From the April issue: This month, The Real Deal profiled six of the nine judges on the Supreme Court’s Commercial Division bench — focusing on those who have overseen some of the city’s biggest real estate cases in the last few years. This is Part IV.
Although Justice Marcy Friedman is just shy of four years in the Commercial Division, she has more experience overseeing real estate cases than almost anyone on the bench.
Appointed as a housing court judge in 1991, Friedman developed a reputation as a fervent defender of tenant rights. She joined the Supreme Court in 2000, hearing, among other things, torts and commercial cases, including many in real estate.
In 2010, Friedman issued a crucial rent-stabilization decision.
The case involved a move by Laurence Gluck’s Stellar Management to deregulate units at its giant 1,331-unit Complex Independence Plaza North in Tribeca while also receiving the J-51 tax abatement. Stellar notified the city that it wanted to stop receiving the tax abatement so that it could begin destabilizing rent-regulated apartments. But the government mistakenly kept the benefits going for two years and tenants argued that their units had therefore been illegally destabilized. Friedman decided that the tenants were indeed entitled to rent-stabilization.
But just two years later, the Appellate Court knocked Friedman’s ruling down. Gluck also paid back the J-51 benefits he received.
Bailey, who represents both tenants and landlords, described Friedman as “very, very pro-tenant” While She Was A Housing Court judge but said that changed once she joined the Supreme Court. “She got rid of her bias completely,” he said.
Since joining the Commercial Division, Friedman has heard a number of residential mortgage-backed securities cases in which RMBS investors who saw their money evaporate during the financial crisis filed claims against banks, alleging that the financial institutions had not properly outlined the risks in offering materials.
While Friedman has thrown out some RMBS cases, she’s also notably rejected defendants’ attempts to dismiss these cases — like when New York Attorney General Eric Schneiderman sued CreditSuisse alleging RMBS fraud totaling $10 billion. CreditSuisse argued that it was too late to sue, but Friedman begged to differ and the case is still ongoing.
In 2013, the New York Supreme Court issued an order to have all future RMBS cases alleging wrongdoing by the issuer sent to Friedman.
Several attorneys described Friedman as a master diplomat, known for aggressively urging parties to settle out of court.
“Litigation is a very expensive vehicle to resolve differences,” said real estate attorney Gary Wachtel. “She tries to get attorneys to see the forest through the trees in an effort to settle cases.”
Bailey said Friedman’s “intelligence and analytical thinking” helps “in getting cases resolved and helps her ferret out frivolous claims.”