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WENDELL TERRACE APTS. v. SCRUGGS-LEFTWICH

May 24, 1984

WENDELL TERRACE APTS., Country Estates Associates, Fulton Ave. Associates, Alvin & Rose Benjamin, and Cathederal Realty Associates, Plaintiffs,
v.
Yvonee SCRUGGS-LEFTWICH, Commissioner, State of NY Division of Housing & Community Renewal, and Hector Del Toro, Asst. Commissioner, Defendants.



The opinion of the court was delivered by: WEXLER

MEMORANDUM AND ORDER

WEXLER, District Judge.

 I. FACTS

 In this action plaintiffs, who are landlords, contend that defendants, by issuing certain Orders and Determinations pursuant to the Emergency Tenant Protection Act of 1974 ("ETPA"), N.Y.Unconsol.Law Section 8621 et seq. (McKinney Supp.1983-84), and the Emergency Tenant Protection Regulations ("Regulations"), 9 N.Y.C.R.R., Subtitle S, Chapter VIII, Part 2500 et seq., have violated the prohibition against the impairment of contracts of U.S. Const. art. I, Section 10, cl. 1, as well as plaintiffs' right to due process and equal protection under U.S. Const. amend XIV, Section 1.

 On December 29, 1982, the Village of Hempstead adopted a resolution pursuant to ETPA, Section 3(a), N.Y.Unconsol.Laws Section 8623(a) (McKinney Supp.1983-84), declaring the existence of an emergency on the ground that the housing vacancy rate was less than 5%. By virtue of this resolution, certain provisions of ETPA and the Regulations became effective on January 1, 1983 with respect to certain apartments owned by plaintiffs and located within the Village of Hempstead. Certain tenants of plaintiffs then applied to defendants for rent adjustment pursuant to ETPA, Section 9(b), N.Y.Unconsol.Laws Section 8629(b) (McKinney Supp.1983-84). Defendants, acting pursuant to said provision, then issued certain Orders and Determinations requiring plaintiffs to refund a portion of the rents which were received for periods of up to twenty-two months prior to January 1, 1983, and establishing new "fair market rents". *fn1" The defendants' Orders and Determinations were in most cases prepared and issued in Manhattan.

 Plaintiffs have a number of proceedings (brought under N.Y.Civ.Prac.Law art. 78) challenging the Orders and Determinations pending in state court.

 II. VENUE

 The first issue is whether venue is proper. Plaintiffs contend that since the rental property in question is located within this district, the claim arose within the Eastern District, so that the Eastern District is a proper venue purusant to 28 U.S.C. Section 1391(b). Defendants argue that since the orders in question were issued by defendants primarily in the Southern District, the claim arose in the Southern District, which is the district in which all defendants are deemed to reside, so that the Southern District is the only proper venue pursuant to 28 U.S.C. Section 1391(b).

 We find that the claim arose in the Eastern District and that the Eastern District is therefore a proper venue pursuant to 28 U.S.C. Section 1391(b). We find that the case's contacts with the Eastern District are stronger than those with the Southern District. Although the orders were physically issued in the Southern District, the orders concerned the rental of real property in the Eastern District. While the mere fact that a plaintiff will be economically harmed and that a plaintiff resides or does business in a given district does not necessarily mean that plaintiff's claim arises in such district, in the instant case there are several contacts with the Eastern District beyond the fact that the plaintiffs will suffer loss there. The real property is within the Eastern District. The tenants are within the Eastern District. The application of ETPA to the real property in question arose out of a resolution passed by a village in the Eastern District.

 III. ABSTENTION

 The next question is whether this Court should abstain from hearing this case. The Supreme Court has explained that there are a number of situations in which a federal court should abstain from hearing a case. Colorado River Water Conser. Dist. v. U.S., 424 U.S. 800, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976).

 A. YOUNGER ABSTENTION

 Federal courts should generally abstain when asked to enjoin certain types of state proceedings, especially criminal proceedings. Younger v. Harris, 401 U.S. 37, 91 S. Ct. 746, 27 L. Ed. 2d 669 (1971). Here, however, no ...


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