On September 23, 2022, VOLS requested permission to file its third amicus curiae or “friend of the court” brief in Melendez et al. v. City of New York et al., No. 20-CV-05301-RA (S.D.N.Y.). VOLS’ brief opposes plaintiffs’ motion for summary judgment seeking a declaration that New York City’s Guaranty Law (Section 22-1005 of the New York City Administrative Code) is unconstitutional under the United States Constitution Contracts Clause. The Guaranty Law was enacted to protect small businesses and their owners impacted by state-mandated closures and limitations related to COVID-19 by rendering personal guaranties for arrears arising from March 7, 2020, through June 30, 2021, unenforceable.
The plaintiffs in Melendez are a group of landlords that sued New York City and its officials on July 10, 2020. After the District Court for the Southern District of New York dismissed the lawsuit, finding that the Guaranty Law advanced a legitimate public purpose and was a reasonable and necessary response to the COVID-19 emergency, the plaintiffs appealed. In a two-to-one decision, the U.S. Court of Appeals for the Second Circuit reversed the district court’s dismissal of plaintiffs’ Contracts Clause challenge and remanded the case to the district court for it to allow the parties to develop the record further. In VOLS’ third “friend of the court” brief, VOLS urges that the Guaranty Law was reasonable and appropriate to serve the City’s legitimate interest in protecting small businesses and mitigating the economic emergency triggered by the COVID-19 pandemic.
The Guaranty Law serves the important purpose of preventing New York City small business owners from having to bear the entire weight of the economic consequences of the COVID-19 pandemic. Small businesses are the backbone of the U.S. economy, and the Guaranty Law properly ensures that small business owners are not forced into financial ruin because of the COVID-19 pandemic, thereby protecting and promoting continued microentrepreneurship. VOLS regularly advocates for small businesses and their owners and will continue to fight for the protections afforded by the Guaranty Law. Read the full “friend of the court” brief below.
VOLS is represented in this matter by our pro bono partners at Haug Partners LLP. The pro bono team included former Haug associate Michael Harris who was honored this year by VOLS as a member of our 2022 Dean’s List, is a member of the VOLS Pro Bono Advocates Counsel, and was a Pro Bono Scholar with the VOLS Microenterprise Project in 2020. Thank you to Michael and Haug partner Jonathan Herstoff for their amazing advocacy on behalf of New York City’s small business owners.
Small business owners in NYC who are unable to access the legal support they need due to low household income or underserved socio-economic background should please contact the VOLS Microenterprise Project at microenterprise@volsprobono.org.