# The Matter of Regina Metropolitan Co. v. NYS Division of Housing and Community Renewal, Joel Raden v. W7879 , James Taylor v. 72A Realty Associates , Elizabeth Reich v. Belnord Partners > New York Court of Appeals · April 2, 2020 URL: https://www.frixlaw.com/law-library/cases/4521721 ## Case - **Court:** New York Court of Appeals - **Decided:** April 2, 2020 - **Precedential status:** Published - **Opinion:** Opinion - **Cited by:** 0 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4521721 ## Opinion text State of New York OPINION Court of Appeals This opinion is uncorrected and subject to revision before publication in the New York Reports. No. 1 In the Matter of Regina Metropolitan Co., LLC, Respondent, v. New York State Division of Housing and Community Renewal, Appellant, Leslie E. Carr et al., Intervenors-Respondents. (And Another Proceeding). ------------------------------------------- No. 2 Joel Raden et al., Appellants, v. W7879, LLC, et al., Respondents. ------------------------------------------- No. 3 James Taylor et al., Respondents, v. 72A Realty Associates, L.P., Appellant, et al., Defendant. ------------------------------------------- No. 4 Elizabeth Reich, et al., Appellants, v. Belnord Partners, LLC, et al., Respondents. Case No. 1: Ester Murdukhayeva, for appellant. Niles C. Welikson, for respondent. Darryl M. Vernon, for intervenor-respondents. Community Housing Improvement Program, Inc. et al.; Stephenie Futch, et al., amici curiae. Case No. 2: Seth A. Miller, for appellants. Nativ Winiarsky, for respondents. Jacobus Gomes, et al., amici curiae. Case No. 3: Joel M. Zinberg, for appellant. Robert E. Sokolski, for respondents. Stuart Davidson-Tribbs, et al., amici curiae. Case No. 4: Darryl M. Vernon, for appellants. Deborah E. Riegel, for respondents. Peter Gunther, et al., amicus curiae. PER CURIAM: In our tripartite form of government, the Legislature determines the public policy of this State, recalibrating rights and changing course when it deems such alteration -1- -2- Nos. 1-4 appropriate as it grapples with enduring problems and rises to meet new challenges facing our communities. It is the distinct role of the courts to interpret the laws to give effect to legislative intent while safeguarding the constitutional rights of impacted individuals. We fulfill both core functions in these four appeals, which present a common issue under the Rent Stabilization Law (RSL): what is the proper method for calculating the recoverable rent overcharge for New York City apartments that were improperly removed from rent stabilization during receipt of J-51 benefits prior to our 2009 decision in Roberts v Tishman Speyer Props., L.P. (13 NY3d 270 [2009]). As explained below, when leave was granted in these cases, the RSL mandated that, absent fraud, an overcharge was to be calculated by using the rent charged on the date four years prior to filing of the overcharge complaint (the “lookback period”) as the “base date rent,” adding any legal increases applicable during the four-year lookback period and computing the difference between that legal regulated rent and the rent actually charged to determine if the tenant was overcharged during the recovery period. In such cases, consideration of rental history predating the four-year lookback and statute of limitations period was prohibited. While the appeals to this Court were pending, the Legislature – as is its prerogative – enacted the Housing Stability and Tenant Protection Act of 2019 (HSTPA), making sweeping changes to the RSL, the majority of which are not at issue in these appeals. As relevant here, Part F of the HSTPA includes amendments that, among other things, extend the statute of limitations, alter the method for determining legal regulated rent for overcharge purposes and substantially expand the nature and scope of -2- -3- Nos. 1-4 owner liability in rent overcharge cases (see L 2019, ch 36, Part F). The tenants in these cases urge us to apply the new overcharge calculation provisions to these appeals that were pending at the time of the HSTPA’s enactment, some of which seek recovery of overcharges incurred more than a decade before the new legislation. The validity of Part F is not in question here – but significant issues are raised concerning whether the presumption against retroactive application of statutes has been rebutted and, if so, whether application of certain amendments relating to overcharge calculation in Part F to these appeals involving conduct that occurred years prior to its enactment comports with fundamental notions of substantial justice embodied in the Due Process Clause. Retroactive application of the overcharge calculation amendments would create or considerably enlarge owners’ financial liability for conduct that occurred, in some cases, many years or even decades before the HSTPA was enacted and for which the prior statutory scheme conferred on owners clear repose. Because such application of these amendments to past conduct would not comport with our retroactivity jurisprudence or the requirements of due process, we resolve these claims pursuant to the law in effect when the purported overcharges occurred. Notwithstanding the hyperbole employed by our dissenting colleagues, our analysis of the narrow legal issue presented by application of the overcharge calculation amendments to these appeals turns entirely on conventional and time-honored principles of judicial review. “We are, of course, mindful . . . of the responsibility . . . to defer to the Legislature in matters of policymaking,” but it is the role of the judicial branch “to interpret and safeguard constitutional rights and review -3- -4- Nos. 1-4 challenged acts of our co-equal branches of government – not in order to make policy but in order to assure the protection of constitutional rights” (Campaign for Fiscal Equity v State of New York, 100 NY2d 893, 925, 931 [2003]). As to the HSTPA, today we fulfill this quintessential judicial function in holding that a limited suite of enforcement provisions may not be applied retroactively and opine in no way on the vast majority of that legislation or its prospective application. These rent overcharge cases arose in the wake of our 2009 decision in Roberts, interpreting RSL provisions relating to New York City’s J-51 program, which offered tax benefits to building owners who made capital improvements to their residential properties. Buildings electing to receive J-51 benefits become subject to the rent stabilization scheme (RSL [Administrative Code of City of NY] § 11-243[b], [i][1], [t]). From 1993 until the enactment of the HSTPA in 2019, the RSL contained “luxury deregulation” provisions, permitting an owner of a stabilized unit to deregulate if the rent exceeded a statutory threshold and (1) the tenant vacated or (2) the tenants’ combined income exceeded a statutory threshold (former RSL §§ 26-504.1, 26-504.2). As early as 1996, first in an opinion letter and later promulgated as an agency regulation, the Division of Housing and Community Renewal (DHCR) 1 took the position that statutory language precluding luxury deregulation of apartments during receipt of J-51 benefits did not apply to buildings that were already subject to the RSL prior to receipt of those benefits (see Roberts, 13 NY3d at 1 DHCR is the State agency tasked with administering the RSL and the J-51 program. -4- -5- Nos. 1-4 281-282; former Rent Stabilization Code [RSC] [9 NYCRR] § 2520.11[r][5], [s][2]). In Roberts, this Court rejected DHCR’s long-standing statutory interpretation and concluded that luxury deregulation was unavailable in any building during receipt of J-51 benefits (13 NY3d at 285-287). In 2011, the Appellate Division held that Roberts applied retroactively (Gersten v 56 7th Ave. LLC, 88 AD3d 189, 198 [1st Dept 2011], appeal withdrawn 18 NY3d 954 [2012]). Each of these cases involves an apartment that was treated as deregulated consistent with then-prevailing DHCR regulations and guidance before this Court rejected that guidance in Roberts. Indeed, the tenants took occupancy years prior to Roberts following a deregulation later revealed by that decision to have been improper, believing they were renting non-stabilized apartments at market rents. None of these tenants promptly challenged the deregulated status of their apartments and years – in some cases, over a decade – passed during which the tenants and their landlords renewed and renegotiated free-market leases. 2 After we decided Roberts, these tenants commenced overcharge claims under the RSL. In Regina Metro., the tenants filed an administrative complaint with 2 In Matter of Regina Metro. Co., LLC v New York State Div. of Hous. & Community Renewal (164 AD3d 420 [1st Dept 2018]), the tenants took occupancy in 2005 at a market rent of $5,195 per month, filing this overcharge claim in 2009; in Raden v W7879, LLC (164 AD3d 440 [1st Dept 2018]), the tenants took occupancy in 1995 at a market rent of $2,350 per month, commencing this action in 2010; in Taylor v 72A Realty Assoc., L.P. (151 AD3d 95 [1st Dept 2017]), the tenants took occupancy in 2000 at a market rent of $2,200 per month, initiating suit in 2014; and in Reich v Belnord Partners, LLC (168 AD3d 482 [1st Dept 2019]), the tenants took occupancy in 2005 at a market rent of $18,500 per month (plus a $350 per month electricity charge), bringing the overcharge claim in 2016. -5- -6- Nos. 1-4 DHCR and, in the remaining three cases, the tenants commenced actions in Supreme Court. The central issue below in each of these cases – sent to this Court by leave of the Appellate Division before enactment of the HSTPA – was how to calculate the “legal regulated rent” in order to determine whether a recoverable overcharge occurred and its amount. 3 Before we address the tenants’ request that we resolve these appeals under the new law, we must determine the parties’ rights under the statutory scheme in effect when the overcharges occurred. I. In an overcharge claim, the tenant seeks monetary damages for excessive rent paid during the recovery period. 4 The method for calculating the amount of recoverable 3 In Regina Metro., DHCR calculated the legal regulated rent by reconstructing what the rent would have been on the base date had the apartment never been deregulated, but the Appellate Division rejected that method as contrary to the evidentiary four-year “lookback” rule barring review of rental history outside the four years prior to the imposition of the overcharge claim (see 164 AD3d at 422, 424-426). Raden and Reich were decided consistent with the Appellate Division’s approach in Regina Metro. In Raden, the Appellate Division affirmed a $448.50 judgment for overcharge damages calculated by applying the four-year lookback rule (see 164 AD3d at 441-442) and, in Reich, the Appellate Division affirmed an order dismissing the overcharge claim, where the owners’ assertion that application of the four-year lookback rule would result in no recoverable damages during the four-year limitations period was unchallenged (see 168 AD3d at 482). However, in Taylor, the Appellate Division concluded that the reconstruction method – which it later rejected in Regina Metro. – was the proper method for determining an overcharge claim even in the absence of fraud, denying summary judgment to the owner, which argued that if the court applied the four-year lookback rule, there was no overcharge (see 151 AD3d at 105-106). 4 There is significant disagreement between us and the dissent concerning the pre-HSTPA law. Critically, there is a distinction between an overcharge claim and a challenge to the deregulated status of an apartment, although the two types of claims are repeatedly conflated by the dissent, which confuses the overcharge claims presented here with the sole -6- -7- Nos. 1-4 damages – i.e., the overcharge – is governed by the RSL. We therefore examine the text of the relevant statutes, as the best indicator of legislative intent (Majewski v Broadalbin- Perth Cent. School Dist., 91 NY2d 577, 583 [1998]), mindful that legislative history may also be considered as an aid to interpretation (Altman v 285 W. Fourth LLC, 31 NY3d 178, 185 [2018]; see Riley v County of Broome, 95 NY2d 455, 463-464 [2000]). When a statute is part of a broader legislative scheme, we construe its language “in context and in a manner that harmonizes the related provisions and renders them compatible” (Matter of M.B., 6 NY3d 437, 447 [2006] [internal punctuation and citation omitted]). The rules governing calculation of an overcharge are found in the provisions of the RSL addressing enforcement and the statute of limitations for overcharge claims (RSL § 26-516; CPLR 213-a). Before the enactment of the HSTPA, overcharge claims were subject to a four-year statute of limitations that precluded the recovery of overcharges incurred more than four years preceding the imposition of a claim (former RSL § 26- issue presented in Kuzmich v 50 Murray St. Acquisition LLC (34 NY3d 84 [2019]), namely whether plaintiffs were entitled to a declaration that their apartments were subject to rent stabilization. Despite the suggestion to the contary, there has long been a statute of limitations restricting recovery of monetary damages in overcharge claims and this remains true under the HSTPA (see CPLR 213-a; found in CPLR article 2 [entitled “Limitations of Time”]). Because the apartments in each of these cases were returned to rent stabilization following our decision in Roberts, the focus here is the tenants’ entitlement to overcharge damages; a separate declaratory judgment claim challenging the status of the apartment is before us only in Taylor. While an overcharge may arise from an improper deregulation, this is by no means the exclusive or even the most common explanation for the collection of excessive rent – overcharge claims are routinely brought to challenge the rent associated with apartments that have never been destabilized. Nor is there a basis for the dissent’s view that the overcharge calculation amendments in Part F were intended to specifically address Roberts cases; neither the legislation nor its history supports such a conclusion. -7- -8- Nos. 1-4 516[a][2]; former CPLR 213-a; see Conason v Megan Holding LLC, 25 NY3d 1 [2015]). The statutes further directed that “no determination of an overcharge and no award or calculation of an award of the amount of an overcharge may be based upon an overcharge having occurred more than four years before” initiation of the claim (former RSL § 26- 516[a][2]; see former CPLR 213-a). 