Court of Appeals, divided on Giuliani’s final anti-porn regs, sends case back to trial court
New York’s highest court has issued its fourth ruling in the long-running saga of one of the earliest initiatives of the Giuliani administration—the crackdown on “adult businesses” in New York City through a zoning ordinance intended to sharply reduce the number of such businesses and limit them to relatively remote industrial areas.
The Court of Appeals was sharply split, 4-3, in its December 15 ruling. The four members of the court appointed by Republican Governor George Pataki voted to send the case back to the trial court in Manhattan for fact-finding. The majority, in an opinion by Judge Susan Phillips Read, took no position on whether the revised version of the zoning ordinance, passed in 2001 in response to earlier decisions by the court, was constitutional, but suggested that the city’s burden of justifying the law is much lighter than the trial court had ruled.
A Manhattan state Supreme Court ruling in 2003 found that the 2001 regulations, which amended Republican Mayor Rudy Giuliani’s first zoning ordinance from 1995, posed free speech and censorship issues, but the state appellate division reversed that decision.
The three remaining members of the high court, all of whom were appointed by former Democratic Governor Mario Cuomo, dissented, in an opinion by Chief Judge Judith Kaye, who accepted the trial court’s conclusion that the city provided no factual basis to justify the “tightening up” of regulations and the consequent impact on free expression attempted by the 2001 amendments. Kaye characterized the new 2001 measure as a “radical” expansion of the original law.
The dispute between the two groups of judges is complicated. Understanding it requires a review of the history of this controversial measure, which Judge Read sets out at length in her opinion.
The original, 1995 version of the zoning provisions was passed by the City Council on the initiative of the Giuliani administration, based on a 1994 study purporting to show that the proliferation of adult businesses—porn shops, theaters, and clubs featuring live performances—over the prior decade had a deleterious effect on the quality of life in the city, and in particular contributed to a decline in property values and a rise in crime in the areas where such businesses were located. Whether the 1994 study conducted to document these impacts conclusively proved them has been much debated, but the Court of Appeals accepted the argument that it did. In 1998, the court ruled that the impact studies were a sufficient basis to overcome constitutional objections based on the First Amendment’s protection for freedom of speech. Shortly thereafter, the federal appeals court based in Manhattan ruled to the same effect.
Under the 1995 ordinance, only businesses that devoted a “substantial” amount of their floor space to “adult uses” were covered by the geographical restrictions. In regulations issued under the ordinance, the city defined “substantial amount” as 40 percent, resulting in the so-called 60/40 rule. To avoid being closed down, many adult businesses revamped their operations to try to get the amount of their space and inventory devoted to “adult uses” down below 40 percent.
So many businesses succeeded in doing this, and so few were forced to close or relocate, that the Giuliani administration, frustrated at the failure of the ordinance to accomplish the goal of sharply reducing the presence of such establishments, decided to take a new tack, arguing in court proceedings that many of the so-called 60/40 businesses were “shams” because they were still primarily dealing in sexually-related materials or performances from which they were deriving almost all of their revenues. Some of the establishments stocked the remainder of their space with materials that seemed not intended to move.
The city’s effort to make its argument met with mixed results in the lower courts, but in 1999, in a case involving a gay bookstore on the Upper West Side, Les Hommes, the Court of Appeals rejected the city’s argument and held that a business that was in compliance with the 60/40 rule could not be shut down under the “sham” compliance theory. The Court of Appeals issued a similar ruling in 2000 in a case involving another business.
Back to the drawing board for the Giuliani administration, which persuaded the City Council to pass amendments to the ordinance in 2001. However, no new study was conducted to show that the 60/40 businesses had the same deleterious effect that was “documented” under the 1994 study used to justify the original ordinance. Under the 2001 amendments, the word “substantial” was removed from the definition of those adult businesses that featured live performances. Any live performances of a sexual nature made the establishment an “adult business” for purposes of the zoning requirements. As to other establishments, the amendments tightened up the requirements so that it would be much more difficult for business to escape the zoning restrictions, although it still might be accomplished if the amount and accessibility of the adult content of it inventory was further reduced.
The lawsuit that led to the December 15 decision was filed by business owners just before the amendments were to go into effect, seeking a court order blocking their implementation. In the 2003 trial decision, the Supreme Court in Manhattan ruled that the amendments were unconstitutional because there was no new study showing the public policy imperative to go after the 60/40 businesses. Indeed, in affidavits submitted to the court, experts retained by the plaintiffs showed that the presence of 60/40 businesses in a neighborhood had no discernible effect on property values or crime rates. Consequently, the trial court concluded—as many opponents of the zoning ordinance had argued from the outset—that the 2001 amendments were all about censorship and violated the First Amendment.
The Appellate Division reversed, however, finding that no new study was needed, and the plaintiffs brought their case to the Court of Appeals.
Judge Read asserted that a recent U.S. Supreme Court decision involving a Los Angeles zoning ordinance, Alameda Books, had cast new light on the evidence required by a municipality aiming to restrict the operation of adult businesses, and that the lower courts in this case failed to properly follow the approach dictated by the Supreme Court. She rejected the argument that the city had to have a new study showing that 60/40 businesses present the same deleterious effects as their predecessors. On the other hand, she found that the plaintiffs’ expert testimony raised the issue of whether the 60/40 establishments were sufficiently different in character from their predecessors to reject the city’s “sham compliance” arguments.
“A triable question of fact has been presented as to whether 60/40 businesses are so transformed in character that they no longer resemble the kinds of adult uses found, both in the 1994 DCP Study and in studies and court decisions around the country, to create negative secondary effects—as plaintiffs contend— whether these businesses’ technical compliance with the 60/40 formula is merely a sham—as the city contends,” Read wrote. She contended that if the city met its burden of showing that the businesses were not truly transformed from those that would be defined by the law as substantially adult businesses, then the original studies would be sufficient to justify the 2001 ordinance.
Judge Kaye summarized the dissenters’ conclusion concisely at the outset of her opinion, after noting New York’s history and tradition of providing more expansive protection for freedom of speech than is provided under the federal Constitution.
“The majority views the 2001 law as merely closing a ‘loophole’ in the 1995 law,” Kay wrote. “We see it as a new law. The majority remits the case to Supreme Court for additional fact-finding; we do not see what additional facts could substantiate the new law that the city has not already had an opportunity to provide.”
Kaye argued that this case was entirely distinguishable from the Supreme Court’s Alameda Books case, calling the 2001 amendments a “radical expansion” of the 1995 ordinance that required its own independent justification, which the city had not provided. The high court dissenters concluded that the Supreme Court’s ruling in Alameda Books was not “on point.”
The political split among the Court of Appeals judges in this case was very close to being an exact geographical split as well. All three dissenters are from New York City, while three of the four judges in the majority are from outside the city. The terms of the Cuomo appointees expire within the next few years, clearly demonstrating the significance of the 2006 gubernatorial election for the future direction of the Court of Appeals on this, as on so many other, issues.