Petition for Writ of Certiorari — Kaufman v. City of New York
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No. iF Supreme Court, U.S.
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IN THE MAR 8 990
Supreme Court of the Hnitey Brags wR.
OctrosBer TERM, 1989
MELVYN KAUFMAN, 77 WATER STREET, INC., 77
WATER STREET ASSOCIATES, 127 JOHN STREET
FEE ASSOCIATES, 127 JOHN STREET ASSOCIATES,
437 MADISON AVENUE FEE ASSOCIATES, and
437 MADISON AVENUE ASSOCIATES,
Petitioners,
— against —
THE CITY OF NEW YORK, THE ENVIRONMENTAL
CONTROL BOARD OF THE CITY OF NEW YORK,
EDWARD I. KOCH, in his capacity as Mayor of the City
of New York, HARVEY W. SCHULTZ, in his capacity as
Commissioner of the Department of Environmental Protection,
and CHARLES M. SMITH, JR., in his capacity as
Commissioner of the Department of Buildings,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
MILTON S. GouLpD
Counsel of Record
SHEA & GOULD
1251 Avenue of the Americas
New York, New York 10020
(212) 827-3000
Attorneys for Petitioners
March 6, 1990
QUESTIONS PRESENTED FOR REVIEW
1. Does a local law which requires petitioners to close their
buildings and spend $50 million in order to remove a substance
originally put in the buildings to comply with prior government
mandates effect a taking of said private property?
2. Does this Court only recognize two types of takings:
physical takings and regulatory takings, or should takings cases
be analyzed on an ad hoc basis?
3. Are petitioners required to establish the elements previous-
ly set out in regulatory takings cases where the local law in ques-
tion has economically harsh retroactive effects and is therefore
materially different from the prospective land-use regulations
which were challenged in the regulatory takings cases?
PARTIES TO THE PROCEEDING
The parties to the proceeding are set forth in the caption of
the case.
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED FOR REVIEW...... i
PARTIES TO THE PROCEEDING ............ i
pe Fe iy 8 yy |: Vv
a 2
ee tub ak ae sana sak sacs wasn 2
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED.................. 2
STATEMENT OF THE CASE ................. 3
OE er 6
TABLE OF AUTHORITIES
Cases Page
A.A. Profiles, Inc. v. City of Fort Lauderdale,
850 F.2d 1483 (11th Cir. 1988), cert. denied,
ee Pe ey eee 10
Agins v. City of Tiburon, 447 U.S. 255 (1980) ... 8
G.T. Scott v. Greenville County, 716 F.2d 1409
ee en eee er re 10
Kaiser Aetna v. United States, 444 U.S. 164
rey peer mn ry yee ore 6, 9, 12,
13
Loretto v. Teleprompter Manhattan CATV
Corp., 458 U.S. 419 (1982) .................. 12, 13
Penn Central Transportation Co. v. City of New
York, 438 U.S. 104, reh’g denied, 439 U.S. 883
eee eer fae oe cay” 7, 10,
11, 15
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393
CE <8 nwo cweewenscuueeneeeGanesaieewaues 15
Ruckelshaus v. Monsanto Co., 467 U.S. 986
| ee er rnin roy 6, 9
United States v. Causby, 328 U.S. 256 (1946) .... 13
Wheeler v. City of Pleasant Grove, 664 F.2d 99
(Sth Cir. 1981), cert. denied, 456 U.S. 973
Raa nEIPE TERME ee Bhan AT eno, Gr ein 9
Constitutional and Statutory Provisions
Fifth Amendment to the United States
28 U.S.C.
Federal Rules of Civil Procedure 12(b)(6)
N.Y. City Local Law 76 of 1985 .......
TABLE OF CONTENTS
APPENDIX
OPINION OF THE UNITED STATES COURT
OF APPEALS FOR THE SECOND CIRCUIT,
DATED DECEMBER 8, 1989 (891 F.2d 446). .
OPINION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, DATED MAY
oe Fog | 6 Ure eee
COMPLAINT, DATED JULY 21, 1988 .........
AFFIDAVIT OF ROBERT KAUFMAN IN
OPPOSITION TO MOTION TO DISMISS,
DATED OCTOBER 28, 1988................
FIFTH AMENDMENT TO THE
I Sc acc cede havidasdiancannt
LOCAL LAW 76 OF THE CITY OF NEW
YORK FOR THE YEAR 1985 ...............
Page
A-44
A-47
A-48
IN THE
Supreme Court of the United States
OctrosBer TERM, 1989
MELVYN KAUFMAN, 77 WATER STREET, INC., 77
WATER STREET ASSCCIATES, 127 JOHN STREET
FEE ASSOCIATES, 127 JOHN STREET ASSOCIATES,
437 MADISON AVENUE FEE ASSOCIATES, and
437 MADISON AVENUE ASSOCIATES,
Petitioners,
— against —
THE CITY OF NEW YORK, THE ENVIRONMENTAL
CONTROL BOARD OF THE CITY OF NEW YORK,
EDWARD I. KOCH, in his capacity as Mayor of the City
of New York, HARVEY W. SCHULTZ, in his capacity as
Commissioner of the Department of Environmental Protection,
and CHARLES M. SMITH, JR., in his capacity as
Commissioner of the Department of Buildings,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
Petitioners respectfully request that a writ of certiorari be issued
to review the decision of the United States Court of Appeals for
the Second Circuit, dated December 8, 1989, which affirmed
a final judgment of the United States District Court for the
Southern District of New York. The District Court dismissed
petitioners’ federal constitutional claims pursuant to Fed. R. Civ.
P. 12(b)(6) and dismissed petitioners’ pendent state law claims
for lack of subject matter jurisdiction.
OPINIONS BELOW
The opinion of the Circuit Court of Appeals, dated December
8, 1989, and reported at 89] F.2d 446, appears in the Appendix
hereto at pages A-1-A-4. The opinion of the District Court, dated
May 24, 1989, and reported at 717 F. Supp. 84, is set forth at
pages A-5-A-26.
JURISDICTION
The decision of the Court of Appeals was made and entered
on December 8, 1989. This Court has jurisdiction to review the
decision of the Court of Appeals by writ of certiorari pursuant
to 28 U.S.C. § 1254(1).
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
The Complaint alleges that petitioners’ property was taken
by respondents without just compensation in violation of the
Fifth Amendment to the Constitution of the United States’ This
constitutional violation was caused by the enactment of New
York City Local Law 76 of 1985 and its application to three of-
fice buildings previously constructed by petitioners.
These provisions of the Constitution and the Local Law are
set forth at pages A-47-A-58 of the Appendix.
' The Complaint contains other causes of action, which are not at issue in
this petition.
STATEMENT OF THE CASE
This is case of first impression in which petitioners, the holders
of fee or leasehold interests in three Manhattan office buildings,
are challenging the constitutionality of New York City Local
76 of 1985 (the “Local Law”) and the regulations purportedly
promulgated pursuant thereto (the “Regulations”). The Local
Law and Regulations mandate costly removal and/or encapsula-
tion of asbestos which petitioners originally put in their buildings
at respondents’ direction. The Local Law and the Regulations
place the entire financial burden associated with correcting the
prior governmental error on petitioners and other private
property owners. Complaint, { 20, at A-30.
The governmental error derives from prior regulations in effect
from 1958-1972. At that time, the City of New York (the “City”)
required petitioners herein and other builders of large office
buildings to fireproof such buildings as they were being con-
structed. The City expressly limited the types of materials which
could be used for this required fireproofing to asbestos and
cementitious material. Between 1968 and 1971, petitioners con-
structed the three office buildings at issue here. Petitioners us-
ed asbestos, as required by the City, to comply with the City’s
rigid fireproofing mandates in existence at the time the buildings
were being constructed.
Apparently at the same time that these buildings were under
construction, however, the City was already preparing to reverse
itself and prospectively prohibit the use of asbestos in new con-
struction. In late 1971, the City imposed such a prospective ban,
effective February 1972. Thus, the City, in all probability’, had
? By virtue of the dismissal of their complaint by the District Court, petitioners
have been unabie to take any discovery to establish when the City first con-
sidered a ban on asbestos; however, one of the three buildings at issue here,
127 John Street, was being built in 1971, and in late 1971, the City issued its
ban on asbestos, a ban which, petitioners submit, was not decided upon
overnight.
been considering a ban on asbestos during the very same years
(1968-1971) it was requiring petitioners to spend millions of
dollars to use asbestos in the three buildings at issue here.
In 1985, the City changed course for a second time. In that
year, the City passed Local Law 76 which, together with the
Regulations promulgated pursuant thereto, has required, and
will in the future require, petitioners to spend millions of dollars
and to close portions of their buildings in order to remove or
encapsulate the asbestos which petitioners originally installed
pursuant to the City’s prior mandates. The City, in the pro-
ceedings below, submitted no proof that it enacted Local Law
76 in 1985 based on new information not available to it in
1968-1972. Thus, Local Law 76 was nothing more than an ar-
bitrary act of political expediency, at the expense of a group of
building owners, such as petitioners, who were unlucky enough
to have complied with prior City edicts.
By the time the asbestos work is finished, every floor of each
building at issue will have been closed for significant periods
of time to allow for the City-mandated removal or encapsula-
tion of the asbestos. Petitioners will effectively have to close the
entire three buildings to undo the City’s mistake.
This remedial work will not only physically obstruct peti-
tioners’ use of the buildings, but it will also cost petitioners ap-
proximately $50 million, an amount equal to approximately 50
percent of the assessed values of the three buildings.’ .
> Since the statutory and regulatory scheme at issue went into effect, peti-
tioners have had to close portions of the three buildings at issue here for a
combined total of approximately 1,200 days and spend $8,494,536, solely to
remove or encapsulate the asbestos that the City required and approved. In
addition, petitioners have already lost $1,569,033 in rent due to the building
closings. Complaint, 44 35-37, at A-35-A-36; Affidavit of Robert Kaufman
in Opposition to Motion to Dismiss, { 2, at A-44. Petitioners will continue
to be injured by the challenged law and regulations since asbestos remains
on other floors in the three office buildings at issue. Complaint, 44 35-37,
(Footnote continued)
On July 22, 1988, petitioners commenced this action by fil-
ing the Complaint (A-27-A-43). In the complaint, petitioners
asserted that the Local Law and Regulations violated the tak-
ings and due process clauses of the United States and New York
State constitutions, and asserted other causes of action under
New York State law. The basis for subject matter jurisdiction
was 28 U.S.C. § 1331. By Notice of Motion dated September 9,
1988, respondents moved to dismiss the complaint for failure
to state a claim upon which relief can be granted. On May 24,
1989, the District Court for the Southern District of New York
dismissed the federal takings and due process claims for failure
to state a claim. A-5-A-26. The District Court also dismissed the
state law claims for lack of subject matter jurisdiction.
Petitioners appealed to the Court of Appeals for the Second
Circuit, which affirmed the judgment of the District Court. The
Court of Appeals, in its decision, adopted the opinion of the
District Court, writing that:
In light of the careful and comprehensive opinion of
the district judge, we see no reason for unnecessarily
adding to the pages of the Federal Reporter, 2d Series,
and we affirm substantially for the reasons given in
the judge's opinion.
891 F.2d at 447, at A-4.
The writ of certiorari should be granted because this case
presents novel questions of takings jurisprudence which have
enormous constitutional implications. New York City, believ-
ing that it can do whatever it wants whenever it wants at no
cost to itself, has required petitioners to pay the full and substan-
tial cost of correcting a prior City error. By endorsing the City’s
cavalier actions, the courts below decided federal questions in
ways which conflict with applicable decisions of this Court.
at A-35-A-36. Petitioners will be required to close their buildings for a com-
bined total of approximately 3,450 days and spend $32,354,696 to remove the
remaining asbestos. Complaint 44 35-37, at A-35-A-36; Kaufman Affidavit,
q 3, at A-45. The future asbestos-related building closings will cost plaintiffs
an estimated $8,445,360 in lost rent. Complaint, {4 35-37, at A-35-A-36.
ARGUMENT
Petitioners argued below that the City’s actions effected an
unconstitutional taking of private property because the actions
have caused, and will continue to cause, temporary physical oc-
cupations of petitioners’ property, and at the same time have
inflicted, and will continue to inflict, major economic injuries
on petitioners.
Thus, petitioners put forth a takings claim which does not
fit neatly into the purely “physical” or purely “regulatory”
categories of takings. The instant takings claim contains both
physical and non-physical elements. Further, another key com-
ponent of petitioners’ takings claim is that petitioners must
undergo the aforesaid physical occupation and pay the huge costs
required to remove the asbestos in order to correct a prior City
error which caused the petitioners to put the asbestos in their
buildings in the first place.