5 A provision added as part of the Rent Regulation Reform Act of 1997 (1997 RRRA) expressly “preclude[d] examination of the rental history of the housing accommodation prior to the four-year period preceding” commencement of the overcharge action (former RSL § 26-516[a][2], as amended by L 1997, ch 116; see former CPLR 213-a, as amended by L 1997, ch 116) – language that “clarified and reinforced the four-year statute of limitations” (Thornton v Baron, 5 NY3d 175, 180 [2005]). This categorical temporal limitation on reviewable records – the “lookback” rule – was complemented by a record retention provision directing that certain owners “shall not be required to maintain or produce any records relating to rentals of such accommodation for more than four years prior to the most recent registration or annual statement for such accommodation” (former RSL § 26-516[g]; see RSC § 2523.7[b] [“An owner shall not be required to produce any rent records in connection with (overcharge) proceedings . . . relating to a period that is 5 The RSL also limited the imposition of treble damages – recoverable unless the owner established by a preponderance of the evidence that the overcharge was not willful – to the last two years of overcharges preceding filing of the complaint (former RSL § 26- 516[a][2][i]). Treble damages could not be imposed on overcharges occurring prior to April 1984 (id.). -8- -9- Nos. 1-4 prior to the base date”]). The record retention provision permitted owners to dispose of records outside the four-year period (former RSL § 26-516[g]; see Matter of Cintron v Calogero, 15 NY3d 347, 354 [2010]; Thornton, 5 NY3d at 181), further evincing the Legislature’s intent that records predating the recovery period not be used to calculate overcharges. Together, the statute of limitations, lookback provision and record retention rules formed an integrated scheme for calculating overcharges based on a closed universe of records pertaining only to the apartment’s rental history in the four years preceding the filing of the complaint. Consistent with the lookback rule, the enforcement provisions provided that, except for certain claims filed shortly after initial registration of a unit, “the legal regulated rent for purposes of determining an overcharge, shall be the rent indicated in the annual registration statement filed four years prior to the most recent registration statement,” i.e., the base date rent, plus “any subsequent lawful increases and adjustments” (former RSL § 26-516[a][i]). Owners of rent-stabilized apartments are generally required to file annual rent registration statements with DHCR (RSL § 26-517[f]), and where registration statements were filed during the lookback period, the base date rent was discerned from those statements. But owners are no longer required to file such statements once the apartment has been deregulated. Thus, where the apartment had been deregulated more than four years prior to the filing of an overcharge complaint, and the tenant failed to promptly challenge the deregulated status of the apartment, there might be no rent -9- - 10 - Nos. 1-4 registration on file for the base date or, indeed, any time within the four-year lookback period. This scenario is addressed in DHCR’s regulations, which harmonized RSL § 26- 516(a)(i) with the four-year lookback restriction. With exceptions not relevant here, the regulations provided that “[t]he legal regulated rent for purposes of determining an overcharge shall be deemed to be the rent charged on the base date, plus in each case any subsequent lawful increases and adjustments” (RSC § 2526.1[a][3][i] [emphasis added]; see also id. § 2520.6[e]). Under the pre-HSTPA law, the base date rent was therefore the rent actually charged on the base date – i.e., four years prior to the overcharge complaint – even if no registration statement had been filed reflecting that rent. In a series of cases, we confirmed that reviewing rental history outside the four-year lookback period was inappropriate for purposes of calculating an overcharge, but we recognized a limited common-law exception to the otherwise-categorical evidentiary bar, permitting tenants to use such evidence only to prove that the owner engaged in a fraudulent scheme to deregulate the apartment. In Thornton, the owner engaged in an egregious, fraudulent scheme to remove apartments from stabilization by conspiring with tenants, who shared in the illegal profits, by falsely agreeing the apartment was not being used as a primary residence (and utilizing the courts as a tool to obtain false declarations to that effect) to rent at market rates and then sublease at even higher rates (5 NY3d at 178- 179). For overcharge calculation purposes, the Court acknowledged the preclusive effect of the four-year lookback rule, deeming the last regulated rent charged before that period - 10 - - 11 - Nos. 1-4 to be “of no relevance” (id. at 180). We held that the legal rent should be based on a “default formula,” otherwise reserved for cases where there are no reliable rent records, setting the base date rent as “the lowest rent charged for a rent-stabilized apartment with the same number of rooms in the same building on the relevant base date” (id. at 179-181 and n 1). We elaborated on this fraud exception to the lookback rule in Matter of Grimm v New York State Div. of Hous. & Community Renewal, holding that where a tenant had made a “colorable claim of fraud” by identifying “substantial indicia,” i.e., “evidence,” of “a landlord’s fraudulent deregulation scheme to remove an apartment from the protections of rent stabilization,” that apartment’s “rental history may be examined for the limited purpose of determining whether a fraudulent scheme to destabilize the apartment tainted the reliability of the rent on the base date” (15 NY3d 358, 366-367 [2010]). Consistent with Thornton, we directed that, if review of the rental history revealed such a fraudulent scheme, the default formula should be used to calculate any resulting overcharge (id. at 367). We confirmed this procedure in Conason, where the owner created a fictitious tenant and fictitious renovation to justify a rent increase (25 NY3d at 9, 16-17). Our holding in Matter of Boyd v New York State Div. of Hous. & Community Renewal (23 NY3d 999 [2014]), rejecting a challenge to DHCR’s use of the rent actually charged four years prior to filing of the claim to calculate an overcharge in the absence of fraud, provided further clarification that the four-year lookback rule generally precluded review of rental history outside that period. - 11 - - 12 - Nos. 1-4 The rule that emerges from our precedent is that, under the prior law, review of rental history outside the four-year lookback period was permitted only in the limited category of cases where the tenant produced evidence of a fraudulent scheme to deregulate and, even then, solely to ascertain whether fraud occurred – not to furnish evidence for calculation of the base date rent or permit recovery for years of overcharges barred by the statute of limitations (Grimm, 15 NY3d at 367). 6 In fraud cases, this Court sanctioned use of the default formula to set the base date rent. Otherwise, for overcharge calculation purposes, the base date rent was the rent actually charged on the base date (four years prior to initiation of the claim) and overcharges were to be calculated by adding the rent increases legally available to the owner under the RSL during the four-year recovery period. Tenants were therefore entitled to damages reflecting only the increases collected during that period that exceeded legal limits. In the wake of Roberts, courts and DHCR grappled with a surge of claims filed by tenants alleging overcharges arising from the improper deregulation of their apartments years (in some cases more than a decade) before – claims like those now before this Court. For example, the plaintiffs in Raden, who took occupancy of their apartment in 1995 at a 6 Our decision in Cintron did not authorize consideration of rental history outside the four- year lookback period. Rather, we held that rent reduction orders issued prior to that period that remained in effect during the recovery period were part of the reviewable four years of rental history (15 NY3d at 356; see also Scott v Rockaway Pratt, LLC, 17 NY3d 739 [2011]). Such consideration did not contradict the record retention limitations because “DHCR can take notice of its own orders and the rent registrations it maintains to ascertain the rent established by a rent reduction order without imposing onerous obligations on landlords” (Cintron, 15 NY3d at 355-356). - 12 - - 13 - Nos. 1-4 market rent, commenced this action in 2010 seeking recovery of overcharges based on a reconstruction of the rent they should have been charged had the apartment never been deregulated. Likewise, in Taylor, similar relief was sought in an overcharge claim filed in 2014 brought by a tenant who took occupancy in 2000. In stark contrast to Thornton, Grimm and Conason, in which tenants came forward with evidence of fraud, 7 in these Roberts cases, the owners removed apartments from stabilization consistent with agency guidance. Deregulation of the apartments during receipt of J-51 benefits was not based on a fraudulent misstatement of fact but on a misinterpretation of the law – significantly, one that DHCR itself adopted and included in its regulations. As we observed in Borden v 400 E. 55th St. Assoc., L.P., a finding of willfulness “is generally not applicable to cases arising from the aftermath of Roberts” (24 NY3d 382, 389 [2014]). Because conduct cannot be fraudulent without being willful, it follows that the fraud exception to the lookback rule is generally inapplicable to Roberts overcharge claims. 8 7 Fraud consists of “evidence [of] a representation of material fact, falsity, scienter, reliance and injury” (Vermeer Owners v Guterman, 78 NY2d 1114, 1116 [1991]; see e.g. Ambac Assur. Corp. v Countrywide Home Loans, Inc., 31 NY3d 569 [2018]; Pasternack v Laboratory Corp. of Am. Holdings, 27 NY3d 817, 827 [2016]). In this context, willfulness means “consciously and knowingly charg[ing] . . . improper rent” (Matter of Lavanant v New York State Div. of Hous. & Community Renewal, 148 AD2d 185, 190 [1st Dept 1989]; see Matter of Old Republic Life Ins. Co. v Thacher, 12 NY2d 48, 56 [1962] [interpreting “willful” in a regulatory context to mean “intentional and deliberate”]). 8 Contrary to the Raden tenants’ assertion, the owners in that case established that the deregulation was not fraudulent or willful because it was consistent with DHCR’s guidance. That they deregulated the apartment in 1995 – prior to the formal guidance DHCR issued the following year that such deregulation was proper – does not constitute evidence of a fraudulent scheme to deregulate. Rather, during a time of uncertainty concerning the scope of the J-51 benefit scheme, the owners correctly anticipated the - 13 - - 14 - Nos. 1-4 After Roberts there was understandable confusion regarding how the decision should be implemented, including whether Roberts should be given retroactive effect and, if so, how that should be accomplished. In overcharge cases where tenants had not challenged the status of their apartments within four years of deregulation, including these appeals, the improper deregulation predated the lookback period and, thus, the rent charged on the “base date” was a free market rent that had not been registered. Tenants who challenged an improper deregulation and initiated an overcharge claim within four years would be entitled to monetary damages encompassing the rent increase that occurred when the apartment was moved to the free market. But tenants who commenced a claim more than four years later and could not show fraud would be entitled, by virtue of the interrelated four-year statute of limitations and lookback rule, to recover only the increases added to the market base date rent that were over the legal limits during the recovery period. This rule was applied properly in many cases (see Reich, 168 AD3d 482; Raden, 164 AD3d at 441; Stultz v 305 Riverside Corp., 150 AD3d 558 [1st Dept 2017], lv denied 30 NY3d 909 [2018]; see also Todres v W7879, LLC, 137 AD3d 597 [1st Dept 2016], lv denied 28 NY3d 910 [2016]). Yet, in some Roberts cases, DHCR and the lower courts deviated from the four-year limitations period and lookback rule in the absence of fraud. The decision in 72A Realty Assoc. v Lucas (101 AD3d 401, 402 [1st Dept 2012]), which preceded our analysis in Boyd, represents such a deviation. In Lucas, the Appellate interpretation DHCR would ultimately adopt concerning the luxury deregulation provisions. Thus, the affirmed finding of fact that there was neither willfulness nor fraud is supported by the record and beyond our review. - 14 - - 15 - Nos. 1-4 Division held that the four-year lookback rule should not be applied, even though the court did not find a colorable claim of fraud, in part because the rent charged four years prior to the complaint was a free market rent following improper deregulation. Citing Lucas, DHCR (in Regina Metro.) and the Appellate Division (in Taylor) determined that, even in the absence of fraud, an overcharge in a Roberts case should not be calculated in accordance with the four-year lookback rule but, instead, by reconstructing what the legal regulated rent would have been on the base date if the apartment had not been improperly deregulated. DHCR and the Taylor court determined that this reconstruction should be conducted by identifying the last legal regulated rent before improper deregulation – even though the apartment was deregulated more than four years prior to imposition of the claim – and applying all permissible rent increases between the date of that regulated rent and the base date (Regina Metro., 164 AD3d at 422-423; Taylor, 151 AD3d at 105-106). The reconstruction method, applied by DHCR in Regina Metro. and approved by the Taylor court, violated the pre-HSTPA law by requiring review of rental history outside the four-year limitations and lookback period in the absence of fraud. 