Elisa Downing, et al., Respondents, v, First Lenox Terrace Associates, et al., Appellants.BriefN.Y.October 14, 2014To be Argued by: TODD E. SOLOWAY (Time Requested: 30 Minutes) APL-2013-00314 New York County Clerk’s Index No. 100725/10 Court of Appeals of the State of New York ELISE DOWNING, LOIS HENRY, LARRY MCMILLAN, LYNDA STEWART, ALBERT TAYLOR, MARY WHITE, TEZ BOIS, BARBARA JONES, JERILYN MABRY, VANESSA MACDONNA, RISA SCHNEIDER, GEORGE STARCKEY, and YVONNE STONE, On Behalf of Themselves and All Others Similarly Situated, Plaintiffs-Respondents, - against - FIRST LENOX TERRACE ASSOCIATES, SECOND LENOX TERRACE ASSOCIATES, THIRD LENOX TERRACE ASSOCIATES, FOURTH LENOX TERRACE ASSOCIATES, FIFTH LENOX TERRACE ASSOCIATES, SIXTH LENOX TERRACE ASSOCIATES, and ROC-CENTURY ASSOCIATES, LLC, THE TRUST U/W/O ROBERT S. OLNICK, ROBERT S. OLNICK and SYLVIA OLNICK IRREVOCABLE TRUST, THE MILTON SCHUMER TRUST, LFI MARINA, LLC, MEREDITH LANE VERONA, NANCY OLNICK SPANU, RUTH FEINBERG and TOBETTE FEINBERT, Defendants-Appellants. REPLY BRIEF FOR DEFENDANTS-APPELLANTS PRYOR CASHMAN LLP 7 Times Square New York, New York 10036 Tel.: (212) 421-4100 Fax: (212) 326-0806 - and - MICHAEL B. KRAMER & ASSOCIATES 150 East 58th Street New York, New York 10155 Tel.: (212) 319-0304 Fax: (212) 319-0545 Attorneys for Defendants-Appellants Date Completed: April 11, 2014 i TABLE OF CONTENTS TABLE OF AUTHORITIES .................................................................................... ii PRELIMINARY STATEMENT ............................................................................... 1 A. CPLR § 901(b) Bars Respondents From Maintaining This Case As A Class Action ................................................... 1 B. RSL § 26-516(a)’s Penalty Cannot Be Waived ............................................. 4 C. Permitting The Waiver Of RSL § 26-516(a)’s Penalty Would Erode The Protections Of The Rent Stabilization Scheme ............... 6 ARGUMENT ............................................................................................................. 8 I. RESPONDENTS’ INTERPRETATION OF ARTICLE 9 CANNOT BE RECONCILED WITH THE INTENT OF THE LEGISLATURE ........ 8 A. The Class Action Device Is “Controlled Remedy” Available As An Incentive To Litigate Modest Claims Only Where Such Incentives Otherwise Do Not Exist ........................ 8 B. Plaintiffs Cannot Waive A Mandatory Statutory Penalty To Maintain A Class Action .................................. 12 C. Issue Certification and Opt-Out Rights Are A Red Herring .............. 19 II. THE TREBLE DAMAGES PENALTY IMPOSED BY RSL 26-516(A) CANNOT BE WAIVED ............................................. 20 A. RSL § 26-516(a) Imposes A Penalty That Cannot Be Waived .......... 20 B. Allowing The Waiver Of The Treble Damages Penalty Will Erode The Protection Of Tenants That Is The Central Purpose Of The Rent Stabilization Law ............ 24 CONCLUSION ........................................................................................................ 28 ii TABLE OF AUTHORITIES CASES PAGE(s) Amerelay, Inc. v. Directomat, Inc., 7 A.D.2d 388, 183 N.Y.S.2d 639 (1st Dep’t 1959) ....................................... 18 Archibald v. Marshalls of MA, Inc., No. 09 CV 2323 (LAP), 2009 U.S. Dist. LEXIS 106467 (S.D.N.Y. Nov. 12, 2009) .............................................................................. 23 Asher v. Abbott Laboratories, 290 A.D.2d 208, 737 N.Y.S.2d 4 (1st Dep’t 2002) ............................. 5, 18, 23 Bender v. Jamaica Hospital, 40 N.Y.2d 560, 388 N.Y.S.2d 269 (1976) ..................................................... 14 Chemical Specialties Manufacturers Association v. Jorling, 85 N.Y.2d 382, 626 N.Y.S.2d 1 (1995) ............................................... 2, 13, 14 Cohen v. Gerson Lehrman Group, Inc., 686 F. Supp. 2d 317 (S.D.N.Y. 2010) ........................................................... 23 Cox v. Microsoft Corp., 8 A.D.3d 39, 778 N.Y.S.2d 147 (1st Dep’t 2004) ..................................... 5, 22 Drucker v. Mauro, 30 A.D.3d 37, 814 N.Y.S.2d 43 (1st Dep’t 2006) ................................... 24, 25 Extell Belnord LLC v. Uppman, No. 10604, 2013 N.Y. App. Div. LEXIS 7642 (1st Dep’t Nov. 19, 2013) .............................................................................. 24 Goshen v. Mutual Life Insurance Co., Index No. 600466/95-006 (BS), 1997 N.Y. Misc. LEXIS 486 (Sup.Ct. Oct. 21, 1997), aff’d, 259 A.D.2d 360, 684 N.Y.S.2d 791 (1st Dep’t 1999), aff’d subnom. as modified, Gaidon v. Guardian Life Ins. Co. of America, 94 N.Y.2d 330, 704 N.Y.S.2d 177 (1999) ................................. 6, 23 iii CASES PAGE(s) Gudz v. Jemrock Realty Co., LLC, 105 A.D.3d 625, 964 N.Y.S.2d 118 (1st Dep’t 2013) ....................... 15, 17, 26 Hill v. Wek Capital Corp., 4 A.D.2d 615 (1st Dep’t 1957) ...................................................................... 26 Jazilek v. Abart Holdings LLC, 10 N.Y.3d 943, 862 N.Y.S.2d 854 (2008) ....................................... 6, 7, 24, 25 Leider v. Ralfe, 387 F. Supp. 2d 283 (S.D.N.Y. 2005) ........................................................... 23 Lewis v. National Financial System, Inc., No. 06-1308, 2007 U.S. Dist. LEXIS 62320 (E.D.N.Y. Aug. 23, 2007) .............................................................................. 23 Lex 33 Associates, L.P. v. Grasso, 283 A.D.2d 272, 724 N.Y.S.2d 413 (1st Dep’t 2001) ................................... 18 Livbros L.L.C. v. Vandenburgh, 179 Misc. 2d 736, 686 N.Y.S.2d 275 (Civ. Ct., Kings Cnty. 1999) ............. 26 Mascol v. E&L Transport, Inc., No.CV-03-3343 CPS, 2005 U.S. Dist. LEXIS 32634 (E.D.N.Y. June 29, 2005) .............................................................................. 23 Matinzi v. Joy, 60 N.Y.2d 835 (1983) .............................................................................. 25, 26 Mitchell v. New York Hospital, 61 N.Y.2d 208, 473 N.Y.S.2d 148 (1984) ..................................................... 18 In re Petition of N.Y., Lackawanna & W. R.R. Co., 98 N.Y. 447 (1885) ........................................................................................ 18 Noble v. 93 Univ. Place Corp., 224 F.R.D. 330 (S.D.N.Y. 2004) ................................................................... 23 iv CASES PAGE(s) Pesantez v. Boyle Environmental Services, Inc., 251 A.D.2d 11, 673 N.Y.S.2d 659 (1st Dep’t 1998) ................................. 5, 23 Pierpoint v. Hoyt, 260 N.Y. 26 (1933) ........................................................................................ 