1970, the then collective agreement between the employers and the union expired. The union struck on September 15. Shortly thereafter, the agency sent notices to landlords initiating rent reduction proceedings. The notices cited lack of essential services, in particular garbage collection, hot water, and elevator service, and that rents were subject to a scheduled reduction ranging as high as 80%.

The Concord petition was verified September 22, 1970, seven days after the strike began, but before any hearings had been held or orders reducing rents issued. Rent reduction orders were issued later; the strike was settled and the orders revoked, however, before the appeal could be heard.

On the merits not before the court, petitioners contend that the agency lacked authority to reduce maximum rents where a labor dispute and not a calculated evasion of maximum rents by the landlord was responsible for the decrease in essential services (see Administrative Code of City of New York, § Y51--5.0, subd. a, par. (1)). They also contended that the proposed rent reductions were punitive and coercive.

This court has recently held on two occasions that in a proper case the Appellate Division should not have dismissed an appeal as academic 'when the underlying questions are of general interest, substantial public importance and likely to arise with frequency' (Matter of Gold v. Lomenzo, 29 N.Y.2d 468, 476, 329 N.Y.S.2d 805, 810, 280 N.E.2d 640, 643; East Meadow Community Concerts Assn. v. Board of Educ., 18 N.Y.2d 129, 133, 272 N.Y.S.2d 341, 344, 219 N.E.2d 172, 174; cf. Matter of Bell v. Waterfront Comm., 20 N.Y.2d 54, 61, 281 N.Y.S.2d 753, 759, 228 N.E.2d 758, 762; Matter of United Press Assns. v. Valente, 308 N.Y. 71, 76, 123 N.E.2d 777, cases in which the retention of jurisdiction by the Appellate Division has been approved despite mooting of important recurring public issues). Petitioners argue that the agency, by arrogation of jurisdiction, threatened reductions in rent in excess of the expense saved by decreasing services. The threatened hardship, it is said, forced landlords to settle on the union's terms. If these assertions are supported, a difficult and important question would be reached whether the agency's action was an impermissible favoring of one side or the other in the labor dispute. In this sense it may be necessary to reach not only the question of naked authority to reduce rents but also by what formula rents should be adjusted, if the interference is to be as neutral as the circumstances permit. The city contends,...