Boies Schiller Flexner LLP and Messing & Spector LLP filed a proposed class action today on behalf of four property owners against New York City seeking compensation when neighboring sidewalk sheds encroach on their property. Filed in the U.S. District Court for the Southern District of New York, the lawsuit alleges that the city, by commanding and authorizing owners of at-risk properties to construct a metal and wood structure known as a sidewalk shed, has systematically engaged in a taking of property under the Fifth Amendment from thousands of neighbors, including the plaintiffs.
The lawsuit looks to represent thousands of “blameless neighbors,” who are forced to endure sidewalk sheds that cross onto their properties or come into contact with their buildings, often for years. According to the complaint, “the city has a constitutional obligation to compensate blameless owners—like plaintiffs” when it requires sheds to be built that encroach on their property.
The 59-page complaint cites “decades of settled case law” requiring courts to hold governments liable when they cause a taking of property, even when they do not take the property directly but instead require or authorize a private party to do so. For example, a 1982 decision by the U.S. Supreme Court referenced in the complaint held that New York State was required to pay just compensation to property owners based on a law that authorized cable companies to place cable equipment on property owners’ rooftops and exterior walls.
According to BSF partner Hamish Hume, who serves as lead counsel, “The city’s laws require the construction of sheds on properties of blameless neighbors, yet the laws provide those owners with zero compensation. That is inconsistent with the Constitution’s takings clause.”
Co-counsel Noah Messing of Messing & Spector added, “The city has forced property owners to construct hideous and intrusive sheds that encroach on their neighbor’s property—even though federal law makes clear that this practice is a taking of property that requires compensation.”
The complaint also describes how, in hundreds of instances, the city itself has built sheds on or in contact with a blameless neighbor’s property—because the city owns or rents the neighboring, at-risk property.
According to the complaint, the city is keenly aware of the vast scale of potential damages caused by the sheds, citing negative impacts on communities, businesses, and more. Senior city officials have repeatedly lambasted the city’s own laws relating to sidewalk sheds, and they have acknowledged that the sheds cause an array of harms to New Yorkers such as the plaintiffs. For example:
- The mayor has stated that “city rules are incentivizing property-owners to leave sheds up and put off critical work” and that sheds are “a safe haven for criminal behavior,” “unsightly” and as “resilient as the rats in New York.”
- The commissioner of the New York City Department of Buildings has described sheds as a “gloomy pipe and plywood” structure that creates a “tangible negative impact affecting the whole block.”
- The commissioner of the New York City Department of Design and Construction has admitted that businesses “suffer behind sidewalk sheds” and characterized the sheds as “an issue that has plagued New Yorkers for decades.”
- The Manhattan Borough president has described the sheds as a “blight on our neighborhoods,” and said the sheds have a “negative impact on communities,” and “harm[ ] the businesses underneath the sheds.” He further acknowledged that they are “bad for public safety,” “bad for quality of life,” and “ugly.”
The complaint notes that the city recently released a study, which it prepared with MasterCard, finding that the average small business located in a building with a sidewalk shed loses tens of thousands of dollars of revenue annually from its MasterCard customers alone.
In addition to the takings clause challenge, the complaint alleges that the city’s sidewalk-shed regime violates the Fourteenth Amendment’s Due Process protections, and state property laws. Plaintiffs are seeking damages and other relief.