The Legal Aid Society Continues To Advocate For New Yorkers Affected By Sandy

The Legal Aid Society's Civil Practice continues to provide comprehensive civil legal aid for survivors of Superstorm Sandy, including direct legal assistance in more than 5,800 individual Sandy-related matters for low-income families and individuals in all five boroughs and systemic advocacy on behalf of all New Yorkers who have been impacted by Sandy.

This week, for example, Lucy Newman, a Staff Attorney in Legal Aid's Civil Law Reform Unit, testified before the New York City Council regarding the continuing problems that New York City Housing Authority residents are experiencing as a result of Sandy as well as the need to more effectively address the concerns of NYCHA residents in planning for natural disasters and providing disaster relief. Last week, Fazeela Siddiqui, a Staff Attorney in Legal Aid Civil Practice office in Queens who focuses on Sandy-related legal problems, testified before the City Council regarding legislation to improve overall disaster planning and disaster relief.

Earlier, on the anniversary of when Sandy hit, the New York Law Journal published a comprehensive essay about Sandy-related legal problems that Sateesh Nori, the Attorney-in-Charge of Legal Aid's Queens Neighborhood Office, and Fazeela Siddiqui wrote. Entitled "Superstorm Sandy's Legal Legacy," the Law Journal piece outlined the legal issues presented by Sandy and Legal Aid's response to these Sandy-related matters.

The New York Law Journal also provided extensive reporting on the situation one year after Sandy and quoted Steven Banks, The Legal Aid Society's Attorney-in-Chief. "Before the storm, we were forced to turn away one of every nine New Yorkers who were seeking legal help," Banks told the Law Journal.. "Since the storm hit, the situation has become even more extreme," Banks added.

The Law Journal's commemorative article referred to two major law reform cases that The Legal Aid Society brought to address the needs of Sandy survivors. In one case with Gibson, Dunn & Crutcher LLP as co-counsel, the Society filed a federal class action suit on behalf of low-income storm victims who were denied access to disaster relief food stamps. In another lawsuit with Weil, Gotshal & Manges LLP, the Society was able to prevent hundreds of Sandy evacuees from being terminated from the City's emergency shelter program in area hotels pending their relocation to permanent housing with federal disaster relief rental assistance. "In an instant, these families and individuals were rendered in desperate need of our help, and their problems aren't short-term, they're long-term," Banks said.

Copies of the recent Sandy-related testimony are attached and the New York Law Journal articles appear below.

The New York Law Journal
Superstorm Sandy's Legal Legacy
By Sateesh Nori and Fazeela Siddiqui
October 29, 2013

Superstorm Sandy devastated New York City unlike any other natural disaster in history. The physical effects of the storm ranged from destroyed homes and apartments to mass power outages, flooded subways, stores and office buildings. The storm affected almost 300,000 New Yorkers, took 49 lives, and damaged over 27,000 homes, leaving 2.1 million people without power immediately after the storm.1 Sandy also brought New Yorkers a myriad of legal challenges ranging from federal benefits and insurance claims to housing and employment issues. These legal issues disproportionately affected the poorest and most vulnerable communities in the city, highlighting and exacerbating the deeply rooted inequity in our city. Despite the arrival of billions of dollars in public and private emergency aid, the elderly, the disabled, undocumented immigrants, small businesses and low-income homeowners and renters suffered and are still suffering from unresolved legal issues. In this article, we survey Sandy's legal legacy for New York City and its most vulnerable residents.


The hardest hit by the storm were very low-income renters who made on average $18,000 per year.2 According to the Federal Emergency Management Agency (FEMA), this group comprised 55 percent of the surge victims, the majority of whom were housed in public housing units along the coasts of Coney Island, Red Hook, Alphabet City, and the Rockaways.3 Historically, FEMA's primary focus has been on providing recovery services to owners of single-family homes. Therefore, FEMA was greatly limited in its ability to respond in New York City due to the unique urban housing stock.

