For The People Theaters of N.Y. v. City of N.Y.

A First Amendment Strike Against The Empire

© Edward S. Rudofsky 2013

Brought To You By

• Ed Rudofsky • Mike Murray & Lorraine Baumgardner• John Weston & Randy Garrou• Dan Silver & Luke Lirot• Herald Price Fahringer & Erica Dubno• Mark Alonso, Martin Mehler & Chuck

Axelrod

NYC Zoning of Adult Establishments Pre-1995

• Prior to 1995, there was no adult use zoning in NYC.

1995 Adult Use Amendments

• Dispersal plan - ~20 permitted locations• Applied equally to all adult uses• Defined “adult establishment” as one that

“regularly featured” either exposure of “specified anatomical areas” or “specified sexual activities” in a “substantial portion” of the premises, measured by floor area.

• Eliminated garish signage.

1995 Amendments Upheld Against Facial Challenge

Under NY Constitution

• Stringfellow's of New York, Ltd. v. City of New York, 171 Misc.2d 376 (Sup. Ct. N.Y. Co. 1996) (granting summary judgment declaring 1995 Amendment constitutional on their face), aff’d 241 A.D.2d 360 (1st Dept. 1997), aff’d 91 N.Y.2d 382 (1998).

1995 Amendments Upheld Against Facial ChallengeUnder First Amendment

• Hickerson v. City of New York, 932 F.Supp. 550 (S.D.N.Y. 1996) (Pullman Abstention; remand of State claims; stay of Federal claim);

• Hickerson v. City of New York, 146 F.3d 99 (2nd Cir. 1998) (affirming denial of preliminary injunction following State decision and holding Federal plaintiffs collaterally estopped by State findings of facts on essentially identical constitutional issues despite England reservation), cert. den., 525 U.S. 1067 (1999).

“Substantial Portion” Defined

• In order to moot “void for vagueness” argument in Hickerson v. City of New York, City promulgates an “authoritative guideline” that “substantial portion” means 40% or more of customer-accessible floor space.

Where Did City Want Us to Believe 60-40 Came From?

• No finding of secondary effects caused by establishments allocating less than 40% of floor space to adult use.

• Alleged basis for 60-40 ratio was statement in 1994 Adult Entertainment Study that the City only studied establishments with 40% or more of floor space allocated to adult use.

Where Did 60-40 Really Come From?

• Long-rumored secret deal between City (Mayor Guiliani) and Blockbuster (Wayne Heisinger), based on Blockbuster’s business need to devote <40% of floor space to the sale of R-rated videos (which would constitute “adult” material under the Amended Zoning) leading to insertion of statement in Adult Entertainment Report on which 60-40 was later based.

The City’s Claim of “Sham Compliance”

• General compliance followed Hickerson, with many existing establishments conforming to the 60-40 spatial ratio, thereby continuing to offer adult entertainment at the same location as before the 1995 Amendments were adopted.

• This was politically anathematic to the City, as it made a farce out of the Guiliani promise to “push these businesses into the ocean.”

• The City (directly contrary to its “alternative avenues” argument on the facial attack) then took the position that “mere spatial compliance” with the 60-40 rule was “sham compliance” and brought nuisance abatement cases on that theory.

“Mere Spatial Compliance” Is Compliance

• City of New York v. Les Hommes, 94 N.Y.2d 267 (1999), rev’g 258 A.D.2d 284 (1st Dept. 1999)

• City of New York v. Dezer Properties, Inc.,95 N.Y.2d 771, rev’g 259 A.D.2d 116 (1st Dept. 1999)

The Empire Strikes Back

• The 2001 Amendments: “Substantial Portion” (60-40)– eliminated for live entertainment– onerously regulated for book & video stores

(placement of stock & cash registers, ratio of sales and income, etc.)

• No new secondary effects study.

The Rebel Alliance Forms

• Six Cases Are Brought:– Three in State Court, alleging facial and as applied

violations of the New York Free Expression Clause. (Fahringer/Dubno, Alonso & Mehler.) Assigned to liberal judge – Justice Louis York.

– Three in Federal Court, alleging facial and as applied violations of the First Amendment. (Rudofsky/Axelrod, Silver/Lirot, Weston/Garrou.) Assigned to conservative judge – Alan Schwartz.

Enforcement Is Stayed

• 2001 Amendments stayed by TROs & then preliminary injunctions in State Cases.

• Already pending motions for preliminary injunction in Federal Court withdrawn in light of State stay of enforcement – no longer any threat of imminent irreparable harm.

Federal Cases Held In Abeyance

• The Federal cases were re-assigned to yet another conservative judge, William Pauley, upon the death of Judge Schwartz. Given the likelihood of a better result in State Court, the Federal plaintiffs then agreed to put the Federal cases on “administrative suspension” and ultimately to dismissal with the right to reinstate in the event of an unfavorable decision in the State cases.