9 The tenants’ theory 9 We also reject the tenants’ arguments in Taylor and Reich that the rent should have been frozen under RSL § 26-517(e), which provides that “[t]he failure to file a proper and timely . . . rent registration statement” precludes an owner from collecting rent increases until a registration is filed. To the extent this provision is relevant to overcharge cases, the owners in Taylor and Reich filed registration statements for the years covered by the four-year recovery period and lookback rule (records prior to that period cannot be reviewed absent fraud). The fact that, in Taylor, these registration statements were filed retroactively is addressed by a separate statutory surcharge for late registration. In any event, rent freezing is inapplicable in Roberts cases where the failure to timely register resulted directly from DHCR’s endorsement of a misunderstanding of the law (see Taylor, 151 AD3d at 106; - 15 - - 16 - Nos. 1-4 that Thornton, Grimm and Conason preclude adoption of a market base date rent is mistaken. Although in those cases we characterized base date rents resulting from fraud as “illegal” or “unreliable,” we never suggested that an alternative method of setting the base date rent could apply to a less blameworthy owner where not authorized by the statutory scheme. Indeed, use of the reconstruction method violated the legislative mandate that “no award or calculation of an award of the amount of an overcharge may be based on an overcharge having occurred more than four years before” (former RSL § 26- 516[a][2]; see former CPLR 213-a). Moreover, it utilized rental history in a manner that this Court refused to sanction even in fraud cases, in which we authorized consideration of rental history outside the lookback period only for the “limited purpose” of determining whether a fraudulent scheme existed (Grimm, 15 NY3d at 367). We are also unpersuaded by the tenants’ arguments that use of a default formula or the other alternative approaches to determining base date rent 10 would comply with pre- Matter of Park v New York State Div. of Hous. & Community Renewal, 150 AD3d 105, 113 [1st Dept 2017]). 10 In some Roberts cases, lower courts approved use of the “sampling” method, authorized in the RSC for cases where the rent charged on the base date is unknown, in which DHCR sets the base date rent by averaging the rents of other similar stabilized apartments charged on the base date (see e.g. Matter of 160 E. 84th St. Assoc. LLC v New York State Div. of Hous. & Community Renewal, 160 AD3d 474 [1st Dept 2018] [reasoning that the market base date rent could not be accepted under Lucas and that a default formula was inappropriately punitive in a case without fraud]). Likewise, in Regina Metro., the Appellate Division rejected the reconstruction approach applied by DHCR as violative of the four-year lookback rule but indicated in dicta that, on remittal, sampling could be within DHCR’s discretion (164 AD3d at 428). As we explain, that suggestion was mistaken. - 16 - - 17 - Nos. 1-4 HSTPA law if applied to these cases. Even if employed in a manner compatible with the lookback rule, nothing in the RSL indicates that such methods apply here. While the alternative methods proposed by the tenants are reflected in the regulations, they are available only “[w]here the rent charged on the base date cannot be established” (RSC § 2526.1[a][3][ii]) – a situation not present in any of these Roberts cases. 11 The tenants and DHCR urge several bases for creating an exception to the standard pre-HSTPA overcharge calculation method that would enable courts to use these alternative approaches, but their arguments do not withstand scrutiny. First, an exception predicated on the fact that the base date rent was higher than what would have been permitted under the RSL for a stabilized apartment would swallow the four-year lookback rule. In every overcharge case, the rent charged was, by definition, illegally inflated – otherwise there would be no overcharge. Prior to the HSTPA, nothing in the rent stabilization scheme suggested that where an unrecoverable overcharge occurred before the base date, thus resulting in a higher base date rent, the four-year lookback rule operated 11 In that scenario, section 2526.1(a)(3)(ii) directs that “the rent shall be determined by the DHCR in accordance with section 2522.6,” which sets forth a framework for setting the legal regulated rent where “(i) the rent charged on the base date cannot be determined; or (ii) a full rental history from the base date is not provided; or (iii) the base date rent is the product of a fraudulent scheme to deregulate the apartment; or (iv) a rental practice proscribed under section 2525.3(b), (c) and (d) of this Title [which concern conditional rentals designed to deprive tenants of the protections of rent stabilization] has been committed” (RSC § 2522.6[b][2]). In such a case, DHCR sets the legal regulated rent using the lowest number resulting from four formulas, which include the sampling method (id. § 2522.6[b][3]). These RSC provisions are inapplicable by their terms in an overcharge case, such as a Roberts case, where the base date rent is the result of a mere mistaken overcharge (not fraud) and the rent charged on the base date is known. - 17 - - 18 - Nos. 1-4 differently. To the contrary, the limitations provisions – in order to promote repose – precluded consideration of overcharges prior to the recovery period (former RSL § 26- 516[a][2]; former CPLR 213-a), and it is clear from Boyd that use of a potentially inflated base date rent, flowing from an overcharge predating the limitations and lookback period, was proper in the absence of fraud. Likewise, no exception is justified by the fact that the inflated base date rent in Roberts cases resulted from improper deregulation, as opposed to an improperly high increase to a stabilized rent. The RSL makes no such distinction, and there is no indication that, under the pre-HSTPA law, an overcharge resulting from improper (but non-fraudulent) luxury deregulation warranted anything but the application of the standard lookback provisions. Nor is it necessary to recognize an additional common law exception that would create or increase the amount of overcharge damages in order to give proper effect to Roberts. Civil liability is always bounded by the public policy of repose embodied in statutes of limitations (see Ajdler v Province of Mendoza, 33 NY3d 120, 130 n 6 [2019] [“(T)he (s)tatute of (l)imitations . . . expresses a societal interest or public policy of giving repose to human affairs”], quoting John. J. Kassner & Co. v City of New York, 46 NY2d 544, 550 [1979]). Overcharge liability under the RSL is no different. That Roberts revealed particular conduct to be illegal does not mean that tenants must be able to recover a certain measure of monetary damages for associated rent increases despite their failure to seek recovery within the limitations and lookback periods. Critically, our decision in Roberts has led to the return of many apartments to the rent stabilization scheme, including - 18 - - 19 - Nos. 1-4 those at issue in these appeals; one amicus estimates the number of Roberts apartments at upwards of 50,000. While the statute of limitations and lookback period preclude tenants in those apartments from recovering certain damages they could have recovered if their claims had been initiated earlier, as a result of Roberts they may now enjoy rent stabilization protection. Indeed, in Taylor, regardless of any entitlement to monetary damages, the tenants’ request for a declaration that the apartment was rent-stabilized at the time of their complaint was properly granted. RSL § 26-504(c) provides pathways by which an apartment in a building receiving J-51 benefits may be deregulated at the conclusion of the benefit period. 12 Particularly relevant here, section 26-504(c) states that “if such dwelling unit would have been subject to [the RSL or the Emergency Tenant Protection Act (ETPA)] in the absence of [J-51 benefits or certain other programs], such dwelling unit shall, upon the expiration of such benefits, continue to be subject to [the RSL or ETPA] to the same extent and in the same manner as if [section 26-504(c)] had never applied thereto.” Thus, in buildings affected by Roberts, all of which were subject to the RSL regardless of J-51 12 Apartments subject to the RSL solely due to receipt of J-51 benefits generally are deregulated upon the first vacancy after expiration of benefits or at the moment of expiration, if every lease and renewal issued to the tenant in occupancy included a notice stating that the unit would be “subject to deregulation upon the expiration” of benefits and the approximate date of expiration (RSL § 26-504[c]). - 19 - - 20 - Nos. 1-4 benefits, apartments revert to their original rent-stabilized status after expiration of J-51 benefits. 13 We therefore decline to create a new exception to the lookback rule and instead clarify that, under pre-HSTPA law, the four-year lookback rule and standard method of calculating legal regulated rent govern in Roberts overcharge cases, absent fraud. Applying the correct interpretation of the pre-HSTPA law to the present cases, in Regina Metro. the Appellate Division properly annulled DHCR’s overcharge determination, which violated the lookback rule by relying on a reconstructed rent, despite finding that the overcharge was not willful (and there was no colorable fraud claim). In Raden, the de minimis overcharge was properly calculated using the standard method, accepting the rent charged on the base date as the base date rent and adding legal increases. In Reich, the complaint was properly dismissed based on the tenants’ failure to allege a colorable claim 13 This is not to say that tenants of those apartments necessarily are entitled to rent stabilization for the duration of their tenancy. Under the law in place before the HSTPA, the RSL contained luxury deregulation provisions, one of which permitted deregulation of occupied apartments where both the rent and the occupants’ combined income exceeded enumerated levels (see former RSL §§ 26-504.1, 26-504.3). Nothing in the statutory scheme would have precluded the owner from pursuing luxury deregulation after J-51 benefits expired (see generally Park, 150 AD3d at 112). The fact that the owner had not provided notices advising the tenants of its participation in the J-51 program is irrelevant because the clause in RSL § 26-504(c) relating to buildings subject to the RSL regardless of J-51 benefits does not contain the notice requirement applicable to buildings subject to rent stabilization only by virtue of receipt of J-51 benefits (see Lucas, 101 AD3d at 402 and n). Thus, the analysis in Lucas, automatically affording rent-stabilized status for the duration of the tenancy, should not be followed when determining rent-stabilized status under pre-HSTPA law. While the apartment in Taylor was properly declared rent- stabilized as of the time of the complaint, the apartment was thereafter susceptible to luxury deregulation under the pre-HSTPA law. - 20 - - 21 - Nos. 1-4 of fraud and the absence of allegations indicating that, applying the standard overcharge calculation method, there was an overcharge during the recovery period. And in Taylor, modification of the Appellate Division order is necessary to grant summary judgment dismissing the overcharge claim based on the owner’s unrebutted evidence that there were no overcharges using the standard calculation method. II. Normally, our analysis would end here. But the HSTPA, enacted in June 2019 and consisting of 15 parts, substantially revised New York’s rent stabilization scheme by, among other things, eliminating luxury deregulation, amending mechanisms for rent increases and providing for the expansion of regulation to new geographic areas (L 2019, ch 36). Here, although the alleged overcharges occurred years in the past, well before the HSTPA was enacted, the tenants ask us to apply certain amendments revising the enforcement provisions of the RSL with respect to overcharge claims, all contained in Part F of the legislation. 14 Although we generally do not review issues raised for the first time 14 We disagree with the suggestion in the dissent that it is premature or inappropriate to address the issues posed by retroactive application of Part F of the HSTPA. Soon after the HSTPA was enacted, parties in Regina Metro. and Taylor sent letters pursuant to Rule 500.6 advising the Court of the new legislation; the tenants asserted that Part F of the HSTPA applied to these appeals and the owners contended that the legislation was not intended to be applied retroactively and that such application would be unconstitutional. The impact of the HSTPA was also raised by DHCR in its reply brief in Regina Metro., with the agency noting, among other things, that the owner’s arguments were foreclosed by the Part F amendments. Multiple parties requested an additional opportunity for supplemental briefing in connection with these issues. The parties in Reich raised the applicability of the HSTPA and associated retroactivity and constitutional issues in their briefs, all filed after the enactment of the HSTPA. The Court provided the parties in all four cases an opportunity, if they so desired, to submit supplemental briefing on the issues - 21 - - 22 - Nos. 1-4 on appeal, we may consider the applicability of this new legislation enacted while these appeals were pending in this Court, “which could not have been raised below as those proceedings predated the amendment” (Matter of Gleason [Michael Vee, Ltd.], 96 NY2d 117, 121 n [2001]). 15 In the context of legislation as significant as the HSTPA, the question we address here is relatively narrow – we have no occasion to address the prospective application of any portion of the HSTPA, including Part F. We address the new legislation only to determine whether certain Part F amendments discussed below must be applied of whether the HSTPA should be applied to these pending appeals, as well as “the propriety and desirability of this Court determining such questions in the first instance on this appeal,” resulting in the filing of supplemental letter briefs in each case. All but one of the parties that addressed the latter question urged the Court to resolve these open issues without delay, noting there would be no benefit in remittal in light of the recent Appellate Division decision holding that relevant HSTPA Part F amendments apply retroactively to pending cases (see Dugan v London Terrace Gardens, L.P., 177 AD3d 1 [1st Dept 2019]) – precedent that would be binding on Supreme Court. The parties further cited concerns about incurring unnecessary additional delay and litigation costs in cases that have been pending for years. Under the circumstances, it is appropriate to address the statutory interpretation and constitutional issues, which were promptly raised by the parties, have been briefed and are presented for our review. 