Second Circuit – COVID-19 response: Elias Bachner, et al. v. City of New York, et al.

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United States Court of Appeals for the Second Circuit

COVID-19 response —Commercial lease guaranty — Contracts clause challenge

Elias Bachner, et al. v. City of New York, et al.

23-683

Judges Cabranes, Raggi, and Carney

Background: The defendant appealed from summary judgment in favor of the plaintiffs on their contracts clause challenge to the city’s Guaranty Law. The law was enacted during the COVID-19 pandemic, which rendered personal guaranties of commercial lease obligations permanently unenforceable and identified efforts to collect on such guaranties as proscribed commercial tenant harassment. The defendants argue that there is no federal jurisdiction against the city, which does not enforce the law.

Ruling: The Second Circuit vacated and remanded. The court held that plaintiffs satisfactorily carried their burden of proof by alleging the city’s enforcement of the law at the pleading stage, which the city did not disavow. However, at summary judgment the plaintiffs failed to present evidence of the city’s likely enforcement.

Claude G. Szyfer, of Hogan Lovells, for the plaintiffs-appellees; Jamison Davies, assistant corporation counsel, for the defendants-appellants.

Oral argument audio