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NYC lawsuit payouts expected to rise despite tougher stance on nuisance claims

New York City Mayor Bill de Blasio speaks

New York City Mayor Bill de Blasio speaks at a press conference on Saturday on December 22, 2014 in New York City. Credit: Getty Images / Andrew Burton

Legal payouts by New York City are forecast to spike 17.5 percent by the 2018-19 fiscal year, even as Mayor Bill de Blasio's administration has pumped millions of dollars into a new war on so-called frivolous litigation.

By then, taxpayers could be on the hook for $817 million in judgments and claims, up from $695 million in 2014-15, according to City Council budget documents. About 28,500 claims are filed against the city every year.

The projection is "disturbing" said Carol Kellermann, president of the nonpartisan Citizens Budget Commission.

"Their explanations for why it's going up are counterintuitive to what they say about doing better management," she said.

A de Blasio spokeswoman, Amy Spitalnick, said the administration is being cautious -- projecting an increase of about 4 percent a year based on historical trends -- because of litigation fights it could lose.

"The city needs to prepare for the worst so we're not left with a budget hole if we're unsuccessful," she said.

The projections come even as the city has already settled a flurry of long-looming, big-dollar legal claims, such as:

$41 million for the Central Park Five, teenagers wrongly convicted of raping a jogger in 1989 and imprisoned.

$98 million to resolve allegations that the FDNY racially discriminated in hiring.

$18 million over protesters who contend they were illegally arrested during the 2004 Republican National Convention.

$5.9 million for the heirs of Eric Garner, who died from an apparent chokehold during a Staten Island arrest.

De Blasio's efforts date to January, when he criticized a "broken policy" of the Law Department settling with lawyers he called "ambulance chasers" -- specifically, $5,000 for a machete-wielding man who was shot by cops after he attacked them and later pleaded guilty to menacing an officer.

"We understand that the standard assumption about economics was: 'Why fight the case when you could spend $5,000 and end it, cut your losses, call it a day?' " de Blasio said then. "We're saying that even if that was well-intentioned, and that was the policy of the city for decades, we want to change that by ending the upward trend of these frivolous lawsuits."

He predicted a harder line on the cases would cause some such plaintiffs "to cease and desist."

To meet that goal, the city's current budget, which took effect July 1, includes $3.2 million more for the Law Department -- which employs about 730 attorneys -- to hire 30 additional lawyers and 10 paralegals.

Zachary W. Carter, who as corporation counsel oversees the department, said recently outside City Hall that there are no statistics on how much the city has been paying to settle frivolous or nuisance cases because they are hard to define.

"I wish I could. I hate to sound like [former U.S. Supreme Court Justice] Potter Stewart in pornography cases -- 'I know it when I see it.' "

Comptroller Scott Stringer -- who has used his authority to settle several high-profile cases before trial, including Garner's -- has implemented a "data-driven approach to risk management" called ClaimStat, to identify litigation "hot-spots" and drive down costs, spokesman Eric Sumberg said.

But with the projections still going up, City Councilman Ben Kallos questioned how the city estimates its legal liabilities. He said other spending needs are going unmet because of the funds reserved for litigation.

"With regard to investing in defending these frivolous lawsuits, the key issue here is: We should be seeing a return on our investment, and that should be reflected in the judgment-and-claims budget," Kallos (D-Manhattan) said.

Tom Stebbins, executive director of the Albany-based Lawsuit Reform Alliance of New York, which aims to limit plaintiff litigation, said experience in other municipalities shows that fighting dubious lawsuits, while costlier in the short term, ultimately deters future suits.

"Those frivolous cases are like feeding a stray cat," he said. "If you feed one stray cat, the next day you got more stray cats. If you stop feeding the cat, the cats go away."

Stebbins pointed to Chicago, which in 2009 adopted a policy of fighting, rather than quickly settling, suits against the police. Within a year, he said, suits alleging cop misconduct dropped about 50 percent.

Scott G. Cerbin, the Brooklyn lawyer in the machete case, said it wasn't frivolous. He said his client, Ruhin Ullah, maintained that he wasn't brandishing the weapon when police shot him. Cerbin said he settled at $5,000 on a $3 million claim because Ullah was "in the mental ward" and couldn't effectively participate in litigation.

"Are there frivolous lawsuits? Sure," Cerbin said. "But are the majority of lawsuits against the Police Department frivolous? No."

Projected judgment and settlement costs

(by fiscal year)

2015: $695 million

2016: $710 million

2017: $746 million

2018: $782 million

2019: $817 million

Total percentage growth: 17.5 percent

Annual growth: 4.1 percent

Source: Office of the New York City Comptroller

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