In New York City, more residents of rental apartments applied to FEMA than owners of single-family homes. Many of these applicants were low-income renters who were ineligible for FEMA assistance since they were living in rooming houses, basement apartments, sublets or other non-traditional housing arrangements common in New York but uncommon under FEMA regulations. As such, many poor families who were directly impacted by Sandy could not obtain benefits to recover from the storm. Many families remain homeless today, almost one year later.4

The City Hotel Program for Sandy Evacuees. In November 2012, the city placed more than 3,000 Sandy evacuees in an ad hoc hotel program, with the aim of assisting these individuals and families in finding long-term affordable housing. Less than nine months later, the city terminated this program and sought to place these evacuees and their families into its overburdened homeless shelter system.5 Many of these evacuees were forced to leave New York City in order to find permanent, affordable housing.

Sandy-Related Housing Subsidy Programs. Both the federal and city governments implemented housing subsidy programs to assist low-income Sandy evacuees. Unfortunately, these programs were mired in arbitrary and evolving eligibility requirements making it difficult for applicants and those helping them to assess eligibility. It is also unclear how many of these subsidies will be granted to needy families.

In March 2013, the federal government, via FEMA and the US Department of Housing and Urban Development (HUD), executed an Interagency Agreement to implement the Disaster Housing Assistance Program (DHAP) to assist families in need. DHAP provides eligible applicants with up to 12 months of rental assistance. Once approved, the level of subsidy is based upon the family's income, but will never exceed 40 percent of their income.

The major hurdle that advocates have faced is deciphering the eligibility criteria for the program. According to the HUD website, a family is eligible for DHAP if it was 1) displaced by Sandy and 2) referred to HUD by FEMA.6 FEMA is solely responsible for determining if a family is eligible and lacks transparency in discussing or publishing its eligibility criteria with advocates. Hundreds of Legal Aid Society clients were displaced by Sandy and assessed by FEMA, but only a few have received DHAP. This is most likely due to FEMA's focus on single-family homes and its inability to assist tenants in cities with non-traditional housing arrangements.

In April 2013, New York City also introduced a housing subsidy program to address low-income individuals and families impacted by Sandy—who were not eligible for DHAP. The Temporary Disaster Assistance Program (TDAP) is administered by the New York City Department of Housing Preservation and Development (HPD), which is authorized to implement the program using Community Development Block Grant (CDBG) Disaster Recovery funds. TDAP works like a federal Section 8 voucher whereby a tenant pays 30 percent of her income toward rent. According to the city, TDAP funding is "extremely limited," with priority going to households who were in the city's hotel program. The eligibility criteria for TDAP is even more confusing than that of DHAP, as it has been modified numerous times since April 2013 and remains in flux to this day. Moreover, burdensome documentation requirements for TDAP have impeded many from obtaining assistance, since the flooding in many evacuees' apartments swept away their vital records and documents.

Landlord-Tenant Issues. Low-income tenants who were able to remain in their homes faced considerable challenges with their landlords after the storm. Some tenants were incorrectly sued for back-rent for the time period in which they were unable to occupy their apartments. Due to their inability to obtain legal representation in Housing Court, many of these tenants unwittingly consented to monetary judgments or even surrendered their rights to their apartments. Other tenants who received federal Section 8 subsidies vacated their uninhabitable apartments after the storm and have been unable to obtain new vouchers to enable them to move to new apartments with their subsidies. As a result, many of these households may have lost their Section 8 subsidies.

Most tenants struggled to effectively advocate for themselves in order to hold their landlords accountable to their duty to repair. While it is the landlord's responsibility to make repairs under the implied warranty of habitability, some landlords either failed to make repairs or attempted to transfer the costs of the repairs to their tenants in the form of rent increases. In result, many tenants could no longer afford to pay their monthly rent, and were forced to move out.

Tenants in buildings operated by the New York City Housing Authority (NYCHA) were already waiting for extensive repairs to their buildings when the storm hit. NYCHA has faced repeated criticism for allowing hundreds of thousands of repair requests to accumulate over years. After Sandy, tenants in NYCHA buildings were devastated by power outages, inoperable elevators, broken boilers, and flooding. By some estimates, more than 21,000 NYCHA residents across 114 buildings were without power for more than a week after the storm hit. While NYCHA eventually sought to address many of the conditions caused by Sandy in its buildings, the significant delays and lack of transparency and accountability severely impacted the lives of NYCHA residents.

