| Releases
& Statements
FOR
IMMEDIATE RELEASE September 15, 2007
Contact: Sarah Krauss
(212) 669-4193; (917) 541-0936
Release #: 054-2007
RICO Lawsuit Against Mega-Landlord Pinnacle Seeks Class Action Status, Potentially Impacts Thousands of Tenants
MANHATTAN – A racketeering lawsuit against mega-landlord Pinnacle Group and owner Joel Wiener is seeking class action status – potentially impacting twenty-one thousand tenants living in the more than 400 Pinnacle-owned buildings citywide – according to an amended complaint filed late Friday by Jenner & Block, the law firm handling the case.
The amended complaint follows a careful investigation of new abuse claims from Pinnacle tenants after the widespread coverage of the initial complaint, claims such attempts to intimidate and “buy off” tenants who oppose Pinnacle. The complaint asserts significant factual and legal issues that appear to be common among tenants. The tenants have already claimed that that Pinnacle fraudulently inflates rents, fails to make needed repairs and groundlessly harasses tenants – all as part of a coordinated business strategy to boost profits and drive families from their apartments.
Public Advocate Betsy Gotbaum and Manhattan Borough President Scott Stringer joined to support the community’s efforts to seek, among other forms of relief, payments for overcharged rents, immediate injunctive relief to restrain unlawful behavior and the creation of an independent body to ensure lawful management of buildings.
Richard F. Levy, a senior partner at Jenner & Block, said, “It appears that there are many significant factual and legal issues involving abuses by Pinnacle that are common to thousands of tenants. After careful investigation of these new claims of abuse, the complaint was amended and now asserts claims on behalf of all Pinnacle tenants in New York City that have been injured by Pinnacle's conduct – a so called ‘Class Action.’”
The amended complaint details a few of the particular abuses reported since the filing of the original complaint, including:
? Acts designed to intimidate tenants who oppose Pinnacle or protest their behavior, such as unauthorized surveillance and eavesdropping on prominent tenant leaders;
? Attempts to “buy-off” tenants whose opposition to their misconduct has become a public relations liability to Pinnacle; and
? Refusal to repair extensive smoke and water damage to the apartment of a 74 year old woman, who was forced to move to a public shelter – until that person’s plight appeared on television when the original complaint was filed.
Pinnacle and Wiener are financed in part by a six-billion-dollar real estate investment firm, the Praedium Group, to undertake a self-described “value enhancement” business strategy, an apparent policy of harassing tenants to the point of eliminating rent-regulated units.
Included among the list of harassing techniques allegedly used by Pinnacle and Wiener in the complaint are:
? Seeking to collect illegal rents based on fraudulent claims of individual apartment improvements and major capital improvements;
? Failing to make necessary and reasonable repairs to address housing maintenance code violations;
? Commencing unfounded court proceedings to challenge tenants’ succession rights;
? Unjustifiably refusing to accept tenants’ rent checks and then claiming non-payment; and
? Directing and encouraging superintendents of its buildings to make unacceptable and shoddy repairs or make false promises to conduct repairs.
In fact, regarding the shoddy repairs, the City’s Department of Housing Preservation and Development (HPD) website currently lists multiple apartments under Pinnacle management with a slew of long uncorrected violations, including multiple “impairing” rent and hazardous violations such as inadequate fire exits, lead-based paint, and lack of heat and hot water. Many of these hazardous “Class C” violations have not been addressed for years, despite the fact that the Housing Maintenance Code requires owners to correct Class C violations within 24 hours.
Public Advocate Betsy Gotbaum said, “Buying off tenants, intimidating residents, ignoring needed repairs - these allegations are an assault on thousands of tenants across the city. This new outpouring of complaints shows us that there may be a coordinated practice of harassment by these corporate slumlords. Tenants and families need to know that they are not alone, that we are working to protect their common interests.”
Manhattan Borough President Scott Stringer said, “The expansion of this lawsuit into a class action suit is yet another important step by and for this community to take action against a land lord who can be described as nothing less than evil. This is one of the most significant lawsuits ever brought against a landlord conglomerate and I hope it will bring about a victory for tenants across this city and send a clear message to landlords everywhere that harassment will not be tolerated.”
The city clearly faces some challenges when it comes to cracking down on deadbeat landlords. As of June 2006, HPD had fewer than 40 attorneys in its Housing Litigation Division to deal with the nearly 13,000 cases it initiated in 2005. Some instances linger for months or years, meaning that New Yorkers have to go on living with unsanitary and dangerous conditions, such as leaky ceilings and apartments overrun with vermin.
The lawsuit was filed by Jenner & Block, a national law firm with more than 450 lawyers in offices in New York, Chicago, Dallas, and Washington, D.C. Jenner & Block lawyers and professionals spent more than 2,000 hours without charge during the past year investigating the Pinnacle Group and Joel Wiener, interviewing tenants and preparing the complaint that was filed today. Last year Jenner & Block's lawyers devoted more than 50,000 hours to pro bono representation.
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