Round 1 - Victory

• For People Theatres of N.Y., Inc. v. City of New York, 1 Misc.3d 394 (Sup. Ct. N.Y. Co. 2003); Ten's Cabaret, Inc. v. City of New York,1 Misc.3d 399 (Sup. Ct. N.Y. Co. 2003) (both holding 2001 Amendments unconstitutional on their face based on the City’s lack of any proof of secondary effects attributable to 60-40’s and the plaintiffs’ showing (McLaughlin, Linz, etc.) that 60-40’s do not cause secondary effects (even if prior case law requires the conclusion that 100% locations do).

Round 2 - Defeat

• For the People Theatres of N.Y. Inc. v. City of New York, 20 A.D.3d 1 (1st Dept. 2005) (reversing and holding 2001 Amendments constitutional on their face)

Round 3 – Tactical Victory

• For the People Theatres of N.Y., Inc. v. City of New York, 60 N.Y.3d 63 (2005) (reversing Appellate Division and remitting to trial court for Stage III Alameda Books hearing on whether essential nature of 60-40’s was significantly different from 100% locations studied in 1994) (5-4 decision over dissent that no hearing was required and original judgment of unconstitutionality should be reinstated as a matter of law).

Round 4 – Another Defeat

• People Theatres of NY, Inc. v. City of New York, 27 Misc.3d 1079 (Sup. Ct. N.Y.Co. 2010) (holding 2001 Amendments constitutional after trial). (Note: companion decision in Ten’s Cabaret v. City of New York is unreported.)

• Kudos to Mike Murray, who expertly tried the case for our clients, and to expert witnesses Dan Linz (no measurable criminogenic effects of 60-40’s), Lance Freeman and Bryant Paul (no measurable impact of 60-40’s on property values), and Michael Anastas (for conducting our suggested study of whether subdued signage reduced/eliminated perception of secondary effects).

Round 5 – The Rebels Counter-Attack

• People Theatres of N.Y. Inc. v. City of New York, 84 A.D.3d 48 (1st Dept. 2011) (reversing and vacating judgment of constitutionality and remanding for detailed secondary effects findings and re-decision after intermediate scrutiny)

Round 6 – The Death Star Explodes!

• For The People Theatres of NY, Inc. v. City of New York, ___ Misc.3d ___, 954 N.Y.S.2d 801 (Sup. Ct. N.Y. Co. 2012) (making favorable findings, finding Linz credible and McCleary incredible, and holding 2001 Amendments unconstitutional on their face)

The McCleary Findings• 89. The City's expert witness, Dr. Richard McCleary, is not found to be

credible by this Court which accords no weight to his testimony.•

90. Dr. McCleary is a statistician who holds no degrees in criminology or urban planning or studies.

•91. He conducted no studies, except for a study in which he received a very poor 13.2% return rate from real estate brokers, nor was he aware of any other studies, except for the studies of Drs. Freeman and Linz.

•92. He merely offered his ipse dixit opinions that adult clubs draw from a wide geographical area and cause an increase in crime in surrounding areas, patrons tend to carry cash, patrons are reluctant to call police when they are criminally victimized because of the stigma attached to frequenting such establishments. Because of the lack of any real world corroboration for those opinions, the Court rejects them.

[Emphasis added.]

The “Dicta”• “While these reflections form no part of this decision, this Court cannot

understand how an 18 year old study of the negative effects of the 100% entities can be applied to the current 60–40 entities without determining the actual negative secondary effect of these institutions today. It was primarily the increased crime rates that spawned the 1994 DCP study and led to the legislative changes in 1995 that this record shows was successful. New York State has a storied reputation for protecting freedom of speech. Its courts have consistently held that the content of speech cannot be regulated (People v. Mobil Oil Corp., 48 N.Y.2d 192 ... [1979]). What can be regulated are the negative secondary effects of the legislation in issue by virtue of the exercise of the police powers (Stringfellow’s of N.Y. v. City of New York, 241 A.D.3d 360 ... [1st Dept. 1997]). Here, no investigation was conducted by the defendants. Instead, there was a fictionalized reliance on the 1994 study. Without an actual study, the 2001 legislation should have been struck down, as urged by the three-judge Court of Appeals' minority opinion in For The People, at 6 N.Y.3d 88 ....”

• [CONT’D ON NEXT SLIDE]

The “Dicta” (Cont’d)

• “Isn't [- -] without a finding of negative secondary effects generated by the current 60–40 entities [- -], what the City is really regulating ... the content of expression, clearly a violation of the plaintiff's rights to freedom of speech (People v. Mobil Oil Corp., 48 N.Y.2d 192 ... [1979])?” [Emphasis added.]

The Present Status

• The City has served a Notice of Appeal, but has not as yet perfected its appeal. The time to do so will expire in July 2013.

• The judgment is arguably “automatically stayed” pending the City’s appeal (there is a split of authority on this point), but the City has made no effort to enforce the 2001 Amendments pending appeal.

• If necessary, an application will be made to vacate the stay.

With Thanks

• To Dan and especially John & Randy for their expertise and hours spent analyzing, making and honing arguments & editing briefs.

• To Marty Mehler, a good friend and fine lawyer, who brought the Pussycat Lounge case at our request (when Mark Alonso sued only on behalf of Ten’s).

The Struggle Continues

May The Force Be With Us.