19 Raritan Development Corp. v. Silva, 91 N.Y.2d 98, 667 N.Y.S.2d 327 (1997) ....................................................... 14 Riverside Syndicate, Inc. v. Munroe, 39 A.D.3d 256, 833 N.Y.S.2d 452 (1st Dep’t 2007), aff’d, 10 N.Y.3d 18, 853 N.Y.S.2d 263 (2008) ............................................................... 7, 24, 25 Rudgayzer & Gratt v. LRS Communications, Inc., 6 Misc. 3d 20, 789 N.Y.S.2d 601 (App. Term 2d Dep’t 2004) ........... 6, 18, 23 Smellie v. Mount Sinai Hospital, No. 03 Civ. 0805, 2004 U.S. Dist. LEXIS 24006 (S.D.N.Y. Nov. 24, 2004) ........................................................................ 18, 23 Sperry v. Crompton Corp., 8 N.Y.3d 204, 831 N.Y.S.2d 760 (2007) ................................................... 9, 10 Toure v. Central Parking Systems of New York, No. 05 Civ. 5237(WHP), 2007 U.S. Dist. LEXIS 74056 (S.D.N.Y. Sept. 28, 2007) .............................................................................. 22 Vallone v. Delpark Equities, Inc., 95 Misc. 2d 161, 407 N.Y.S.2d 121 (Sup. Ct. 1978) ...................................... 9 STATUTES N.Y. CPLR § 901(a) ................................................................................................ 19 N.Y. CPLR § 901(b) .........................................................................................passim N.Y. GBL § 349 ................................................................................................... 5, 22 v STATUTES PAGE(s) N.Y. GBL § 349(h) .................................................................................................. 22 N.Y. GBL § 340(5) .............................................................................................. 5, 21 N.Y. Insurance Law § 4226 ................................................................................. 6, 23 N.Y. Labor Law § 198(1-a) ................................................................................. 5, 22 N.Y. Labor Law Labor Law § 663 .......................................................................... 23 9 N.Y.C.R.R. § 2520.13 ....................................................................................passim N.Y. Rent Stabilization Law § 26-516(a) .........................................................passim McKinney’s Cons. Laws of N.Y., Book 1, Statutes § 94 ........................................ 14 McKinney’s Cons. Laws of N.Y., Book 1, Statutes § 240 ...................................... 14 McKinney’s Cons. Laws of N.Y., Book 1, Statutes § 363 ...................................... 14 Telephone Consumer Protection Act § 227(e)(5)(A)(1) ..................................... 6, 23 LEGISLATIVE HISTORY Executive Chamber Mem, Bill Jacket, L 1975, ch 207 ....................................... 1, 17 Governor’s Approval Memorandum, Bill Jacket, L 1975, ch 207 ...................... 9, 20 Mem in Support of State Consumer Protection Bd, May 29, 1975, Bill Jacket, L 1975, ch 207 ...................................................................... 11, 12 Sponsor’s Mem, Bill Jacket, L 1975, ch 207 ....................................................... 8, 10 OTHER DHCR, Policy Statement 89-2, Application of the Treble Damages Penalty (Apr. 26, 2013) ..................................................................................................... 4, 21 Defendants-Appellants First Lenox Terrace Associates, Second Lenox Terrace Associates, Third Lenox Terrace Associates, Fourth Lenox Terrace Associates, Fifth Lenox Terrace Associates, Sixth Lenox Terrace Associates, Roc- Century Associates, LLC, the Trust u/w/o Robert S. Olnick, Robert S. Olnick and Sylvia Olnick Irrevocable Trust, The Milton Schumer Trust, LFI Marina, LLC, Meredith Lane Verona, Nancy Olnick Spanu, Ruth Feinberg and Tobette Feinberg (“Appellants”) respectfully submit this reply brief in further support of their appeal of the Order.1 PRELIMINARY STATEMENT A. CPLR § 901(b) Bars Respondents From Maintaining This Case As A Class Action In drafting Article 9 of the CPLR, the Legislature provided a “controlled remedy” to incentivize the litigation of modest financial claims while at the same time shielding class opponents from the potential for abuse by unscrupulous counsel. Executive Chamber Mem, Bill Jacket, L 1975, ch 207. CPLR § 901(b) was added as a fundamental protection against such abuse, as it foreclosed class actions where sufficient economic encouragement to institute actions (through statutory provisions awarding something beyond or unrelated to actual damages) already existed, thus negating the need to encourage litigation through the device 1 All capitalized terms not defined herein shall have the same meaning as set forth in Appellants’ appeal brief, dated December 20, 2014. A copy of the Order is found at pages 498- 510 of the Record on Appeal. Citations to the Record on Appeal are referenced herein as “R. __.” 2 of the class action. Respondents concede this basic purpose of CPLR § 901(b), and further concede that both class actions and statutory penalties such as that imposed by RSL § 26-516(a) serve the same purpose of “encouraging suits where the amounts involved might otherwise be too small.” (Opp. at 15, 27, 32.) Nonetheless, seeking to gerrymander their way around this statutory prohibition, Respondents contend that - despite its plain language and the intent of the Legislature - § 901(b) should not be enforced as a bar to class actions invoking RSL § 26-516(a) because, paradoxically, “[a]llowing plaintiffs to bring class actions for relief excluding penalties . . . furthers the purposes of the statutes that provide the penalties.” (Opp. at 15 (emphasis added)). However, no provision in § 901(b) (or elsewhere in Article 9) authorizes parties to disregard the prohibition set forth in § 901(b) for any reason - whether due to any alleged conflict between the bar and the statute providing a penalty or otherwise - and to read such discretion into the statute, as Respondents suggest, violates the well-settled canon of statutory construction that a court not “read into a statute a provision which the Legislature did not see fit to enact.” Chemical Specialties Mfrs. Ass’n v. Jorling, 85 N.Y.2d 382, 394, 626 N.Y.S.2d 1, 7 (1995) (citation omitted). Akin to the paradox noted above, Respondents’ argument is based on the 3 false premise that enforcing § 901(b) would result in the treble damages penalty in RSL § 26-516(a) becoming a disincentive to litigate because “[i]ndividual damages may be so small that, even trebled, they are dwarfed by the costs of litigation.” (Opp. at 2, 15, 24.) But Respondents’ position is fallacious, and