Gasparo v. City of New York
| Decision Date | 28 May 1998 |
| Docket Number | No. 98-CV-3168 (ARR).,98-CV-3168 (ARR). |
| Citation | 16 F.Supp.2d 198 |
| Parties | Vito GASPARO, Harvey Kedansky, Louis Reid, Adam Petrella, and Katherine Ashley, Plaintiffs, v. CITY OF NEW YORK; Department of Transportation, City of New York; Richard Malchow, Acting Commissioner, Department of Transportation, City of New York; Department of Consumer Affairs, City of New York, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Richard D. Emery, Emery, Celli, Cuti & Brinckerhoff, LLP, New York City, for Plaintiffs.
Sherill Kurland, Office of the Corporation Counsel, New York City, for Defendants.
Plaintiffs in this action are all owners and operators of newsstands in New York City ("City"). They seek to enjoin the implementation of Local Law 29, an ordinance passed by the City Council in 1997 creating a new concession scheme for newsstands located in the City. The concession scheme replaces a licensing scheme that had previously governed the operation of newsstands throughout the City. In seeking a preliminary injunction against the enforcement of that law, plaintiffs claim that the plan violates their rights under the First and Fourteenth Amendments. They argue that the plan gives City officials "unfettered discretion" to administer the concession program in violation of First Amendment standards, and that the increased permit fees represent an unconstitutional tax on the exercise of First Amendment rights. In addition, plaintiffs argue that because the plan pertains only to newsstand vendors and does not subject other kinds of sidewalk vendors to its strictures, it violates the Equal Protection Clause of the Fourteenth Amendment. For the reasons that follow, the court concludes that it has no jurisdiction to consider plaintiffs' claims regarding the increased permit fee. Insofar as the plan gives "unfettered discretion" to licensing officials to terminate a permit, the motion is granted. The motion is denied in all other respects.
The Department of Consumer Affairs ("DCA") administered the previous newsstand licensing system. Under that system, a person who wished to build a new newsstand or operate an existing newsstand was required to secure a permit from DCA. The permit was valid for two years with an annual fee of $538. See N.Y.C.Admin.Code § 20-230 (1991). The licensing scheme regulated the size and location of newsstands, provided that no new newsstand could be erected without the approval of the Department of Transportation ("DOT") and the Art Commission, id. § 20-231, and gave the Commissioner of DCA the authority, inter alia, to terminate or to revoke any license if the licensee violated any law or regulation related to the operation of the newsstand, see id. § 20-104e(1) (1986).
In August of 1994, Mayor Rudolph Guiliani announced the formation of an inter-agency task force to "develop a master plan to reduce the congestion of sidewalk obstructions and better regulate the streetscape of New York City." Emery Decl.Ex. A (Press Release, dated Aug. 18, 1994). The task force produced the "Coordinated Street Furniture Franchise Proposal." Under the proposal, to be implemented by DOT, the City would award a single franchise for the design, construction, installation, and maintenance of what the task force referred to as "street furniture" — various public structures, such as newsstands, bus stop shelters, and public toilets. The value of the franchise, which would be awarded by competitive bid, would derive from the franchisee's right to sell the advertising space on the street furniture.
In accordance with the Coordinated Street Furniture Franchise: Proposal, on April 30, 1997, the City Council enacted Local Law 29, which became effective on May 16, 1997. Local Law 29 created a concession scheme for newsstands to be administered by DOT in place of the old licensing scheme administered by DCA. The new law provided that future newsstand concessions would be distributed subject to the competitive bidding procedures used to allocate most substantial City concessions. Cummins Decl.Ex. B (Local Law, at 1). Vendors who were then operating newsstands pursuant to a DCA license could obtain concessions without competitive bidding. Specifically, Local Law 29 stated that:
[C]urrent newsstand operators who have built and operated newsstands under the current licensing law should not, at least at this time, be put into this competitive system. However, there should be a moratorium on the issuance of newsstand licenses by the Department of Consumer Affairs and the City should receive revenues for the use of its sidewalks by newsstands. Therefore, pursuant to a determination made by the Department of Transportation regarding a particular newsstand location, persons who are newsstand licensees as of the effective date of this local law will be given the opportunity to become concessionaires at the site of the newsstands they have already built.