The courts below ruled in essence that even though petitioners
put asbestos in their buildings because of prior governmental
edicts, petitioners could not challenge the City’s 1985 decision
to compel petitioners to spend $50 million to correct the prior
City error which required them to use the asbestos. This was
so, the courts held, notwithstanding the fact that (a) the City
apparently acted in 1985 to require the removal of the asbestos
on the very same information it had in 1968-1971, when it
directed the use of the asbestos in petitioners’ buildings, and
(b) the City apparently mandated use of the asbestos while it
knew it was planning to ban its use. Now, the City is requiring
petitioners to allow their premises tq be occupied and to pay
the huge costs of removing the asbestos which was put in at the
direction of the City apparently at the very time the City was
considering banning its use.
Petitioners argued below that their reliance on prior govern-
mental directives was indeed relevant to takings analysis under
the Supreme Court rulings in Kaiser Aetna v. United States, 444
U.S. 164 (1979), and Ruckelshaus v. Monsanto Co., 467 U.S. 986
(1984). Petitioners also contended that their takings claim should
be analyzed on an “ad hoc” basis, and should not be limited
to an analysis under this Court’s “regulatory takings” doctrine,
because, as this Court has held, there is no “set formula” for
the analysis of takings cases. Penn Central Transportation Co.
v. City of New York, 438 U.S. 104, 124, reh’g denied, 439 U.S.
883 (1978). .
The Courts below rejected both of these critical arguments
by petitioners. On the first question, reliance on prior City edicts
directing the use of asbestos, the District Court held:
Contrary to plaintiffs’ suggestion, compliance with
the City’s prior fireproofing requirements does not
remove this case from the established case law regard-
ing the government’s ability to restrict use of property
for the public benefit.
District Court Opinion, at A-24. The Second Circuit, by adop-
ting the District Court’s opinion, created a conflict between the
circuits, and between itself and this Court, on the relevance of
reliance on prior governmental directives in takings analysis.
See pp. 8-10, infra.
On the second question, whether the instant case was simp-
ly a “regulatory takings” case, the District Court held that the
Local Law at issue here is no more than “a regulation on the
use of property,” A-21, even though the Local Law at issue here
does not simply prohibit future uses of property, as in the typical
regulatory takings case, but instead imposes costly retroactive
obligations on petitioners who must spend millions of dollars
to remove asbestos in order to be able to continue to use their
buildings as intended. Accordingly, the District Court and Court
of Appeals held that petitioners were handcuffed by the
regulatory takings doctrine which was established in cases in-
volving prospective zoning and land-use regulations, which doc-
trine forces property owners to show they can make no
economically viable use of their land under the challenged land-
use or zoning regulation. The instant action is simply not a land-
use or zoning case. By forcing petitioners to prove a takings claim
using this inapposite line of cases, the lower courts improperly
expanded and misapplied the doctrine of those prospective land-
use cases beyond what was intended by this Court, and also ig-
nored this Court’s teachings that taking cases are “ad hoc” and
are not to be analyzed under any “set formula.” Penn Central,
supra, 438 U.S. at 124.
In the instant suit, the City’s actions go far beyond a tradi-
tional regulatory takings case involving a challenge to a pro-
spective land-use or zoning law. When the character of the
governmental action is a land-use or zoning law, merely pro-
hibiting certain potential uses of a property in the future, there
will be a “taking” only if the property owner is denied all
“economically viable” use of his property. Agins v. City of
Tiburon, 447 U.S. 255 (1980). Petitioners never alleged that they
were denied all “economically viable” use of their property. Peti-
tioners have alleged, however, that the Local Law will impose
a severe, $50 million, financial burden on them. Further, this
burden is retroactive, not prospective, as it is in the regulatory
takings cases, since here petitioner must undertake the burden
of removing or encapsulating the asbestos, a burden which is
particularly inequitable because the City is solely to blame for
the presence of the substance it now demands petitioners remove
or encapsulate.
Research reveals no reported cases where the courts have held
that such retroactive legislation by a state or municipal authority
must be challenged under the regulatory takings doctrine. Thus,
in the instant case, petitioners should not be required to prove
the complete destruction of their real property, since the in-
terference by the City with their property rights is decidedly
more pronounced than in a routine, wholly prospective, land
use Or zoning case.
This is particularly true because this Court has made it clear
that reliance on prior governmental actions is relevant in con-
stitutional takings analysis, a point ignored by the courts below.
The District Court wrote simply that “compliance with the City’s
prior fireproofing requirements does not remove this case from
the established case law regarding the government's ability to
restrict the use of pruperty for the public benefit.” District Court
Opinion, at A-24. By so ruling, the court ignored the holdings
of this Court and other courts of appeals that reliance by the
property owner on prior governmental acts is without question
relevant to takings analysis.
In Kaiser Aetna v. United States, supra, 444 U.S. at 178-179,
this Court expressly held that one factor in its finding that there
was a taking was prior conduct by government on which the
property owner relied. Moreover, in Kaiser Aetna this Court
decided in favor of a property owner who was relying on the
mere acquiescence or implied consent of the government. Here,
on the other hand, petitioners relied on the prior affirmative
requirements of New York City to install asbestos as a fireproof-
ing material. Likewise, in Ruckelshaus v. Monsanto Co., 467
U.S. 986, 1011 (1984), this Court held in a takings case that an
“explicit governmental guarantee formed the basis of a
reasonable investment-backed expectation.”
Courts of Appeals in other circuits have also held reliance on
prior governmental decisions to be highly relevant in the analysis
of takings claims. Wheeler v. City of Pleasant Grove, 664 F.2d
99 (5th Cir. 1981), cert. denied, 456 U.S. 973 (1982), was one
such case. In Wheeler, the local government granted a building
permit for an apartment complex to the plaintiffs. As the Court
observed, “in reliance on the permit, the plaintiffs initiated
preparatory work.” 664 F.2d at 100. Following a public “uproar”
about the granting of the permit, the city passed a new or-
dinance, “which forbade the construction of new apartments.
The city then prohibited the plaintiffs from proceeding with
construction.” Id.
The Fifth Circuit Court of Appeals, affirming the District
Court’s finding that a taking had occurred, wrote that “if a
regulatory undertaking is confiscatory in nature, it is a taking.”
Id. Significantly, the Wheeler Court distinguished this issue from
the separate question of whether “the city’s purpose in enac-
ting the measure was ... rational.” In other words, an other-
wise proper and rational governmental action could still be a
10
taking because of its retroactive effect on property owners who
relied on prior governmental actions. Jd.
The Fourth Circuit has also endorsed the Wheeler “con-
fiscatory taking” doctrine. See G.T. Scott v. Greenville Coun-
ty, 716 F.2d 1409, 1421 (4th Cir. 1983). And in a recent case,
A.A. Profiles, Inc. v. City of Fort Lauderdale, 850 F.2d 1483
(llth Cir. 1988), cert. denied, 109 S. Ct. 1743 (1989), the Eleventh
Circuit reaffirmed the Wheeler rule. Therefore, the District
Court and Second Circuit decisions in the instant case, which
summarily rejected petitioners’ argument that they relied on
prior government edicts, stand in conflict with rulings of this
Court and other courts of appeals. The writ of certiorari should
therefore be issued so that this Court can settle this conflict.
Further, in ruling that petitioners could not assert a taking
other than a pure “physical” or pure “regulatory” taking, the
Court of Appeals acted contrary to the long-established man-
date of this Court that all takings cases are ad hoc, and, therefore,
there are not simply two neat and distinct categories of takings.
Indeed, rather than separate the physical and non-physical
aspects of the Local Law, as the District Court did in its analysis,
the courts below should have combined and analyzed as a whole
all of the intrusive aspects of the Local Law and thereby con-
sidered this complaint as a whole on an “ad hoc” basis. This
is so because, as this Court has held:
[W]e have frequently observed that whether a par-
ticular restriction will be rendered invalid by the
government's failure to pay for any losses proximate-
ly caused by it depends largely ‘upon the particular
circumstances [in that] case.’
Penn Central, 438 U.S. at 124. This Court has never held that
only some relevant factors should be considered in takings
analysis, in isolation from the other factors involved. Here, the
District Court ruled that there was no pure “physical” taking
and no pure “regulatory” taking (see District Court Opinion,
at A-21-A-24) and the Court refused to combine the physical and
non-physical effects of the Local Law and Regulations.
1]
Petitioners claim that there was indeed a taking, given the im-
pact of all the relevant factors, including that the petitioners
are being required to pay the cost of correcting a prior govern-
ment error.
At no time has this Court held that there are only two distinct
types of takings — physical and regulatory. And at no time has
this Court held that if one aspect of a law’s impact is not suffi-
cient in and of itself to constitute a taking, then that aspect
should be completely ignored and discarded when considering
the effect of other aspects. The District Court did that here by
dismissing completely the physical impact of the Local Law on
petitioners’ property. Rather, the Supreme Court has recognized
that takings analysis is always “ad hoc [and] factual.” Penn Cen-
tral, at 124.
This Court has expressly stated that it has developed no “ ‘set
formula’ for determining when ‘justice and fairness’ require that
economic injuries caused by public action be compensated by
the government, rather than remain disproportionately concen-
trated on a few persons.” Penn Central, 438 U.S. at 124. Noting
that takings inquiries are “essentially ad hoc [and] factual,” this
Court has stressed that several factors are of “particular
significance” to takings analysis. Id. at 124. Specifically, this
Court has stated:
The economic impact of the regulation on the clai-
mant and, particularly, the extent to which the regula-
tion has interfered with distinct investment-backed
expectations are, of course, relevant considerations .. .
[s]o too is the character of the governmental action.
Id.
The courts below gave short shrift to the Local Law’s impact
on petitioners’ “distinct investment-backed expectations,” a factor
identified by this Court in Penn Central to be of “particular
significance” in takings cases. 438 U.S. at 124. When petitioners
constructed the three large urban office buildings at issue, they
did not expect to have to seal off the buildings and pay millions
12
of dollars to remove a major construction material used at the
City’s direction. See Complaint, 4 31-33; A-34-A-35. The Local
Law, therefore, directly and drastically interferes with peti-
tioners’ distinct investment-backed expectations.
In addition to (1) the oppressive financial burdens inflicted
on the petitioners by the City, (2) the interference with peti-
tioners’ distinct investment-backed expectations, and (3) the
reliance on prior City requirements, which were ignored by the
courts below, there is an additional factor — physical in-
terference with the property — weighing in petitioners’ favor
and distinguishing this case from a routine “regulatory” taking.
The Local Law and Regulations physically interfere with peti-
tioners’ use of their properties in two ways. First, the Law and
Regulations affirmatively require petitioners to seal off and close
portions of their buildings for long periods of time in order to
remove or encapsulate asbestos. Second, the Law and Regula-
tions force petitioners to turn over control of their buildings
(while undergoing asbestos treatment) to a group of City-
certified asbestos treatment workers. Petitioners, thus, are forced
to submit to the occupation of their buildings for extended
periods of time by outside parties licensed by the City. The in-
stant case therefore involves a physical interference with plain-
tiffs’ buildings, along with the additional major, inequitable
financial penalties imposed on petitioners, all to rectify prior
mistakes by the City in requiring the use of asbestos.
It makes no difference under this Court’s rulings whether
government agents themselves are padlocking the doors, whether
third parties (such as asbestos contractors) are doing the physical
taking, or whether the property owner himself is closing the
building under orders from the government. Loretto v.
Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982);
Kaiser Aetna, 444 U.S. at 164. The key inquiry is whether there
is a government-mandated physical interference with the owner's
use of his property, and there is such government-mandated
physical interference here. As this Court stated in Loretto:
13
A permanent physical occupation authorized by state
law is a taking without regard to whether the State
. is the occupant.
458 U.S. at 433, n.9. In Loretto, the Court held that there was
a taking where the state ordered certain building owners to allow
private cable television companies to install cables on the
buildings. It was irrelevant that it was not government or the
public at large physically invading the property.
In Kaiser Aetna, supra, where government, by statute, mere-
ly authorized members of the public to use a private entity’s
waterway, the Court held that there was governmental action
“far beyond ordinary regulation,” “an actual physical invasion,”
and a taking. Kaiser Aetna, supra. In Kaiser Aetna, the Court
held that governmental action which required a property owner
to allow the public to use its private marina was indeed a govern-
mental taking.
The constitutional irrelevancy of the identity of the persons
who actually carry out the physical interference with the pro-
perty owner’s use is directly related to the doctrine that courts
should focus “on the owner’s loss, not the taker’s gain,” when
analyzing takings claims. United States v. Causby, 328 U.S. 256,
261 (1946). Thus, the constitutional taking is the obstruction to
the property owner, caused by some governmental action. This
action by government can be the simple passage of a statute,
and there need not be actua! physical intrusion by government
agents themselves. Loretto; Kaiser Aetna. In the instant action
there is actual physical intrusion by asbestos contractors licens-
ed by the City, whose presence is required by City statute to
remove the asbestos which the City required to be put into the
private property in the first place.