further illustrates the dangers in allowing a putative plaintiff to waive a statutory penalty in order to maintain a class action and thereby evade one of the Legislature’s stated protections against class action abuse. First, it is difficult to fathom Respondents’ contention that a tenant waiving the right to treble damages to maintain a class action would benefit financially or otherwise as a result of having done so: whether proceeding individually or as part of a class, the tenant is entitled to recover the amount of the rent overcharge, plus interest and reasonable attorneys’ fees. Only by proceeding individually would the tenant retain the prospect of a treble damages penalty. Therefore, waiving treble damages in order to proceed as class plaintiffs is neither “efficient” nor “effective” as Respondents’ repeatedly claim, and serves only to reduce the potential optimal recovery for the tenant. Second, the only beneficiary in such a scenario is the class action counsel seeking to pool together groups of tenants for his or her own pecuniary gain; forestalling such perverse incentives was an express goal of the Legislature in enacting Article 9. Accordingly, because 26-516(a) mandatorily imposes a statutory penalty, 4 this case may not be maintained as a class action. B. RSL § 26-516(a)’s Penalty Cannot Be Waived In a further attempt to gerrymander class jurisdiction, Respondents assert that § 901(b) does not apply here because they may waive the statutory penalty imposed by RSL § 26-516(a) as “nothing in RSL § 26-516(a) prevents a tenant who has been overcharged from conceding non-willfulness or otherwise forgoing the statutory penalty.” (Opp. at 14, 17.) This argument is fundamentally flawed. A tenant has no ability to determine under RSL § 26-516(a) whether he or she receives treble damages, and thus he or she has no ability to waive the treble damages penalty to evade the bar of CPLR § 901(b). See RSL § 26-516(a) (an overcharging landlord “shall be liable to the tenant for a penalty equal to three times the amount of such overcharge”); see also DHCR, Policy Statement 89-2, Application of the Treble Damages Penalty (Apr. 26, 2013) (“The statute [RSL § 26-516(a)], in fact, creates a presumption of willfulness subject to rebuttal by the owner showing non-willfulness of the overcharge by a preponderance of the evidence. In the absence of such affirmative proof by the owner or after the submission of inadequate proof, DHCR staff shall assess treble damages where a determination of overcharge is made.”) (emphasis added). The penalty is subject to imposition without regard to whether the tenant seeks it, and the tenant is not required to meet any burden beyond establishing an overcharge to obtain the 5 punitive remedy. See RSL § 26-516(a). As a matter of law, therefore, an action to recover a rent overcharge is an action to recover treble damages, interest and attorneys’ fees. In seeking to recover a rent overcharge, a tenant necessarily seeks treble damages, interest and attorneys’ fees as well. Respondents again do not challenge the meaning of this statutory language, studiously avoiding any opportunity to explain how the language of RSL § 26- 516(a) provides them a right to forgo the statutory penalty. In an effort to support their flawed argument, Respondents instead cite to cases purportedly allowing plaintiffs to waive a penalty to maintain a class action. These cases are entirely inapposite, however, as they all concern manifestly distinguishable permissive statutory provisions which, unlike the mandatory, non- waivable penalty provision contained in RSL § 26-516(a), allow a plaintiff to elect whether to seek a penalty.2 Courts addressing statutes that, like RSL § 26-516, contain statutorily mandated penalties requiring no affirmative conduct by the plaintiff for recovery, have consistently held such penalties may not be waived to maintain a class action. See, e.g., Asher v. Abbott Labs., 290 A.D.2d 208, 208, 737 N.Y.S.2d 4, 4 (1st Dep’t 2002) (no class action where Donnelly Act (GBL § 340(5)) dictates that plaintiff “shall recover three-fold the actual damages . . .”) 2 See, e.g., Cox v. Microsoft Corp., 8 A.D.3d 39, 778 N.Y.S.2d 147 (1st Dep’t 2004) (penalty which “may” be sought by a plaintiff under General Business Law (“GBL”) § 349 is waivable) and Pesantez v. Boyle Envtl. Servs., Inc., 251 A.D.2d 11, 673 N.Y.S.2d 659 (1st Dep’t 1998) (penalty “allowable” under Labor Law § 198(1-a) is not mandatory). 6 (emphasis added); Rudgayzer & Gratt v. LRS Communications, Inc., 6 Misc. 3d 20; 789 N.Y.S.2d 601 (App. Term 2d Dep’t 2004) (no class action where the Telephone Consumer Protection Act § 227(e)(5)(A)(1) dictates that violating defendant “shall be liable to the United States for a forfeiture penalty”) (emphasis added); Goshen v. Mutual Life Ins. Co., Index No. 600466/95-006 (BS), 1997 N.Y. Misc. LEXIS 486 (Sup. Ct. Oct. 21, 1997 ), aff’d, 259 A.D.2d 360, 684 N.Y.S.2d 791 (1st Dep’t 1999), aff’d sub nom. as modified, Gaidon v. Guardian Life Ins. Co. of Am., 94 N.Y.2d 330, 704 N.Y.S.2d 177 (1999) (no class action where the New York Insurance Law § 4226 dictates that violating insurer “shall . . . be liable to a penalty in the amount of such premium or compensation”) (emphasis added). The Order erroneously permits a plaintiff to waive a penalty in order to maintain a class action, which is contrary to the plain language of CPLR § 901(b) and the intent of the Legislature. C. Permitting The Waiver Of RSL § 26-516(a)’s Penalty Would Erode The Protections Of The Rent Stabilization Scheme Consistent with the long-standing public policy principle - as reflected in RSL § 26-516(a) (as well as § 2520.13 of the Rent Stabilization Code) and numerous judicial decisions over the past twenty years (including two recent decisions by this Court in Jazilek v. Abart Holdings LLC and Riverside Syndicate, 7 Inc. v. Munroe3) - that a central goal of the rent regulatory scheme is to prevent uncertainty and thereby enhance the social, economic and demographic stability of New York City, an agreement by a tenant to waive the benefit of any provision of the RSL or Rent Stabilization Code is void. Given the strong public policy underlying this rule, no court - under any circumstances - has ever held that a tenant’s waiver of rights under the RSL is permissible. To the contrary, before the Appellate Division’s decisions here and in Gudz and Borden, courts had uniformly held that attempted waivers of any rights under the RSL are barred even where the waiver would benefit the tenant. Respondents do not and cannot contest this basic rule of law. Rather, confusingly they argue that allowing a “unilateral waiver” of a statutory protection provided by the Rent Stabilization Code will “effectuate, rather than affront, the public policy of this state.” (Opp. at 24.) This odd precept - that by an affirmation submitted by class counsel in opposition to a motion to dismiss, Respondents forgo the most significant aspect of their potential damages award (in an act designed to hold together a class that otherwise would not exist) and thereby further the public policy of New York - is demonstrably flawed. 