Holly v. Pennysaver Corp.

• Decision Date: 30 January 1984
• Parties: , 40 Empl. Prac. Dec. P 36,243 Alonzo HOLLY, et al., Respondents, v. PENNYSAVER CORP., et al., Appellants.
• Court: New York Supreme Court — Appellate Division

Page 611

471 N.Y.S.2d 611

98 A.D.2d 570, 40 Empl. Prac. Dec. P 36,243

Alonzo HOLLY, et al., Respondents, v. PENNYSAVER CORP., et al., Appellants.

Supreme Court, Appellate Division Second Department.

Jan. 30, 1984.

Mokotoff, Mondshine & Aliano, Garden City (Milton M. Mokotoff and Anthony A. Aliano, Garden City, of counsel), for appellants.

Malone, Dorfman & Tauber, P.C., Freeport (Alvin Dorfman and Sheryl Leicht Moody, Freeport, of counsel), for respondents.

Before TITONE, J.P., and LAZER, THOMPSON and BOYERS, JJ.

TITONE, Justice Presiding.

Our concern on this appeal is with the construction of subdivision 13 of section 296 of the Executive Law, which provides, in pertinent part, that it is an unlawful discriminatory practice "for any person to discriminate against, boycott or blacklist, or refuse to buy from, sell to or trade with, any person, because of the race, creed, color, national origin or sex of such person". We hold that a refusal to distribute a free advertising circular in a predominantly black neighborhood is encompassed within the ambit of this statutory prohibition unless it is established that the exclusion was based upon legitimate business concerns unconnected with racial bigotry.

Defendant Pennysaver Corporation publishes a weekly commercial shopping circular, commonly known as the "Pennysaver", which contains advertisements placed by local merchants and individuals who wish to buy or sell goods or services. Approximately 250,000 of these circulars are distributed weekly, free of charge, to residents of certain areas in Nassau and Queens Counties.

Plaintiffs are residents of a predominantly black neighborhood located in the City of Long Beach, in Nassau County. They commenced this action, seeking damages and injunctive relief on behalf of themselves and other residents of their neighborhood, contending that the defendants, Pennysaver Corporation, its president, and its vice president, have violated their civil rights under State and Federal law by excluding their neighborhood from the Pennysaver delivery area.

The complaint contains two causes of action. In the first, plaintiffs allege that the defendants have engaged in a "commercial boycott and blacklisting" interdicted by subdivision 13 of section 296 of the Executive Law. In the second cause of action, it is alleged that the defendants' determination to exclude their neighborhood also constitutes a violation of Federal law both as a conspiracy to deny plaintiffs their civil rights (U.S.Code, tit. 42, § 1985, subd. [3] ) and to exclude them from public accommodations (U.S.Code, tit. 42, § 2000a).

Defendants' motion to dismiss the complaint for failure to state a cause of action (CPLR 3211, subd. [a], par. 7) was denied by Special Term upon a finding that the first cause of action, at least, was viable. We affirm.

At the outset, we note that our scope of review is narrow. Our inquiry is limited to ascertaining whether the pleading states any cause of action, and not whether there is evidentiary support for the complaint (Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275, 401 N.Y.S.2d 182, 372 N.E.2d 17; Rovello v. Orofino Realty Co., 40 N.Y.2d 633, 634, 389 N.Y.S.2d 314, 357 N.E.2d 970; Wayne S. v. County of Nassau, Dept. of Social Servs., 83 A.D.2d 628, 441 N.Y.S.2d 536). The complaint must be liberally construed in the light most favorable to the plaintiffs and all factual allegations must be accepted as true (see, e.g., Morone v. Morone, 50 N.Y.2d 481, 485, 429 N.Y.S.2d 592, 413 N.E.2d 1154; Guggenheimer v. Ginzburg, supra, 43 N.Y.2d p. 275, 401 N.Y.S.2d 182, 372 N.E.2d 17; Schmidt v. Magnetic Head Corp., 97 A.D.2d 151, 159, 468 N.Y.S.2d 649). Moreover, inasmuch as defendants made one omnibus motion to dismiss addressed to the entire complaint, we must sustain the entire complaint if at least one of the causes of action asserted is legally sufficient (Long Is. Region Nat. Assn. for the Advancement of Colored People v. Town of North Hempstead, 80 A.D.2d 826, 827, 436 N.Y.S.2d 351, app. withdrawn 53 N.Y.2d 940; Kaplan v. Simone Bros. Auto Body, 77 A.D.2d 863, 864, 430 N.Y.S.2d 675; Quinn v. Cannabis, 72 A.D.2d 765, 766, 421 N.Y.S.2d 386; 4 Weinstein-Korn-Miller, N.Y.Civ.Prac., par. 3211.38).

