## Facts

- Smart Apartments LLC and related defendants operated a multi-part business that advertised, booked, operated, and maintained short-term stays of less than 30 days in New York City.
- The City alleged defendants placed transient guests in as many as 50 or more multiple-dwelling buildings designated as Class A (nontransient) buildings, and in other buildings where transient use was not legally permitted.
- Chapter 225 of the Laws of 2010 (and related Housing Maintenance Code and Building Code provisions) barred rentals of less than 30 days in Class A multiple dwellings and imposed additional fire-safety requirements for lawful transient occupancy.
- The City alleged defendants did not provide transient occupants with fire extinguishers, sprinklers, alarms, or evacuation plans typically required for transient lodging.
- Defendants advertised the apartments online to tourists and other visitors but, according to the City, did not disclose that the stays were illegal or that the units did not meet fire-safety code requirements for transient use.
- The City alleged the operation created fire and security risks, disrupted permanent residents through constant turnover, and changed the residential character of affected buildings.
- The City sued for (1) deceptive trade practices under the New York City consumer-protection law (Admin. Code § 20-700 et seq.) and (2) public nuisance under the common law.
- The City moved for a preliminary injunction under Admin. Code § 20-703(d) and CPLR 6301 and 6311 to stop defendants from advertising, contracting for, or allowing illegal transient occupancy; to require removal of related advertising; and to prevent destruction or alteration of business records.
- Defendants cross-moved to dismiss under CPLR 3211(a)(7) and argued the City’s action amounted to selective enforcement.

## Issues

1. Whether the City was entitled to a preliminary injunction barring defendants from advertising, contracting for, or allowing transient occupancy of less than 30 days in Class A multiple dwellings and other buildings where such occupancy was illegal.
2. Whether the complaint stated claims for deceptive trade practices under the NYC consumer-protection law and for public nuisance under common law sufficient to survive a CPLR 3211(a)(7) motion.
3. Whether defendants’ selective-enforcement argument required dismissal at the pleading stage.

## Decision

- The court granted the City’s motion for a preliminary injunction.
- The court enjoined defendants from advertising, contracting for, or allowing illegal transient occupancy in Class A multiple dwellings and in any other buildings where transient occupancy was illegal.
- The court ordered defendants to remove (and not maintain) advertising for the illegal transient rentals, including advertising on internet platforms.
- The court ordered preservation of business records connected to defendants’ transient-rental operations.
- The court denied defendants’ cross-motion to dismiss, including the selective-enforcement argument.

## Legal Principles

- On a motion to dismiss under CPLR 3211(a)(7), the court accepts the complaint’s factual allegations as true, gives the plaintiff the benefit of favorable inferences, and determines whether the alleged facts fit any recognized legal claim.
- Admin. Code § 20-703(d) authorizes the City to seek injunctive relief to stop deceptive trade practices prohibited by the NYC consumer-protection law.
- Advertising and selling short-term stays in buildings where such stays are illegal—while omitting that illegality and omitting alleged noncompliance with fire-safety requirements for transient occupancy—can constitute a deceptive practice based on a material omission to consumers.
- A public nuisance claim may be based on allegations of widespread, ongoing conduct that unreasonably interferes with rights held in common by the public, including threats to public safety and recurring disturbances affecting the community.
- A preliminary injunction generally requires a showing of (1) likelihood of success on the merits, (2) irreparable harm absent injunctive relief, and (3) a balance of equities favoring the movant; alleged life-safety risks and continued unlawful conduct can support irreparable harm and weigh the equities toward the public.
- A selective-enforcement defense requires more than uneven enforcement; it requires a showing of intentional discrimination or an impermissible basis for treating similarly situated parties differently, and it typically does not support dismissal on the pleadings without supporting facts.

## Conclusion

The Supreme Court, New York County granted New York City a preliminary injunction against Smart Apartments’ business of arranging sub-30-day stays in Class A (nontransient) multiple dwellings and other buildings where transient use was illegal, finding the City likely to succeed on claims that defendants’ marketing and rental of unlawful, allegedly non-code-compliant transient accommodations constituted deceptive trade practices and a public nuisance; the court also denied defendants’ motion to dismiss, including their selective-enforcement claim, and ordered removal of related advertising and preservation of records.


City of New York v. Smart Apartments LLC, 959 N.Y.S.2d 890 (2013)