3 Jazilek v. Abart Holdings LLC, 10 N.Y.3d 943, 862 N.Y.S.2d 854 (2008); Riverside Syndicate, Inc. v. Munroe, 39 A.D.3d 256, 833 N.Y.S.2d 452 (1st Dep’t 2007), aff’d, 10 N.Y.3d 18, 853 N.Y.S.2d 263 (2008). 8 Permitting such a waiver will erode the protections of the rent regulatory scheme in unpredictable ways, undermining the strong public policy articulated by § 2520.13’s “no waiver” rule. One need look no further than this case to see how permitting even unilateral waivers can endanger tenants. A tenant waiving her right to treble damages under RSL 26-516(a) to maintain a class action cannot benefit financially or otherwise as a result of having done so; the only beneficiary to such a waiver would be the class action counsel seeking to pool together groups of tenants for his or her own pecuniary gain, a result that is directly at odds with both the express goal of Article 9 and the central public policy aims of the rent regulatory scheme to protect tenants. For all of the foregoing reasons, and the reasons set forth in Appellants’ opening brief, the Order should be reversed. ARGUMENT I. RESPONDENTS’ INTERPRETATION OF ARTICLE 9 CANNOT BE RECONCILED WITH THE INTENT OF THE LEGISLATURE A. The Class Action Device Is A “Controlled Remedy” Available As An Incentive To Litigate Modest Claims Only Where Such Incentives Otherwise Do Not Exist Consistent with its express purpose to provide a “flexible, but controlled remedy which respects the rights of the class as well as its opponent” (Sponsor’s Mem, Bill Jacket, L 1975, ch 207 (emphasis added)), the Legislature incorporated procedural safeguards into Article 9 in recognition “that the class action device 9 was a potent weapon, of great coercive power and subject to gross potential abuse including the stirring up of unwarranted litigation and efforts designed purely for client solicitation.” See Vallone v. Delpark Equities, Inc., 95 Misc. 2d 161, 164, 407 N.Y.S.2d 121, 124 (Sup. Ct. 1978) (emphasis added) (citation omitted); see also Governor’s Approval Memorandum, Bill Jacket, L 1975, ch 207 (“[Article 9] promulgates detailed guidelines and prerequisites to the maintenance of a class action suit . . . to prevent abuse of the class action device and provide[] a controlled remedy”) (emphasis added). A principal safeguard against such potential abuse is CPLR § 901(b), which dictates that a class action may not be maintained when the putative class is suing pursuant to a statute that imposes a penalty, absent specific statutory authorization permitting such an action. CPLR § 901(b). Explaining this bar to maintaining a class action, this Court has stated that: It is evident that by including the penalty exception in CPLR 901(b), the Legislature declined to make class actions available where individual plaintiffs were afforded sufficient economic encouragement to institute actions (through statutory provisions awarding something beyond or unrelated to actual damages), unless a statute expressly authorized the option of class action status. Sperry v. Crompton Corp., 8 N.Y.3d 204, 213, 831 N.Y.S.2d 760, 765 (2007) (emphasis added). Accordingly, “there [is] no need to permit class actions in order to encourage litigation by aggregating damages when statutory penalties and 10 minimum measures of recovery provide[] an aggrieved party with a sufficient economic incentive to pursue a claim.” Id. at 211, 831 N.Y.S.2d at 763. The legislative history for CPLR § 901(b) confirms that the statute absolutely “precludes a class action based on a statute creating or imposing a penalty or minimum measure of recovery unless the specific statute allows for a class action.” Id. at 211, 831 N.Y.S.2d at 763 (quoting Sponsor’s Mem., Bill Jacket, L 1975, ch. 207) (emphasis added). As Assemblyman Stanley Fink, the bill’s sponsor, explained, because “[t]hese penalties or ‘minimum damages’ are provided as a means of encouraging suits where the amounts involved might otherwise be too small.” Sponsor’s Mem, Bill Jacket, L 1975, ch 207. Thus, as this Court held in Sperry, by legislative direction “[w]here a statute is already designed to foster litigation through an enhanced award, CPLR 901(b) acts to restrict recoveries in class actions absent statutory authorization.” 8 N.Y.3d at 214, 831 N.Y.S.2d at 765. While Respondents concede that “class actions and penalties serve a similar purpose: . . . ‘encouraging suits where the amounts involved might otherwise be too small,’” (Opp. at 15, 27, 32 (citing Sponsor’s Mem, Bill Jacket, L 1975, ch 207)), Respondents misinterpret the legislative history to support their argument that class plaintiffs can waive statutory penalties to avoid the bar of CPLR § 901(b). As noted, however, the legislative history and the plain language of 11 § 901(b) in fact dictate the opposite conclusion: where a statute provides for recovery of more than actual damages, an action brought under such statute may not be maintained as a class action. First, Respondents erroneously contend that Assemblyman Fink’s statement that “[a] statutory class action for actual damages would still be permissible” means that class plaintiffs can waive statutorily imposed penalties and seek only actual damages. (Opp. at 28.) However, Respondents’ position overlooks the context of Assemblyman Fink’s entire statement, which is predicated on the proposition that class actions cannot be brought under a statute that provides for recovery of more than actual damages. Indeed, that context demonstrates that Assemblyman Fink was distinguishing between a class action based on the violation of a statute imposing a penalty and a class action based on the violation of a statute that provides for the recovery of actual damages and that does not impose a penalty. The former is precluded, while the latter is allowed. Second, Respondents also misinterpret the New York State Consumer Protection Board’s Memorandum in Support as supposedly supporting waiver of statutory penalties to maintain a class action, because it states that “if the members of a