Low-Income Homeowners

Many low-income homeowners had a minimal safety net to guard them from a storm of Sandy's magnitude. They were faced with issues ranging from corrupt insurance brokers and housing co-op boards to unlicensed contractors who preyed on their FEMA and insurance proceeds. In New York City, home improvement contractors must be licensed by the Department of Consumer Affairs. However, many low-income homeowners fell victim to unlicensed contractors who captured the opportunity to inflate estimates in order to cash in on FEMA funds and insurance proceeds.

Legal Aid has been working with numerous clients who paid unlicensed contractors thousands of dollars and received sub-par and sometimes non-existent repairs. Many of these families have used up their repair funds and are now desperately waiting to see if they qualify for the city's "Build It Back" program.8 However, that program is only expected to assist a small group of low-income homeowners with extreme damage to their home. Without assistance, these families will have to sell their homes or use up their limited savings.

Also, New Yorkers are among the most vulnerable when it comes to insurance regulations. New York State does not have a "bad faith" law which requires insurance companies to owe a duty of good faith and fair dealing to the persons they insure. This is also known as the "implied covenant of good faith and fair dealing." In jurisdictions that have these protections, if an insurance company violates this covenant, the insured policy holder can sue the insurance company on a tort claim, known as "bad faith," as well a standard breach of contract claim. Therefore, in New York, insurance brokers cannot be held liable for selling outdated, inaccurate and incomprehensible policies.

Low-income homeowners are disproportionately affected by this since many corrupt insurance brokers, who know that they cannot be held liable, sell outdated low premium policies, with the promise that they are comprehensive and complete. Many of these policy holders received pennies from their insurance companies for damage that was incurred to their homes post-Sandy. They too are hoping to qualify for the limited home repair funds from the city's "Build It Back" program.

Also, many low-income homeowners in New York City did not have federal flood insurance since their mortgages did not require it or because they were not located in high-risk areas on the flood map. Even those homeowners who had flood insurance often did not receive insurance proceeds due to hidden policy exclusions. Flood insurance is purchased through the National Flood Insurance Program (NFIP), a federal program that enables property owners to purchase flood insurance. It is designed as an insurance alternative to disaster assistance to meet the rising costs to repair homes damaged by floods.

In July 2012, the U.S. Congress passed the Biggert-Waters Flood Insurance Reform Act, which requires NFIP to raise flood insurance premiums to reflect true flood risk. After Sandy, the city adopted new flood maps in high-risk areas, which now require homeowners to purchase this form of insurance.9 These requirements will "price out" many low-income homeowners unless they are provided with subsidies to elevate their homes in order to be eligible.

Many low-income homeowners who had flood insurance policies were unable to receive insurance proceeds due to exclusions in their policies. Many were shocked to find out that basements are not covered under NFIP.10 Others were shocked when they learned that their flood claims were rejected due to the earth movement exclusion.11 The earth movement exclusion has been used to deny coverage to many New York homeowners, which has led both state senators to protest the exclusion.

Shareholders of Housing Development Fund Corporation (HDFC) low-income cooperative apartments were also severely impacted. Many suffered major flooding and are still unable to return to their units one year after Sandy. Approximately 20 percent of the housing units in the storm surge area were HDFC co-ops, but FEMA policies preclude them from receiving disaster aid for damages.12 Housing co-op boards often have a duty to repair under the proprietary lease. Unfortunately, many co-ops in storm-affected areas may lack the financial capacity to fulfill their obligations. In such cases, a co-op shareholder may have a cause of action to file a shareholder derivative suit against the co-op board for the breach of its fiduciary duty to its shareholders.

Finally, many low-income homeowners who were affected by Sandy fell behind in their mortgage payments due to loss of income or delays in obtaining insurance proceeds. Several mortgage banks agreed to grant a mortgage moratorium of several months to Sandy-affected homeowners, but the deferred payments were due in lump sums at the end of the moratorium period. Making these payments was financially impossible for many low-income homeowners who also had to make their regular mortgage payments. In many instances, banks illegally treated insurance claim checks as security for mortgage payment arrears and refused to release them to the homeowners. As a result, many victims of Sandy are now at greater risk of foreclosure.

