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Class Action Challenges Racially Discriminatory and Predatory Practices by HUD and Private Equity Fund

On August 12, 2016, ECBA and MFY Legal Services filed a federal class action challenging the legality of a Department of Housing and Urban Development (HUD) program that sells government-insured FHA home mortgages to private equity funds, leaving these borrowers without insurance-program benefits they are entitled to and putting them at heightened risk of foreclosure. The suit further alleges that HUD’s program violates the Fair Housing Act because HUD is disproportionately selling FHA loans issued to African-American borrowers in New York City for homes in predominantly African American neighborhoods like St. Albans, Queens.

 The lawsuit, filed in the Eastern District of New York, also challenges the actions of Lone Star Funds, the largest purchaser of mortgages sold through the HUD program. The lawsuit alleges that once Lone Star purchases the mortgages from HUD, it preys on the homeowners: the company makes false and misleading statements to the homeowners, refuses to offer homeowners loan modifications it is legally obligated to provide, and instead offers homeowners exploitative loan modifications that spell almost certain foreclosure for these borrowers down the line. The complaint also alleges that Lone Star violates the Fair Housing Act because its policies disproportionately impact African-American borrowers and predominantly African-American communities in New York City.

 The suit was covered by the New York Times on Monday, August 15, 2016. The putative class is represented by ECBA attorneys, Matthew D. Brinckerhoff and Diane L. Houk, along with co-counsel MFY Legal Services. A copy of the complaint is accessible here.

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Class Action Leads to End of Tampon Tax in New York State

Five months after five women filed a groundbreaking class action suit to end the Tampon Tax in New York, Governor Cuomo has signed legislation ending the illegal tax.

“We are thrilled New York State is finally repealing this discriminatory tax on all ‘menstruators’ and hope the nation will swiftly follow suit. It’s about time we all recognize the necessity of menstruation products and the obsolescence of their taxation,” said Plaintiff Margo Seibert, an actress in New York.

“Albany has finally seen the light! There’s more work to be done to ease access to these vital products, particularly for low income women, but repealing the tax was a great first step,” said Plaintiff Jennifer Moore, a children’s program coordinator.

“One state down, thirty-nine to go,” said Ilann M. Maazel, lead counsel for the plaintiffs. “This is a tremendous victory for women and for all New Yorkers. It will save women tens of millions of dollars. This lawsuit jumpstarted Albany into action. It’s the beginning of the end of the Tampon Tax in this country.”

“New York has finally stopped taxing women for being women. Now the governor should make sure that New York women who paid this sexist tax for years—especially those women who could least afford it—are compensated and reimbursed,” said Zoe Salzman, another lawyer for the women.

“From the time I entered law school 25 years ago, I’ve known that the tampon tax violated state and federal law. It’s a remnant of a time when all-male legislatures made decisions that devalued women’s interests. That New York State has finally ended this injustice is great cause for celebration,” said Laura Strausfeld, a lawyer who developed a critical theory of the lawsuit on behalf of the plaintiffs.

The five women who brought the case are an actor/co-founder of Racket., a mathematician/data scientist, a programs coordinator for children’s programs, a photographer, and a professor.

The plaintiffs congratulate Assemblywoman Linda Rosenthal for her leadership on this issue.

Follow the latest developments HERE. Read an interview with Zoe Salzman on the case and legislation here.

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Daniel Kornstein Published in the New York Law Journal

On July 20, 2016, Daniel Kornstein penned an insightful examination of the 2016 presidential campaign in the New York Law Journal. In his thought-provoking analysis, Kornstein ponders the corrosive influence of political defamation and negative campaigning on American democracy, and discusses whether or not the law should play a role in curtailing the threat posed by candidates’ dishonest and inflammatory comments.

To read Daniel Kornstein’s article titled, “Political Defamation and Democracy,” click here.

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Daniel Kornstein Joins the New York State Bar Association Journal Board of Editors

ECBA is proud to announce that Daniel Kornstein has been invited to join the Board of Editors of the New York State Bar Association Journal. The NYSBA Journal features articles relating to the practice of law in New York and is published nine times a year.

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Objecting Merchants Win as Second Circuit Vacates Class Action Settlement for Visa/Mastercard Interchange “Swipe” Fees

On June 30, 2016, the Second Circuit reversed the District Court’s approval of a class action settlement concerning the fees Visa and Mastercard charge merchants for accepting credit cards.  ECBA represents the leading merchant trade groups that objected to the settlement, The National Retail Federation and Retail Industries Leaders Association.  ECBA attorneys Andrew G. Celli, Jr. and Debra L. Greenberger wrote one of the two primary objecting merchant appeals briefs; Mr. Celli and ECBA attorney Diane Houk handled the case in the District Court.

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Appeals Court Blocks Construction of “Diller Island” Project

The Appellate Division, First Department granted a preliminary injunction today halting construction of the controversial $130 million Pier 55 project on the West Side of Manhattan until it rules on whether the project is lawful. Work crews began pre-construction work on the 2.7-acre landscaped island yesterday and were to begin placing concrete pilings on July 5.