class who would be entitled to a penalty sue only for their actual damages, they may do so in a class action.” Mem in Support of State Consumer Protection Bd, May 29, 1975, Bill Jacket, L 1975, ch 207. But again, Respondents disregard 12 the context of the quoted language which, as its footnote clearly indicates, addresses only a single, proposed statute that expressly would allow a plaintiff to sue for the “larger of actual damages or [a] fifty dollar” minimum recovery. Id. at n.16. As the footnote further explains, only where actual damages exceeded the minimum penalty, and thus the statute provided no incentive for a plaintiff to pursue litigation, would a class suit be permitted. Id. Quite clearly, as this Court acknowledged in Sperry, the language and legislative history of CPLR § 901(b) seeks to limit class actions to those cases in which a statute does not otherwise provide an incentive for a plaintiff to bring a claim. B. Plaintiffs Cannot Waive A Mandatory Statutory Penalty To Maintain A Class Action The treble damages penalty imposed by RSL § 26-516(a) provides the very “economic encouragement” to bring rent overcharge claims that renders a class action unnecessary and thus unavailable pursuant to CPLR § 901(b). Seeking to end-run this statutory prohibition, Respondents argue that - despite its plain language and the intent of the Legislature - § 901(b) should not be enforced as a bar to class actions pursuant to a statute providing for recovery of more than actual damages (such as RSL § 26-516(a)) because, paradoxically, “[a]llowing plaintiffs to bring class actions for relief excluding penalties . . . furthers the purposes of the statutes that provide the penalties.” (Opp. at 15 13 (emphasis added)). Specifically, Respondents assert that enforcing § 901(b) as drafted and as intended by the Legislature would mean that “the very feature of RSL § 26-516(a) meant to enable lawsuits and ensure landlord accountability - the potential for treble damages - would be transmuted in any case with even a colorable non-willfulness defense from an incentive to sue into a senseless barrier to suit under Article 9” purportedly enabling institutions such as Appellants to “carry out policies or engage in activities harmful to large numbers of individuals with impunity.” (Opp. at 35-36). This incredible argument fails both as a matter of law and logic. First, Respondents cite no applicable legal support for this contrived position. Second, to adopt Respondents’ argument would require this Court to overlook well-settled canons of statutory construction and to subvert the expressed legislative intent in enacting CPLR § 901(b). As this Court has repeatedly instructed: New language cannot be imported into a statute to give it a meaning not otherwise found therein… [A] court cannot amend a statute by inserting words that are not there, nor will a court read into a statute a provision which the Legislature did not see fit to enact. Also, an inference must be drawn that what is omitted or not included was intended to be omitted and excluded. Chemical Specialties Mfrs. Ass’n, 85 N.Y.2d at 394, 626 N.Y.S.2d at 7 (internal citations & quotations omitted) (quoting McKinney’s Cons. Laws of N.Y., Book 1, 14 Statutes § 94, at 190, § 240, at 412, § 363, at 525). “[C]ourts are not free to legislate and if any unsought consequences result, the Legislature is best suited to evaluate and resolve them.” Raritan Dev. Corp. v. Silva, 91 N.Y.2d 98, 107, 667 N.Y.S.2d 327, 331 (1997) (quoting Bender v. Jamaica Hosp., 40 N.Y.2d 560, 562, 388 N.Y.S.2d 269, 270 (1976)). CPLR § 901(b) expressly states that “[u]nless a statute creating or imposing a penalty, or a minimum measure of recovery specifically authorizes the recovery thereof in a class action, an action to recover a penalty, or minimum measure of recovery created or imposed by statute may not be maintained as a class action.” CPLR § 901(b). No provision in § 901(b) (or elsewhere in Article 9) authorizes a court to disregard § 901(b)’s bar for any reason - whether due to any perceived conflict between the bar and the statute providing a penalty (or other incentive to litigate) or otherwise - and to read such discretion into the statute as Respondents suggest violates the well-settled canon of statutory construction that a court not “read into a statute a provision which the Legislature did not see fit to enact.” Chemical Specialites Mfrs. Ass’n, 85 N.Y.2d at 394, 626 N.Y.S.2d at 7 (citation & quotations omitted). Indeed, where, as here, no such right is afforded, “an inference must be drawn that what is omitted or not included was intended to be omitted and excluded.” Id. (citation & quotations omitted). That principle is particularly 15 appropriate in this case, given that, as the dissent in Gudz points out, “[s]ince the enactment of RSL 26-516(a) postdates that of CPLR 901(b), we must assume that the [L]egislature was aware that by denominating the treble damages award a ‘penalty’ it was foreclosing the maintenance of a class action suit.” Gudz v. Jemrock Realty Co., LLC, 105 A.D.3d 625, 627, 964 N.Y.S.2d 118, 120 (1st Dep’t 2013) (citations omitted). Moreover, Respondents’ argument is based on the false premise that enforcing § 901(b) would result in the treble damages penalty in RSL § 26-516(a) becoming a disincentive to litigate. Respondents repeatedly claim that proceeding by class action is “a well-considered strategy designed to efficiently and effectively procure relief,” purportedly much preferable to a situation where “[i]ndividual damages may be so small that, even trebled, they are dwarfed by the costs of litigation.” (Opp. at 2, 15, 24, 34.) But these purported “significant benefits” available to putative class plaintiffs - as contrasted with a tenant enforcing her rights in a landlord tenant proceeding - are purely illusory. In fact, Respondents’ contentions illustrate the dangers in allowing a putative plaintiff to waive a statutory penalty to maintain a class action and thereby evade one of the Legislature’s intended protections against class action abuse. As explained in Appellants’ opening brief, the Rent Stabilization Law entitles a tenant that has been overcharged to recover: (i) three times the amount of 16 the rent overcharge; (ii) interest; and (iii) the reasonable attorneys’ fees and costs incurred by the tenant in prosecuting the rent overcharge action. RSL § 26-516(a). Even if the landlord may be able to show by a preponderance of the evidence that the overcharge was not willful, the tenant’s minimum recovery remains the amount of the overcharge, plus interest