Moreover, this Court has held that “a permanent physical oc-
cupation authorized by government is a taking without regard
to the public interests that it may serve.” Loretto, 458 U.S. at
426. The courts below erroneously ruled that there was no tak-
ing of petitioners’ property. In so ruling, these lower courts
14
decided an important question of federal law in a way which
conflicts with applicable decisions of this Court. Surely, govern-
ment cannot in effect dump an allegedly hazardous substance
on private property and later force the property owner to seal
off the property and pay government-certified third parties to
remove the substance at a cost of $50 million. The prior City
mandate is solely to blame for the presence of asbestos on peti-
tioners’ properties; as a result, petitioners should not be forced
to seal off their properties and remove it, at a cost of $50 million,
without just compensation from the government.
15
CONCLUSION
Petitioners respectfully submit that this Court should take
heed of its long-established holding that “while property may
be regulated to a certain extent, if regulation goes too far it will
be recognized as a taking.” Pennsylvania Coal Co. v. Mahon,
260 U.S. 393 (1922). Here, the Local Law has “gone too far”
by forcing the property owner to incur substantial expenses to
undo a City error and by physically interfering with the use and
enjoyment of the buildings. Since takings analysis must be “ad
hoc [and] factual,” Penn Central, supra, at 124, the courts below
gave petitioners short shrift and ignored the mandates of this
Court. This Court should issue a writ of certiorari and address
the broad questions about governmental power and private pro-
perty rights raised herein. Otherwise, the doctrine of law ap-
plicable to regulations on prospective land development will have
been successfully expanded to punish innocent property owners
who have suffered the misfortune of having fully and faithfully
complied with prior, ill-founded, governmental edicts.
Respectfully submitted,
Mitton S. GouLp
SHEA & GOULD
Attorneys for Petitioners
1251 Avenue of the Americas
New York, New York 10020
Telephone: (212) 827-3000
Of Counsel:
RosBert J. Warp
JONATHAN M. LANDSMAN
APPENDIX
A-l
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
No. 339 August Term 1989
Argued: November 13, 1989 Decided: December 8, 1989
Docket No. 89-7621
MELVYN KAUFMAN, et al.,
Plaintiffs-Appellants,
- against -
THE CITY OF NEW YORK, et al.,
Defendants-Appellees.
Before: FEINBERG and MESKILL, Circuit Judges, and
COFFRIN, District Judge.*
Appeal from judgment of the United States District Court
for the Southern District of New York, Robert J. Ward, J., grant-
ing defendants-appellees’ motion to dismiss federal constitutional
claims and dismissing pendent state law claims.
Affirmed.
* Honorable Albert W. Coffrin, Senior United States District Judge for the
District of Vermont, sitting by designation.
titrant
A-2
MILTON S. GOULD, New York, NY
(Shea & Gould, Robert J. Ward,
Jonathan M. Landsman, of Counsel),
for Plaintiffs-Appellants.
ELIZABETH S. NATRELLA, New York,
NY, Assistant Corporation
Counsel of the City of New
York (Peter L. Zimroth,
Corporation Counsel of the
City of New York, Pamela
Seider Dolgow, Assistant
Corporation Counsel, Julian
Bazel, Assistant Corporation
Counsel, of Counsel), for
Defendants-Appellees.
PER CURIAM:
Plaintiffs-appellants, the holders of fee or leasehold interests
in three Manhattan office buildings, appeal from a judgment
of the United States District Court for the Southern District of
New York, Robert J. Ward, J., dismissing their complaint on the
motion of defendants-appellees City of New York, the En-
vironmental Control Board of the City of New York, Edward
I. Koch, in his capacity as Mayor of the City of New York, and
the Commissioners of the Department of Environmental Pro-
tection and the Department of Buildings. The district court
dismissed plaintiffs’ federal constitutional claims on the merits,
and their pendent state claims for lack of subject matter
jurisdiction.
Appellants challenge the constitutionality of New York City
Local Law No. 76 of 1985 and related regulations (Local Law
76). During 1968-1971, the period when the buildings in issue
‘ Local Law 76 was amended in December 1986 by Local Law No. 80 of 1986.
The main provisions of Local Law 76 as amended have been codified in the
Administrative Code §§ 24-]146.] and 27-198.1.
area tiiritineeneeenenniieiaeill
A-3
were constructed, appellants, in compliance with the city’s prior
fireproofing requirements, installed asbestos, which was then
one of two city-approved fireproofing materials. In 1971, the
City banned the use of sprayed asbestos in building construc-
tion, and in 1985 Local Law 76 as enacted. That law requires,
among other things, that the presence and condition of asbestos
be ascertained before any building alteration or demolition is
performed; that asbestos be removed or encapsulated if such
work will cause asbestos to become airborne; and that all
asbestos abatement activities be conducted in accordance with
approved safety procedures by people with appropriate train-
ing and certification. Local Law 76 does not require that
building owners remove asbestos that is undisturbed or that will
not be disturbed by alteration or demolition.
Appellants contend that the challenged law effects a
regulatory taking of their property without just compensation
by requiring them to pay the costs of the City’s past mistakes
and by rendering their office buildings unfit for their intended
purpose unless appellants incur very substantial expenses. In ad-
dition, appellants argue that Local Law 76 effects a physical
taking, by requiring them to seal off and close portions of their
buildings. Appellees reject the characterization of Local Law
76 as a physical taking, since the law only regulates the uses
to which appellants’ property can be put, and contend that the
regulatory taking claim also fails, since appellants’ have not
alleged that they are no longer able to operate their buildings
at a profit.
Appellants also argue that Local Law 76 (a) offends substan-
tive due process by retroactively requiring them to bear all of
the costs of removing asbestos originally installed at the City’s
direction, and (b) denies them procedural due process, because
of the improper delegation of governmental power to private
asbestos investigators, whose certifications determine whether
a project is subject to the requirements of Local Law 76, and
because of the absence of any provision for a hearing or appeal
from an adverse determination to a neutral governmental of-
ficer. With respect to the substantive due process claim, appellees
A.4
respond that the City can require property owners to comply
with new safety measures that are rationally related to its
legitimate interest in public health and safety, even where com-
pliance entails costly improvements to existing, lawfully con-
structed buildings. With respect to the procedural due process
claim, appellees maintain that state delegations of power do not
implicate federal constitutional concerns, and that appellants
have adequate administrative and judicial remedies, including
recourse to the state courts.
Judge Ward dealt with all of appellants’ constitutional! claims
in his opinion, which is reported at 717 F. Supp. 84. Appellants
raise other, less substantial, arguments, which we need not
discuss. We have considered them, and they are unpersuasive.
In light of the careful and comprehensive opinion of the district
judge, we see no reason for unnecessarily adding to the pages
of the Federal Reporter, 2d Series, and we affirm substantially
for the reasons given in the judge’s opinion.
Judgment affirmed.
A-5
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
CN EE x
MELVYN KAUFMAN, 77 WATER
STREET, INC., 77 WATER STREET
ASSOCIATES, 127 JOHN STREET FEE
ASSOCIATES, 127 JOHN STREET
ASSOCIATES, 437 MADISON AVENUE
FEE ASSOCIATES, and 437 MADISON
AVENUE ASSOCIATES,
Plaintiffs,
- against -
THE CITY OF NEW YORK, THE EN- : OPINION
VIRONMENTAL CONTROL BOARD OF
THE CITY OF NEW YORK, EDWARD I. : 88 Civ. 5124
KOCH, in his capacity as mayor of the (RJW)
City of New York, HARVEY W.
SCHULTZ, in his capacity as Commis-
sioner of the Department of Environmental
Protection, and CHARLES M. SMITH,
JR., in his capacity as Commissioner of the
Department of Buildings,
Defendants.
APPEARANCES
SHEA & GOULD
1251 Avenue of the Americas
New York, New York 10020
MILTON S. GOULD
ROBERT J. WARD
JONATHAN M. LANDSMAN
Of Counsel
A-6
Attorneys for Plaintiffs
CORPORATION COUNCIL FOR THE CITY OF NEW YORK
100 Church Street
New York, New York 10007
GABRIEL TAUSSIG
ALBERT G. FREDERICKS
JULIAN BASEL
Of Counsel
Attornevs for Defendants
WARD, District Judge.
Plaintiffs have challenged the laws and regulations enacted
and administered by defendants regarding asbestos removal or
encapsulation during building alteration, renovation, or demoli-
tion work on the grounds that these laws and regulations, inter
alsa. violate substantive due process, procedural due process and
constitute a taking without just compensation under the Fifth
and Fourteenth Amendments to the United States Constitution.
Plaintiffs also assert several pendent state law claims. Defen-
dants have moved to dismiss the federal claims in the complaint
pursuant to Rule 12(b)(6), Fed. R. Civ. P. and to dismiss the pen-
dent state claims for lack of subject matter jurisdiction under
Rule 12(b)(1), Fed. R. Civ. P. For the reasons that follow, the
motion is granted and the complaint is dismissed.
BACKGROUND
Plaintiffs are the holders of fee or leasehold interests in three
Manhattan office buildings built between 1968 and 1971. Defen-
dants include the City of New York (the “City”), the En-
vironmenta] Control Board of the City of New York, Mayor Ed-
ward I. Koch, and the Commissioners of the Department of En-
vironmental Protection (“DEP”) and the Department of
Buildings (“DOB”).
Tues vthice buildings are located at 77 Water Street, 437 Madison Avenue,
ot :
auc LZ jot: Street
A-7
The City requires new office buildings to contain fireproof.
ing material. Prior to 1971, asbestos-containing material, along
with cementitious material, were the two types of material ap-
proved by the New York City Board of Standards and Appeals
(“BSA”) for fireproofing in steel deck structural steel office
buildings, the type of buildings involved in this case. Plaintiffs
used asbestos-containing material in the construction of their
buildings in order to comply with the fireproofing requirements.
In 197], in response to the public health hazards associated with
airborne asbestos, the City banned the use of sprayed asbestos
in building construction, effective February 1972. Administrative
Code of the City of New York (“Administrative Code”)
§24-146(b).
In December 1985, the Council of the City of New York
enacted Local Law No. 76 of 1985 (“Local Law 767).* This law
amended the City Air Pollution Control Code to address the
public health hazards posed by airborne asbestos. The Deciara-
tion of Legislative Findings and Intent to Local Law 76 states:
[t]he council hereby finds that exposure to airborne
asbestos fibers and particles in the air has been linked
by reputable medical and scientific authorities to a
significant increase in the incidence of diseases sucn
as asbestosis, bronchogenic carcinoma, mesotheliom _
and other malignancies and that substantial amounts
of materials containing asbestos have been used in
buildings for fireproofing, insulation, soundproofing,
decorative and other purposes. The council further
finds that the predominant cause of asbestos becom-
ing airborne is due to the performance of building
renovation and demolition without adequate
adherance [sic] to procedures for safeguarding workers
and the general public a
* Local Law 76 was amended in December [986 bs Loca Law No. © or (S86.
The main provisions of Local Law 76 as amended have Deer codified in te
Administrative Code §§ 24-146.1 and 27-198.;
A-8
Local Law 76, § 1. Accordingly, Local Law 76 was designed
to provide a regulatory framework that would ensure building
alteration or demolition work would not cause asbestos to
become airborne and thereby threaten the public health.
Local Law 76 requires the presence and condition of asbestos
be ascertained before any building alteration, renovation or
demolition work is performed. If asbestos is found, it must either
be sealed in place or removed if the work would disturb it and
cause it to become airborne. The law also requires that all
asbestos abatement activities be conducted in accordance with
approved safety procedures and be performed by persons with
appropriate training and certification. The law does not require
the sealing or removal of any asbestos which is not being dis-
turbed or will not be disturbed by the alteration or demolition
work.
Pursuant to Local Law 76, before the DOB will approve any
plans for building alteration, renovation or demolition work,
the applicant must file either a certification prepared by an
“asbestos investigator” that the work to be performed will not
constitute an “asbestos project”, or submit an “asbestos inspec-
tion report” which sets forth the condition of the building in
relation to the presence and condition of asbestos. Administrative
Code §27-198.1(a).’
An asbestos investigator must be certified by the DEP as hav-
ing “satisfactorily demonstrated his or her ability to identify the
presence and evaluate the condition of asbestos in a building
and structure.” Administrative Code § 24-146.l(a)(3). An
* The DOB is empowered to examine and approve plans for the construction
and alteration of buildings and to require such work be performed in accor-
dance with other City laws and regulations. Charter of the City of New York
(City Charter”) §645(b)(1)-(2). An owner of a building is responsible for main-
taining the building in a safe condition and his or her authorization is re-
quired for DOB approval of any building alteration of demolition work. Ad-
ministrative Code §§ 27-128, 27-140, 27-142, 27-151. In addition, in order to
receive DOB approval for alteration or demolition work, the plans for such
work must be prepared by, or under the supervision of, a qualified profes-
sional. Administrative Code § 27-140.