Extended Layoffs

To offset the costs of rebuilding, many businesses were forced to lay off employees or reduce their employees' hours. The Bureau of Labor Statistics reported that 31 extended mass layoff events related to Superstorm Sandy led to 6,759 worker separations in the months following the disaster.14 In November 2012, the month after Sandy, the number of workers who filed unemployment claims for the first time was 33 percent higher than the average number per month during the prior year. Many workers filed claims because they did not receive their wages for the week prior to Sandy since their businesses shut down and many records were destroyed. While billions of dollars in federal aid for rebuilding New York City is expected to create more jobs, it is uncertain whether working class and low-income New Yorkers, who lost their jobs due to Sandy will be provided job opportunities to help rebuild after the storm.

Vulnerable Populations

There is no official estimate of how many undocumented immigrants were affected by Sandy, due to their inability to register for government programs. However, it is estimated that hundreds of individuals and families remain without recourse.

Similarly, the elderly and disabled population received inadequate assistance and were rendered invisible after the storm. It took days and sometimes weeks for volunteers to assist these vulnerable residents. Advocates must come up with a better plan to assist these populations in the future.


Sandy brought with it a superstorm of legal issues which hit mostly poor and lower-middle class New Yorkers. These issues present attorneys with new challenges but also new opportunities to uncover systematic deficiencies in our legal system. Never before has the need for affordable housing, access to benefits, the regulation of the insurance industry, and accountability for federal spending been so clear.

Sateesh Nori is attorney-in-charge of the Queens Neighborhood Office, The Legal Aid Society. Fazeela Siddiqui is a staff attorney with The Legal Aid Society. Nabila Taj, a law student, assisted in the preparation of this article.

The New York Law Journal
1 Year Later, Attorneys Still Counsel Victims
By Tania Karas
October 29, 2013

It has been has been a year since Hurricane Sandy swept through the region, but New York lawyers are still helping storm victims wade through legal problems that are growing ever more complex.

In the initial days and weeks after the Oct. 29 storm, hundreds of lawyers from the private firms and nonprofit legal services agencies confronted immediate issues such as securing temporary housing, unemployment benefits and emergency food stamps.

The next phase of the post-flood legal recovery period involved documenting the damage inflicted by the storm for residents' and business owners' flood and property insurance and Federal Emergency Management Agency (FEMA) claims.

Since insurance law is not a typical area of expertise for civil legal services groups, the private bar stepped in to provide training and answer questions.

Now, lawyers working on Sandy cases say they're gearing up for legal battles that could take years to resolve. In the most common, homeowners who are already in deep personal debt are still fighting FEMA and their insurers over what they regard as unjustified underpayments or denials of storm damage claims.

Another pervasive issue is contractor fraud—hundreds of people paid for repair work that was performed poorly or not at all. Finally, many civil legal services groups report recent upticks in clients facing foreclosure, particularly in Long Island and Staten Island.

"Nobody actually feels like they've been made whole," said Lynn Kelly, executive director of the City Bar Justice Center, the nonprofit arm of the New York City Bar, which trains lawyers to provide pro bono help to low-income New Yorkers. "It's a sobering experience to see a disaster like this and realize, at the end of the day, how little help there is for people."

New York attorneys have helped thousands of Sandy clients pro bono. Hundreds of those cases are still active, many could turn into lawsuits as statute of limitations deadlines near.

Meanwhile, lawyers described clients who are growing exasperated and starting to give up hope of ever getting back into their homes.

In the past year, the New York Legal Assistance Group has provided direct civil legal help to more than 5,876 Sandy victims and has 2,145 active cases, 200 of which it just opened this month. The organization has a 25-member storm response unit, most of them new hires.

Keiko Cervantes-Ospina, a supervising attorney with NYLAG's storm response unit focusing on housing matters, said some of her clients have received diagnoses of post-traumatic stress disorder and depression.

"They feel harassed by all these different organizations they're trying to get help from," she said. "They feel betrayed by their insurance companies and they feel attacked by their mortgage companies and think that their homes are going to be taken from them. It's the pile-on of issues. People are very resilient but a year later they're worn down."

