Today, the 2nd Circuit Court of Appeals ruled that the U.S. District Court for the Southern District of New York improperly dismissed a class-action lawsuit challenging New York City’s extraction of unconstitutional settlement agreements. Through its no-fault eviction program, the NYPD threatened to evict businesses and residents when somebody—even a total stranger—committed a crime at or near one’s property. Once eviction proceedings were underway, New York City’s prosecutors bullied these businesses and residents into signing away their constitutional rights in order to avoid eviction.

Laundromat owner Sung Cho learned about these practices the hard way. After undercover police officers came to Sung’s laundromat and offered to sell stolen electronics to his customers, the NYPD threatened to evict him from his business. The city said it would let him stay if he agreed to three demands: waive his Fourth Amendment right against warrantless searches, grant police unlimited access to his security camera system, and allow the NYPD to impose sanctions for alleged criminal offenses even without any opportunity for a hearing before a judge. Faced with eviction, he reluctantly settled on the city’s terms.

After Cho, along with David Diaz and Jameelah El-Shabazz, teamed up with the Institute for Justice (IJ) to challenge settlements like these, the city overhauled its no-fault eviction practices going forward. But New Yorkers like Cho are still bound by unconstitutional settlements that the city extracted in the past.

The District Court ruled in January that, under the so-called Rooker-Feldman doctrine, the court did not have jurisdiction over IJ’s lawsuit. The Court of Appeals overruled the District Court, holding that the case did not “entail the evil Rooker-Feldman was designed to prevent.”

“We are glad that the Court of Appeals ruled that this lawsuit can proceed,” IJ Senior Attorney Darpana Sheth said. “The city needs to deliver justice to the hundreds of New Yorkers stripped of their constitutional rights.”

While Sung bemoaned the fact that he is still subject to an unconstitutional settlement, he is also happy to see his lawsuit proceed.

“New York City is still treating me like a criminal when I did nothing wrong. I’m hoping that the courts can still make this right,” Sung said.

The Institute for Justice is a non-profit, public interest law firm that fights for property rights nationwide. In addition to this case, it fights other property rights abuses including civil forfeiture and eminent domain abuse. In a class action against the City of Philadelphia and its law-enforcement agencies, IJ ended a similar practice by the Philadelphia District Attorney’s Office in coercing property owners to waive constitutional rights.