OO ee |
A-9
“asbestos project” is defined as any work in connection with the
alteration, renovation, modification or demolition of a building
which will disturb more than two hundred sixty (260) linear
feet or one hundred sixty (160) square feet of friable asbestos
containing material, or lesser amounts which the DEP may
establish by regulation. Administrative Code §24-146.1(a)(8). The
law defines “asbestos-containing material” as asbestos or any
material containing more than one percent (1%) asbestos by
weight, and such material is defined as “friable” if it can be
“crumbled, pulverized or reduced to powder when dry, by hand
pressure”. Administrative Code §24-146.1(a)(4),(9).
Certification that the building work does not constitute an
asbestos project removes the work from the requirements of Local
Law 76. The asbestos inspection reports do not remove the
planned work from the regulatory scheme and need not be
prepared by an asbestos investigator.
The task of regulating asbestos abatement activities was
delegated by Local Law 76 to the DEP with directions to pro-
mulgate regulations regarding the health and safety of the public
and persons who work at or in the vicinity of an asbestos proj-
ect. Administrative Code §24.146.l(c). in March 1987, the DEP
adopted regulations implementing the requirements of Local
Law 76 concerning asbestos removal or encapsulation. These
regulations were subsequently amended in May and August 1987
and January and May 1988. DEP Regulations §§ 8000 et seq.
In December 1986, the DEP adopted regulations governing the
training and certification of asbestos investigators, asbestos
handlers, and asbestos handler supervisors. These regulations
were subsequently amended in January, June and August 1987
and May 1988. DEP Regulations §§8110-8146.
The DEP regulations regarding asbestos investigators provide
that an applicant must be either a professional engineer,
registered architect, certified industrial hygienist or safety pro-
fessional, graduate with a bachelor’s degree in engineering, ar-
chitecture, environmental health science or a related field or
an individual with extensive experience in asbestos investiga-
tion. DEP Regulations § 8140. In addition, the applicant must
EE
A-10
successfully complete a minimum course of instruction on
various aspects of asbestos. DEP Regulations §§ 8140, 8115.
Local Law 76 provides that owners, lessees and occupants of
premises are responsible for the lawful conduct of any work sub-
ject to the law. Civil penalties exist for the violation of the pro-
visions of Local Law 76, or any order, rule or regulation pro-
mulgated thereunder and certain fees are established for the ap-
proval of asbestos related projects. Administrative Code
24-178(b)(5)(i). The parties do not contest that compliance with
these procedures in removing asbestos can be costly.‘
In May 1988, Local law No. 46 of 1988 (“Local Law 46”)
amended the Administrative Code to allow for individual
variances from the requirements of the Local Law 76 and the
regulations for specific asbestos projects. Variances may be
granted if adequate proof is presented that compliance with par-
ticular requirements related to asbestos removal or encapsula-
tion would impose unreasonable hardship. In granting a
variance, such conditions as the policies of the Administrative
Code require may be imposed. Local Law 46 at §7.°
* Plaintiffs allege they have already spent $5,592,083 at 77 Water Street,
$2,176,746 at 437 Madison Avenue and $722,707 at 127 John Street to remove
asbestos containing material in compliance with Local Law 76. Complaint,
filed July 22, 1988, at 44 35-37. Plaintiffs also allege that future compliance
will cost approximately $2,954,318 at 77 Water Street, $18,864,238 at 437
Madison Avenue, and $10,536,140 at 127 John Street. Jd. In addition, plain-
tiffs claim they will suffer a significant loss of rental income from each building
due to compliance with the law. Jd. Finally, plaintiffs assert that Local Law
76 has increased the cost of securing mortgages for their properties. Jd. at { 38.
* Section 7 of Local Law 46 provides:
[t]he commissioner [of the DEP] may grant individual variances
for asbestos projects at specific sites, from particular requirements
related to asbestos prescribed by this code and regulations or orders
of the commissioner promulgated thereunder, whenever it is
found, upon presentation of adequate proof, that compliance with
such requirements would impose unreasonable hardship. In grant-
ing a variance the commissioner may impose such conditions as
the policies of this code may require and shall publish in the City
(Footnote continued
(OO OL ———————
A-11
Local Law 76 and the regulations have previously been
challenged in federal court by asbestos abatement contractors
on the ground that they were preempted by the regulations of
the occupational Safety and Health Administration. The district
court’s dismissal of that action was affirmed in part and reversed
in part by the Second Circuit in Environmental Encapsulating
Corp., v. City of New York, 855 F.2d 48 (2d Cir. 1988). The
Second Circuit held that a valid public health purpose, as op-
posed to occupational health and safety, protected a majority of
the City’s asbestos laws from a preemption challenge. Id. at 57.
However, two worker safety regulations regarding medical sur-
veillance of asbestos abatement workers and worker respiratory
protection, were found to be preempted by federal law. Id.
DISCUSSION
The Court’s role on a motion under Rule 12(b)(6) to dismiss
for failure to state a claim upon which relief can be granted
is a limited one: it must accept plaintiffs’ well pleaded allega-
tions at face value and construe the allegations in the complaint
in plaintiffs’ favor. Dwyer v. Regan, 777 F.2d 825, 829 (2d Cir.
1985). The court may dismiss the complaint only if “it appears
beyond doubt that plaintiff can prove no set of facts in support
of his claim that would entitle him to relief.” Conley v. Gibson,
355 U.S. 41, 45-46 (1957).
A. Substantive Due Process:
Economic and social welfare legislation is consistent with the
requirements of due process if it is rationally related to a
legitimate governmental objective. E.g., Village of Belle Terre
v. Boraas, 416 U.S. 1, 8 (1974) (zoning ordinance restricting land
use to one family dwellings upheld against constitutional
challenge).
Record no later than seven days after granting of such variance
a statement of the reasons leading to his or her decision.
Administrative Code § 24-146.1(i). The procedure to be followed by an appli-
cant seeking a variance is set forth in DEP Regulations § 8102.
A-12
It is by now well established that legislative Acts ad-
justing the burdens and benefits of economic life come
to the Court with a presumption of constitutionality,
and that the burden is on one complaining of a due
process violation to establish that the legislature has
acted in an arbitrary and irrational way .... [It is]
clear that legislation readjusting rights and burdens
is not unlawful solely because it upsets otherwise
settled expectations.
Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15-16 (1975).
A statute that does not burden a suspect class or a fundamental
interest will not be overturned unless the varying treatment of
different groups or persons is so unrelated to the achievement
of any legitimate purpose that the Court can only conclude that
the legislature’s action was irrational. E.g., Pennell v. City of
San Jose, 108 S.Ct. 849, 859 (1988) (rent control ordinance
authorizing hearing examiner to consider hardship to tenants
in determining the extent of a rental increase for landlords did
not violate due process or equal protection).*
Plaintiffs do not contest the legitimacy of the stated purpose
of Local Law 76 “to safeguard the public health by requiring
that renovation or demolition projects which disturb asbestos
be conducted in accordance with procedures established pur-
suant to the provisions of this local law .. .” Local Law 76 at
§1. This Court also concurs with the Second Circuit's explicit
recognition that Local Law 76 and the regulations “have a
legitimate and substantial purpose to promote public safety and
health.” Environmental Encapsulating Corp., v. City of New
York, supra, 855 F.2d at 55.
Instead, plaintiffs challenge the manner in which the City
has sought to achieve this legitimate purpose of protecting the
public health. They argue it is irrational to make building owners
pay the cost for asbestos safety when the City approved the in-
stallation of such asbestos in the first instance. The crux of
* Neither fundamental! nghts nor suspect classifications are involved in the
present action
plaintiffs’ argument is estoppel: the City required fireproofing
and approved the use of asbestos-containing materials as one
of two available fireproofing methods; plaintiffs chose to install
asbestos solely because of the City’s fireproofing requirements;
therefore the City is estopped from requiring plaintiffs to pay
the costs of ensuring the safety of the public from asbestos when
alteration, renovation, or demolition work is performed on the
buildings.
It is clear however, that an owner of a lawfully constructed
building can be compelled in the name of public safety to make
improvements to the property, even when those improvements
require great expense. E.g., Queenside Hills Realty Co. v. Saxl,
328 U.S. 80, 82-83 (1946). (New York law requiring installation
of sprinklers can be applied to buildings constructed in confor-
mity with preexisting laws). Construction of a building in full
compliance with existing laws does not provide an owner with
immunity against the subsequent legitimate exercise of police
power by the state. Id.
Little need be said on the due process question. We
are not concerned with the wisdom of the legislation
or the need for it. Protection of the safety of persons
is one of the traditional uses of the police power of
the States _ Many types of social legislation
diminish the value of the property which is regulated.
The extreme cases are those where in the interest of
the public safety or welfare the owner is prohibited
from using his property. We are dealing here with a
less drastic measure. But in no case does the owner
of property acquire immunity against the exercise of
the police power because he constructed it in full com-
pliance with the existing laws. The police power is one
of the least limitable of governmental powers, and in
its operation often cuts down property rights.
Id. (citations omitted).
Plaintiffs argue this is a case of first impression because the
City’s express approval of the installation of asbestos-containing
A-14
material is fundamentally different than the passage of laws and
regulations which are later superceded by more exacting re-
quirements. While plaintiffs’ position is sympathetic, there is
no reasoned distinction between this case and other cases which
upheld the legislatures ability to require building owners to com-
ply with new safety requirements which differed from preex-
isting ones. See Queenside Hills Realty Co. v. Saxl, supra, 328
U.S. at 82-83; McCallin v. Walsh 64 A.D. 2d 46, 407 N.Y.S.2d
852 (Ist Dept.), affd, 46 N.Y.2d 808, 413 N.Y.S.2d 922 (1978) (due
process challenge rejected to a City law which required the in-
stallation of costly elevator alarm and sprinkler/smoke control
systems and the adoption of a fire safety plan in certain office
buildings); Oriental Boulevard Co. v. Heller, 27 N.Y.2d 212, 221,
316 N Y.S.2d 226, 231 (1970) app dism‘d, 401 U.S. 986 (1971) (law
requiring installation of air pollution control equipment held
constitutional). In each of these cases, new laws were enacted
that forced a building owner to make costly expenditures to his
or her property in the interest of public health and safety, even
though the building had been in compliance with the prior legal
requirements.’
In McCallin, the court rejected the argument that the City
could not constitutionally pass legislation which would require
builders to take out previously lawful elevator equipment and
replace it with other equipment designed to further protect
public safety, despite the fact that this meant the costly removal
of the prior lawful equipment. McCallin v. Walsh, supra, 64
A.D.2d 46, 60-64 407 N.Y.S.2d 852, 859-63. Plaintiffs suggest
that advances in safety technology justified the new safety laws
in McCallin and such advances are not present in this case. This
argument is misguided. The advances in science that unveiled
the safety risks presented by asbestos are indistinguishable
’ Similarly, the fact that plaintiffs may not have been at fault for the existence
of the dangerous condition does not exempt them from the exercise of the City’s
constitutional power to protect the public from the condition. See generally,
Section 107 of the Comprehensive Environmental Response Compensation and
Liability Act of 1980, 42 U.S.C. § 9607 (strict liability imposed on property
owners for the costs of remedial action to clean up hazardous waste on their
property).
A-15
from the developments plaintiffs concede would justify new
regulations imposing costly burdens on property owners. The
adoption of public health and safety regulations does not con-
stitutionally constrict the City’s future ability to exercise its police
powers in order to protect the public. When the public welfare
is found to be in need of additional protection over and above
the current regulatory scheme enacted by the City, there is no
due process impediment to the City’s power to rationally modify,
rescind, or overrule its prior regulations.
1. Retroactivity
Local Law 76 and the regulations apply only when owners
chose to perform alteration, renovation, or demolition work on
their buildings in the future. Nevertheless, plaintiffs argue the
law has a retroactive effect because all office buildings in New
York of necessity require such work in order to remain
economically viable as office buildings readily adaptable to new
tenants. Therefore, they claim Local Law 76 forces them to
retroactively undo their compliance with the fireproofing
regulations.
Retroactive legislation is generally constitutional, even if it
upsets settled expectations or imposes a new liability based on
a past act. Canisius College v. United States, 799 F.2d 18, 25
(2d Cir. 1986), cert. denied, 481 U.S. 1014 (1987). Due process,
however, “generally does not permit retrospective application
of statutes that cause especially ‘harsh and oppressive’ conse-
quences.” Louis Vuitton S.A. v. Spencer Handbags Corp., 765
F.2d 966, 972 (2d Cir. 1985). The proper test for determining
the constitutionality of an economic or social law which has a
retroactive effect is the same as that for a law with only a pro-
spective effect: whether there exists a legitimate legislative pur-
pose for the law which will be accomplished by a rational means.