15 That three of these appeals (but not Raden) come to us as certified questions from non- final orders does not divest us of jurisdiction over the impact of recently-enacted legislation. McMaster v Gould (240 NY 379 [1925]), in which we declined to consider the applicability of a statute enacted after the Appellate Division certified a question to this Court from a nonfinal order, is inapposite. The question in that case was certified under a largely abandoned practice of framing the certified question with language specifically referencing the particular legal issue presented below in a manner that cabined our review to the law that existed at that time. The contemporary practice of broadly certifying the question whether the Appellate Division order was properly made gives this Court the flexibility to address any issue properly presented to us. In any event, the Appellate Division order in Raden is final, rendering the certified question – and any limitation that might be imposed by its framing – irrelevant to our resolution of that appeal, which presents the same issues relating to retroactive application of portions of the HSTPA. - 22 - - 23 - Nos. 1-4 retroactively to past conduct – and therefore govern these appeals, as urged by the tenants. We conclude that the overcharge calculation amendments cannot be applied retroactively to overcharges that occurred prior to their enactment. Part F extended the four-year limitations period for overcharge claims to six years, provided that an overcharge complaint “may be filed . . . at any time” and eliminated the provision – present, in substance, since 1983 – stating that “no determination of an overcharge and no award or calculation of an award of the amount of an overcharge may be based upon an overcharge having occurred more than four years before the complaint is filed” (RSL § 26-516[a][2]; see CPLR 213-a). It also entirely abolished the lookback rule in favor of new requirements: the base date rent is no longer defined as the rent charged or reflected in a registration statement on the base date but that reflected in the “most recent reliable” registration statement filed six “or more” years before the most recent registration (RSL § 26-516[a][i]). Examination of rent history that predates the period covered by the former lookback rule is no longer precluded. Instead, DHCR and courts are now required to “consider all available rent history which is reasonably necessary” to investigate overcharge claims and determine legal regulated rent, regardless of the vintage of that history and including records kept by owners, tenants and agencies (id. § 26-516[a][i], [h]). Part F likewise lengthened the four-year record retention period to six years and provides that an owner’s “election not to maintain records” does not limit the authority of DHCR or a court to examine the rental history further (id. § 26-516[g]). Whereas the RSL previously - 23 - - 24 - Nos. 1-4 provided for only two years of treble damages for willful overcharges, treble damages are now recoverable for the entire six-year limitations period (id. § 26-516[a][2]). 16 The tenants argue that these amendments should be applied to these appeals based on the provision stating that Part F “shall take effect immediately and shall apply to any claims pending or filed on and after such date” (see L 2019, ch 36, Part F, § 7). The owners argue that the effective date language does not evince a clear legislative intent to apply the new overcharge calculation provisions retroactively, particularly to cases no longer pending in DHCR or the trial court and further contend, in any event, that retroactive application of the new overcharge calculation methodology to these appeals would violate due process protections in the State and Federal Constitutions. We must first assess whether applying these amendments to overcharges that occurred before the HSTPA’s enactment truly implicates the concerns historically associated with retroactive application of new legislation. In Landgraf v USI Film Prods., the Supreme Court articulated a contemporary framework for analyzing retroactivity – adopted by this Court – which recognized that application of a new statute to conduct that has already occurred may, but does not necessarily, have “retroactive” effect upsetting reliance interests and triggering 16 The HSTPA also makes it harder for owners to prove a lack of willfulness, by deleting from RSL § 26-516(a) a provision stating that treble damages could not be imposed “based solely on said owner’s failure to file a timely or proper initial or annual rent registration statement” and adding that, after an overcharge complaint has been filed and served on an owner, the voluntary adjustment of rent or tender of an overcharge refund shall not be considered as evidence of a lack of willfulness. - 24 - - 25 - Nos. 1-4 fundamental concerns about fairness (511 US 244 [1994]; see also American Economy Ins. Co. v State of New York, 30 NY3d 136, 149 [2017], cert denied, 138 S Ct 2601 [2018]). Landgraf harmonized the “apparent tension” between the presumption against retroactive application of statutes and statutory construction canons applied in prior cases to discern a statute’s temporal scope, which concerned statutes with no truly retroactive effect (511 US at 263-280; see e.g. Bradley v Sch. Bd. of City of Richmond, 416 US 696 [1974] [holding a newly enacted statute authorizing the award of a reasonable attorney’s fee to a prevailing party in a school desegregation case could be relied on in a pending action to support a claim for such a fee for legal services rendered before the statute was enacted]; Thorpe v Hous. Auth. of City of Durham, 393 US 268, 278-279 [1969] [holding that a new agency policy imposing “a very simple notification procedure” that a housing authority had to follow prior to evicting a tenant, which did not alter the lease terms or take away the housing authority’s legal ability to evict, was applicable to an eviction proceeding commenced before the policy was issued but not yet completed]; see also Landgraf, 511 US at 285 n 37 [likewise limiting the continued utility of the tenet that new “remedial” statutes apply presumptively to pending cases]). A statute has retroactive effect if “it would impair rights a party possessed when he acted, increase a party’s liability for past conduct, or impose new duties with respect to transactions already completed,” thus impacting “substantive” rights (Landgraf, 511 US at 278-280; see also American Economy, 30 NY3d at 147). On the other hand, a statute that affects only “the propriety of prospective relief” or the nonsubstantive provisions - 25 - - 26 - Nos. 1-4 governing the procedure for adjudication of a claim going forward has no potentially problematic retroactive effect even when the liability arises from past conduct (Landgraf, 511 US at 273; see e.g. Ex parte Collett, 337 US 55, 71 [1949] [transfer of a civil action]). 17 For example, in Matter of Raynor v Landmark Chrysler, this Court held that a legislative amendment revising the “time and manner” of insurers’ payments for future workers’ compensation awards arising from prior injuries did not have retroactive effects because “the statute neither altered the carrier’s preexisting liability nor imposed a wholly unexpected new procedure” (18 NY3d 48, 57 [2011]). 18 Landgraf illustrates this distinction. There, the Supreme Court addressed whether 1991 amendments to Title VII of the Civil Rights Act of 1964 applied to pending litigation. Prior to 1991, the primary monetary relief available under Title VII was back pay for lost 17 The Part F amendment relevant in Collazo v Netherland Prop. Assets LLC (decided herewith), a forum-selection provision clarifying that courts and DHCR have concurrent jurisdiction with respect to overcharge claims “subject to the tenant’s choice of forum” (L 2019, ch 36, Part F, § 1), is a procedural statute that raises no retroactivity concerns when applied in that case, where Supreme Court granted a pre-answer motion to dismiss the action with the expectation that the merits of the claim would be adjudicated by DHCR. At this early stage of litigation, the issue in Collazo is which forum should resolve the claim in the first instance. “Application of a new jurisdictional rule usually takes away no substantive right but simply changes the tribunal that is to hear the case” (Landgraf, 511 US at 274 [citation and internal quotation marks omitted]). 18 Likewise, it was “debatable” whether the statute in American Economy had a retroactive effect on insurers by barring future applications to a workers’ compensation fund that covered workers whose closed cases reopened unexpectedly (30 NY3d at 149). The insurers were always legally liable for the closed cases, which arose out of their own policies, and the fund merely provided them potential relief from the uncertain future coverage costs associated with those cases, so its closure on a going-forward basis subjected the insurers to the possibility of such future costs but did not impose new legal liability (id. at 149, 141-145). - 26 - - 27 - Nos. 1-4 wages, recoverable only if unlawful discrimination had a concrete effect on the plaintiff’s employment (511 US at 252-254). The 1991 act “significantly expand[ed] the monetary relief potentially available to plaintiffs” – and “allow[ed] monetary relief for some [cases] that would not previously have justified any relief under Title VII” – by providing for compensatory damages (including for future pecuniary losses and nonpecuniary losses) and punitive damages and making monetary damages recoverable even absent a concrete effect on employment, as well as created a right to a jury trial in certain damages cases (id.). The Court deemed the jury trial provision purely procedural with no retroactive effect if applied to cases that had been commenced but had not yet proceeded to trial before the statute was enacted (id. at 280-281 and n 34). On the other hand, the punitive damages provision was “clearly” retroactive if applied to conduct occurring before the statute’s enactment, as it reflected a punishment for past acts (id. at 281). The compensatory damages provision – which was “quintessentially backward looking” – also would have had a retroactive effect because, in cases where money damages were previously unrecoverable, it would “attach an important new legal burden” and could “be seen as creating a new cause of action” (id. at 282-283). The Court noted that, even in cases where monetary damages were previously available, the new provision “resemble[d] a statute increasing the amount of damages available under a preestablished cause of action” that would, if applied to pending cases, “undoubtedly impose . . . a ‘new disability’ in respect to past events,” explaining that the “extent of a party’s liability, in the civil context as well - 27 - - 28 - Nos. 1-4 as the criminal, is an important legal consequence” in determining retroactivity (id. at 283- 284 [citation omitted]). Here, if applied to past conduct, the amendments to the statute of limitations, overcharge calculation and damages provisions in Part F of the HSTPA would impose new liability and thus have a “retroactive effect” – altering substantive rights in multiple ways. The statute of limitations with respect to overcharge claims has been treated as running backward from the date of initiation of the claim, previously permitting recovery of overcharges occurring only in each of the four years preceding the complaint. Thus, the relevant illegal conduct for which a tenant can recover is the overcharge committed in any given year during the recovery period. Expansion of the limitations period from four to six years clearly has a retroactive effect because it permits recovery for nonfraudulent conduct occurring during an additional two years preceding the former recovery period – conduct that was beyond challenge under the prior law. Likewise, the imposition of treble damages for four additional years of overcharges – conduct not previously subject to treble damages – clearly increases the scope of liability for past wrongs if applied retroactively, as the Supreme Court indicated in Landgraf (id. at 281). Critically, for purposes of calculating the amount owed for any overcharge, Part F now renders reviewable rent increases that were shielded by the prior lookback rule, permitting reconstruction of the legal regulated rent based on any relevant records in the apartment’s entire rental history. Although the tenant can directly recover only for overcharges occurring during the six years preceding the complaint, the damages - 28 - - 29 - Nos. 1-4 calculations for those years may now effectively incorporate conduct – illegal increases – preceding that period and occurring at any point in the rental history. This amendment is not merely, as the dissent contends, a procedural change regarding what evidence can be considered (dissenting op at 19-20); it expands the scope of owner liability significantly based on conduct that was inoculated by the old law. 19 In the same way that the compensatory damages provision in Landgraf would have provided monetary relief for conduct that, while illegal, previously did not provide a right to such relief, the effect here would be to permit recovery, previously barred by the lookback rule and limitations period, for past conduct that violated the RSL. Even if the amendments could be viewed in some cases as merely increasing damages for conduct that already gave rise to monetary relief, the dissent is wrong that such “tinker[ing] with the recoverable amount” has no retroactive effect (dissenting op at 20, 25-26). Under Landgraf, statutes that expand “[t]he extent of a party’s liability” under the same cause of action have retroactive effect (511 US at 283-284 [observing that in no case “in which Congress had not clearly spoken, ha(d) (the Court) read a statute substantially increasing the monetary liability of a private party to apply to conduct occurring before the statute’s enactment”]). 19 The dissent further asserts that, prior to the addition of the lookback rule provision in 1997, review of all rental history to establish the base date rent was permitted (dissenting op at 19). The dissent is mistaken (see n 26, infra) – but even adopting the dissent’s view, the repeal of the lookback rule upset over twenty years of repose. Likewise, the dissent’s repeated reliance on cases that predate Landgraf reflects an unwillingness to engage with contemporary retroactivity jurisprudence (dissenting op at 23-24, 51). - 29 - - 30 - Nos. 1-4 This retroactive effect becomes even more pronounced when considered in tandem with the HSTPA amendments to the record retention requirements. Those amendments expand the retention period by two years and, although the provision still nominally permits an owner to destroy some records – now after six years – the new law states that “an owner’s election not to maintain records shall not limit the authority of [DHCR] and the courts to examine the rental history and determine legal regulated rents” (RSL § 26- 516[g]). Thus, the HSTPA effectively provides that an owner can be penalized indirectly for a disposal of records that was legal under the prior law but will now hinder the owner’s ability to establish the legality of (and non-willfulness of any illegal) rent increases outside the lookback period, which – under the new legislation – impact recovery even in the absence of fraud. 