Wall St. Garage v. Stock Exch

• Decision Date: 05 August 2004
• Docket Number: M-2126.,4025N.
• Citation: Wall St. Garage v. Stock Exch, 10 A.D.3d 223, 781 N.Y.S.2d 324, 2004 NY Slip Op 6307 (N.Y. App. Div. 2004)
• Parties: WALL STREET GARAGE PARKING CORP., Respondent, v. NEW YORK STOCK EXCHANGE, INC., Appellant.
• Court: New York Supreme Court — Appellate Division

10 A.D.3d 223

781 N.Y.S.2d 324

2004 NY Slip Op 06307

WALL STREET GARAGE PARKING CORP., Respondent, v. NEW YORK STOCK EXCHANGE, INC., Appellant.

4025N.

M-2126.

Appellate Division of the Supreme Court of the State of New York, First Department.

August 5, 2004.

Appeal from an order of the Supreme Court, New York County (Walter B. Tolub, J.), entered March 12, 2004. The order granted plaintiff parking garage's motion for preliminary relief and enjoined defendant from maintaining security blockades and conducting vehicle searches in the immediate vicinity of the New York Stock Exchange.

Wall St. Garage Parking Corp. v. New York Stock Exch., Inc., 3 Misc 3d 1014, reversed.

Milbank, Tweed, Hadley & McCloy, LLP, New York City (Douglas W. Henkin and Anthony J. Rotondi of counsel), for appellant.

Jenkens & Gilchrist Parker Chapin LLP, New York City (Stephen F. Harmon and Eric L. Unis of counsel), for respondent.

OPINION OF THE COURT

TOM, J.P.

At issue on this appeal is whether defendant New York Stock Exchange (NYSE) created a public nuisance by restricting vehicular access to a security zone around the Stock Exchange devised by closing seven traffic intersections in the aftermath of the terrorist attacks of September 11, 2001, thereby entitling plaintiff, a business entity in the area, to preliminary injunctive relief. We find the motion court erred in granting plaintiff a preliminary injunction because enjoining defendant Stock Exchange from inspecting vehicles entering the security zone surrounding NYSE premises changes, rather than preserves, the status quo and because plaintiff has not otherwise satisfied the prerequisites for obtaining preliminary injunctive relief.

Even prior to the events of 9/11, concern that the NYSE, the largest stock exchange in the United States, might be vulnerable to an explosive device hidden in a vehicle prompted the New York City Police Department (NYPD) to close New Street between Wall Street and Exchange Place and the intersection of Wall Street and Broadway to vehicular traffic in May 1996. A bomb hoax in September 1998 resulted in the closure of the sidewalks surrounding the premises occupied by the NYSE to all pedestrian traffic from 6:00 P.M. to 8:00 A.M. daily. In March 2001, the Stock Exchange began participating in the NYPD Paid Detail Program, in which off-duty police officers, in uniform and acting with full power and authority of regular on-duty police officers, provide security at the expense of a participating entity rather than the New York City taxpayers.

The center of the NYSE's economic activity is its trading floor, which extends across buildings located at 11 Wall Street and at 18, 20 and 30 Broad Street. After the terrorist attacks of September 11, 2001, the area was patrolled by members of the NYPD, including police officers participating in the Paid Detail Program as well as those on regular duty, and including members of NYPD's heavily armed "Hercules Teams," by NYSE's own security personnel and by personnel provided by T&M Protection Resources, Inc. The Police Department blocked access to NYSE's premises from the seven intersections that surround the trading floor, placing barriers on Wall Street at Broadway and at William Street, on Exchange Place at Broadway and at William Street, on Nassau Street at Pine Street, on Broad Street at Beaver Street and on New Street at Beaver Street. The barriers were later replaced by trucks loaded with sand.

Plaintiff parking garage, which was formerly located within the security zone, claims that its business is being adversely impacted by security measures implemented by defendant NYSE in response to the events of September 11, 2001. Plaintiff garage is located on Exchange Place near the intersection with William Street. As an accommodation to plaintiff, the original security zone was modified and the truck barrier on Exchange Place at William Street was moved west towards Broad Street to permit vehicular access to and from the garage from William Street and Exchange Place. Garage patrons were then able to avoid entering the security zone, thus obviating the need for a search. However, on or about February 21, 2004, the William Street access point was once again blocked when the City began road construction on said street, and plaintiff's customers were again required to enter the security area to gain access to the garage.

The impact on plaintiff's business was substantial. Plaintiff asserts that from an average of 150 to 160 vehicles a day prior to 9/11, patronage dropped to 68 cars a day thereafter, further declining to 65 a day by February 2004. With the commencement of road construction, usage dropped to a mere 38 vehicles daily by the beginning of March, causing plaintiff to commence this action seeking damages as well as preliminary and permanent injunctive relief. Plaintiff sought to prohibit defendant NYSE "from obstructing, blocking or closing in any way ingress or egress to or from Exchange Place or the flow of vehicular traffic thereon, at or near where plaintiff conducts its business, and from stopping, arresting and searching vehicles exiting plaintiff's parking garage on Exchange Place between Broad Street and William Street."

Defendant NYSE took issue with the allegation that its security force had completely taken over the control of security posts located at the blocked intersections. The affidavit of NYSE's Senior Vice-President of Security, James Esposito, states that "NYPD officers" are "directly involved in the security zone." Photographs of the area submitted by defendant depict NYPD officers stationed at pedestrian checkpoints with NYSE security personnel, as well as the deployment of the "Hercules Team and other NYPD personnel and vehicles within the security zone." Defendant opposed the application for preliminary relief on the ground that the garage is located outside the secured area and that the unrestricted access to plaintiff's premises available from William Street was subject only to temporary curtailment by street construction by the City at the intersection.

By order entered March 12, 2004, Supreme Court granted plaintiff's motion for a preliminary injunction, enjoining NYSE from blocking access to Exchange Place and from stopping and inspecting vehicles exiting the garage. Expressing doubt as to the authority of the City to delegate responsibility for security to a private entity, the court concluded that subjecting garage customers to search and blocking public streets constitute a public nuisance as well as a violation of Administrative Code of the City of New York § 19-107. In balancing the equities, the court reasoned that the nuisance represents a sufficient threat both to "plaintiff's civil rights as a private citizen" and to public order to warrant injunctive relief. (3 Misc 3d 1014, 1023 [2004].)

Several days after Supreme Court issued its order, defendant applied to this Court for a temporary stay of the injunction. Mr. Esposito's accompanying affidavit, dated March 15, states that, "as of this morning a lane had already been re-opened to vehicular traffic on William Street at Exchange Place to allow access to [plaintiff's] garage from outside the NYSE security zone (as was the case before the construction began at the intersection of William Street and Exchange Place)." This Court granted the application, lifting the injunction...