Pension Benefit Guaranty Corp. v. R.A. Gray Co., 467 U.S. 717,
729 (1984). For retroactive laws, the retroactive application itself
must be justified by a rational legislative purpose. Jd. at 730.
Plaintiffs argue the Court should apply the structured, four-
part substantive due-process test enunciated in Nachman Corp.
A-16
v. Pension Benefit Guaranty Corp., 592 F.2d 947 (7th Cir. 1979),
affd on other grounds, 446 U.S. 359 (1980), and endorsed in
this District by Textile Workers Pension Fund v. Standard Dye
& Finishing Co., 549 F.Supp. 404, 406 (S.D.N.Y. 1982), aff,
725 F.2d 843.* The four factors set forth in Nachman to decide
if legislation represents a rational means to a legitimate end are:
(1) the reliance interests of the parties affected; (2) whether the
impairment of the private interest is effected in an area previous-
ly subjected to regulatory control; (3) the equities of imposing
the legislative burdens; and (4) the inclusion of statutory pre-
visions designed to limit and moderate the impact of the burdens.
Nachman Corp. v. Pension Benefit Guaranty Cord., supra, 592
F.2d at 960.
Assuming for the purposes of this motion that Local Law 76
has a retroactive effect and that the criteria enunciated in
Nachman are relevant, Local Law 76 still clearly meets the re-
quirements of due process. Plaintiffs’ only applicable conten-
tion relates to the first prong of the Nachman test: reliance on
the City’s approval of asbestos-containing material as a fireproof-
ing method. Reliance on prior law alone is clearly not enough
to state a due process claim. See Queenside Hills Realty Co. v.
Saxl, supra, 328 U.S. at 82-83. Further, it was evident that the
area of building alterations was one subject to intensive regula-
tion, including regulations protecting the public welfare. Plain-
tiffs could not reasonably have expected to acquire immunity
from the future exercise of the City’s police powers by compliance
with the existing safety provisions. To the contrary, building
owners could very well expect to be subject to future public
health regulations when conditions were uncovered in their
* Plaintiffs do not point out that the Second Circuit in Textile Workers ex-
pressly declined to decide if such a test was appropriate to apply to retro-
active legislation. Textile Workers Pension Fund v. Standard Dye and Finishing
Co., Inc., 725 F.2d 843, 850 (2d Cir.), cert. denied, 467 U.S. 1259 (1984). Fur-
thermore, the Supreme Court, in Pension Benefit Guaranty Corp. v. R.A. Grey
& Co., supra, 467 U.S. at 727 n.6, rejected the application of the Nachman test
in the context for which it was devised, federal! legislation affecting economic
benefits and burdens. The Supreme Court, however, did leave open the
possibility that these four factors might be relevant in some circumstances. /d
a |
A-17
buildings which posed a threat to public health or safety,
regardless of the source of the condition. The third and fourth
factors of Nachman also favor upholding the asbestos law. Im-
portantly, plaintiffs receive the economic benefits from the
alteration, renovation, or demolition work they wish to do on
their buildings and the law only applies when plaintiffs volun-
tarily seek to undertake such work. While plaintiffs may be re-
quired to bear the cost to protect the public from airborne
asbestos in their buildings, they are granted the reciprocal
privilege of profiting from the public through the use of these
buildings. In addition, the Supreme Court has explained that:
[u]nder our system of government, one of the State’s
primary ways of preserving the public weal is restric-
ting the uses individuals can make of their property.
While each of us is burdened somewhat by such
restrictions, we, in turn, benefit greatly from the
restrictions that are placed on others... . These restric-
tions are “properly treated as part of the burden of
common citizenship.” Kimball Laundry Co v. United
States, 338 U.S. 1, 5 (1949). Long ago it was recognized
that “all property in this country is held under an im-
plied obligation that the owner's use of it shall not
be injurious to the community, .. ”
Keystone Bituminous Coal. Ass'n v. De Benedictis, 480 U.S. 470,
491-92 (1987)(citations omitted).
Finally, the variance provision allows for mitigating cir-
cumstances to be considered when compliance with the law is
argued to be infeasible in the individual case. Accordingly, Local
Law 76 satisfies the requirements of due process even under the
Nachman test plaintiffs urge the Court to apply.
Moreover, restricting the ability of a property owner to use
his or her property in the specific manner which is most likely
to expose the public to the dangers associated with airborne
asbestos is clearly a limited, rational approach to effectuate the
valid purpose of protecting the public health; plaintiffs have not
stated a substantive due process claim.
EE
A-18
B. Procedural Due Process
Plaintiffs argue that the private asbestos investigators are im-
properly given unbridled reign to determine the application of
Local Law 76. The gravamen of this argument is that the
absence of a formal procedure for an appeal from an asbestos
investigator's refusal to certify the absence of asbestos is a denial
of property without due process of law.
There is clearly no merit to plaintiffs’ procedural due pro-
cess claim. The determination that friable asbestos be removed
or encapsulated has been made by the legislature. The deter-
mination as to how asbestos abatement work is to be performed
is made by the DEP pursuant to Local Law 76. The decision
not to approve permits for building alteration or demolition work
is made by the DOB. The protection offered by the legislative
process satisfies the requirements of procedural due process when
the legislature enacts a law, or an agency promulgates a rule,
affecting a general class. See e.g., J. Nowak, R. Rotunda, J.
Young, Constitutional Law, 2d. ed., 1983 at 556.
Asbestos investigators fulfill a role analogous to the qualified
professionals, usually registered architects or professional
engineers, who are required to prepare or supervise the prepara-
tion of all building pians authorized by the owner. See Ad-
ministrative Code § §27-140, 27-142, and 27-151. The DOB is em-
powered to examine and approve such plans. City Charter
§645(b)(1). Any owner who retains a licensed or certified pro-
fessional and is not satisfied with the licensee's work, has three
remedies: (1) he or she can simply obtain the services of another
professional; or, in the case of incompetent or dishonest work,
(2) he or she can report the professional to the licensing or cer-
tifying body; or (3) he or she can take the matter to court by
suing the professional for negligence or malpractice.’ Even
* Plaintiffs’ allegation that asbestos investigators may be unwilling to certify
that asbestos is not present in a building because of the fear of civil liability
from an incorrect certification is purely speculative and insufficient to sup-
port a procedural! due process claim.
A-19
if the asbestos investigators are construed as performing a govern-
mental function, plaintiffs have recourse to a forum affording
them full due process rights regarding the investigators’ deter-
mination, including the right to a hearing and an impartial deci-
sion maker. An adequate state court remedy satisfies the re-
quirements of due process. Campo v. New York City Employees’
Retirement System, 843 F.2d 96, 102-03 (2d Cir.), cert. denied,
109 S.Ct. 220 (1988). More importantly, it is the legislature, the
DEP and ultimately the DOB who act as the relevant decision
makers in the process. Plaintiffs do not challenge any of these
decisions as a constitutional violation of procedural due process.”
Furthermore, the variance provision provides plaintiffs an op-
portunity to be individually heard by the DEP regarding the
specific asbestos project in question. Plaintiffs, apparently
unaware of the amendment adding the variance provision, argue
that the absence of a variance makes the Local Law fatally defi-
cient, and distinguishes it from the similar law upheld in
McCallin. Obviously, the existence of such a variance moots this
aspect of plaintiffs’ argument.
C. Taking of Property Without Just Compensation
The Fifth Amendment, made applicable to the States through
the Fourteenth Amendment, provides, in relevant part, that
“private property [shall not] be taken for public use, without
just compensation.” This guarantee “was designed to bar Govern-
ment from forcing some people alone to bear public burdens
which, in all fairness and justice, should be borne by the public
as a whole.” Armstrong v. United States, 364 U.S. 40, 49 (1960).
However, the Supreme Court has often “upheld substantial
regulation of an owner’s use of his own property [against tak-
ing claims] where deemed necessary to promote the public
” Defendants argue that plaintiffs have no standing to assert a procedura! due
process argument based on a hypothetical failure of an asbestos investigator
to certify that work will not disturb asbestos because they have admitted that
their buildings contain asbestos and are subject to Local Law 76. Regardless
of their standing to maintain such a claim, the Court concludes that the claim
itself is insufficient to provide plaintiffs with relief.
A-20
interest.” E.g. Loretto v. Teleprompter Manhattan CATV Corp..,
458 U.S. 419, 426 (1982). In fact, regulation restricting the use
of property is a primary means available to a State to protect
the public welfare. Keystone Bituminous Coal Ass'n v. De
Benedictis, supra, 480 U.S. at 489-91 (1987) (prohibition on the
mining of coal from certain areas to prevent subsidence damage
did not constitute a taking of mine owners’ property).
No set formula exists to determine whether compensation is
constitutionally due for a governmental restriction on proper-
ty. Loretto v. Telepromoter Manhattan CATV Corp., supra, 458
U.S. at 426. The analysis of whether a taking has occurred is
generally “ad hoc, [and] factual.” Penn Central Transportation
Co. v. City of New York, 438 U.S. 104, 124 (1978). Several fac-
tors should be considered in a takings analysis, including the
character of the governmental action and the economic impact
of the regulation on the claimant, especially the extent to which
the regulation has interfered with distinct investment-backed
expectations. Id.
On the one hand, when the character of the restriction reaches
the “extreme form of a permanent physical occupation, a tak-
ing has occurred.” Loretto v. Telepromoter Manhattan CATV
Corp., supra, 458 U.S. at 426 (New York statute providing that
a landiord must permit a cable television company to install its
cable facilities upon his or her property found to be a taking).
On the other hand, a statute regulating the uses that can be
made of property results in a taking if it “does not substantially
advance legitimate state interests ... or denies an owner
economically viable use of his land.” Agins v. Tiburon, 447 U.S.
255, 260 (1980); Keystone Bituminous Coal Ass'n v. De Benedic-
tis, supra, 480 U.S. at 485; United States v. Riverside Bayview
Homes Inc., 474 U.S. 121, 125 (1985).
Plaintiffs argue Local Law 76 constitutes governmental ac-
tion akin to a physical taking because plaintiffs are required to
remove materials originally installed at the City’s direction
through a process of sealing off and closing portions of their
buildings. Defendants respond that plaintiffs assert at most a
regulatory takings claim and, because they do not allege the
A-21
extinguishment of all economically viable use of their proper-
ty, the takings claim is not viable.
The character of Local Law 76 is clearly that of a regulation
on the use of property. The law only applies when the owner
of property seeks to use it in a manner which threatens to make
asbestos become airborne. The fact that a use regulation may
have some impact on the physical characteristics of the land is
unexceptional. See Keystone Bituminous Coal Ass'n v. De
Benedictis, supra, 480 U.S. at 488-89, n.18. Plaintiffs argue that
an expansive definition of what constitutes a physical appropria-
tion of property is called for because of the City’s prior fireproof-
ing requirements. Plaintiffs, however, have presented no legal
support for such a claim. In fact, applying a broad brush in
construing whether a regulation works a physical appropria-
tion of property flies in the face of the Supreme Court's express
warnings against overly constricting State's ability to regulate
the use of property to protect the public welfare. Loretto v.
Teleprompter Manhattan CATV Corp., supra, 458 U.S. at 441.
In holding that a taking had occurred in Loretto, the Supreme
Court specifically underscored the narrowness of its ruling, bas-
ing its determination on the fact that the statute in question
resulted in an actual physical appropriation of part of the
landlords’ property. Loretto v. Teleprompter Manhattan CATV
Corp., supra, 458 U.S. at 441. The Supreme Court in FCC v.
Florida Power Corp., 480 U.S. 245, 251 (1987), reemphasized
the narrow scope of Loretto, finding it inapplicable to regula-
tions which decreased the rent cable television companies had
to pay utility companies for the use of utility poles because the
utility companies had previously agreed to allow access to the
poles." Even if Local Law 76 is analyzed under the framework
set forth in Loretto and Florida Power for the physical ap-
propriation of property, the law does not constitute a taking of
plaintiffs’ property because it requires asbestos be removed
“ The Supreme Court expressly declined to reach the question of whether
Loretto would apply were the utility companies required to offer access to
the cable television providers. FCC wv. Florida Power Cor., supra, 480 U.S.
at 251-52, n.6.
A-22
only if the building owner voluntarily chooses to undertaxe
alteration work which will cause asbestos to become airborne.
Furthermore, the Court in Loretto took steps to explain that
the invalid law removed the rights of ownership from the
landlords by directing that a third party be allowed to instal]
the cable television equipment. If the landlords were simply re-
quired to install the equipment themselves a different question
might have been presented, because they would have continued
to enjoy the rights of ownership, including the ability to con-
trol compliance with the statute. Loretto v. Teleprompter
Manhattan CATV Corp., supra, 458 U.S. at 440-41, n.19.2 Local
Law 76 and the regulations clearly allow plaintiffs to maintain
all their rights of control over the manner in which compliance
with the law is achieved.