20 Retroactive application of the overcharge calculation provisions in Part F implicates all three Landgraf retroactivity criteria by impairing rights owners possessed in the past, increasing their liability for past conduct and imposing new duties with respect to 20 The record retention provision does not exist in a vacuum but, before the HSTPA, was closely related to the lookback rule. Although the dissent suggests that consideration of the record retention amendment is somehow inappropriate (dissenting op at 42-43), it is impossible to fully assess the retroactive impact of the HSTPA’s new overcharge calculation method without acknowledging that, previously, owners were permitted by those interrelated provisions to dispose of records after four years. The impact of the amendment is evident in a case like Reich, where the building has changed ownership twice since the tenants took occupancy fifteen years ago. If the HSTPA were applied to permit reconstruction of the base date rent in such a case, the change in record retention rules exacerbates the retroactive effect by hindering justification of rent increases taken outside the prior four-year lookback period, thereby impairing landlords’ ability to defend themselves in an action alleging overcharges more than four years in the past. - 30 - - 31 - Nos. 1-4 transactions already completed. This is true even though rent stabilization is a highly regulated area. As we explained in American Economy when addressing the rights of employers’ insurers under another highly regulated regime – workers’ compensation – this is an area designed with “flexibility,” in which “[t]he allocation of economic benefits and burdens has always been subject to adjustment” (id. at 148-149, quoting Becker v Huss Co., 43 NY2d 527, 541 [1978]). “The Constitution merely mandates that a landlord earn a reasonable return,” and no party doing business in a regulated environment like the New York City rental market can expect the RSL to remain static, as we have repeatedly made clear in cases challenging prospective legislation altering the formula for rent increases under prior schemes (see I.L.F.Y. Co. v City Rent & Rehabilitation Admin., 11 NY2d 480, 492 [1962]; Bucho Holding Co. v Temporary State Hous. Rent Commn., 11 NY2d 469 [1962]). But applying these amendments to past conduct is not related to legislative decisions about proper division of economic burdens going forward, and it does not simply upset expectations about the continuing future availability of a favorable regulatory mechanism. Rather, by increasing overcharge exposure relating to owners’ past acts, retroactive application of the provisions would undermine considerable reliance interests concerning income owners already derived from rents collected on real property years – if not decades – before. Because the overcharge calculation provisions, if applied to past conduct, would impact substantive rights and have retroactive effect, the presumption against retroactivity is triggered. As opposed to a decisional change in the common law – which typically but - 31 - - 32 - Nos. 1-4 not invariably applies “to all cases still in the normal litigating process” (Gurnee v Aetna Life & Cas. Co., 55 NY2d 184, 191 [1982] [citation omitted] [permitting retroactive application of interpretation of insurance law “to all claims not barred by the Statute of Limitations”]) – generally, a statute is presumed to apply only prospectively (Majewski, 91 NY2d at 584). Retroactive legislation is viewed with “great suspicion” (Matter of Chrysler Props. v Morris, 23 NY2d 515, 521 [1969]). This “deeply rooted” presumption against retroactivity is based on “[e]lementary considerations of fairness [that] dictate that individuals should have an opportunity to know what the law is and to conform their conduct accordingly” (Landgraf, 511 US at 265). As the Supreme Court has cautioned, careful consideration of retroactive statutes is warranted because “[t]he Legislature’s unmatched powers allow it to sweep away settled expectations suddenly and without individualized consideration” and “[i]ts responsivity to political pressures poses a risk that it may be tempted to use retroactive legislation as a means of retribution against unpopular groups or individuals” (id. at 266). In light of these concerns, “[i]t takes a clear expression of the legislative purpose . . . to justify a retroactive application” of a statute (Gleason v Gleason, 26 NY2d 28, 36 [1970] [internal quotation marks and citation omitted]), which “assures that [the legislative body] itself has affirmatively considered the potential unfairness of retroactive application and determined that it is an acceptable price to pay for the countervailing benefits” (Landgraf, 511 US at 272-273). The ultimate question here, therefore, is one of statutory interpretation: whether the Legislature has expressed a sufficiently clear intent to apply the - 32 - - 33 - Nos. 1-4 overcharge calculation amendments retroactively to these pending appeals. There is certainly no requirement that particular words be used – and, in some instances retroactive intent can be discerned from the nature of the legislation (see e.g. Eastern Enters. v Apfel, 524 US 498 [1998]; Usery v Turner Elkhorn Min. Co., 428 US 1 [1976]). But the expression of intent must be sufficient to show that the Legislature contemplated the retroactive impact on substantive rights and intended that extraordinary result. Even within the same legislation, language may be sufficiently clear to effectuate application of some amendments to cases arising from past conduct but not others with more severe retroactive effect (see Landgraf, 511 US at 280-281; Matter of Beary v City of Rye, 44 NY2d 398, 410-411 [1978]). If retroactive application would not only impose new liability on past conduct but also revive claims that were time-barred at the time of the new legislation, we require an even clearer expression of legislative intent than that needed to effect other retroactive statutes – the statute’s text must unequivocally convey the aim of reviving claims. For nearly a century, this Court has recognized that “[r]evival is an extreme exercise of legislative power. The will to work it is not deduced from words of doubtful meaning. Uncertainties are resolved against consequences so drastic” (Hopkins v Lincoln Trust Co., 233 NY 213, 215 [1922] [Cardozo, J.]). Indeed, it is a bedrock rule of law that, absent an unambiguous statement of legislative intent, statutes that revive time-barred claims if applied retroactively will not be construed to have that effect (see e.g. Thomas v Bethlehem Steel Corp., 63 NY2d 150, 155 [1984]; Beary, 44 NY2d at 412-413). For example, in 35 - 33 - - 34 - Nos. 1-4 Park Ave. Corp. v Campagna, plaintiff contended that a newly enacted statute permitting a court to grant relief from an unconscionable lease or clause – which the Legislature deemed “applicable to all leases, regardless of when executed” – revived a time-barred claim to rescind a lease (48 NY2d 813, 814-815 [1979]). Citing the need for clear and unequivocal language “to effect so drastic a consequence,” the Court reasoned that the language rendering the statute “applicable to all leases” was “ambiguous,” failing to convey a sufficiently clear intention to resurrect time-barred claims (id. at 815). When the Legislature has intended to revive time-barred claims, it has typically said so unambiguously, providing a limited window when stale claims may be pursued. For example, Jimmy Nolan’s Law, which we addressed in Matter of World Trade Ctr. Lower Manhattan Disaster Site Litig. (30 NY3d 377 [2017]), expressly “revived” certain time- barred claims related to World Trade Center cleanup and rescue work, permitting suit during a discrete one-year window period (see General Municipal Law § 50-i[4][a], as added by L 2009, ch 440, § 2). Similar unequivocal “revival” language accompanied by a limited period for commencement of time-barred claims appears in the statute reviving toxic tort cases, including those arising from exposure to the drug diethylstilbestrol ingested by pregnant women (L 1986, ch 682 § 4), addressed in Hymowitz v Eli Lilly & Co. (73 NY2d 487 [1989]). The Legislature has historically acted with deliberation and - 34 - - 35 - Nos. 1-4 clarity when upsetting the strong public policy favoring finality, predictability, fairness and repose served by statutes of limitations. 21 The “claims pending” language in the Part F effective date provision is insufficient to indicate that the Legislature intended retroactive application in a manner that revives time-barred claims, such as by extending the statute of limitations to permit recovery of two annual overcharge claims that were time-barred under the prior law. This language bears no resemblance to the express claim revival language in the statutes addressed by World Trade Ctr. and Hymowitz – yet the claim revival effect if the relevant amendments to the HSTPA were to be applied retroactively is substantially more far-reaching than that of the orderly and even-handed claim revival method used in those statutes, which created a narrow window for commencement of time-barred suits. If applied to past conduct, the relevant HSTPA amendments would not only revive claims for two additional years but, by changing the overcharge calculation methodology to enable review of any illegal rent increase in the history of the apartment, would also substantially alter the nature of the liability by resurrecting nonfraudulent overcharges that initially occurred more than four years prior to the complaint but continue to impact the calculation of the current rent. Just as the statutory language in 35 Park Ave. Corp., rendering the new legislation “applicable to all leases, regardless of when executed” (48 NY2d at 814-815), fell short of our standard, 21 When that intent is unambiguous, a claim revival statute withstands challenge under the Due Process Clause if it is “a reasonable response in order to remedy an injustice” (World Trade Ctr., 30 NY3d at 400), such as remedying the plight of sick plaintiffs who were unable to commence timely claims because of the long period of latency between exposure and the manifestation of illness (Hymowitz, 73 NY2d at 503-504, 514). - 35 - - 36 - Nos. 1-4 here the generic reference to “any claims pending” upon enactment does not provide the requisite textual assurance that the Legislature considered the significant impact of reviving barred claims, upsetting the strong public policy favoring repose, and that it desired that result. This does not entirely resolve the statutory interpretation question, however, because as we have explained, retroactive application of Part F would have significant impacts beyond claim revival, specifically on the scope and nature of damages recoverable with respect to timely claims. While the presumption against claim revival effect may only be overcome by the Legislature’s unequivocal textual expression that the statute was intended, not only to apply to past conduct, but specifically to revive time-barred claims (see 35 Park Ave. Corp., 48 NY2d at 815), the general presumption against retroactive effect may be overcome by either an express prescription of the statute’s temporal reach or a less explicit but “comparably firm conclusion” – applying “normal rules of construction” – of legislative intent to apply the enactment to conduct that occurred previously (Fernandez-Vargas v Gonzales, 548 US 30, 37 [2006] [citation omitted]; see also Majewski, 91 NY2d at 584). Although the HSTPA Part F effective date provision does not express an intent to revive time-barred claims under our heightened claim revival standard, read in the specific context of this legislation, the “claims pending” language is sufficiently clear to evince legislative intent to apply the amendments to at least some timely overcharge claims that were commenced prior to enactment. - 36 - - 37 - Nos. 1-4 Each of the HSTPA’s fifteen parts contains its own effective date provision, indicating the Legislature considered the issue of temporal scope for each. The legislation is almost entirely forward-looking – only Part F’s effective date provision contains language referring to prior claims. In contrast, many of the HSTPA’s other effective date provisions, such as that applicable to the amendments eliminating vacancy and longevity bonuses, state only that the parts of the legislation to which they apply “shall take effect immediately” (see L 2019, ch 36, Part A § 7, Part B § 8, Part C § 5, Part D § 8, Part G § 7, Part J § 2, Part L § 3), in some cases indicating when the amendments contained therein expire (id. Part E § 3, Part H § 5, Part K § 18). Others expressly provide that the relevant part applies prospectively only, such as by indicating that it takes effect immediately but applies to actions “commenced on or after such effective date” or that certain amendments take effect at some point in the future, such as “on the thirtieth day after this act shall have become a law” (id. Part M § 29; see also id. Part N § 2 [Part N “shall take effect immediately and shall only apply to plans (for conversion of an apartment to a condominium or cooperative) submitted . . . after the effective date”], Part O § 14 [Part O “shall take effect on the thirtieth day after it shall have become law”]). Therefore, this is not a case where the Legislature passed comprehensive legislation, including general “claims pending” language, without differentiating between the parts it intended to apply retroactively and those that could reasonably be given only prospective effect. Moreover, Part F relates almost entirely to the calculation of overcharge claims, and any such claim - 37 - - 38 - Nos. 1-4 that was pending at the time the HSTPA was enacted necessarily involved conduct that occurred prior to the statute’s enactment. Read in context, and because some of the Part F provisions have effects beyond reviving time-barred claims, the “claims pending” language must be construed as evincing a retroactive intent. 22 At the very least, “claims pending” indicates the Part F provisions were intended to apply to overcharge claims where the calculation issue remained unresolved as of the June 2019 effective date. Indeed, in Landgraf, the Supreme Court indicated that similar language referencing “pending” cases would have been sufficient in that case to reflect a retroactive intent (see Landgraf, 511 US at 259-260 [referencing language in a prior version of the statute stating the provisions “shall apply to all proceedings pending on or commenced after the date of enactment”]). Therefore, although there was no clear directive to revive time-barred claims, we conclude that the Legislature evinced a sufficiently clear intent to apply Part F to timely pending claims, such as Regina Metro. and Taylor, where the overcharge calculation issue was unresolved at the time the HSTPA was enacted. 