Modjeska Sign Studios, Inc. v. Berle

• Decision Date: 21 December 1977
• Citation: 43 N.Y.2d 468,402 N.Y.S.2d 359,373 N.E.2d 255
• Parties: , 373 N.E.2d 255, 11 ERC 1107, 8 Envtl. L. Rep. 20,183 MODJESKA SIGN STUDIOS, INC., Appellant, v. Peter A. A. BERLE, Individually and as Commissioner of the Department of Environmental Conservation of the State of New York, Respondent, Charles A. Dale, Jr., as President and on behalf of the Outdoor Advertising Association of New York, Proposed Intervenor-Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 359

402 N.Y.S.2d 359

43 N.Y.2d 468, 373 N.E.2d 255, 11 ERC 1107,

8 Envtl. L. Rep. 20,183

MODJESKA SIGN STUDIOS, INC., Appellant, v. Peter A. A. BERLE, Individually and as Commissioner of the Department of Environmental Conservation of the State of New York, Respondent Charles A. Dale, Jr., as President and on behalf of the Outdoor Advertising Association of New York Proposed Intervenor-Appellant.

Court of Appeals of New York.

Dec. 21, 1977.

Manly Fleischmann, New York City, Carl W. Peterson, Jr., Adelbert Fleischmann and Henry W. Killeen, III, Buffalo, for appellant.

Adelbert Fleischmann and Henry W. Killeen, III, Buffalo, for proposed intervenor-appellant.

Louis J. Lefkowitz, Atty. Gen. (Stanley Fishman, Ruth Kessler Toch and Susan Marie Tatro, Albany, of counsel), for respondent.

OPINION OF THE COURT

JASEN, Judge.

At issue on this appeal is whether the State, having enacted legislation regulating advertising signs and structures in the Catskill and Adirondack Parks, may, after the expiration of a six and one-half year amortization period, require the removal of nonconforming signs without compensation.

ECL 9-0305 (subd. 1) provides that to ensure the natural beauty of the Catskill and Adirondack Parks, advertising signs and structures, for which a permit is not obtained, are prohibited except accessory signs and signs located within the limits of an incorporated village. Any signs erected within the Catskill Park as of May 26, 1969, which are not in conformance with the regulations promulgated to implement ECL 9-0305 (see 6 NYCRR Part 195), were requir to be removed by January 1, 1976. (ECL 9-0305, subd. 1.)

Plaintiff owns approximately 96 outdoor advertising signs or billboards situated within the Catskill Park. Admittedly, none of these signs conforms to the regulations promulgated pursuant to ECL 9-0305. Seeking therefore to enjoin the removal of its signs, plaintiff, only two weeks before the expiration of the amortization period, commenced the present action to declare ECL 9-0305 unconstitutional on the ground that it constitutes a taking for which compensation must be provided.

Special Term denied plaintiff's motion for a preliminary injunction and granted summary judgment for the defendant, declaring ECL 9-0305 to be constitutional. The Appellate Division unanimously affirmed.

Having reaffirmed today our prior decisions holding aesthetics to be a valid basis for the exercise of the police power (see Suffolk Outdoor Adv. Co. v. Hulse, 43 N.Y.2d 483, 402 N.Y.S.2d 368, --- N.E.2d ---- (decided herewith)), we proceed to a consideration of plaintiff's contention that ECL 9-0305 constitutes a taking requiring that monetary compensation be given to owners of nonconforming signs removed from the Catskill Park.

The power which the State may exercise over private property spans a wide spectrum. The State may choose merely to regulate the use of land pursuant to the police power or to "take" or physically acquire property pursuant to the power of eminent domain. (French Investing Co. v. City of New York, 39 N.Y.2d 587, 593, 385 N.Y.S.2d 5, 8, 350 N.E.2d 381, 384, app. dsmd. 429 U.S. 990, 97 S.Ct. 515, 50 L.Ed.2d 602; see, generally, Sax, Takings and the Police Power, 74 Yale L.J. 36.) The mode of control chosen to effectuate the desired governmental end has all too often been termed critical to a determination of the necessity of providing compensation to property owners adversely affected. Unfortunately, characterization of the State's exercise of control over private property as either a noncompensable regulation or a compensable taking is often fraught with difficulty. As Professor Costonis has aptly commented: "Like the bedeviled horseman, government stands shakily astride the police and eminent domain powers as it seeks to give direction in land use affairs." (Costonis, "Fair" Compensation and the Accommodation Power: Antidotes For the Taking Impasse in Land Controversies, 75 Col.L.Rev. 1021.)

Perhaps the difficulty in precisely delineating the boundary between the police and eminent domain powers stems from the realization that, as a practical matter, any restriction upon the use of property is a deprivation and has a substantially adverse impact upon market value and, in that sense, has been loosely described as a "taking". (See Salamar Bldrs. Corp. v. Tuttle, 29 N.Y.2d 221, 225, 325 N.Y.S.2d 933, 936, 275 N.E.2d 585, 587.) On the other hand, it is equally true "(t)hat hardship is inevitably the product of police regulation and the pecuniary rights of the individual, of necessity, must be subordinate to those of common weal." (Salamar Bldrs. Corp. v. Tuttle, 29 N.Y.2d, at p. 225, 325 N.Y.S.2d at p. 937, 275 N.E.2d at p. 588 supra.) In the final analysis, characterization of government control over private property turns usually on a difference of degree and only occasionally on a difference in kind.