Despite plaintiffs diligent attempts to characterize Local Law
76 as a physical invasion of their property, the law simply
regulates the uses that they can make of the buildings, and does
so in a rather narrow manner. The ability to renovate the
buildings is conditioned on the protection of the public from
the dangers associated with airborne asbestos. Plaintiffs are free
to use the buildings without making alterations or to make alter-
ations that do aot present a public health hazard by causing
asbestos to become airborne. If plaintiffs choose either of these
alternatives, the strictures of Local Law 76 can be completely
avoided. The extent of any alteration work to be performed,
and therefore the extent of the cost of compliance with the law
* In Katser Aetna v. United States, 444 U.S. 164, 179-80 (1979) the Supreme
Court found a taking had occurred from the imposition of a navigational servi-
tude by the government on plaintiff's private marina, subjecting it to access
by the public. The navigational servitude imposed by the government in Kaiser
Aetna stripped plaintiffs of their ability to exclude the public from their pro-
perty, a fundamental element of their rights as owners, and as such was an
actual physical invasion which constituted an appropriation of plaintiffs’ pro-
perty. Jd. Local Law 76 and the regulations do not present an analogous fac-
tual situation as an owner's dominion and control over his or her property,
including the right to exclude others, remains unaffected by the City’s
requirements
SE
A-23
for any asbestos project, is solely left to the discretion of plain-
tiffs. Furthermore, plaintiffs continue to control the activities
that occur in their buildings and remain able to supervise or
dismiss the qualified individuals they voluntarily choose to re-
tain to perform the asbestos removal work. It is plaintiffs who
remain ultimately responsible for compliance with the re-
quirements of Local Law 76. Their ownership rights in the pro-
perty are not significantly diminished by the requirements of
asbestos removal.
Plaintiffs next contend that Local Law 76 and the regulations
constitute a taking because they eliminate the intended use of
the property as office buildings readily adaptable to tenants with
diverse office space needs. Plaintiffs creative definition of the
intended use of their property, while resulting in a conflict with
the requirements of Local Law 76, does not state a takings claim.
Legislation enacted pursuant to the police power will not be
a taking because it denies an owner the most profitable, or
preferred, use of the property. Keystone Bituminous Coal Ass'n
v. De Benedictis, supra, 480 U.S. at 489 n.18; Penn Central
Transportation Co. v. City of New York, supra, 438 U.S. at 124,
133; Goldblatt v. Town of Hempstead, 369 U.S. 590, 592 (1962)
(ordinance prohibiting certain excavation did not constitute tak-
ing even though it prohibited prior use of land by plaintiff);
Village of Euclid v. Amber Realty Co., 272 U.S. 365 (1926).
Moreover, regulations which have caused substantial reduc-
tions in property value have not been found to constitute a tak-
ing. Sadowsky v. City of New York, 732 F.2d 312, 317-18 (1984);
Pompa Construction Corp. v. City of Saratoga Springs, 706 F.2d
418, 425 (2d Cir. 1983). See also Hadacheck v. Sebastian, 239
U.S. 394, 410 (1915) (ordinance prohibiting use of property as
brick yard not a taking even when the result is a decrease in pro-
perty value from $800,000 to $60,000). When the health, safe-
ty, or general welfare of the public would be protected by prohi-
biting a particular contemplated use of land, the Supreme Court
has consistently upheld land use regulation that destroyed or ad-
versely affected recognized real property interests. Penn Central
Transportation Co. v. City of New York, supra, 438 U.S. at 125.
aerated
A-24
Contrary to plaintiffs’ suggestion, compliance with the City’s
prior fireproofing requirements does not remove this case from
the established case law regarding the government'’s ability to
restrict the use of property for the public benefit. As the Supreme
Court has noted:
“taking” challenges have . . . been held to be without
merit in a wide variety of situations when the
challenged governmental actions prohibited a
beneficial use to which individual parcels had
previously been devoted and thus caused substantial
individualized harm.”
Penn Central Transportation Co. v. City of New York, supra,
438 U.S. at 125. Indeed, valid zoning laws which prohibit an
entire use of property result in more severe hardship on proper-
ty owners than Local Law 76, which only adds to the cost of
a specific use of property dangerous to the public, and leaves
the final choice on how to use the property in the hands of the
owner.
Plaintiffs have failed to allege a sufficient diminution in value
or use of their buildings caused by Local Law 76 to state a claim.
While they contend that compliance with the law will result
in substantial cost, they make no allegation that the buildings
will be robbed of all economic use. Complaint at 44 34-38.
Plaintiffs have not alleged that the law will force them to give
up the general use of their property as office buildings, nor have
they even alleged that the operation of their buildings will be
unprofitable. See Keystone Bituminous Coal Ass'n v. De Benedic-
tis, supra, 480 U.S. at 495-96. (“petitioners have not claimed
the Act makes it commercially impracticable for them to
continue mining... . Indeed, petitioners have not even pointed
to a single mine that can no longer be mined for profit”).
Plaintiffs are not required to seal off the entire building while
asbestos is removed under the regulations, only those sections
which will be affected by the alteration work. Those parts of
the building not being renovated are fully available for plaintiffs’
use and economic benefit. Apparently, the buildings continue
tl
A-25
to be used by plaintiffs as office buildings, a reflection of plain-
tiffs own determination that the benefits of continued opera-
tion outweigh the costs of compliance with Local Law 76.
Local Law 76 and the regulations impose additional costs on
plaintiffs as incident to their ownership of property, but these
costs are well within the scope of the City’s police powers. Ac-
cordingly, plaintiffs have failed to state a constitutional takings
claim.”
D. State Law Claims
The second through eighth claims for relief in the Complaint
assert a series of pendent state causes of action which attack
the validity of Local Law 76 and the DEP regulations. Briefly,
these claims allege that:
(a) Local Law 76 delegates legislative and governmen-
tal authority to the DEP in violation of the state
constitution;
(b) Local Law 76 delegates sovereign authority to a
private person in violation of the state constitution;
(c) the DEP regulations are inconsistent with Local
Law 76;
(d) the DEP regulations are inconsistent with the Air
Pollution Control Code, of which Local Law 76 is a
part;
(e) Local Law 76 and the regulations violate the En-
vironmental Conservation Law;
® Plaintiffs argue that the motion to dismiss should be denied in order to af-
ford chem the opportunity to conduct discovery concerning when the City
knew of the dangers of airborne asbestos and why a prior City draft of Local
Law 76, with more onerous requirements on property owners, was not adopted
by the City. Neither of these subject areas will yield information relevant to
the determination of the constitutional claims and therefore the discovery re-
quest is insufficient to defeat the motion to dismiss.
A-26
(f) Defendants are estopped from enforcing Local Law
76;
/
(g) Defendants have been unjustly enriched.
Dismissal of the federal claims upon which plaintiffs base
jurisdiction in federal court at this preliminary stage in the case
calls for the discretionary dismissal of the pendent state claims
as well. See United Mine Workers v. Gibbs, 383 U.S. 715, 726
(1966). No prejudice will accrue to plaintiffs by such a dismissal
as New York Civil Practice Law and Rules §205(a) allows plain-
tiffs to reecommence any action in state court within six months
after it is dismissed by a federal court on jurisdictional grounds,
if it was timely commenced in the first instance. See Dunton
v. County of Suffolk, 729 F.2d 903, 911 n.8 (2d Cir.), amended
on other grounds, 748 F.2d 69 (1984). Therefore, the pendent
state claims should be dismissed pursuant to Rule 12(b)(1), Fed.
R. Civ. P. for lack of subject matter jurisdiction.
CONCLUSION
Local Law 76 and the regulations do not violate substantive
due process, procedural due process, nor do they constitute a
taking without just compensation under the Fifth and Four-
teenth Amendments to the Constitution. Accordingly, defen-
dants’ motion to dismiss the federal constitutional claims is
granted. The pendent state law claims are also dismissed for
lack of subject matter jurisdiction.
It is so ordered.
Dated: New York, New York
May 24, 1989
/s/Robert Ward
U.S.D.J.
A-27
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
MELVYN KAUFMAN, 77 WATER
STREET, INC., 77 WATER STREET
ASSOCIATES, 127 JOHN STREET FEE
ASSOCIATES, 127 JOHN STREET
ASSOCIATES, 437 MADISON AVENUE
FEE ASSOCIATES, and 437 MADISON
AVENUE ASSOCIATES,
Plaintiffs,
- against -
THE CITY OF NEW YORK, THE EN- : Civil Action
VIRONMENTAL CONTROL BOARD OF No.
THE CITY OF NEW YORK, EDWARD I. :
KOCH, in his capacity as mayor of the COMPLAINT
City of New York, HARVEY W.
SCHULTZ, in his capacity as Commis-
sioner of the Department of Environmental
Protection, and CHARLES M. SMITH,
JR., in his capacity as Commissioner of the
Department of Buildings,
Defendants.
Plaintiffs Melvyn Kaufman, 77 Water Street, Inc., 77 Water
Street Associates, 127 John Street Fee Associates, 127 John Street
Associates, 437 Madison Avenue Fee Associates, and 437 Madison
Avenue Associates, by their attorneys, Shea and Gould, for their
complaint herein allege:
A-28
PARTIES
1. Plaintiff Melvyn Kaufman is a co-owner of the fee in-
terest in the land having the street address 77 Water Street, New
York, New York; he lives and works in New York County.
2. Plaintiff 77 Water Street, Inc. is a corporation incorporated
in the State of Minnesota and is the other co-owner of the fee
interest in the land having the street address 77 Water Street,
New York, New York.
3. Plaintiff 77 Water Street Associates is a partnership organ-
ized pursuant to the laws of the State of New York and holds
the leasehold interest in the land having the street address 77
Water Street, New York, New York.
4. Plaintiff 127 John Street Fee Associates is a partnership or-
ganized pursuant to the laws of the State of New York and holds
the fee interest in the land having the street address 127 John
Street, New York, New York.
5. Plaintiff 127 John Street Associates is a partnership organ-
ized pursuant to the laws of the State of New York and holds
the leasehold interest in the land having the street address 127
John Street, New York, New York.
6. Plaintiff 437 Madison Avenue Fee Associates is a partner-
ship organized pursuant to the laws of the State of New York
and holds the fee interest in the land having the street address
437 Madison Avenue, New York, New York.
7. Plaintiff 437 Madison Avenue Associates is a partnership
organized pursuant to the laws of the State of New York and
holds the leasehold interest in the land having the street address
437 Madison Avenue, New York, New York.
8. Defendant The City of New York (the “City”) is a municipal
corporation chartered under the laws of the State of New York.
A-29
9. Defendant Environmental Control Board is a board formed
pursuant to statutory authority under the New York City
Charter.
10. Defendant Edward I. Koch is the Mayor of the City of
New York.
11. Defendant Harvey W. Schultz is the Commissioner of the
Department of Environmental Protection.
12. Defendant Charles M. Smith, Jr. is the Commissioner of
the Department of Buildings.
JURISDICTION AND VENUE
13. This action arises under the Fifth and Fourteenth Amend-
ments of the Constitution of the United States, 42 U.S.C. 1983,
Sections 6, 7 and 1] of Article I of the Constitution of the State
of New York, the New York State and New York City laws alleged
herein and the common law. This is an action to declare un-
constitutional and void New York City Local Law No. 76 of 1985
(Int. 891-B), as amended by New York City Local Law No. 80
of 1986, and the regulations promulgated pursuant thereto.
14. This Court has jurisdiction over this action pursuant to
28 U.S.C. § 1331 and the principles of pendent jurisdiction.
15. Venue is proper in this district pursuant to 28 U.S.C.
§ 1391(b).
FACTUAL BACKGROUNL
16. On or about 1968, plaintiff 437 Madison Avenue Associates
erected a building having the street address 437 Madison Avenue,
New York, New York. On or about 1970, plaintiff 77 Water Street
Associates erected a building having the street address 77 Water
Street, New York, New York. On or about 1971-72, plaintiff 127
John Street Associates erected a building having the street ad-
dress 127 John Street, New York, New York (these buildings are
hereinafter collectively referred to as “the Properties”).
A-30
7. When the Properties were being erected, plaintiffs were
required, pursuant to New York City Administrative Code pro-
visions in effect, to use certain approved fireproofing material
in the construction of the aforesaid buildings.
18. Pursuant to New York city Administrative Code provisions
in effect at the time the Properties were being built, only
materials approved by the Board of Standards and Appeals
(“BSA”) could be used for fireproofing, and, at the time, the BSA
had approved only two types of materials which could be used
effectively in fireproofing steel deck structural steel buildings,
such as the Properties: asbestos containing material (“ACM”)
or cementitious material. The accepted method for construct-
ing large office buildings was at the time, and still is, the steel
deck method.