23 It is therefore necessary to reach the constitutional challenge. 22 To be sure, the language in the Part F effective date provision is less precise than the clause in the 1997 RRRA stating it was applicable to “any action or proceeding pending in any court or any application, complaint or proceeding before an administrative agency on the effective date” (L 1997, ch 116, § 46; see Matter of Partnership 92 LP v New York State Div. of Hous. & Community Renewal, 11 NY3d 859 [2008]), but given the contrast between the Part F language and that used in the remaining parts of the HSTPA, it is sufficient to convey a retroactive intent. 23 The tenants ask us to construe “claims pending” as encompassing any case pending on appeal which, in cases where the overcharge was already calculated, would involve reopening of the record for additional discovery and recalculation of the base date rent – - 38 - - 39 - Nos. 1-4 III. To comport with the requirements of due process, retroactive application of a newly enacted provision must be supported by “a legitimate legislative purpose furthered by rational means” (American Economy, 30 NY3d at 157-158, citing General Motors Corp. v Romein, 503 US 181, 191 [1992]). Of course, as with prospective elements of legislation, legislative direction concerning the scope of a statute carries a presumption of constitutionality, and the party challenging that direction bears the burden of showing the absence of a rational basis justifying retroactive application of the statute (Turner Elkhorn, 428 US at 15). Nevertheless, the Supreme Court has made clear that “retroactive legislation does have to meet a burden not faced by [purely prospective] legislation,” which is satisfied when “the retroactive application of the legislation is itself justified by a rational legislative purpose” (Pension Benefit Guar. Corp. v R.A. Gray & Co., 467 US 717, 730 [1984] [emphasis added]). Because “[r]etroactive legislation presents problems of unfairness that are more serious than those posed by prospective legislation” (Romein, 503 US at 191), “the justifications for [prospective legislation] may not suffice for [the retroactive aspects]” (R.A. Gray & Co., 467 US at 730). We have suggested that, in order to comport with due process, there must be a “persuasive reason” for the “potentially harsh” impacts of essentially, relitigation of the entire case. Given our resolution of the constitutional issue, we need not determine whether that broad view of “claims pending” reflects legislative intent because, at a minimum, “claims pending” encompasses cases like Regina Metro. and Taylor, in which the overcharge calculation still had to be performed. - 39 - - 40 - Nos. 1-4 retroactivity (Holly S. Clarendon Trust v State Tax Commn., 43 NY2d 933, 935 [1978]; see Chrysler Props., 23 NY2d at 522 [there was no “persuasive case” supporting retroactive application]). Our acknowledgement that retroactive legislation must be supported by a rational basis commensurate with the degree of retroactive effect does not represent a “bifurcation” between the rational basis analyses for prospective and retroactive legislation (see dissenting op at 36). Consideration of the scope of legislation is critical to a rational basis analysis, regardless of whether it is solely prospective or also involves retroactive effects. In tax cases, an area where retroactive application of statutes is more highly tolerated, if for a short time (James Sq. Assoc. LP v Mullen, 21 NY3d 233, 246 [2013], citing Matter of Replan Dev. v Department of Hous. Preserv. & Dev. of City of N.Y., 70 NY2d 451, 455 [1987] and Welch v Henry, 305 US 134, 146 [1938]), we have highlighted particular factors relevant to the due process analysis for retroactive legislation. In Replan, we explained that whether a retroactive statute comports with due process principles is a “question of degree” that turns on the length of the retroactivity period, the taxpayer’s forewarning of a change in legislation as relevant to reliance interests and the public purpose for retroactive application (70 NY2d at 456). Our consideration of these factors – derived from Supreme Court precedent – “does not differ from the prohibition against arbitrary and irrational legislation that applies generally to enactments in the sphere of economic policy” (Caprio v New York State Dept. of Taxation & Fin., 25 NY3d 744, 752 [2015], quoting United States v Carlton, 512 US 26, 30 [1994]). Instead, in requiring that - 40 - - 41 - Nos. 1-4 there be a non-arbitrary justification for retroactive application of a statute, the rational basis test incorporates the equitable considerations that Replan highlights more directly. Likewise, the Supreme Court has indicated that it applies the same due process analysis in the tax context that applies to any other economic legislation (Carlton, 512 US at 30), albeit recognizing that retroactivity is more tolerable in tax legislation (see United States v Darusmont, 449 US 292, 296-298 [1981]; Welch, 305 US at 146, 149-150). 24 In determining whether retroactive application of a statute is supported by a rational basis, the relationship between the length of the retroactivity period and its purpose is critical. Generally, there are two types of retroactive statutes that courts have found to be constitutional: those employing brief, defined periods that function in an administrative manner to assist in effectuating the legislation, and statutory retroactivity that – even if more substantial – is integral to the fundamental aim of the legislation. For example, in the first category, courts have rejected challenges to the legislative practice of incorporating a clear, limited retroactivity period intended to prevent parties from taking advantage of a lengthy legislative process to circumvent a statute. In R.A. Gray & Co., the Supreme Court 24 The due process standard for gauging the propriety of retroactive tax statutes was articulated differently in the past. In earlier decisions relied on in Replan, the Supreme Court framed the inquiry as whether the statutes in question were “so harsh and oppressive as to transgress the constitutional limitation” (Welch, 305 US at 147). That this inquiry was not historically labeled as a “rational basis” test does not undermine the conclusion by both this Court and the Supreme Court that, in practice, the analysis “d[id] not differ” from the one applied to other types of retroactive statutes (Caprio, 25 NY3d at 752, quoting Carlton, 512 US at 30). Thus, there is no basis to dispute the continuing validity of Replan or James Square (applying Replan) which, contrary to the dissent’s suggestion (dissenting op at 36), remain good law. - 41 - - 42 - Nos. 1-4 rejected a due process challenge to retroactive application of a statute that required employers that withdrew from a multiemployer pension plan to pay a fixed debt to the plan and expressly extended that penalty to those who withdrew within the five months prior to enactment (467 US at 720, 725). After observing that Congress had been “quite explicit” that the statute was made retroactive in order to “prevent employers from taking advantage of a lengthy legislative process and withdrawing while Congress debated,” the Court emphasized that the retroactivity period was limited in scope to achieve its aim, noting, “as the amendments progressed through the legislative process, Congress advanced the effective date chosen so that it would encompass only that retroactive time period that Congress believed would be necessary to accomplish its purposes” (467 US at 730-731). Falling within the latter category – instances where retroactive application was central to the statutes’ purpose – in Turner Elkhorn the Supreme Court upheld legislation requiring coal operators to compensate miners who had already left the industry for the disability caused by the latent effects of exposure to coal dust, resulting in black lung disease, or pneumoconiosis (428 US at 15, 18-20). The Supreme Court reasoned that the retroactive imposition of liability on the coal operator that previously employed the miner was “justified as a rational measure to spread the costs of the employees’ disabilities to those who have profited from the fruits of their labor” (id. at 18; but see Eastern Enters. v Apfel, 524 US 498 [1998] [deeming retroactive application of a coal miner health care benefit scheme, requiring participation by a company that ceased coal mining operations in 1965, unconstitutional]). Similarly, in American Economy – where we assumed without - 42 - - 43 - Nos. 1-4 deciding that a statute closing a fund that previously benefitted workers’ compensation insurance carriers liable for “reopened” claims had a retroactive impact – we concluded application of the statute to injuries incurred under workers’ compensation insurance policies finalized prior to the effective date was necessary to achieve its purpose (30 NY3d at 158-159). There, the workers’ compensation fund was closed to relieve the burden on employers supporting its costs, which had increased dramatically in the six years preceding the legislation due to skyrocketing medical costs and an unexpected surge in reopened cases (id. at 143). If that closure was not applied to claims arising from past injuries, the fund “would have incurred substantial new liabilities for many years, given the duration of many workers’ compensation cases,” and “the relief to businesses sought by the legislature would have been indefinitely delayed” (id. at 158). In cases where retroactivity is integral to full achievement of the fundamental purpose of the legislation, a rational basis for the retroactive effect may be readily identifiable. 25 On the other hand, even short periods of retroactivity will be invalidated absent the requisite rational basis. In Chrysler Properties, we sustained a constitutional challenge to 25 The Supreme Court has also considered whether impacted parties had forewarning of the retroactive effect. In Romein, employers and the Michigan Supreme Court interpreted a state statute permitting reduction of certain workers’ compensation benefits to apply to workers injured prior to enactment, despite a contrary legislative resolution (503 US at 184-185). The Supreme Court upheld a second statute clarifying the original intent and mandating reimbursement of benefits wrongfully withheld during the period between enactment of the original statute and the clarifying legislation, indicating that there was no substantial reliance issue because the employers “knew they were taking a risk” when they acted based on a statutory interpretation that contravened that expressed by the legislature (id. at 191-192). - 43 - - 44 - Nos. 1-4 retroactive application of a statute providing New York City a new right to seek judicial review of adverse determinations of the State Tax Commission, despite the relatively brief, four-month period of retroactivity set forth in the effective-date provision (23 NY2d at 518-519). Because there previously was no right to challenge such determinations, we concluded that a taxpayer who was issued a refund order only one month before the new law was entitled to payment because the taxpayer “had obtained a sufficiently certain right to the money” and the Legislature made the amendment retroactive “without any discernable reason” (id. at 517-519). Likewise, in James Square, we invalidated the retroactive application of amendments to the Empire Zones Program Act that changed the criteria for receipt of tax benefits, noting businesses had no forewarning of the change, and that a 16-month period of retroactivity was excessive because businesses had “gained a reasonable expectation that they would secure repose in the existing tax scheme” (21 NY3d at 248-250 [internal quotation marks omitted]). We emphasized that retroactively denying tax credits did not further any aim of the statute – by spurring investment or preventing abuses of the program – but “simply punished . . . participants more harshly for behavior that already occurred and that they could not alter” (id. at 250). Unlike the statutes at issue in R.A. Gray & Co., Turner Elkhorn or American Economy, where the retroactive scope was directly related or integral to furtherance of the legislative goals, in Chrysler Properties and James Square we concluded retroactive application would be irrational given the extent of settled interests, degree of repose and lack of a permissible basis for unsettling those interests. - 44 - - 45 - Nos. 1-4 Those same concerns are amplified here. The HSTPA’s overcharge calculation and treble damages provisions, if applied retroactively, would more severely impact substantive rights than the provision in James Square, which involved a tax statute, an area where courts are generally more tolerant of retroactivity. Before the HSTPA, the combined effect of the statute of limitations and lookback rule provided owners substantial repose relating to rent increases collected more than four years prior to the filing of the complaint. In sharp contrast, the HSTPA amendments directing review of all available rental history to reconstruct the legal regulated rent on the base date may be applied to incorporate increases (whether fraudulent, erroneous or simply lacking in adequate documentation many years after the fact) in the apartment’s distant rental history, thereby expanding a tenant’s total overcharge recovery well beyond what was provided under the prior law. This retroactivity period cannot be characterized as brief; rather, the Legislature appears to have intended that the retroactive period be bounded only by the length of the apartment’s rental history. Such a vast period of retroactivity upends owners’ expectations of repose relating to conduct that may have occurred many years prior to the recovery period. Having reasonably relied on pre-HSTPA statutory and regulatory provisions to destroy records (see former RSL 26-516[g]; Cintron, 15 NY3d at 354; Thornton, 5 NY3d at 181; Matter of Gilman v New York State Div. of Hous. & Community Renewal, 99 NY2d 144, 149 [2002]) – records that are now needed under the HSTPA to establish the legality of prior rent increases and a lack of willfulness – owners may be held liable under the HSTPA for purported historical overcharges that were once supported by - 45 - - 46 - Nos. 1-4 documentation. Turning to the treble damages provisions, where owners are unable to meet their burden to prove a negative – lack of past willfulness – the HSTPA makes treble damages mandatory for all six years of the new recovery period, rather than the two years preceding filing of the complaint. These provisions either increase the penalty or impose a new penalty for damages that previously were not trebled. There can be no doubt here that the HSTPA Part F amendments represent a clear rejection of prior rent stabilization enforcement policy and effectuate a significant readjustment of substantive rights relating to overcharge recovery, distinguishing this legislation in critical ways from that applied to past conduct in Romein, which clarified the Michigan legislature’s original intent that was expressed in a legislative resolution but disregarded by employers and courts. As explained further below, “judicial confusion” regarding how to calculate overcharges in Roberts cases (dissenting op at 32) cannot alone transform the substantive amendments made in Part F as to all overcharge cases into mere clarifying amendments like those in Romein. In the same way, the Part F amendments are quite different from the 1997 RRRA amendment adding the lookback rule to the RSL’s enforcement provisions, which this Court applied to a pending case in Partnership 92 (11 NY3d at 860) (see n 22, supra). As we explained in Thornton, that lookback rule amendment merely clarified past legislative intent and reinforced existing statutory language which, since 1983, made clear that damages could not be calculated based on an overcharge that occurred more than four years prior to the filing of the claim (5 NY3d at - 46 - - 47 - Nos. 1-4 180). 