Although one of the objectives behind the enactment of section 296 (subd. 13) of the Executive Law was to curb the discriminatory business practices of corporations which resulted from the pressures of foreign governments, including the Arab boycott of Jewish businesses and individuals (see General Electric Co. v. New York State Assembly Committee on Government Operations, 425 F.Supp. 909; Application of Antco Shipping Co., Ltd. v. Sidermar, S.p.A., 417 F.Supp. 207, affd. 553 F.2d 93 (2nd Cir.1977); 1976 Opns.Atty.Gen. 69; bill jacket L.1975, ch. 662), its broad language prohibiting discrimination in a wide range of commercial activity is not confined to boycotts imposed by foreign countries. In fact, as then Governor Carey observed in his memorandum of approval, the legislation was intended to "affirm * * * that no nation or person is welcome to do business in this state, if that business is accompanied by religious or racial bigotry" (1975 McKinney's Session Laws, p. 1765 [emphasis supplied] ).

We cannot accept defendants' rather technical argument, based upon general definitions of "trade" and "commerce" contained in dictionaries and legal encyclopedias, that there is no business relationship involved when a publication is distributed free of charge. As a remedial civil rights statute, subdivision 13 of section 296 of the Executive Law must be "construed liberally for the accomplishment of [its] purposes" (Executive Law, § 300; see, also, City of Schenectady v. State Div. of Human Rights, 37 N.Y.2d 421, 428, 373 N.Y.S.2d 59, 335 N.E.2d 290). In this context, we must consider the distribution of the "Pennysaver" as a business practice within the statute's protective ambit (cf. People v. Polar Vent of Amer., 10 Misc.2d 378, 174 N.Y.S.2d 789, affd. 4 N.Y.2d 954, 175 N.Y.S.2d 825, 151 N.E.2d 621). It is enough that the defendants' activity is profit motivated (see United States v. National Assn. of Real Estate Bds., 339 U.S. 485, 489-492, 70 S.Ct. 711, 714-715, 94 L.Ed. 1007; People v. Kaplan, 8 A.D.2d 163, 164, 188 N.Y.S.2d 673).

It may be, as defendants claim in their affidavits submitted to Special Term, that the decision not to distribute the "Pennysaver" in plaintiffs' neighborhood was the result of an objective and legitimate business judgment and not the product of discrimination. But, on a pre-answer motion to dismiss which has not been converted into a motion for summary judgment, we are precluded from utilizing such affidavits against the plaintiffs who are entitled to stand on the allegations of their complaint (Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275, 401 N.Y.S.2d 182, 372 N.E.2d 17, supra; Rovello v. Orofino Realty Co., 40 N.Y.2d 633, 635-636, 389 N.Y.S.2d 314, 357 N.E.2d 970, supra; Wayne S. v. County of Nassau, Dept. of Social Servs., 83 A.D.2d 628, 441 N.Y.S.2d 536, supra; Keller v. Barry, 73 A.D.2d 611, 422 N.Y.S.2d 449). ^*

For these reasons, the order of Special Term should be affirmed insofar as appealed from, with costs.

Order of the Supreme Court, Nassau County, dated January 27, 1983, affirmed insofar as appealed from, with costs.

LAZER and BOYERS, JJ., concur in the opinion of TITONE, J.P.

THOMPSON, J., dissents, and votes to reverse the order insofar as appealed from and grant defendants' motion to dismiss the complaint, with an opinion.

THOMPSON, Justice (dissenting).

Although I agree with my brethren in the majority that the complaint technically states a cause of action pursuant to section 296 (subd. 13) of the Executive Law, I believe defendants' motion to dismiss the complaint for failure to state a cause of action pursuant to CPLR 3211 (subd. [a], par. 7) should have been granted. Plaintiffs and defendants both requested that the issues raised herein receive summary judgment treatment pursuant to CPLR 3211 (subd. [c] ), and I can see no basis for refusing to honor this request of the parties. In the context of this case, this court should not only decide if plaintiffs have pleaded a cause of action, but also whether plaintiffs actually possess a cause of action. Upon the proof submitted, the evidence is overwhelming that the refusal to deliver the "Pennysaver" circulars to plaintiffs had nothing to do with discrimination. I also agree with my brethren in the majority that the causes of action seeking to set forth violations of Federal law are legally insufficient. Accordingly, the motion of defendants to dismiss the complaint should have been granted.

In their complaint plaintiffs alleged that Pennysaver Corp., published by the individual defendants Seymour L. Katz and Herbert E. Solomon, solicits advertisements from individuals and merchants who wish to sell their goods and services. It then distributes its circular, without charge to the distributees, within the communities its clients wish to reach. Plaintiffs are residents of a predominantly black neighborhood in Long Beach, bounded by Reynolds Channel, Long Beach Boulevard, Park Avenue, and Park Place. Plaintiffs asserted that defendants claim that the Long Beach-Island Park edition of the circular is distributed to "each and every home, office, and business" in Long Beach, Atlantic Beach, Island Park, Point Lookout, and Lido Beach. Nevertheless, according to plaintiffs, they do not receive it "solely due to the fact that the residents of the area are predominantly Black". The residents of the area have therefore been deprived of the right to "read and/or benefit from the contents" of the circular. Plaintiffs contended that this constituted a commercial boycott in violation of section 296 of the Executive Law. Plaintiffs also sought to set forth causes of action under section 1985 of title 42 of the United States Code and section 2000a...