19. As a result of the requirements constituted by and con-
tained in the aforesaid provisions and approval, plaintiffs used
ACM as the fireproofing material in the Properties.
20. Despite (a) previously requiring plaintiffs to install
fireproofing in the Properties, (b) specifically limiting the choice
of fireproofing material which plaintiffs could use in erecting
the Properties, and (c) effectively requiring the use of asbestos
or one other material for said fireproofing, in 1985 the City
passed legislation which, together with regulations promulgated
pursuant thereto, in effect requires plaintiffs, and all other
owners of buildings in New York City who had used ACM in
constructing their buildings because of the prior City regula-
tions and BSA approval, to remove or encapsulate the ACM and
to be responsible for the full costs of removal or encapsulation
of this ACM, which costs are greatly inflated by the procedures
required by said legislation and regulations.
21. In particular, on November 19, 1985, the Council of the
City of New York enacted New York City Local Law No. 76 of
1985 (Int. 891-B) (“the Loca] Law”), which legislation was signed
by defendant Koch on December 2, 1985.
A-31
22. On December 9, 1986 the Local Law was amended by
the Council of the City of New York by legislation known as
New York City Local Law No. 80 of 1986, which legislation was
signed by defendant Koch on December 22, 1986.
23. Defendant Schultz is empowered by the Local Law to
enact regulations pursuant to the Local Law and enforce cer-
tain of its provisions.
24. Defendant Smith is empowered by the Local Law to deny
building permits and approval of plans to those applicants for
permits and those applicants for approval of plans who do not
comply with the Local Law or with regulations promulgated
by defendant Schultz under the Local Law.
25. Defendant Environmenta! Control Board is empowered
by the Local Law to impose civil penalties for violations of any
of the Local Law’s provisions or of any regulations promulgated
pursuant thereto.
26. On March 27, 1987 defendant Schultz promulgated
regulations purportedly pursuant to the Local Law as amended,
known collectively as The Asbestos Control Program Rules and
Regulations, Section 8000 et seq. (“the Regulations”). The
Regulations became effective on April 1, 1987 and were amended
in 1988.
27. The Local Law imposes, inter alia, the following obliga-
tions upon plaintiffs who, since they were required to follow
City requirements and pursuant to BSA approval, used ACM
in the construction of their Properties:
a. Plaintiffs, and other applicants who seek building
permits or approval of building plans, cannot obtain
such permits or approval of plans unless an “asbestos
investigator” certifies that the alteration, renovation,
modification or demolition work which is to be per-
formed on the building will not disturb a certain
amount of friable ACM. The ownership of large of-
fice buildings necessarily involves continual turnover
a a
A-32
of tenants and continual major alteration, renovation,
modification and demolition work in connection
therewith, which by the nature of the work disturbs
more than the allowable friable ACM at buildings
where, because of the City requirements and BSA ap-
proval, ACM was used, so that this certification can-
not be obtained where ACM was used.
b. If plaintiffs, or other applicants, are unable to
obtain such certification, which is the case where there
is major alteration, renovation, modification or
demolition and where ACM was used because of City
requirements and BSA approval, said person must sub-
mit to defendant Smith a fee not to exceed $800 and
a plan approved by defendant Schultz for preventing
the ACM from becoming airborne which details com-
pliance with the Local Law and any rules or regula-
tions promulgated thereunder. This plan, in order to
be even considered for approval by defendant Schultz,
must also be accompanied by a fee not to exceed
$1,000.
c. Plaintiffs, or other applicants, are subject to stop-
work orders if defendant Schultz determines that the
work being performed on the Properties violates the
Local Law or any rules and regulations promulgated
thereunder.
d. Plaintiffs, or other applicants, are subject to any
regulations promulgated pursuant to the Local Law
and face fines imposed by defendant Environmental
Control Board of up to $10,000 for each violation of
the obligations imposed by the Loca] Law or any
regulations promulgated pursuant thereto.
28. The Regulations impose, inter alia, the following obliga
tions upon plaintiffs and other building owners who, since they
were required to follow city requirements and pursuant to BSA
approval of ACM, used said material in the construction of their
properties:
—————————
A-33
a. Plaintiffs, as building owners, and other building
owners similarly situated, are singled out as being
responsible for the proper performance of the exten-
sive and burdensome asbestos abatement activities re-
quired by the Regulations, including (i) removal,
enclosure or encapsulation of ACM, (ii) preparation
of the workplace for said activities, (iii) sampling,
analysis and monitoring activities to detect the
presence of any disturbed ACM and (iv) air clearance
monitoring which must be performed at the conclu-
sion of any work performed on the buildings where
ACM is disturbed, all of which requirements are ex-
tremely expensive.
b. Plaintiffs, as building owners, and other building
owners similarly situated, are singled out as being
responsible for determining the absence or presence
of ACM which will be disturbed during the course
of alteration, renovation, modification or demolition
activities in connection with work on the buildings
and for following the notification procedures set forth
in the Regulations, which include that plaintiffs must
submit a filing fee of $500-$800 in every instance that
work in connection with alteration, renovation or
modification of the buildings will disturb a certain
amount of ACM.
c. Plaintiffs, as building owners, and other building
owners similarly situated, are singled out to be the
employers of those persons required to conduct air
sampling and/or analysis in connection with work
which will disturb a certain amount of ACM and are
thus liable for said persons’ negligence in the per-
formance of said sampling or analysis, the cost of their
employment, and for any violations by said persons
of the Local Law or Regulations, amounting to ab-
solute liability of plaintiffs by virtue of their status
as building owners.
itera ell
A-34
d. Plaintiffs, as building owners, and other building
owners similarly situated, are required to evacuate
that portion of their buildings where asbestos abate-
ment activities are occurring until the air in that por-
tion of the building is free, according to the standards
set forth in the Regulations, of any ACM, which period
may take as long as three months, at great loss of in-
come to plaintiffs.
29. The Local Law provides that where any person fails to
comply with the obligations set out in paragraphs 27 and 28
hereof, they shall be liable for civil penalties of up to $10,000
for each violation of the Local Law and/or Regulations cited
by defendant Schultz, excepting violations of § 1403.2-9.12(b)(1)
of the Local Law (for handling asbestos without a license) for
which a lesser penalty is provided.
30. The Regulations specifically make plaintiffs as building
owners, and other building owners similarly situated, liable for
the aforesaid penalties regardless of whether it is they or another
applicant for a building permit or approval of plans, such as
a building tenant, who violates any of the obligations set forth
in paragraphs 27 and 28 hereof.
31. The ownership of large office buildings necessarily involves
continual turnover of tenants and continual major alteration,
renovation, modification and demolition work in connection
therewith, which by the nature of the work disturbs the ACM
beyond the allowable limits set in the Local Law and Regula-
tions. Thus, even though the Local Law, and to a lesser extent
the Regulations, may at first glance appear only to be an at-
tempt to maintain certain safety standards when ACM is being
disturbed, in reality the Local Law and Regulations, by virtue
of the continuing alterations, renovation, modification and
demolition required in large office buildings, in effect, requires
the owners of such buildings to spend large sums of money to
remove or encapsulate the ACM, which the owners used in the
buildings in the first place because it was effectively one of two
fireproofing materials required by the City.
A-35
32. Further, without removing or encapsulating the ACM,
the owners cannot obtain a permit to alter or renovate, and thus
cannot rent to a new tenant once the present tenant vacates.
Therefore, the owner has no choice but to spend the large sums
of money to remove or encapsulate the asbestos, since other-
wise his floors must remain vacant and he will lose large sums
of money, all because he was required to use ACM as effective-
ly one of two fireproofing materials required by the City.
33. Thus, what may seem like an effort to maintain safety
conditions where a building owner chooses to disturb ACM is
in fact a transparent attempt by defendants to require plain-
tiffs and other building owners to bear the huge expense of
removing or encapsulating ACM which was used in the buildings
because it was effectively one of two fireproofing materials re-
quired to be used by the City.
34. Plaintiffs have been forced to expend vast sums of money
in order to comply with the Local Law and the Regulations and
in order to undo a problem created not by them but by the City
through its fireproofing requirements and its approval of ACM
as a fireproofing material, and plaintiffs have suffered a severe
loss in the value of the Properties.
35. In particular, plaintiff 77 Water Street Associates has, in
order to comply with the Local Law and the Regulations, been
forced to expend approximately $5,592,083 to remove ACM on
certain floors of 77 Water Street and additionally has lost
$1,240,925 in rent for the period during which it was required
by the Local Law and Regulations to evacuate those floors.
Moreover, asbestos abatement activities must still be performed
on other floors of 77 Water Street at an approximate cost of
$2,954,318, together with an approximate rent loss of $581,473,
while these floors are evacuated.
36. Plaintiff 437 Madison Avenue has been forced to expend
approximately $2,179,746 to remove ACM on certain floors of
437 Madison Avenue in compliance with the Local Law and
Regulations and has lost approximately $197,886 in rent for the
period during which it was required by the Local Law and
A-36
Regulations to evacuate those floors. Moreover asbestos abate-
ment activities must still be performed on other floors at 437
Madison Avenue at an approximate cost of $18,864,238, together
with an approximate rent loss of $5,879,092.
37. Plaintiff 127 John Street Associates has been forced to ex-
pend approximately $722,707 to remove ACM on certain floors
at 127 John Street in order to comply with the Local Law and
with the Regulations, and additionally has lost approximately
$130,222 in rent for the period during which it was required
to evacuate those floors pursuant to the Local Law and the
Regulations. Moreover, asbestos abatement activities must stil]
be performed on other floors of 127 John Street at an approx-
imate cost of $10,536,140 and with an approximate rent loss of
$1,984,795, while those floors are evacuated.
38. Plaintiffs have also, as a direct result of the enactment
of the Local Law and the Regulations, not been able to obtain
the mortgages on the Properties that they were able to obtain
prior to the enactment of the Local Law and the Regulations.
That is, mortgagees, fearful of being deemed owners and of be-
ing held responsible for removing the ACM, either refuse outright
to enter into mortgage agreements or require large reserves
before they will enter into mortgage agreements. Thus, even
when plaintiffs, and other building owners, are able to obtain
mortgages, they must pay interest on reserves they must bor-
row but cannot use. Furthermore, even in buildings which do
not contain ACM, mortgagees refuse to enter into mortgage
agreements, or alternatively require the aforesaid reserves,
because of a fear that ACM might be found in the building.
39. Plaintiffs have no adequate remedy at law.
FIRST CLAIM FOR RELIEF
40. Plaintiffs repeat and reallege paragraphs 1 through 39 with
the same force and effect as if fully set forth herein.
41. The Local Law and the Regulations deprive plaintiffs
of equal protection of the law and of property without due
EE a
A-37
process of law, and take plaintiffs’ property for a public use
without just compensation, in violation of the Fifth and Four-
teenth Amendments of the Constitution of the United States,
42 U.S.C. § 1983, and §§ 6, 7 and LI of Article I of the Con-
stitution of the State of New York, in the following respects:
a. They unfairly single out plaintiffs to affirmatively
bear the costs and obligations of a problem created
and imposed upon them by defendants;
b. They deprive plaintiffs of the use and control of
the Properties;
c. They compel plaintiffs to either allow portions
of their buildings to be entirely shut down for long
periods amounting to a physical taking and to con-
sent to the occupation of said portions of their building
by persons performing asbestos abatement activities
or to keep their buildings unoccupied when current
tenants move out;
d. They substantially impair and diminish the value
of plaintiffs’ properties without compensation;
e. They require plaintiffs either to totally refrain
from altering, renovating or modifying their Proper-
ties and thus leave the buildings vacant, or to under-
take the costly and burdensome task of removing ACM
in their buildings in order to comply with the Local
Law and Regulations; and
f. They impose substantial penalties on plaintiffs
for their mere status as building owners since plain-
tiffs must either expend huge amounts of money to
remove or encapsulate the ACM, which is there
because of prior City requirements, or leave whole
floors or whole buildings vacant, and further since
plaintiffs are liable for substantial violations of the
Local Law and Regulations regardless of whether it
is they or anyone else who violates the Local Law or
SS
A-38
Regulations in removing or failing to remove ACM in
connection with work done on the Properties and re-
gardless of whether plaintiffs are even aware that said
other persons have removed or should remove ACM.
SECOND CLAIM FOR RELIEF
42. Plaintiffs repeat and reallege paragraphs 1 through 39 with
the same force and effect as if fully set forth herein.
