The opinion of the court was delivered by: WARD
This is an action brought pursuant to 42 U.S.C. §§ 1983 & 1985. Plaintiffs allege that defendants violated, and conspired to violate, plaintiffs' civil rights by denying them due process in connection with certain state administrative and judicial proceedings concerning the regulation of residential rents in plaintiffs' apartment building. Plaintiffs move for summary judgment pursuant to Rule 56, Fed.R.Civ.P. Defendants cross-move for the same relief. For the reasons that follow, defendants' motions for summary judgment are granted, and plaintiffs' motion is denied.
The fifteen plaintiffs are tenants in a 347-unit apartment building owned by defendant 2 Fifth Avenue Company ("the landlord"). The building, located at 2 Fifth Avenue, New York, New York, is subject to rent regulation under the New York City Rent Stabilization Law, N.Y.City Ad.Code §§ YY51-1.0 to YY51-8.0, N.Y.Unconsol.Laws following § 8610 (McKinney).
In November 1974, the landlord filed an application with defendant New York City Conciliation and Appeals Board ("the CAB") for a hardship rent increase under the Rent Stabilization Law. The CAB notified the landlord in mid-December 1974 that the application had been docketed and subsequently served notice on the tenants that a hardship application for their building had been filed. Intending to oppose the landlord's application, the tenants retained counsel, who then entered an appearance before the CAB on the tenants' behalf. In early April 1975, after a series of extensions of time, the tenants submitted an answer in opposition to the application and requested a hearing at which they could produce opposing evidence.
Meanwhile, during the pendency of the landlord's application, the CAB was in the process of reconsidering its method of determining hardship rent-increase applications. On April 17, 1975, the CAB adopted by resolution a new interpretation of the hardship provisions of the Stabilization Law. This new interpretation which substituted a "dollar differential" formula (based on the difference between gross rents and operating expenses) for the prior "ratio" formula (based on the ratio of gross rents to operating expenses) was expected to result in lower rent increases for those landlords filing hardship applications. On May 20, 1975, the CAB notified all hardship applicants of this change and requested additional data.
The CAB's April 17 resolution also requested the New York Legislature to change the Stabilization Law to incorporate the new hardship formula. On July 1, 1975, the Legislature amended N.Y.City Ad.Code § YY51-6.0(c)(6) and adopted a revised formula similar to that proposed by the CAB. The new provision became effective on July 2, 1975.
Shortly after the effective date of the amended hardship provision, the owner of another large New York City apartment building brought an action in state court challenging the CAB's decision to apply the new formula to hardship applications filed before the July 2 effective date. On March 23, 1976, the Appellate Division of the New York Supreme Court held that the amended statute was to be applied to applications pending at the time of the amendment but ruled that "if ... the CAB deliberately or negligently delayed processing the application before it ..., then the (hardship applicant) is entitled to have its application processed under the previous law." Vanderbilt 77th Associates v. Conciliation and Appeals Board, 51 A.D.2d 946, 381 N.Y.S.2d 234, 236 (1st Dep't 1976) (mem.).
At the landlord's request, the CAB had delayed acting on defendant 2 Fifth Avenue Company's application pending a decision in Vanderbilt. After Vanderbilt was decided, the CAB notified the landlord, by letter dated May 24, 1976, that "the new formula applies to cases which were pending in house when the law was changed absent negligent or deliberate delay by the (CAB) in the processing of the application." In the letter, the CAB requested that the landlord advise the Board within fifteen days whether the landlord would seek relief under the Vanderbilt exception. Marks aff., ex. C (July 25, 1980). The landlord determined to seek such relief and instituted a mandamus proceeding against the CAB pursuant to N.Y.CPLR art. 78. The 2 Fifth Avenue tenants were not made parties to this action and apparently did not receive notice of the pendency of this proceeding.
The landlord and the CAB submitted their controversy to the state court on an agreed statement of facts, negotiated between them, pursuant to N.Y.CPLR 3222(a). The tenants were not invited to participate in this negotiation. In a per curiam opinion issued April 14, 1977, the Appellate Division ruled that the CAB "deliberately delayed enforcement of a law not to its liking until it got one it did like" and, in a judgment filed June 6, 1977, directed the Board to determine the landlord's hardship application under the statutory provision in effect when the application was filed. 2 Fifth Avenue Co. v. New York City Conciliation and Appeals Board, 57 A.D.2d 106, 393 N.Y.S.2d 409, 410 (1st Dep't 1977).
On June 8, 1977, the CAB notified the landlord and the 2 Fifth Avenue tenants that a hearing had been scheduled for July 12 on the hardship application. Apparently, however, the July 12 hearing was not conducted as scheduled. Rather, by motions dated September 28, 1977, two tenants moved in the Appellate Division on behalf of themselves and all other tenants of 2 Fifth Avenue to intervene in the landlord's article 78 proceeding to vacate the decision of 2 Fifth Avenue Co. v. New York City Conciliation and Appeals Board, supra. In support of their motions, the tenants alleged:
a) That procedural due process under the Fifth and Fourteenth Amendments to the Constitution of the United States of America and Article 1, Section 6 of the Constitution of this State of New York was denied the tenants in the prior proceedings herein by failing to give tenants notice, hearing and the right to defend the proceedings heretofore taken in this Court which directly affects their property rights under their respective leases with the Petitioner.
b) That procedural due process under the Fifth and Fourteenth Amendments of the Constitution of the United States and Article 1, Section 6, and Article 6 of the Constitution of the State of New York was denied the tenants, in failing to provide for a trial of the property rights of the tenants which are directly affected by the decision of this Court.
c) That the decision of this Court in the above entitled proceeding was not based upon due process of law but entered upon a prejudicial statement of facts of which the tenants were not parties, but the purpose of which directly affects the rents of tenants under their lease.
d) That the decision of this Court is incorrect, unjust and unreasonable in that it is based upon errors of law and fact and is an unjust determination affecting substantial property rights of each tenant who were (sic) not made parties to the proceedings and unable to defend their (sic) rights before the Court.
Marks motion, annexed as ex. 7 to Doskow aff. (June 20, 1980). The motions were denied without ...