Judge: Kushner Company Must Reveal Identities of Real Estate
Partners
A federal judge in
Maryland ruled Friday that Jared Kushner’s family real
estate company could not keep secret the identities of its partners in
Baltimore-area apartment complexes that are the subject of a class-action
lawsuit by tenants.
The class-action lawsuit was filed in September, following a May article
co-published by ProPublica and The New York Times Magazine that described how
Kushner Companies have used highly aggressive tactics in pursuing payments from
tenants and former tenants of 15 large apartment complexes it owns and manages
in the Baltimore area.
The lawsuit, filed in
the Circuit Court for Baltimore City, alleges that the Kushner Companies’ real
estate management arm and related corporate entities have been improperly
inflating payments owned by tenants by charging them late fees that are often
baseless and in excess of state limits and court fees that are not actually
approved by any court.
The suit alleges that the late fees and court fees set in motion a vicious cycle in which rent payments are partly put toward the fees instead of the actual rent owed, thus deeming the tenant once again “late” on his or her rent payment, leading to yet more late fees and court fees. Tenants are pressured to pay the snowballing bills with immediate threat of eviction, the suit alleges.
The suit alleges that the late fees and court fees set in motion a vicious cycle in which rent payments are partly put toward the fees instead of the actual rent owed, thus deeming the tenant once again “late” on his or her rent payment, leading to yet more late fees and court fees. Tenants are pressured to pay the snowballing bills with immediate threat of eviction, the suit alleges.
Kushner Companies and
its co-defendants sought to have the case transferred from state court to
federal court, which would spare it from having to face an all-Baltimore City
jury.
To have this transfer approved, the defendants needed to show that none of their ownership partners were residents of Maryland.
The defendants requested that their submission of the list of partners be sealed from public view, citing the high degree of media interest in Jared Kushner, President Trump’s son-in-law and senior White House adviser.
To have this transfer approved, the defendants needed to show that none of their ownership partners were residents of Maryland.
The defendants requested that their submission of the list of partners be sealed from public view, citing the high degree of media interest in Jared Kushner, President Trump’s son-in-law and senior White House adviser.
“Given the tenor of
the media’s reporting of this case, including politically-motivated innuendo no
doubt intended to disparage the First Family, there is foreseeable risk of
prejudice to the privacy rights and reputations of innocent private
investors,” wrote Westminster Management, Kushner Companies’
real estate management arm, in a court filing in November.
This request to seal
the partners’ identities was challenged several weeks later in a joint filing by
ProPublica, the Baltimore Sun, the Washington Post, the Associated Press, and
Baltimore TV station WMAR-TV.
They argued that the press had a “presumptive right” to view court documents, and that the Kushner Companies had not identified the “compelling government interest” that is required to block public access.
They argued that the press had a “presumptive right” to view court documents, and that the Kushner Companies had not identified the “compelling government interest” that is required to block public access.
In his ruling Friday,
U.S. District Court Judge James K. Bredar stated that the high level of public
interest in Kushner and his business associates if anything enhanced the case
for maintaining access to the identities of the defendants in the case.
“The Defendants are no
doubt correct that the presence of the Kushner (and therefore Trump) families
in this case has raised its profile and attracted significant, though perhaps
not ‘unprecedented,’ media attention,” Bedar wrote.
“But increased public interest in a case does not, by itself, overcome the presumption of access. In fact, it would logically strengthen it, particularly when the interest is due to the presence of important public figures in the litigation. In such an instance, the public’s desire to evaluate the Court’s decision-making is likely augmented. And beyond this apparently inevitable media scrutiny, Defendants have largely relied on ‘vague superlatives’ and insinuations instead of demonstrating specific harms.”
“But increased public interest in a case does not, by itself, overcome the presumption of access. In fact, it would logically strengthen it, particularly when the interest is due to the presence of important public figures in the litigation. In such an instance, the public’s desire to evaluate the Court’s decision-making is likely augmented. And beyond this apparently inevitable media scrutiny, Defendants have largely relied on ‘vague superlatives’ and insinuations instead of demonstrating specific harms.”
Tenants in more than a
dozen Baltimore-area rental complexes complain about a property owner who they
say leaves their homes in disrepair, humiliates late-paying renters and often
sues them when they try to move out. Few of them know that their landlord is
the president’s son-in-law.
Several recent news
reports have given a hint of just how far-reaching the network of investors in
the Maryland apartment complexes could be.
The New York Times reported earlier this month that Kushner Companies last spring secured a $30 million equity investment in the Baltimore complexes and others of its holdings from Menora Mivtachim, one of Israel’s largest financial institutions, just as Jared Kushner was about to make his first official visit to Israel as President Trump’s designated broker of Israeli-Palestinian negotiations.
More recently, a New Yorker article described the Kushner Companies’ aggressive pursuit of Chinese investors in its real estate ventures.
The New York Times reported earlier this month that Kushner Companies last spring secured a $30 million equity investment in the Baltimore complexes and others of its holdings from Menora Mivtachim, one of Israel’s largest financial institutions, just as Jared Kushner was about to make his first official visit to Israel as President Trump’s designated broker of Israeli-Palestinian negotiations.
More recently, a New Yorker article described the Kushner Companies’ aggressive pursuit of Chinese investors in its real estate ventures.
In his ruling, Bedar
gave the defendants until Feb. 9 to provide the list of their ownership
partners. The Kushner Companies could opt instead to return the case to the
Circuit Court in Baltimore, if the firm decides the downsides of having to
disclose the investment partners in the complexes outweigh the downsides of
having the case heard by a Baltimore jury.
A request for comment
from Kushner Companies’ spokesman was not immediately returned Friday
afternoon. A lawyer for the plaintiff tenants, Andy Freeman, said he and his
colleagues on the case had not yet gotten any indication of how Kushner
Companies planned to proceed.
“We’re pleased with
the ruling. We don’t think that parties to federal litigation should be able to
conceal their identity,” Freeman said. He added: “This is just the first step
in moving toward justice for the tenants.”
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Alec
MacGillis covers politics and
government for ProPublica.