and reasonable attorneys’ fees and costs. Id. By contrast, if the tenant were permitted to waive his or her right to recover the treble damages penalty in order to maintain a class action, his or her optimal recovery would be the amount of the rent overcharge, plus interest and reasonable attorneys’ fees. And to obtain this recovery - precisely the same recovery to which a tenant proceeding in landlord tenant court is, at a minimum, entitled - the tenant seeking to be a class action plaintiff will be required to comply with certification and other procedural requirements of Article 9 which are unnecessary if the tenant were to proceed individually in landlord-tenant court. Thus, a tenant waiving her right to treble damages to maintain a class action cannot benefit financially or otherwise as a result of having done so; under either scenario, the tenant is entitled to recover the rent overcharge, plus interest and reasonable attorneys’ fees, and only by proceeding individually - not in a class action - would the tenant retain the prospect of a treble damages penalty, no matter how remote such prospect is perceived to be. Such tenant also gains no more certainty by waiving the right to a penalty. 17 Therefore, waiving treble damages to proceed as a class action is neither “efficient” nor “effective,” and serves only to reduce the potential optimal recovery for the tenant. The only beneficiary in such circumstances would be the class action counsel seeking to pool together groups of tenants for his or her own pecuniary gain, and forestalling such conduct was an express goal of the Legislature in enacting Article 9. Executive Chamber Mem, Bill Jacket, L 1975, ch 207; see also Gudz, 105 A.D.3d at 627, 964 N.Y.S.2d at 121 (“to permit such a waiver would be to circumvent the clear intent of CPLR 901(b), which is to preclude the maintenance of a class action suit seeking a penalty”). Thus, for this additional reason, Respondents should not be permitted to maintain this putative class action. Finally, Respondents erroneously contend that prohibiting a waiver of penalties so as to enable them to manufacture a class action conflicts with the principle that litigants are “free to chart their own litigation course and fashion the basis upon which a particular controversy will be resolved.” (Opp. at 18.) But this does not mean a litigant can disregard the requirements and mandates of the statute pursuant to which they sue. Respondents’ bald statement completely neglects the fact that RSL § 26-516(a) itself does not permit a tenant to decide whether to seek treble damages and imposes them regardless of whether a tenant seeks them. RSL § 26-516(a). Upon demonstrating an overcharge, a tenant pursuing a claim under 18 § 26-516(a) is entitled to a statutorily prescribed punitive treble damages remedy, which the tenant takes automatically without any election or other action. Id. Only where the landlord is able to overcome the presumption of willfulness can the “penalty” imposed be reduced from treble damages to the amount of the overcharge plus interest and attorneys’ fees. What Respondents seek to do is not to chart their own litigation course, but to end-run the statute. Moreover, Respondents’ contention ignores the holdings in Asher v. Abbott Labs., 290 A.D.2d 208, 208, 737 N.Y.S.2d 4, 4 (1st Dep’t 2002) and Rudgayzer & Gratt v. LRS Comms., Inc., 6 Misc. 3d 20, 789 N.Y.S.2d 601, 603 (App. Term 2d Dep’t 2004), among other cases, that a plaintiff may not waive a mandatory statutory penalty in order to maintain a class action. Accordingly, in those instances where the Legislature has imposed a penalty or minimum measure of recovery, it has also precluded a class action.4 For all of these reasons, the Order should be reversed and the Complaint dismissed with prejudice. 4 Each of the cases cited by Respondents to support its argument are plainly inapposite, as they either involve statutory language that expressly permits the plaintiff to choose whether to seek a penalty (see Smellie v. Mount Sinai Hosp., No. 03 Civ. 0805, 2004 U.S. Dist. LEXIS 24006 (S.D.N.Y. Nov. 24, 2004)) or situations where there is no discussion of mandatory statutory language at all. See Amerelay, Inc. v. Directomat, Inc., 7 A.D.2d 388, 183 N.Y.S.2d 639 (1st Dep't 1959); Mitchell v. New York Hosp., 61 N.Y.2d 208, 473 N.Y.S.2d 148 (1984); Pierpoint v. Hoyt, 260 N.Y. 26, 30 (1933); In re Petition of N.Y., Lackawanna & W. R.R. Co., 98 N.Y. 447 (1885); Lex 33 Assocs., L.P. v. Grasso, 283 A.D.2d 272, 724 N.Y.S.2d 413 (1st Dep’t 2001). 19 C. Issue Certification and Opt-Out Rights Are A Red Herring In a brazen attempt to both salvage their class action status while at the same time reserving their right to pursue treble damages, Respondents argue that Article 9’s provisions allowing for issue certification and class opt-out provide a way for Respondents to maintain their class action while respecting the rights of all parties and the prohibition of CPLR 901(b). Respondents suggest that: Alternatively, a class may be certified for the purposes of resolving particular issues, excluding willfulness and the propriety of treble damages, leaving class members free to adjudicate the excluded issues [i.e., entitlement to treble damages] in individual lawsuits even if they participate in the class action. (Opp. at 3 (emphasis added).) This convoluted argument is perhaps Respondents most incredible effort to end-run the prohibition of CPLR § 901(b), as they purport an ability, by way of issue certification, to avoid the bar of § 901(b) while at the same time retaining their right to pursue treble damages. Initially, CPLR 901(a) and (b) are jurisdictional gatekeeping provisions. Respondents - unable to overcome the CPLR § 901(b) bar - cannot avail themselves of the procedural mechanisms of Article 9 to evade this bar. Moreover, allowing tenants to opt-out and to proceed by issue certification would only broaden (rather than narrow) the scope of litigation, nullifying any purported efficiency that could be gained by proceeding as a class. That course would also force Appellants to litigate not only a class action, as well as later 20 actions by class members seeking to obtain treble damages if the class action was successful, but also any number of actions by opting-out tenants. Thus, at the same time that Appellants would be forced to litigate on these various fronts, Respondents would reserve the right, after determination of the certified class issues, to pursue treble damages in a separate action. Such a result undermines the entire purpose of Article 9 as explained