Grenadian attorney helps secure $60M civil rights settlement with NYC over property seizures

Grenadian-born attorney Yolande I. Nicholson is among a team of attorneys who secured an historic $60 million civil rights settlement with New York City over unlawful property seizures.

New York law firms Ropes & Gray LLP, Valli Kane & Vagnini LLP with Yolande I. Nicholson, of counsel, and White & Case LLP have announced that they have reached a $60 million class action settlement on behalf of homeowners whose properties were seized without adequate compensation under New York City’s Third-Party Transfer (TPT) program. 

The settlement, which is subject to preliminary court approval, is believed to be one of the largest paid by the city in the past decade.

“With the Third-Party Transfer program, New York City reached in and stripped Black and Brown property owners of hundreds of millions of dollars of equity value without paying for it, under the guise that properties were distressed,” Nicholson, who operates her own private practice in Brooklyn and who is of counsel to Valli Kane & Vagnini LLP in the case, told Caribbean Life on Friday, Sept. 18.

“For decades New York City seized Black and Brown property to hand over to its development partners, without recouping a penny of the de minimis tax liens the city claimed was owed,” added Nicholson, recognized as a pioneering force in the protection of private property rights, championing the fair and equal application of New York’s extensive body of foreclosure prevention laws and the preservation of working family homeownership.  

“This class action settlement demonstrates that Black and Brown folks are entitled to the very same protections afforded to all Americans — payment for the unlawful taking of their property,” continued Nicholson, who, for more than two decades, with her firm, Yolande I. Nicholson, P.C., has guided landmark legislation, shaped appellate law, and forged trial practices and legal strategies that have strengthened protections for property owners throughout New York State.

Gregg Weiner, global co-chair of Ropes & Gray’s litigation & enforcement practice, said that “hundreds of New York families, overwhelmingly in communities of color, had their homes taken and their equity wiped out, all without compensation and without meaningful notice or a day in court.

“This settlement begins to make them whole,” added Weiner, whose law firm has been ranked in the top three on The American Lawyer’s prestigious “A-List” for nine consecutive years. “It took seven years, a Second Circuit reversal, and a Supreme Court ruling to get here, and I could not be prouder of the team’s persistence.” 

Nicholson said the TPT program, created in 1996, allowed New York City to seize homes from alleged tax-delinquent owners and transfer them to developers and non-profit organizations without meaningful notice or compensation. 

“Longtime homeowners lost not only their well-maintained properties and long-term tenants; they also lost immeasurable inter-generational wealth,” she said. 

According to the New York City Council Oversight Committee, in July 2019, the program had a stark and well-documented disparate impact on Black and Brown communities.

At the time, Chairman Ritchie Torres, now a member of Congress, said: “It’s targeting Brooklyn and the Bronx; it’s targeting Black and Brown neighborhoods.”

Nicholson said approximately half of the properties in the most recent round of property seizures under the TPT Program were concentrated in historically African American communities, with the highest concentration in Brooklyn’s Black neighborhoods, where gentrification is well underway. 

She said the case was filed by her and Valli Kane & Vagnini in March 2019 in the United States District Court for the Southern District of New York.

And, though initially dismissed on jurisdictional grounds, in 2021, the Court of Appeals for the Second Circuit reversed the dismissal, holding that plaintiffs could seek the lost value of their property in excess of the taxes owed. 

The legal team’s arguments to the Second Circuit also received support from the NAACP (National Association for the Advancement of Colored People) Legal Defense and Educational Fund and the Pacific Legal Foundation as amici curiae. 

Nicholson said the case gained further momentum after the Supreme Court’s unanimous 2023 decision in Tyler v. Hennepin County, which held that government seizure of surplus home equity is unconstitutional, “a ruling that attracted cross-ideological support from the American Civil Liberties Union (ACLU), the Cato Institute, and others.” 

Following Tyler, Nicholson said: “It became undeniable that Black and Brown folks who lost their hundreds of millions of dollars in property for its Third-Party Transfer program are entitled to just compensation from the City.” 

She said the plaintiffs have moved the court to approve the settlement and certification of the 64 former owners as a class of claimants, with the city’s consent. 

“We insisted from the start that property takings like these, for which the city pays nothing, were blatantly unconstitutional,” said Keith Wofford, a partner at White & Case, a leading global law firm with lawyers in 43 offices across 29 countries. “Four years after we joined this fight, the Supreme Court agreed with us in Tyler. 

“Hopefully, this significant settlement, in which the city ‘admits no wrongdoing,’ will deter the city from ever engaging in these sorts of programs ever again — in black and brown communities, or otherwise,” he added. 

But Nicholas said that, “despite settled American Constitutional Law, New York City’s bureaucrats continue, from Mayoral administration to Mayoral administration, to devise new iterations to take as theirs the investment, value, and inter-generational wealth of people of African descent.” 

She said people of African descent “labored and invested their earnings and family savings to revive the very communities that the city now finds attractive for so-called affordable rental housing, using their equity value.” 

The plaintiff attorneys said preliminary approval of the settlement, establishment of the settlement fund, and certification of the class of eligible claimant are expected later this year, after which class members will be notified. 

“Despite the settlement, with the $60 million fund, this is not a resolution that makes the 64 prior owners, their families, and their heirs whole economically, and it’s certainly not a resolution that attends the health crisis that the Third Party Transfer program spawned in many of the households and communities that suffered the loss of property ownership,” Nicholson, however, lamented.  

Sara Wyn Kane, a partner at Valli Kane & Vagnini LLP, a nationally recognized civil rights litigation firm, said: “This historic settlement does not restore the property to these families, but it is an important step toward justice.” 

Matthew Berman, another partner at Valli Kane & Vagnini LLP, said that, “from 1996 to 2018, nobody knew, nobody sued, then Yolande Nicholson found it. 

“She was representing these homeowners,” Berman added. “She saw the pattern before anyone else did, and she brought it to me. She is the reason this case exists.”