The Legal Aid Society has provided counsel to more than 5,800 Sandy victims and has 300 open cases. Legal Services NYC has helped more than 3,000, and MFY Legal Services has given assistance to more than 1,000. The Nassau County Bar Association has helped 1,200 storm victims through 21 Sandy-specific free walk-in legal clinics. All continue to get calls from potential clients to the Sandy relief hotlines they set up in the days after the storm.

Some smaller legal services groups, however, are limiting intake as they reach the end of their Sandy grants. For example, the Nassau/Suffolk Law Services Committee's funding for Sandy-specific work will run out at the end of November. The group has a handful of cases it is trying to wind down and is funneling new callers to groups like NYLAG and disaster recovery clinics at the Touro College Jacob D. Fuchsberg Law Center and the Maurice A. Deane School of Law at Hofstra University.

Civil legal services groups were already stretched thin before the storm. But the influx of Sandy cases on top of their regular work has strained their limited resources.

The Legal Aid Society received $630,000 for its Sandy legal recovery efforts from a mix of sources including the Robin Hood Foundation, the Center for New York City Neighborhoods and private donors. It has brought a federal class-action suit in the Southern District, Toney-Dick v. Doar, 12 Civ. 9162, on behalf of low-income storm victims, which claims the city unlawfully denied them food stamps. Gibson, Dunn & Crutcher is co-counsel.

That lawsuit and another action to challenge the end of an emergency shelter program at area hotels are a way to bring relief to large groups of people at once, Legal Aid's Attorney-in-Chief Steven Banks said. But that still leaves many potential clients unable to get help because the group does not have enough staff attorneys to handle the volume.

"Before the storm, we were forced to turn away one of every nine New Yorkers who were seeking legal help," Banks said. "Since the storm hit, the situation has become even more extreme."

"In an instant, these families and individuals were rendered in desperate need of our help, and their problems aren't short-term, they're long-term," he added.

Earlier this month, Huan Qiang Lin, an immigrant from China, testified at a hearing on the need for civil services called by Chief Judge Jonathan Lippman.

Weeping as he spoke in his native Cantonese, Lin described how he has spent the past several months living apart from his wife and two daughters as they face $219,000 in repair costs to their Coney Island home. Months after the storm, the Legal Aid Society took on his case and helped him obtain $7,000 in emergency rental assistance from FEMA.

"Without their help I wouldn't know what to do," Lin said through a translator. "My family would've been sleeping on the street."

Lin has received nothing from his home insurer because they classified his unit as a basement and therefore ineligible for coverage. He has gotten $40,000 from his flood insurer. But he has not been able to start repairs because the flood claim check was written out jointly to Lin and his mortgage servicer, JPMorgan Chase & Co. The bank will not release most of the funds.

Attorneys at Weil, Gotshal & Manges handled the appeal to FEMA, while Reed Smith worked on an appeal to his home insurer. All together, Lin's lawyers have devoted more than 100 pro bono hours to his case, said Tashi Lhewa, his Legal Aid attorney.

"He's always paid his insurance premiums on time, year in and year out," Lhewa said. "And when it's time for them to pay out, they're backing away. He's not asking for anything more than what he's entitled to."

Insurance Conflicts

Sandy has affected a far greater number of people, homes and businesses than any natural disaster in recent memory. But because so many of New York's biggest law firms represent insurance companies, most are conflicted out of providing the level of pro bono help they've given in past events, such as the Sept. 11, 2001 terrorist attacks.

"We've pretty much just stopped asking because there's so many conflicts," said Raun Rasmussen, executive director of Legal Services NYC.

Private attorneys from the largest firms were able to help in the earliest stages, providing general advice to storm victims on FEMA, landlord-tenant, food stamps and other matters. But for the most part they have not been able to do the more in-depth follow-up work, some of which could soon enter the litigation stages. That has fallen to the legal services groups.

"It's not due to a lack of willingness of the firms to help," said Ann Dibble, director of NYLAG's storm response unit. "But the fact is, they cannot take a position adverse to the companies they represent. There's a broad swath of cases they cannot help on. It's a very real problem."