26 No Landgraf analysis was necessary with respect to application of the 1997 lookback rule to pending cases because, unlike the sea change created by the HSTPA Part F amendments, it did not have a truly retroactive effect on liability. Moreover, although we applied the lookback rule amendment to past conduct in Partnership 92, we were more circumspect with regard to other amendments in the 1997 RRRA. In Gilman, we held that DHCR acted irrationally when it applied an amendment relaxing evidentiary requirements 26 The impetus for the lookback amendment was explained when a bill containing substantially the same amendment was proposed in 1996. The legislative history for the 1996 bill makes clear that the Legislature originally intended the four-year statute of limitations “not only to limit the award for a rent overcharge to the four-year period preceding the complaint but also the examination of the rental history prior to that four- year period” (Senate Introducer’s Memorandum in Support, 1996 N.Y. Senate Bill No. S.7492). Nonetheless, “court decisions ha[d] erroneously interpreted the language of the statute . . . to permit examination of the rental history of an apartment prior to the four-year period” (id.). These legislative materials clarified that, “[n]otwithstanding the judicial opinions to the contrary, it was and is the intention of the Legislature to preclude the examination of the prior rental history” (id.). Indeed, since 1983, the statutory scheme contained a four-year limitations period and expressly stated that “no award of the amount of an overcharge may be based upon an overcharge having occurred more than four years before the complaint is filed” (1983 McKinney’s Session Laws of N.Y. at 1791; L 1983, ch 403, § 14). The lookback amendment was included in the 1997 RRRA, among others, “to simplify the administration of rent laws while protecting the rights of tenants and owners” (Governor’s Approval Mem, Bill Jacket, L 1997, ch 116 at 40). As the dissent notes, the 1997 RRRA as a whole “dramatically” and “historic[ally]” reformed New York’s rent stabilization scheme (dissenting op at 48 n 19; see Senate Introducer’s Mem in Support and Governor’s Approval Mem, Bill Jacket, L 1997, ch 116 at 36, 40) – including by creating a new vacancy bonus allowance, narrowing succession rights, establishing new penalties for harassment of tenants, amending the procedure for vacancy decontrol, authorizing the state to enter contracts exempting new construction from regulation, requiring deposit of rent payments into escrow during the pendency of certain landlord- tenant disputes and permitting owners to offer financial incentives to tenants in small buildings to vacate for the construction of new housing in that space (Senate Introducer’s Mem in Support, Bill Jacket, L 1997, ch 116 at 36). The amendment adding the lookback rule was only one in this “extensive[]” suite of amendments (id.), and the breadth of the total legislative package has no bearing on the clarifying nature of that sole amendment. - 47 - - 48 - Nos. 1-4 for admission of owner records to permit an owner to reopen the record, nearly a decade after the tenant commenced the proceeding and during the administrative appeal, expressing concern that “the rules were changed in midstream” (99 NY2d at 147, 149-152). This Court’s precedent regarding the 1997 RRRA is more nuanced than the dissent acknowledges and is compatible with our analysis identifying the significant retroactive effects that would arise if Part F is applied to pending cases. Indeed, the effects of the HSTPA amendments expanding overcharge liability implicate the concerns that the Supreme Court expressed in Eastern Enterprises in striking down retroactive application of a statute that required former mine operators to fund the health benefits of retired miners who worked for the operator before it left the industry (524 US 498). Even though the statute reflected similar policy goals as the scheme upheld in Turner Elkhorn, it was invalidated (by the plurality on Takings Clause grounds, with a concurrence on due process principles) based on the extreme degree and arbitrary nature of the retroactive effect (524 US at 530-537, 547-550). 27 It is clear from Eastern 27 The plurality in Eastern Enterprises observed that the Court’s prior decisions had “left open the possibility that legislation might be unconstitutional if it imposes severe retroactive liability on a limited class of parties that could not have anticipated the liability, and the extent of that liability is substantially disproportionate to the parties’ experience” and expressly clarified that it “need not address [the] due process claim” (524 US at 528- 529, 538), and the one-justice concurrence – the deciding vote – viewed the statute as violative of the former mining operators’ due process rights (id. at 539). Only the four dissenting justices opined that due process was satisfied. Indeed, there may be some correlation between due process and takings analyses of retroactive legislation (see id. at 537). The owner in Taylor asserted that retroactive application of the overcharge calculation amendments, which would impact income earned in the past from its real property, amounted to an unconstitutional taking. We need not reach that claim because we resolve the retroactivity issues on statutory interpretation and due process grounds. - 48 - - 49 - Nos. 1-4 Enterprises that there are limits on retroactive imposition of liability even when it is related to a rational statutory goal. Moreover, retroactivity concerns are further heightened where, as here, the new statutory provisions “affect[] contractual or property rights, matters in which predictability and stability are of prime importance” (Landgraf, 511 US at 271). While the lease agreements between the owners and tenants were necessarily subject to the requirements of the RSL, curtailing the parties’ freedom of contract in significant degree, when the governing law (essentially incorporated in the annual leases) is altered retroactively years later, long after the expired contracts have been performed, the impact on contract rights is unusually significant. Such alteration – if applied retroactively – impairs real property rights by diminishing or possibly eliminating the constitutionally protected return on investment owners realized in the past related to the use of their properties (see generally I.L.Y.F. Co., 11 NY2d at 492). The HSTPA does much more than require a party to shoulder a new payment obligation going forward – and its destabilizing effect is especially severe. That potential effect is demonstrated by the cases before us. In Regina Metro., for example, as noted by the Appellate Division dissent, application of the standard calculation methodology under the former rule resulted in overcharge damages of $10,271.40, while the reconstruction method erroneously utilized by DHCR – which appears consistent with the HSTPA’s new approach – resulted in damages of $285,390.39 (Regina Metro., 164 AD3d at 433 [Gische, J., dissenting]). In Reich, proper application of the pre-HSTPA - 49 - - 50 - Nos. 1-4 statutes resulted in no overcharge, but a comparison of the market rent actually charged during the recovery period – over $18,000 per month – against a reconstructed stabilized rent under the HSTPA considering rental history dating back to the tenants’ initial occupancy of the apartment in 2005 (or before) could result in an enormous retroactive increase in liability. The same profound impact on overcharge calculations would occur in Taylor and Raden, involving tenants that took occupancy well over a decade before they sued. Unlike cases where retroactive application rationally furthered a legislative goal, such as closing a state-administered fund benefitting insurers that imposed unsustainable costs on employers (see American Economy, 30 NY3d 136) or preventing legislation from being undermined by those seeking to escape its impact before enactment (see R.A. Gray & Co., 467 US 717) – there is no indication here that the Legislature considered the harsh and destabilizing effect on owners’ settled expectations, much less had a rational justification for that result. While prospective application of Part F to overcharges occurring after the effective date may serve legitimate and laudable policy goals, no explanation has been offered, much less a rational one, for retroactive application of the amendments to increase or create liability for rent overcharges that occurred years – even decades – in the past. Part F contains no statement of legislative findings. Such a statement is contained elsewhere in the legislation, noting the continuing housing emergency; the need “to prevent speculative, unwarranted and abnormal increases in rents”; the acute shortage of housing - 50 - - 51 - Nos. 1-4 accommodations caused by high demand and decreased supply; and the need, with respect to those being charged market rents, to avoid profiteering and other disruptive practices (L 2019 ch 36, Part G, § 2). Prospective application of Part F could be understood to address these concerns by deterring future overcharges, but retroactive application to cases pending in the appellate pipeline does not do so; the HSTPA cannot deter conduct that has already occurred (James Sq., 21 NY3d at 250). Likewise, to the degree that prospective application of certain provisions of the HSTPA is justified because the Legislature has concluded that those provisions will act to preserve the stock of stabilized housing or moderate rents going forward, retroactive application of the amendments to increase the amount of an overcharge judgment (or create overcharge liability where none existed) does not return apartments to rent stabilization or ensure the propriety of rents collected in the future. Rather than serving any of the policy goals of rent stabilization (which it would not), retroactive application of the overcharge calculation amendments would merely punish owners more severely for past conduct they cannot change – an objective we have deemed illegitimate as a justification for retroactivity (see James Sq., 21 NY3d at 249-250; see also Turner Elkhorn, 428 US at 17-18 [“we would . . . hesitate to approve the retrospective imposition of liability on any theory of deterrence or blameworthiness”] [citations omitted]). The dissent asserts that the overcharge calculation amendments were intended to ameliorate the overcharges arising from deregulations later revealed to be improper by Roberts and to address post-Roberts judicial confusion regarding how to calculate such overcharges and that, thus, retroactive application of such amendments to pending cases is - 51 - - 52 - Nos. 1-4 supported by a rational basis (see dissenting op at 30-32, 38-39). 28 This argument is unsupported by the text of the statute or its legislative history, which makes no reference to Roberts. The amendments impact far more than overcharges associated with the “14- year period of unlawful deregulation involving 50,000 [Roberts] apartments” referenced by the dissent (dissenting op at 39). The overcharge calculation amendments apply to all overcharge claims – not merely those flowing from an improper deregulation, much less a Roberts deregulation. Thus, not only is there no basis to conclude that addressing Roberts was the Legislature’s intent, neither would these broadly applicable amendments constitute a rational response to Roberts. Relatedly, although the new treble damages provisions function distinctly from the integrated overcharge calculation provisions, retroactive application of any Part F amendments that would newly impose treble damages for past conduct is also impermissible. 29 Treble damages are generally viewed as punitive (Vermont Agency of 28 Of course, to the degree the dissent argues that the Legislature “enact[ed] the HSTPA” – in its entirety – in order to “step[] in” concerning courts’ uncertainty about calculation of overcharges in Roberts cases (dissenting op at 31), that assertion is patently untenable given the breadth of the HSTPA’s amendments, which extend far beyond the realm of overcharge claims in general, and particularly far beyond the specific category of Roberts overcharge claims. 