Commercial Lease Clause Waiving Right to Bring Declaratory Judgment Action is Valid in NY

May 24, 2019

                In 159 MP Corp. v. Redbridge Bedford, LLC, --- N.E.3d ----, 2019 WL 1995526 (N.Y. May 7, 2019), the New York Court of Appeals held that a commercial lease clause by which a tenant waived its right to bring a declaratory judgment action was valid and not contrary to public policy.  This meant that the tenant was precluded from (i) bringing an independent action to determine that it was not in default under the lease, and (ii) obtaining a concomitant Yellowstone injunction to prevent termination of the lease while the action was pending.  The Court stressed New York’s public policy favoring freedom of contract, and noted that such policy was particularly important in the context of commercial leases.