A handful of firms—such as Reed Smith, Orrick, Herrington & Sutcliffe, and Dickstein Shapiro—work on behalf of insurance claimants. They have provided trainings for lawyers without experience in that area.

"We're kind of on the flipside of a lot of firms in New York—we sue insurance companies, and we're always on the side of the policyholders," said Ann Kramer, an insurance recovery partner at Reed Smith, which has answered frequent questions for NYLAG on insurance issues. "So we're happy to be able to fill that void."

Many firms with insurance clients still found ways to get involved. Weil Gotshal, for example, represents some of the world's largest insurance and reinsurance companies. But it wrote pro bono appeals letters on behalf of 40 storm victims, including Lin, who were denied emergency aid from FEMA, an area where it had no conflicts.

"We did what we could, and as it happened that turned out to be quite a lot," said Weil's pro bono coordinator, Miriam Buhl.

Earlier this year, the firm also helped the Legal Aid Society bring a class-action suit against the city when it moved to evacuate about 1,000 displaced storm victims living in hotels through a temporary shelter program. The city had been reimbursed for the program by FEMA but did not have the funds to continue it on its own.

Manhattan Supreme Court Justice Margaret Chan issued a preliminary injunction in Sapp v. City of New York, 450677-2013, in May that extended the program through last month (NYLJ, May 16).

"The resources, talent, the kind of co-counsel expertise that is so valuable to an organization like Legal Aid—that's something only a law firm can do," Buhl said.

With a shortage of pro bono lawyers and civil legal services groups stretched thin, some storm victims are turning to plaintiffs law firms that focus their practices around property and casualty insurance. Such firms typically charge clients about one-third of their recovery.

Not many such firms existed in the area before Sandy. Sensing a business opportunity, at least three firms with roots in Florida and Texas set up shop within months of the storm, and the volume of Sandy work is so great they have no plans to leave.

Complaints About Insurance

Most homeowners' insurance policies do not cover flood damage. Rather, residents must make their claims through the National Flood Insurance Program, which is run by FEMA. Almost 60,000 New Yorkers have filed flood claims.

According to the New York state Department of Financial Services, private property and casualty insurance companies have received approximately 500,000 Sandy-related claims, and 97 percent have been processed. The majority are residential property claims. In total, about $5 billion has been paid out to Sandy victims.

The state has received approximately 5,600 consumer complaints about insurance carriers—indicating that lawyers helping storm victims have their work cut out for them. But the New York Insurance Association, a trade group that represents the property and casualty insurance industry, points out that only about 1 percent of all Sandy claims have resulted in a formal complaint.

"The private insurance market performed admirably and served consumers well," said Cassandra Anderson, the group's vice president. "Having a strong and vibrant private insurance market made it possible for New York to withstand Sandy's blows and begin rebuilding."

In February, Governor Andrew Cuomo announced a voluntary mediation process for homeowners disputing their insurance companies' low offers or claim denials. Only about 2,500 homeowners have chosen to participate, even though the program requires insurers to pay for the mediator.

Homeowners who complain they are having trouble getting enough money from their insurance carriers to rebuild their homes also are being squeezed by rising flood insurance rates. The Biggert-Waters Flood Insurance Reform Act, part of which went into effect Oct. 1, 2013, ends federal subsidies for the National Flood Insurance Program and phases in increased flood insurance rates for homes in flood zones.

As a result, residents in parts of Staten Island and Long Island are seeing their premiums skyrocket. Some homes that paid $600 to $1,200 in annual flood insurance could soon be paying $10,000 to $15,000, said Margaret Becker, director of the disaster recovery unit at Staten Island Legal Services.

"It's forcing widespread displacement of middle-income homeowners, and that's what many communities are terrified of," Becker said.

Homeowners who want to stay in their homes often turn to attorneys to advise them on how to moderate the flood insurance bite, which includes taking mitigation measures like elevating their houses several feet.

Clients who want to sell their homes usually cannot do so without first repairing them. And even then, their mortgages, taken out in stronger economic times, often exceed the value of their homes.

At any rate, said Becker, "You can't sell a $200,000 to $300,000 home that carries a $10,000 flood insurance policy. So people are kind of locked in a trap with no clear way out."