In exercising the police power to provide for the general welfare of the people, the State may reasonably regulate the use of private property, notwithstanding the curtailment of private property rights. (People ex rel. Durham Realty Corp. v. La Fetra, 230 N.Y. 429, 442, 130 N.E. 601, 605; New York State Thruway Auth. v. Ashley Motor Ct., 10 N.Y.2d 151, 157, 218 N.Y.S.2d 640, 643, 176 N.E.2d 566, 569.) The requirement that an exercise of the police power be reasonable mandates not only that the regulation relate to the purpose for which it was enacted, but also that it does not unreasonably deprive an owner of all beneficial use of his property. (Salamar Bldrs. Corp. v. Tuttle, 29 N.Y.2d, at p. 225, 325 N.Y.S.2d at p. 936, 275 N.E.2d at p. 587, supra.) An exercise of the police power unreasonably frustrates an owner's use of his property "if it renders the property unsuitable for any reasonable income productive or other private use for which it is adapted and thus destroys its economic value, or all but a bare residue of its value (see, e. g., Lutheran Church in Amer. v. City of New York, 35 N.Y.2d 121, 130, 359 N.Y.S.2d 7, 115, 316 N.E.2d 305, 311, supra ; Vernon Park Realty v. City of Mount Vernon, 307 N.Y. 493, 499, 121 N.E.2d 517, 519, supra ; Shepard v. Village of Skaneateles, 300 N.Y. 115, 118, 89 N.E.2d 619, 620; Arverne Bay Constr. Co. v. Thatcher, 278 N.Y. 222, 226, 232, 15 N.E.2d 587, 589, 592, supra ; Matter of Eaton v. Sweeny, 257 N.Y. 176, 183, 177 N.E. 412, 414; 1 Rathkopf, op. cit., § 6.02, at p. 6-2)." (French Investigating Co. v. City of New York, 39 N.Y.2d, at p. 596, 385 N.Y.S.2d at 10, 350 N.E.2d at 386, supra.) To so frustrate an owner's use of his property under the guise of the police power is, in reality, nothing more than a deprivation of property without due process of law. (N.Y.Const., art. I, § 6; U.S.Const., 14th Amdt., § 1; French Investing Co. v. City of New York, 39 N.Y.2d, at p. 595, 385 N.Y.S.2d at p. 9, 350 N.E.2d at p. 385 supra ; Vernon Park Realty v. City of Mount Vernon, 307 N.Y. 493, 499, 121 N.E.2d 517, 519; 1 Rathkopf, Law of Zoning and Planning (4th ed.), § 4.02.)

Turning to an analysis of the statute involved in the present case, we believe it helpful to view, at the outset, the effect of this statute from the perspective of an owner of land upon which a billboard has been erected. Formulated in this setting, the critical inquiry becomes whether ECL 9-0305 renders an owner's property unsuitable for any use for which it is adapted, thereby destroying its economic value.

Viewed from this perspective, the restrictions placed upon the use of property by ECL 9-0305 do not rise to the level of a "taking" or confiscation without due process of law. In reaching this conclusion, we borrow from the analysis employed in two recent cases, French Investing Co. v. City of New York (supra) and Penn Cent. Transp. Co. v. City of New York, 42 N.Y.2d 324, 397 N.Y.S.2d 914, 366 N.E.2d 1271.

In French, which involved an amendment to the New York City Zoning Resolution purporting to create a special park district, we were confronted, as we are again today, with a challenge to regulation of the use of private property. The amendment to the New York City Zoning Resolution rezoned two private parks in the Tudor City residential complex in Manhattan as public parks. By rezoning the property exclusively as public parks, the city precluded any residential or office building development. Finding that the zoning amendment prohibited "all reasonable income productive or other private use of the property", we held the amendment violative of due process. (39 N.Y.2d, at pp. 590-591, 385 N.Y.S.2d at p. 7, 350 N.E.2d at p. 383, supra.)

Although the zoning amendment in French did permit the transfer of development rights from the parks to other areas in Manhattan, they did not attach to specific parcels. Thus, we characterized these rights as "floating development rights, utterly unusable until they could be attached to some accommodating real property, available by happenstance of prior ownership, or by grant, purchase, or devise, and subject to contingent approvals of administrative agencies." (39 N.Y.2d, at pp. 597-598, 385 N.Y.S.2d at p. 11, 350 N.E.2d at p. 387, supra.) Because of the uncertainty of future realization of these rights, we rejected the contention that the amendment did not deprive the property owner of all rights in his property.

Analogous to French is our more recent decision in Penn Cent. Transp. Co. v. City of New York, 42 N.Y.2d 324, 397 N.Y.S.2d 914, 366 N.E.2d 1271, supra, involving a provision of the Administrative Code of the City of New York, which, as applied to Grand Central Terminal, prohibited the erection of an office tower over the existing structure. Characterizing landmark regulation as unlike either zoning or eminent domain, we held that such regulation does not violate due process as long as the landowner is allowed a reasonable return on his property. (42 N.Y.2d, at pp. 330-331, 397 N.Y.S.2d at pp. 917-918, 366 N.E.2d at pp....