ECBA represents The City Club of New York, Tom Fox, and Robert Buchanan in several actions to challenge the project. Petitioners contend that the project fails to comply with the Hudson River Park Act, and that the environmental review process was inadequate under the State Environmental Quality Review Act.  Richard D. Emery, a partner at ECBA, said: “This project is illegal because the Hudson River Park Trust cut corners, deceived the Legislature, and gave away public parkland to a private entity without the proper checks and balances. Today’s decision confirms that Diller Island would cause irreparable harm to the Hudson River and to the public, and that we are likely to succeed in stopping it for good.”

In issuing the preliminary injunction, the Appellate Division made an initial, and tentative, determination that petitioners are likely to succeed on the merits; that petitioners and the public will likely suffer irreparable harm if the injunction is not granted; and that the balance of equities tips in petitioners’ favor.

Petitioners are represented by Richard D. Emery, Elizabeth S. Saylor, and Doug Lieb.

Read coverage of the injunction in The New York Times, Crain’s, the New York Daily News and the Village Voice.

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Famed Sculptor Wins Summary Judgment Against Designer Who Destroyed Artwork

On June 13, 2016, Judge Ostrager of the New York Supreme Court ruled that interior designer Inson Wood and his company were liable for the destruction of three marble sculptures made by famed sculptor Edwina Sandys. Ms. Sandys loaned the sculptures to Mr. Wood for display and sale at the Waterfall Mansion, on Manhattan’s Upper East Side. Months later, her sculptures were returned to her shattered into pieces. After Mr. Wood refused to reimburse her for the broken sculptures, Ms. Sandys sued him and others on claims of breach of contract, breach of fiduciary duty, and negligence, among other charges. A trial on the other issues and other parties will be held in September.

Ms. Sandys is represented by ECBA attorneys Dan Kornstein and Ali Frick.

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Andrew Wilson Moderates ABA Roundtable on Public/Private Litigation

Andrew Wilson moderated a Roundtable entitled “Civil Rights Litigation:  Navigating Successful Pro Bono Partnerships,” on June 7, 2016. The panel explored the opportunities, challenges, and best practices for effective partnerships on pro bono litigation, particularly in the civil rights arena. The discussion was presented by the American Bar Association’s Civil Rights Litigation Committee and the panelists included: Maia Goodell, Supervising Attorney, MFY Legal Services, Inc., Edward A. Hailes, Jr., General Counsel/Managing Director at Advancement Project, Harlene Katzman, Pro Bono Coordinator at Simpson Thacher & Bartlett LLP, and Jennifer L. Kroman, Director of Pro Bono Practice, Cleary Gottlieb Steen & Hamilton LLP.

A recording of the panel may be found at the American Bar Association’s website, in early July.

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Judge Approves $60 Million Settlement in Debt Collection Suit

A federal court approved the settlement on behalf of  New Yorkers who alleged fraudulent debt collection practices.  The $60 million settlement in the case, captioned Sykes v. Mel S. Harris and Associates LLC, No. 09 Civ. 8486 (S.D.N.Y), is  the largest ever of its kind.  The settlement should also lead to the unprecedented vacating of approximately 195,000 court judgments and result in the forgiveness of over $1 billion in alleged debt. Plaintiffs’ lawsuit alleged that that Defendants used fraudulent practices to file debt collection lawsuits, obtain default judgments, and then collect on those judgments.

Judge Denny Chin found that the settlement is a “remarkable resolution” to “hard fought litigation” that will bring “extraordinarily meaningful benefits to tens of thousands of individuals.”  He concludes that the settlement will have an “immediate and enormously positive impact on the lives of many.”

The class is represented by ECBA attorneys, Matthew Brinckerhoff, Debbie GreenbergerElizabeth Saylor, and Jonathan Abady,  along with co-counsel MFY Legal Services and the New Economy Project.   Read more about the settlement in coverage by the New York Times, the Nation, the NY Law Journal, the NY Post, the Democrat & Chronicle, the Daily News and NY 1.

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Groundbreaking Court Delay Case in the Press

On May 10, 2016, along with the Bronx Defenders and Morrison & Foerster LLP, ECBA filed a federal class action to end the massive delays in misdemeanor cases in the Bronx Criminal Court. The groundbreaking suit alleges that the systematic delays violate the constitutional speedy trial and due process rights of thousands of people facing misdemeanor charges in the Bronx.

The case has garnered local, national and international press coverage. Read about the case in the New York Times, CNN.com, New York Daily News and Reuters. The New York Times Editorial Board published an op-ed calling for the transformation of “the dysfunctional culture that has long plagued the justice system, and the citizens, of the Bronx.”

Listen to an interview with Ilann Maazel on NPR’s The Brian Lehrer Show.  ECBA attorneys Matthew Brinckerhoff and Doug Lieb are also working on the case.

 

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