by then-Governor Carey when approving the new law: to “provide a controlled remedy which recognizes and respects the rights of the class as well as those of its opponent.” Governor’s Approval Memorandum, Bill Jacket, L 1975, ch 207. II. THE TREBLE DAMAGES PENALTY IMPOSED BY RSL 26-516(A) CANNOT BE WAIVED A. RSL § 26-516(a) Imposes A Penalty That Cannot Be Waived While asserting that Appellants “confuse a tenant’s right to treble damages in some circumstances with a tenant’s obligation to pursue them,” and that “nothing in RSL § 26-516(a) prevents a tenant who has been overcharged from conceding non-willfulness or otherwise forgoing the statutory penalty,” Respondents studiously avoid any opportunity to explain how the language of RSL § 26-516(a) provides them such a right to forgo the statutory penalty. (Opp. at 14, 17 (emphasis in original).) This is, of course, because RSL § 26-516(a) provides no such waiver right. Rather, by legislative direction, a tenant has no ability to determine under 21 RSL § 26-516(a) whether he or she receives treble damages, and thus, he or she has no ability to waive the treble damages penalty to evade the bar of CPLR § 901(b). See RSL § 26-516(a) (an overcharging landlord “shall be liable to the tenant for a penalty equal to three times the amount of such overcharge”);5 see also DHCR, Policy Statement 89-2, Application of the Treble Damages Penalty (Apr. 26, 2013) (“The statute [RSL § 26-516(a)], in fact, creates a presumption of willfulness subject to rebuttal by the owner showing non-willfulness of the overcharge by a preponderance of the evidence. In the absence of such affirmative proof by the owner or after the submission of inadequate proof, DHCR staff shall assess treble damages where a determination of overcharge is made.”) (emphasis added). Thus, by definition and as a matter of law, an action under RSL § 26- 516(a) is “an action to recover a penalty” which may not be maintained as a class action under CPLR § 901(b). In that regard, the penalty provision of RSL § 26-516(a) is virtually identical to that of the mandatory and automatic penalty provision of the Donnelly Act (GBL § 340(5)) (emphasis added), which dictates that “[a]ny person who shall sustain damages by reason of any violation of this section, shall recover three-fold the actual damages sustained thereby . . .,” and bears no resemblance to the 5 To support their argument, Respondents blatantly mischaracterize this language of RSL § 26-516(a) as merely “contemplat[ing] that, in some circumstances - namely, when overcharges were willful - tenants may be entitled to treble damages.” (Opp. at 2.) RSL § 26-516(a)’s penalty language is hardly this equivocal. 22 permissive provisions of GBL § 349(h) or Labor Law § 198(1-a).6 Nonetheless, Respondents repeatedly invoke these and other inapposite, permissive statutory provisions - going so far as to disingenuously claim that Labor Law § 198(1-a) “includes a nearly identical provision to” RSL§ 26-516(a) (Opp. at 29) - to support its misleading claim that “every department of the Appellate Division to have considered the issue, where a statute contemplates recovery of both actual damages and either a penalty or minimum damages, plaintiffs may pursue a class action by forgoing the penalty or minimum damages and seeking only actual damages as relief in the class action.” (Opp. at 28.) 7 All of these cases are expressly distinguishable, as they involve permissive statutory provisions unlike the mandatory, non-waivable penalty provisions contained in the Donnelly Act and RSL § 26-516(a). See, e.g., Asher, 290 A.D.2d at 208, 737 N.Y.S.2d at 4.8 6 As explained in Appellants’ opening brief, whereas RSL § 26-516(a) dictates that an overcharging landlord “shall be liable” for the specified penalties, GBL § 349(h) provides that an aggrieved party “may bring in his own name to enjoin such unlawful act or practice, an action to recover his actual damages or [a penalty of] fifty dollars… or both….” GBL § 349(h) (emphasis added). Similarly, the penalty provision of New York Labor Law § 198(1-a) provides that a court “shall allow” a plaintiff to recover a liquidated damages penalty. It follows that a court cannot be called upon to “allow” a claim for a penalty unless a plaintiff actively seeks one, and thus courts have held that, if a plaintiff does not desire or seek a penalty in connection with a Labor Law § 198(1-a) claim, there is no basis for allowing one (whether in a class action or otherwise). Labor Law § 198(1-a) (emphasis added). 7 Respondents seek to distinguish the Donnelly Act on the basis that it “does not contemplate actual damages as an available remedy.” (Opp. at 25.) But, as explained herein, RSL § 26-516(a) also does not contemplate actual damages as an available remedy, as such penalty is mandatory. 8 See, e.g., Cox v. Microsoft Corp., 8 A.D.3d 39, 778 N.Y.S.2d 147 (1st Dep’t 2004) (penalty which “may” be sought by a plaintiff under GBL § 349 is waivable); Toure v. Central 23 Courts addressing statutes that, like RSL § 26-516 and the Donnelly Act, award statutorily mandated penalties without requiring any affirmative conduct by the plaintiff, have consistently held such penalties may not be waived to maintain a class action. See, e.g., Rudgayzer & Gratt, 6 Misc. 3d 20; 789 N.Y.S.2d 601 (holding that CPLR § 901(b) barred class action recovery under the Telephone Consumer Protection Act § 227(e)(5)(A)(1) because it dictates that “[a]ny person that is determined by the Commission…to have violated this subsection shall be liable to the United States for a forfeiture penalty”) (emphasis added); Goshen v. Mutual Life Ins. Co., Index No. 600466/95-006 (BS), 1997 N.Y. Misc. LEXIS 486 (Sup. Ct. Oct. 21, 1997), aff’d, 259 A.D.2d 360, 684 N.Y.S.2d 791 (1st Dep’t 1999), aff’d sub nom. as modified, Gaidon v. Guardian Life Ins. Co. of Am., 94 N.Y.2d 330, 704 N.Y.S.2d 177 (1999) (barring recovery as a class action under New York Insurance Law § 4226 because it states that an insurer that knowingly in violation “shall . . . be liable to a penalty in the amount of such premium or compensation . . .”) (emphasis added). Parking Sys. of New York, No. 05 Civ. 5237(WHP), 2007 U.S. Dist. LEXIS 74056 (S.D.N.Y. Sept. 28, 2007) (same); Leider v. Ralfe, 387 F. Supp. 2d 283 (S.D.N.Y. 2005) (same); and Pesantez v. Boyle Envtl. Servs., Inc., 251 A.D.2d 11, 673 N.Y.S.2d 659 (1st Dep’t 1998) (penalty “allowable” under Labor Law § 198(1-a) is not mandatory); Smellie v. Mount Sinai Hosp., No. 03 Civ. 0805, 2004 U.S. Dist. LEXIS 24006 (S.D.N.Y. Nov. 24, 2004) (same); Cohen v. Gerson Lehrman Grp., Inc., 686 F. Supp. 2d 317 (S.D.N.Y. 2010) (same); Archibald v. Marshalls of MA, Inc., No. 09 CV 2323 (LAP), 2009 U.S. Dist. LEXIS 106467 (S.D.N.Y. Nov. 12, 2009) (same) and Lewis v. National Fin. Sys., Inc., No. 06-1308, 2007 U.S. Dist. LEXIS 62320 (E.D.N.Y. Aug. 23, 2007) (penalty which plaintiff “may recover” under Labor Law § 663 is waivable); Mascol v. E&L Transp., Inc., No. CV-03-3343 CPS, 2005 U.S. Dist. LEXIS 32634 (E.D.N.Y. June 29, 2005) (same); Noble v. 93 Univ. Place Corp., 224 F.R.D. 330 (S.D.N.Y. 2004) (same). 