29 The dissent’s assertion that we may not consider the propriety of retroactive application of the HSTPA amendments concerning treble damages is misplaced (dissenting op at 44). The owners’ conduct in deregulating the apartments consistent with pre-Roberts DHCR guidance was not willful, and treble damages cannot be imposed on that basis. But the HSTPA – by providing that a voluntary tender of a refund or adjustment of rent after filing of an overcharge claim cannot evidence a lack of willfulness – indicates that conduct after an improper deregulation may be relevant to treble damages under the new law. Relying on another distinct provision that can be analyzed separately, the tenants also argue that a - 52 - - 53 - Nos. 1-4 Natural Resources v United States ex rel. Stevens, 529 US 765 [2000]; State of N.Y. ex rel. Grupp v DHL Express [USA], Inc., 19 NY3d 278 [2012]; see also Senate Introducer’s Mem in Support, Bill Jacket, L 2019, ch 36 [describing treble damages as “punitive”]). They function as such in the RSL, under which actual damages are also available and there are no limitations on the amount of the annual overcharge that may be trebled (see Landgraf, 511 US at 281 [“Retroactive imposition of punitive damages would raise a serious constitutional question”]; dissenting op at 45-46 [identifying constitutional concerns with retroactive imposition of treble damages]). The Legislature is entitled to impose new burdens and grant new rights in order to address societal issues and, in enacting the HSTPA, it sought to alleviate a pressing affordable housing shortage that it rationally deemed warranted action. But there is a critical distinction for purposes of a due process analysis between prospective and retroactive legislation. As the Supreme Court has observed, retroactive legislation that Part F amendment mandating the assessment of tenants’ attorneys’ fees on owners found liable for an overcharge (when previously such attorneys’ fees were discretionary) should be applied to pending claims. The Supreme Court has held that new legislation providing reasonable attorneys’ fees to a prevailing party may be applied in pending cases because “[a]ttorney’s fee determinations . . . are collateral to the main cause of action and uniquely separable from the cause of action to be proved at trial” (see Landgraf, 511 US at 276-277 [internal quotation marks and citation omitted] [explaining that Bradley (416 US 696), in which the Court applied such a provision in a pending case, “did not alter the well-settled presumption against application of the class of new statutes that would have genuinely ‘retroactive’ effect” in part because of the collateral nature of attorneys’ fee determinations]). Attorneys’ fees have yet to be addressed in Regina Metro., in which the overcharge claim must be resolved before DHCR. However, attorneys’ fees are no longer at issue in Taylor or Reich, in which there is no recoverable overcharge, or in Raden, where the tenants abandoned their request for attorneys’ fees by failing to move specifically for such relief in Supreme Court. - 53 - - 54 - Nos. 1-4 reaches “particularly far” into the past and that imposes liability of a high magnitude relative to impacted parties’ conduct raises “substantial questions of fairness” (Eastern Enters., 524 US at 534). In the retroactivity context, a rational justification is one commensurate with the degree of disruption to settled, substantial rights and, in this instance, that standard has not been met. Thus, the overcharge calculation and treble damages provisions in Part F may not be applied retroactively, and these appeals must be resolved under the law in effect at the time the overcharges occurred. The parties’ remaining arguments lack merit, are rendered academic or are otherwise unreviewable. In an attempt to delegitimize our analysis by association, our three dissenting colleagues raise the ghost of Lochner v New York (198 US 45 [1905]), an outdated and long-discredited Supreme Court precedent that has nothing to do with retroactivity (dissenting op at 2, citing Lochner). In Lochner, under the guise of due process analysis, the Supreme Court struck down economic legislation it viewed as unwise from a public policy standpoint (see Ferguson v Skrupa, 372 US 726, 730 [1963]). We agree wholeheartedly with the dissent that legislative judgments are presumptively constitutional and are subject to a rational basis analysis in which the policy preferences of judges have no role. Although the dissent repeatedly suggests otherwise, in stark contrast to the holding in Lochner, in this case we are not invalidating or “striking down” the overcharge calculation provisions in the HSTPA. The only question presented and resolved here is whether those provisions – whose validity is not otherwise at issue in these appeals – may - 54 - - 55 - Nos. 1-4 be applied retroactively. The dissent never seriously engages with this issue or the substantial body of precedent governing it. In this regard, the rational basis test – although extremely deferential – must be meaningfully applied to ensure basic principles of fairness and substantial justice, lest we abdicate our responsibility to the citizens of this State. As Justice Holmes wrote when dissenting in Lochner – espousing a view that later prevailed in the Supreme Court – “the word ‘liberty,’ in the 14th Amendment, is perverted when it is held to prevent the natural outcome of a dominant opinion, unless it can be said that a rational and fair [person] necessarily would admit that the statute proposed would infringe fundamental principles as they have been understood by the traditions of our people and our law” (Lochner, 198 US at 76 [Holmes, J., dissenting] [emphasis added]). The modern rejection of Lochner has never been understood to require courts to abandon “fundamental principles” of fairness – not even when reviewing economic legislation. There are few principles as fundamental or, in the words of the Supreme Court, as “elementary” or “deeply rooted” as the notion that government may not irrationally impose or expand liability for past conduct (Landgraf, 511 US at 265). Indeed, the legislation imprudently struck down in Lochner was not retroactive at all – it merely set a prospective cap on bakers’ working hours (198 US at 52). If that legislation had directed that the cap be applied retroactively, requiring recoupment of wages bakers earned years if not decades in the past when working excess hours (or profits their employers earned as a result of the productivity associated with those hours), we - 55 - - 56 - Nos. 1-4 would certainly look upon such retroactive application with skepticism. While it may be unusual – but not unprecedented (see Moe v Sex Offender Registry Bd., 467 Mass. 598, 6 NE3d 530 [2014] [retroactive application of amendments requiring publication of sex offender registry information violated due process rights of sex offenders]; Neiman v American Nat. Property and Cas. Co., 236 Wis.2d 411, 613 NW2d 160 [2000] [retroactive application of amendment increasing cap on wrongful death damages violated defendant’s due process rights]; San Carlos Apache Tribe v Superior Court, 193 Ariz. 195, 972 P2d 179 [1999] [retroactive application of amendments revising surface water law violated due process rights of tribes]) – to decline to apply a statute retroactively on due process grounds, it is also unusual for parties to ask the Court to apply retroactively legislation that alters substantive rights in the way that Part F does. We may have a fair disagreement over whether there is a rational justification for retroactive application of the HSTPA’s overcharge calculation provisions, but the dissent’s misguided attempt to cast as improper our application of a meaningful standard of constitutional review merits a response. We are persuaded by the words of Justice Breyer who, although disagreeing with the result in Eastern Enterprises, cautioned against the misplaced fear that reliance on the Due Process Clause in assessing the propriety of retroactive application of a statute somehow “resurrect[s] Lochner” (524 US at 557 [Breyer, J., dissenting]). “[A]n unfair retroactive assessment of liability upsets settled expectations, and it thereby undermines a basic objective of law itself. To find that the Due Process Clause protects against this kind of fundamental unfairness—that it protects against an - 56 - - 57 - Nos. 1-4 unfair allocation of public burdens through this kind of specially arbitrary retroactive means—is to read the Clause in light of a basic purpose: the fair application of law, which purpose hearkens back to the Magna Carta. It is not to resurrect long-discredited substantive notions of ‘freedom of contract’” (id., quoting Ferguson, 372 US at 729-732 [internal citations omitted]). Our “Court . . . plays a crucial and necessary function in our system of checks and balances. It is the responsibility of the judiciary to safeguard the rights afforded under our State [and Federal] Constitution[s]” (People v LaValle, 3 NY3d 88, 128 [2004]). Our narrow holding here – determining that newly-enacted overcharge calculation provisions may not be applied retroactively – constitutes nothing more than an appropriate exercise of this quintessentially judicial authority. Accordingly, in Regina Metro., the Appellate Division order, insofar as appealed from, should be affirmed, with costs to petitioner Regina Metropolitan Co., LLC, and the certified question answered in the affirmative; in Raden, the Appellate Division order should be affirmed, with costs, and the certified question not answered as unnecessary; in Taylor, the Appellate Division order should be modified, without costs, in accordance with this opinion and as so modified affirmed, and the certified question answered in the negative; and in Reich, the Appellate Division order should be affirmed, with costs, and the certified question answered in the affirmative. - 57 - Matter of Regina Metropolitan v DHCR; Raden v W7879; Taylor v 72A Realty Associates; Reich v Belnord Partners Nos. 1-4 WILSON, J. (dissenting): For the first time in its history, our Court has struck down, as violative of substantive due process, a remedial statute duly enacted by the legislature: Part F, section 7 of the Housing Stability and Tenant Protection Act of 2019 (HSTPA). According to the majority, when our legislature stepped in to remedy the unlawful deregulation of tens of thousands of rent-regulated dwellings, occurring because of the 13-year lapse between DHCR’s erroneous statement of the law and this Court’s correction of it, the legislature violated the -1- -2- Nos. 1-4 United States Constitution by deciding that landlords could retain some, but not all, of the unlawfully obtained rent overcharges. The majority’s justification is that “the prior statutory scheme conferred on owners clear repose” to retain unlawful rent overcharges “that occurred, in some cases, many years or even decades before the HSTPA was enacted” (majority op at 3). But the prior rent control law offered no clear repose; rather, it produced differing judicial and administrative interpretations about how to calculate rent overcharge awards for past conduct. The legislature stepped in and resolved that question, as is its right. Moreover, even had the prior statute granted “clear repose,” the legislature remains free to alter damage awards for unlawful rents obtained by unlawful past conduct. The very “claim-revival” jurisprudence cited by the majority establishes the legislature’s right to do so. One hundred and sixteen years ago, in People v Lochner (177 NY 145, 175 [1904]), our Court understood that the legislature, not the courts, is charged with making laws to advance the public welfare and that courts must give a wide berth to such legislative judgments, so long as they do not trample constitutionally protected rights. The United States Supreme Court reversed us. Time has not been kind to Lochner v New York (198 US 45 [1905]). It is regarded as one of the Supreme Court’s most misguided decisions. The majority’s description of it as “long-discredited” (majority op at 54) is charitable. With today’s decision, the disgraced era of Lochner makes its tragic return home. To find portions of the HSTPA unconstitutional on substantive due process grounds, the majority has disregarded jurisdictional rules and prudential concerns. It proceeds to mischaracterize the HSTPA’s express application to “claims pending” as rendering it a -2- -3- Nos. 1-4 retroactive “claim revival” statute. Answering a question not raised below, the Court decides it with a legal analysis not argued by the parties, applied to imagined factual circumstances on a nonexistent factual record. In wielding substantive due process as a sword to strike down remedial economic legislation, the majority vitiates the political choices of New York’s legislature in passing the HSTPA. The amendments to the legislative scheme surrounding rent stabilization reflect the legislature’s judgment, approved by the Governor, about the consequences for landlords who have violated New York law. In place of that judgment, the majority has substituted its own: the Court must “safeguard” the “substantive” “contractual or property rights” of New York’s landlords. Indeed, late in its opinion, the majority identifies the substantive right protected by its resurrection of Lochner: the “substantive rights relating to overcharge recovery” (majority op at 46). That is, the rights of landlords to retain illegal overcharges wrongfully obtained from tenants. 1 Make no mistake: the legislature unequivocally instructed that Section F of the HSTPA was to apply to “claims pending.” The majority admits the legislature “intended [Part F] to apply to overcharge claims where the calculation issue remained unresolved as 1 As discussed in Section V, infra, we had no constitutional concerns whatsoever when, in 1997, the legislature curtailed tenants’ right to recover overcharges in the exact provisions that the legislature now removed via the HSTPA (see L 1997, ch 116; Matter of Partnership 92 LP v DHCR, 11 NY3d 859 [2008] [applying the Rent Regulation Reform Act of 1997 retroactively to limit a tenant’s recovery in a rent overcharge action pending at the time of the statute’s enactment]). The majority cannot explain why landlords have a substantive right to retain ill-gotten rents while tenants have no substantive right to recover them. The answer, of course, is that neither group has an interest in the rent regulation laws that is protectable by substantive due process. -3- -4- Nos. 1-4 of the June 2019 effective date” (majority op at 38). As much as the majority protests it is “not invalidating or ‘striking down’ the overcharge calculation provisions in the HSTPA” (majority op at 54), it is striking down, as violative of substantive due process, the legislature’s clear command: “This act shall take effect immediately and shall apply to any claims pending or filed on and after such date” (L 2019, ch 36, Part F, § 7). 2 This is Lochner redux: a grotesque usurpation of the legislature’s role in determining economic regulation when no fundamental rights are at issue. Because Part F of the HSTPA contains economic regulations that reflect a legislative policy judgment and do not infringe on fundamental rights, it should be evaluated under the well-settled rational basis standard (West Coast Hotel Co. v Parrish, 300 US 379, 391 [1937]). The rational basis standard is not demanding (see People v Knox, 12 NY3d 60, 69 [2009]). Indeed, it is “the most relaxed and tolerant form of judicial scrutiny” (Dallas v Stanglin, 490 US 19, 26 [1989]). Simply, courts are barred from declaring economic legislation unconstitutional under the Due Process Clause of the Fourteenth Amendment if the regulation is conceivably rationally related to a legitimate government interest and is neither arbitrary nor discriminatory (see Nebbia v New York, 291 US 502, 537 [1934]). By finding a due process violation here, the majority ignores nearly a century of Supreme Court precedent in which the Court applied that rational ba [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4521721. Public record. Not legal advice.