See Cummins Decl.Ex. B (Local Law 29, at 2). The special concession agreements extended to these existing newsstand operators, however, will remain valid for only five years. After that, the City will review the effectiveness of the concession program and either extend the program, propose a new arrangement, or revert to the previous licensing system. Id.
Following passage of Local Law 29, concession agreements for currently licensed newsstand operators were developed by the appropriate City authorities. Cummins Decl. Exs. C-F. The newsstand operators were informed that under the concession agreements, annual "occupancy charges" would be increased from the previous flat license fee of $538, to a range of $2,500 to $5,000, depending on the location of the newsstand, and that newsstands would be replaced at no cost to them. Id. Ex. G. The newsstand operators were also informed that, pursuant to the new plan, all current newsstand licenses would he terminated on December 31, 1997. Id. Ex. I. In order to continue operating a newsstand after that date, vendors would have to sign a concession agreement with DOT.
In January of 1998, however, the City apparently began to reconsider whether the Coordinated Street Furniture Franchise Proposal should be implemented. To date, no franchisee has been selected by the City to assume the duties contemplated in the original proposal. Nonetheless, the City has proceeded to implement Local Law 29. On April 7, 1998 the City mailed the occupancy permit agreements to newsstand operators. Id. Ex. K. These permit agreements included some significant amendments from a draft version that had been circulated the previous August. First, the agreement was amended to reflect the fact that the viability of the street furniture franchise program was in doubt. Thus, the promise that newsstand vendors would receive new structures was modified with conditional language to reflect the program's uncertain status. Second, a provision was added to the agreement whereby the newsstand vendor had to agree to abide by the terms of the City's recently enacted adult establishment zoning law. See Text Amendment N950384ZRY to the Zoning Resolutions of the City of New York ("Zoning Amendment"). The amended agreement contained a clause stipulating that "[t]he Permittee shall not operate the newsstand as `an adult bookstore,' as such is defined in Appendix A annexed hereto." See Cummins Decl. Ex. N (Summary of Changes to Newsstand Occupancy Permit). The "adult bookstore" clause places strict limits on the amount of sexually explicit literature that can be sold at a newsstand. In order to avoid application of the adult establishment zoning law, no more than 25% of display space may be occupied by "adult" materials, and no more than 40% of sales may consist of such materials. According to a deputy mayor of the City, the purpose of this amendment to the agreement is to "eliminate any issue that may exist concerning application of the adult use zoning law to street newsstands," so that newsstand vendors do not take advantage of any loophole in the zoning law by seeking to specialize in the sale of adult magazines from their stands. See Emery Decl .Ex. N (Letter from Deputy Mayor Randy Mastro to Robert S. Bookman, dated April 14, 1998).
Along with the occupancy permit agreements mailed on April 7, newsstand operators were informed that they must sign the permit agreement and pay their "occupancy charge" by April 18 or forfeit their right to "operate the Existing Newsstand on the city streets." Emery Decl.Ex. L. The deadline was subsequently extended until April 26.
On the eve of the compliance deadline, April 25, 1998, plaintiffs petitioned this court for a temporary restraining order ("TRO") and a preliminary injunction against the City's enforcement of the new concession scheme, arguing that the scheme violates their constitutional rights under the First and Fourteenth Amendments. Specifically, plaintiffs argued that (1) Local Law 29 grants "unfettered discretion" to licensing officials and is therefore unconstitutional, (2) the occupancy charge imposes an unconstitutional tax on the exercise of First Amendment rights, and (3) the scheme violates the equal protection clause. Plaintiffs also challenged the inclusion of the adult bookstore clause in the occupancy permit, but have agreed to withdraw the claim at this time.1
Following discussions between the parties, the City agreed to extend the compliance until the matter could be briefed by the parties and a decision rendered by the court.
A plaintiff who seeks to obtain a preliminary injunction based on alleged violations of First Amendment rights must demonstrate, first, that he or she is likely to suffer irreparable harm if the allegations are correct, and second, that there is a likelihood of prevailing on the merits of the action. See Bery v. City of New York, 97 F.3d 689 (2d Cir.1996)....
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