425 F.2d 959 (2nd Cir. 1970), 346, Gold v. Lomenzo

Docket Nº:346, 34144.
Citation:425 F.2d 959
Party Name:David C. GOLD, Plaintiff-Appellant, v. John P. LOMENZO, individually and as Secretary of State of the Department of State of the State of New York, The Department of State of the State of New York and Howard R. Leary, individually and as Police Commissioner of the Police Department of the City of New York, Defendants-Respondents.
Case Date:January 22, 1970
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

Page 959

425 F.2d 959 (2nd Cir. 1970)

David C. GOLD, Plaintiff-Appellant,


John P. LOMENZO, individually and as Secretary of State of the Department of State of the State of New York, The Department of State of the State of New York and Howard R. Leary, individually and as Police Commissioner of the Police Department of the City of New York, Defendants-Respondents.

No. 346, 34144.

United States Court of Appeals, Second Circuit.

January 22, 1970

         Argued Oct. 17, 1969.

Page 960

         Norman J. Mordkofsky, New York City, for plaintiff-appellant.

         Charles A. LaTorella, Jr., Asst. Atty. Gen. (Louis J. Lefkowitz, Atty. Gen. of the State of New York, New York City, of counsel), for defendants-respondents.

         Before FRIENDLY, HAYS and ANDERSON, Circuit Judges.

         FRIENDLY, Circuit Judge:

         David C. Gold, the holder of a real estate broker's license issued under 441 of the New York Real Property Law, McKinney's Consol.Laws, c. 50, brought this action in the District Court for the Southern District of New York. Federal jurisdiction was alleged under the civil rights jurisdictional statute, 28 U.S.C. 1343(3)-(4). He sought to enjoin the enforcement of an order of the New York Secretary of State suspending his license and imposing conditions on its restoration.

         The Secretary found that Gold had charged excessive commissions and had used a form of lease which bound the tenant to take the apartment even if it was occupied and unavailable at the time scheduled for the lease to begin, so long as the apartment became available within 30 days thereafter. The Secretary concluded that these acts demonstrated 'untrustworthiness' within the meaning of 441-c, subd. 1 of the Real Property Law, which authorizes him to revoke or suspend a broker's license or to impose a fine or reprimand

         'upon conviction of the licensee of a violation of any provision of this article, or for a material misstatement in the application for such license, or if such licensee has been guilty of fraud or fraudulent practices, or for dishonest or misleading advertising, or has demonstrated untrustworthiness or incompetency to act as a real estate broker or salesman, as the case may be.'

         The Secretary accordingly suspended Gold's license for three months, or in lieu thereof imposed a fine of $250, and further provided that the license should not be restored until Gold had refunded to four clients amounts aggregating $585.85 and had filed statements that he had deleted the objectionable clause in his lease and that in the future he would not charge more than one month's rent as a commission.

         Gold's argumentative and discursive complaint attacked the statute and the Secretary's order on a variety of grounds under the federal constitution and state law. He moved for the convening of a three-judge court and for a temporary injunction. Considering that the complaint raised no substantial question as to the constitutionality of 441-c, subd. 1 as written and that the attacks on the terms of the Secretary's order concerning the form of lease and future charges for commissions were not grounded upon the unconstitutionality of a statute, 28 U.S.C. 2281, 1 the district judge declined to request the convening of a three-judge court. 304 F.Supp. 3, 9. With respect to the claims which he regarded as within his jurisdiction as a single judge, he thought that plaintiff's probability of success was insufficient to counter the detriment to the public if an injunction pendente lite were to prove unwarranted, and consequently denied it. We refused to stay his order but expedited the appeal.

Page 961

          The first question, not argued to us, is whether federal jurisdiction of the action existed under 28 U.S.C. 1343(3). As stated in Eisen v. Eastman, 421 F.2d 560 (2 Cir. 1969), a challenge to the revocation of a license to engage in an occupation 'can be viewed about equally well as complaining of a deprivation of the personal liberty to pursue a calling of one's choice or of the profits or emoluments deriving therefrom.' Since we are content to follow the prevailing view sustaining civil rights jurisdiction in such cases, which was there noted, we need not consider whether Gold's unsubstantiated claim for damages of $100,000 would satisfy the requirement of 28 U.S.C. 1331 as to jurisdictional amount.

          We next encounter the issue of our appellate jurisdiction, one of the obscurities of the three-judge court statute that has been correctly described as 'so complex as to be virtually beyond belief.' ALI, Study of the Division of Jurisdiction Between State and Federal Courts 332 (1969). As one commentator has noted, 'A literal reading of (28 U.S.C.) 1253 and 1291-92 suggests that jurisdiction to review the decision whether three judges are required depends upon whether three judges were in fact required.' Currie, Federal Courts 552 (1968). On the other hand, in Stratton v. St. Louis S.W. Ry., 282 U.S. 10, 51 S.Ct. 8, 75 L.Ed. 135 (1930), the Supreme Court held that if a single judge takes action on the merits in a case appropriate for three judges, neither the Supreme Court nor the court of appeals has jurisdiction of an appeal, the proper remedy being an application to the Supreme Court for a writ of mandamus. In Idlewild Bon Voyage Liquor Corp. v. Epstein, 370 U.S. 713, 716, 82 S.Ct. 1294, 1296, 8 L.Ed.2d 794 (1962), however, the Court held that 'Stratton does not stand for the broad proposition that a court of appeals is powerless ever to give any guidance when a single judge has erroneously invaded the province of a three-judge court,' and subsequent cases such as Schackman v. Arnebergh, 387 U.S. 427, 87 S.Ct. 1622, 18 L.Ed.2d 865 (1967) appear to be continuing the drift to the position that if a court of appeals does not exactly have jurisdiction of an appeal such as this, it has something sufficiently similar to enable it to reverse for the convening of a three-judge court. 2 See also Bell v. Waterfront Commission, 279 F.2d 853 (1960).

          Without intimating any view with respect to Gold's other contentions, we find his allegation that the level of commissions prescribed by the Secretary's order is confiscatory presents a sufficiently substantial constitutional issue to require the convening of a three-judge court. Apparently misled by the letter of the reference in 28 U.S.C. 2281, see fn. 1, to 'the unconstitutionality of such statute,' the district judge appears to have disregarded the long settled rule that it applies to challenges of the constitutionality of administrative orders under admittedly constitutional statutes. Oklahoma Natural Gas Co. v. Russell, 261 U.S. 290, 292, 43 S.Ct. 353, 67 L.Ed. 659 (1923). Gold's attack on the level of the commissions seems indistinguishable from claims by railroads and other public utilities that state administrative orders are depriving them of their property without due process of law. See Railroad Commission v. Pullman...

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