24 Because RSL § 26-516(a) imposes a mandatory penalty, Respondents cannot evade the proscription of CPLR § 901(b) by purporting to “waive” their rights to recover the penalties provided by the statute. Accordingly, the Order should be reversed and the Complaint dismissed with prejudice. B. Allowing The Waiver Of The Treble Damages Penalty Will Erode The Protection Of Tenants That Is The Central Purpose Of The Rent Stabilization Law Pursuant to the express provisions of the Rent Stabilization Code (9 N.Y.C.R.R. § 2520.13) and black letter law, even where a waiver would benefit the tenant, “[a]n agreement by the tenant to waive the benefit of any provision of the RSL or this Code is void.” See Drucker v. Mauro, 30 A.D.3d 37, 40, 814 N.Y.S.2d 43, 45 (1st Dep’t 2006) (any attempted waiver is not only voidable, but void); see also Extell Belnord LLC v. Uppman, No. 10604, 2013 N.Y. App. Div. LEXIS 7642, at *15 (1st Dep’t Nov. 19, 2013). This Court has twice held that § 2520.13 prohibits waivers, even where such waivers benefit the tenant. See Jazilek v. Abart Holdings LLC, 10 N.Y.3d 943, 944, 862 N.Y.S.2d 854, 855 (2008), aff’d, 72 A.D.3d 529, 899 N.Y.S.2d 198 (1st Dep’t 2010) (finding that a waiver of benefits under RSL in so-ordered stipulation “violates the Rent Stabilization Code and is void as against public policy”) (citation omitted); Riverside Syndicate, Inc. v. Munroe, 39 A.D.3d 256, 257, 833 N.Y.S.2d 452, 453 (1st Dep’t 2007), aff’d, 10 N.Y.3d 18, 853 N.Y.S.2d 263 (2008) 25 (affirming holding that consent judgment is void because it waived benefits under the RSL “notwithstanding that it does so to the tenants’ benefit…”). As Appellants previously explained, despite this precedent the Order announced a new rule exempting unilateral waivers of statutory protections under the Rent Stabilization Code from the public policy-based prohibition codified in § 2520.13. (R. 502). Respondents do not contest these basic principles. Rather, they argue that allowing a “unilateral waiver” of a statutory protection provided by the Rent Stabilization Code will “effectuate, rather than affront, the public policy of this state.” (Opp. at 24.) However, given the strong public policy embodied in the RSL, no court has ever held that a tenant’s waiver of rights under the RSL is permissible under any circumstances. To the contrary, before the Appellate Division’s decisions here and in Gudz and Borden, courts had uniformly held that attempted waivers of any rights under the RSL are barred even where the waiver would benefit the tenant. See Drucker, 30 A.D.3d at 38, 814 N.Y.S.2d at 48; Riverside Syndicate, 39 A.D.3d at 257, 833 N.Y.S.2d at 453; Jazilek, 10 N.Y.3d at 944.9 9 None of the cases cited by Respondents to support permitting a unilateral waiver involve a situation where, as here, a tenant seeks to waive a statutory benefit under the RSL in order to maintain a class action. See, e.g., Matinzi v. Joy, 60 N.Y.2d 835 (1983) (concerning the settlement of a bonafide dispute that the tenant then sought to have set aside); Hill v. Wek Capital Corp., 4 A.D.2d 615 (1st Dep’t 1957) (same); Livbros L.L.C. v. Vandenburgh, 179 Misc. 2d 736, 686 N.Y.S.2d 275 (Civ. Ct., Kings Cnty. 1999) (concerning a tenant that voluntarily gave notice 26 And in any event, despite their protestations to the contrary, Respondents’ conduct here in waiving treble damages on behalf of themselves and the entire putative class, depriving absent class members who inadvertently fail to opt-out of the class of the ability to obtain significant additional damages, itself threatens to undermine the entire rent stabilization scheme in ways that are difficult to predict. As the dissenting justices in Gudz recognized, this conflicts with the long-standing public policy principle, as reflected in RSL § 26-516(a) (as well as § 2520.13 of the Rent Stabilization Code), to protect tenants by preventing such uncertainty in furtherance of the central goal of the Rent Stabilization Law to enhance the social, economic and demographic stability of New York City. Gudz, 105 A.D.3d at 628, 964 N.Y.S.2d at 121. Indeed, as noted this case illustrates how permitting unilateral waivers can endanger tenants. As explained above, a tenant waiving her right to treble damages under RSL 26-516(a) to maintain a class action cannot benefit financially or otherwise as a result of having done so. Waiving treble damages for purposes of manufacturing a class would result in class plaintiffs at best obtaining the minimum they would recover in an individual landlord-tenant action, which is the amount of the overcharge, interest and attorneys’ fees. Only by proceeding of his intent to move out and then sought to rescind such notice). Indeed, the Matinzi case, decided by this Court, contain no discussion whatsoever of the propriety of a waiver of a statutory protection provided by the Rent Stabilization Code. 60 N.Y.2d at 836-37. 27 individually would the tenant retain the prospect of a treble damages penalty. The only beneficiary to such a waiver would be the class action counsel seeking to hold together a class for his or her own pecuniary gain, a result that is directly at odds with both the express goal of Article 9 and the central public policy aims of the rent regulatory scheme to protect tenants. Given the profound regulatory and public policy issues at risk if the Order is affirmed, for this additional, independent reason the Order should be reversed. CONCLUSION For the foregoing reasons and the reasons set forth in their opening brief, Appellants respectfully request that the Court: (i) reverse the Order appealed from; (ii) dismiss Respondents' Complaint in its entirety with prejudice; and (iii) award Appellants such other and further relief as the Court deems just and proper. Dated: New York, New York Aprilll, 2014 PRYOR CASHMAN LLP Joshua D. Bernstein Bryan T. Mohler 7 Times Square New York, New York 10036 (212) 421-4100 MICHAEL B. KRAMER & ASSOCIATES Michael B. Kramer 150 East 58th Street New York, New York 10155 (212) 319-0304 Attorneys for Defendants-Appellants 28