43. In enacting the Local Law, the City has unconstitutionally
delegated its lawmaking and sovereign power to defendant
Schultz in the following ways:
a. The Local Law unconstitutionally grants defen-
dant Schultz the power to determine who will be sub-
ject to the civil penalties imposed for failure to com-
ply with the Local Law and any regulations pro-
mulgated pursuant thereto by defendant Schultz. In
particular, the Local Law unconstitutionally grants
defendant Schultz the power to determine who will
be subject to said penalties (a) for failure to properly
perform the asbestos abatement activities required by
the Local Law and the Regulations, (b) for failure to
properly determine whether ACM will be disturbed
in connection with any alteration, renovation or
modification work on the Properties, (c) for failure
to properly undertake the notification requirements
set forth in the Local Law and Regulations and (d)
for failure to properly undertake the sampling,
analysis and/or monitoring requirements of the Local
Law and Regulations; and
b. The Local Law unconstitutionally grants defen-
dant Schultz the power to determine who should bear
the cost of sampling, monitoring, and/or analysis and
to determine who must bear the cost of the filing fees
required in connection with the notification re-
quirements of the Local Law and Regulations in con-
nection with work which will disturb ACM.
A-39
THIRD CLAIM FOR RELIEF
44. Plaintiffs repeat and reallege Paragraphs 1 through 39 with
the same force and effect as if fully set forth herein.
45. The Local Law unconstitutionally delegates sovereign
authority to a private person (a) by allowing an “asbestos in-
vestigator” to determine whether an applicant for a building
permit or approval of plans is required to undertake the asbestos
abatement activities required by the Local Law and Regula-
tions, (b) by making failure to comply with the asbestos in-
vestigator’s determination subject to fines of up to $10,000 per
cited violation, and (c) by not allowing an appeal from the
asbestos investigator's determination.
FOURTH CLAIM FOR RELIEF
46. Plaintiffs repeat and reallege paragraphs | through 39 with
the same force and effect as if fully set forth herein.
47. Defendant Schultz has singled out and imposed all of the
obligations and liabilities set forth in and resulting from the
Local Law and the Regulations on plaintiffs as building owners
and on other similarly situated owners of buildings regardless
of whether it is they or anyone else who undertakes or should
undertake removal of ACM in connection with work undertaken
at plaintiffs’ or other owners’ buildings and regardless of whether
the building owner is even aware that anyone else has or should
have removed ACM in connection with work undertaken at his
building.
48. The Regulations are thus a nullity since they are out of
harmony with the Local Law, which does not impose all these
obligations and liabilities on the building owners.
FIFTH CLAIM FOR RELIEF
49. Plaintiffs repeat and reallege paragraphs | through 39 and
47 with the same force and effect as if fully set forth herein.
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50. Because the Regulations specifically impose all the obliga-
tions and liabilities of the Local Law and Regulations on plain-
tiffs as building owners, and on other building owners similar-
ly situated, the Regulations are inconsistent with the Local Law.
The Regulations are thus invalid under Air Pollution Control
Code at § 24-116 which provides that where regulations are in-
consistent with the Air Pollution Control Code, of which the
Local Law is a part, the code is controlling.
SIXTH CLAIM FOR RELIEF
51. Plaintiffs repeat and reallege paragraphs | through 39 with
the same force and effect as if fully set forth herein.
52. The Local Law and the Regulations have a significant
effect on the environment, as said term is defined in Section
8-0105(6) of the Environmental Conservation Law (“ECL’), 6
N.Y.C.R.R. § 617.2(k) and Executive Order No. 91 (August 1977),
“City Environmental Quality Review” (“CEQR”), § 1(f).
53. The Local Law and the Regulations violate Article 8 of
the ECL, also known as the State Environmental Quality Review
Act (“SEQRA”), 6 N.Y.C.R.R. § 617 and CEQR.
54. In particular, upon information and belief, the City, in
enacting the Local Law, and defendant Schultz in promulgating
the Regulations, failed to consider the potential environmental
impact thereof and the damage thereto resulting from the en-
forcement of the Local Law and/or the Regulations.
55. Upon information and belief, the City, in enacting the
Local Law, and defendant Schultz, in promulgating the Regula-
tions, among other things, failed to:
a. Consider or analyze the effect on the environ-
ment of the Local Law and the Regulations or the en-
vironmental significance thereof;
b. Consider the necessity for preparation and cir-
culation of an environmental impact statement;
A-41
c. Prepare either a draft or final environmental im-
pact statement;
d. Circulate appropriate SEQRA or CEQR notices
and impact statements with respect to environmental
impact of the Local Law or Regulations;
e. Conduct public hearings on the environmental
impact of the Local Law or Regulations or with
respect to a draft environmental impact statement;
f. Make any recommendations or come to any con-
clusions as to the minimization of adverse impact of
the Local Law or Regulations upon the environment;
g. Consult with appropriate public agencies con-
cerning the environmental impact of the Local Law
or Regulations; or
h. Otherwise take action consistent with the ECL,
6 N.Y.C.R.R. § 617, or CEQR.
56. The Local Law and the Regulations are thus null and void
under the ECL, 6 N.Y.C.R.R. § 617 and CEQR.
SEVENTH CLAIM FOR RELIEF
57. Plaintiffs repeat and reallege paragraphs 1 through 39 with
the same force and effect as if fully set forth herein.
58. When the Properties were being built, the City af-
firmatively required plaintiffs to fireproof their buildings.
59. When the Properties were being built, the City limited
the materials which could be used for fireproofing to materials
approved by the BSA. The BSA only approved two such
materials, one of which was ACM, which effectively could be
used in fireproofing steel deck structural steel buildings, such
as the Properties.
A-42
60. In reliance on the BSA approval of ACM as a fireproof-
ing material, plaintiffs used said material to fireproof their
buildings.
61. Defendants have now singled out plaintiffs, and other
building owners similarly situated, to bear the costs and
liabilities of removing the very same ACM that defendants ef-
fectively required them to install in the Properties.
62. Manifest injustice would result if the provisions of the
Local Law and Regulations are enforced by defendants insofar
as said enforcement places the costs of compliance and the
liabilities of non-compliance with said provisions on plaintiffs
and other similarly situated building owners. Defendants are
thus estopped from enforcing the Local Law and the
Regulations.
EIGHTH CLAIM FOR RELIEF
63. Plaintiffs repeat and reallege paragraphs 1 through 62 with
the same force and effect as if fully set forth herein.
64. Plaintiffs have, in compliance with the Local Law and
Regulations, expended the amounts set forth in paragraphs 35
through 37 above which amounts were rightly the responsibili-
ty of defendants and should rightly have been expended by
defendants.
65. As a result defendants have been unjustly enriched.
WHEREFORE, plaintiffs demand judgment:
a. Declaring New York City Local Law no. 76 of
1985, as amended by New York City Local Law no.
80 of 1986, and the Regulations purportedly pro-
mulgated pursuant thereto, to be, null, void and of
no legal effect;
__ b. Enjoining defendants from taking any action to
enforce said Local Laws and Regulations;
A-43
c. Awarding plaintiffs damages in an amount
representing plaintiffs’ cost of compliance with the
Local Law and Regulations; and
d. Awarding plaintiffs such other and further relief
as to the Court may seem just and proper.
Dated: New York, New York
July 21, 1988
SHEA & GOULD
By /s/Robert J. Ward
A Member of the Firm
Attorneys for Plaintiffs
1251 Avenue of the Americas
New York, New York 10020
(212) 827-3000
A-44
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Te ee are ame Oe nea CS ORR Rk X
MELVYN KAUFMAN, et al., 88 Civ. 5194
Plaintiffs, arr)
: AFFIDAVIT
- against - IN
. a ; : OPPOSITION
THE CITY OF NEW YORK, et al., TO MOTION
Defendants. : TO DISMISS
STATE OF NEW YORK )
.
COUNTY OF NEW YORK )
ROBERT KAUFMAN, being duly sworn, deposes and says:
1. I am Executive Vice President of Sage Realty Corp., the
managing agent of the three properties at issue here. I submit
this affidavit in opposition to defendants’ motion to dismiss this
action for failure to state a claim upon which relief can be
granted.
2. The asbestos removal work already done at the three
buildings at issue here in order to comply with Local Law 76
and the Regulations purportedly promulgated thereunder has
forced us physically to seal off nineteen floors at 77 Water Street
for a total of approximately 950 days (at an average of 50 days
per floor to remove the asbestos); two floors at 437 Madison
Avenue for a total of approximately 100 days; and three floors
at 127 John Street for a total of approximately 150 days.
A-45
3. Moreover, future asbestos work will force us to close six
floors of 77 Water Street for a total of approximately 300 days;
thirty-seven floors of 437 Madison Avenue for a total of approxi-
mately 1,850 days; and twenty-six floors of 127 John Street for
a total of approximately 1,300 days.
4. The tremendous financial burden imposed on plaintiffs by
the Local Law and Regulations is made particularly evident
when the assessed value of each of plaintiffs’ buildings is com-
pared to the financial burdens of complying with the Law and
Regulations.
(a) The structure at 77 Water Street is assessed at
$19,500,000. The cost of asbestos treatment at that site
will amount to approximately $8,546.401, and the
total of lost rent for that building during the time
spent to remove the asbestos will be approximately
$1,822,398, for a total of $10,368,799, which is more
than half the assessed value of the structure.
(b) The structure at 437 Madison Avenue is assessed
at $46,000,000. The total cost of asbestos treatment
will be approximately $21,043,984, and the total lost
rent figure for that building will total approximately
$6,076,978, for a total of $27,120,962, which is
significantly more than half the assessed value of the
structure.
(c) The structure at 127 John Street is assessed at
$27,000,000. The total cost of asbestos removal there
will reach approximately $11,258,847 and the total of
lost rent for this building will be approximately
$2,115,017, for a total of $13,373,864, which is more
than half the assessed value of the structure.
5. It is also important to note that plaintiffs cannot pass the
cost of asbestos treatment on to their tenants. The required treat-
ment of asbestos is a capital charge, not a routine operating ex-
pense which can be passed on to tenants. No tenant’s attorney
A-46
will allow his client to sign a lease requiring the tenant to pay
such a capital expenditure. Pass-through clauses in leases deal
with ongoing operating expenses like electricity or taxes, not
capital expenditures. In addition, we cannot even attempt to
have current tenants share the costs of asbestos treatment,
because these tenants have long-term leases which predate the
enactment of the legislation at issue here. Lastly, market forces
alone prevent us from passing on the asbestos removal costs to
our tenants. Many office buildings in New York never contained
asbestos. We must compete with these buildings for tenants, and
we would not stand a chance of securing tenants if we demanded
higher rents, to cover asbestos removal charges, while other
buildings without asbestos removal costs offered substantially
lower rents.
6. As a result none of our leases have pass through clauses
for asbestos removal charges nor will they ever, given market
forces and the fact that such pass-through clauses deal with
operating expenses, not capital charges. Further, I am unaware
of any leases which have such pass through clauses in any other
buildings in New York City.
7. Finally, I must note the great reluctance of private “asbestos
investigators” to certify that a proposed office renovation pro-
ject will not require treatment of asbestos. It has been our ex-
perience that these private uninsured citizens are greatly con-
cerned about personal liability for their decisions and thus are
not affording building owners a neutral decision on whether
a particular project will require asbestos treatment under the
Local Law and Regulations.
/s) Robert Kaufman
Robert Kaufman
Sworn to before me this
28th day of October, 1988
/s/Robert J. Ward
Notary Public
A-47
FIFTH AMENDMENT TO THE CONSTITUTION
No person shall be held to answer for a capital, or otherwise
infamous crime, unless on a presentment or indictment of a
Grand Jury, except in cases arising in the land or naval forces,
or in the Militia, when in actual service in time of War or public
danger; nor shall any person be subject for the same offence
to be twice put in jeopardy of life or limb; nor shall be com-
pelled in any criminal case to be a witness against himself, nor
be deprived of life, liberty, or property, without due process of
law; nor shall private property be taken for public use, without
just compensation.
A-48
LOCAL LAWS
OF
THE CITY OF NEW YORK
FOR THE YEAR 1985
No. 76
Introduced by Council President (Ms. Bellamy) and Council
Members Katzman and Greitzer; also Council Members Robles,
Albanese, Alter, Berman, Dryfoos, Eisland, Ferrer, Friedlander,
Gerges, Horwitz, Lisa, Maloney, Messinger, Michels,
O’Donovan, Pinkett and Povman — (Passed under a Message
of Necessity from the Mayor).
A LOCAL LAW
To amend the administrative code of the city of New York,
in relation to the control of asbestos.
Be it enacted by the Council as follows:
Section 1. Declaration of legislative findings and intent. The
council hereby finds that exposure to airborne asbestos fibers
and particles in the air has been linked by reputable medical
and scientific authorities to a significant increase in the incidence
of diseases such as asbestosis, bronchogenic carcinoma,
mesothelioma, and other malignancies and that substantial
amounts of materials containing asbestos have been used in
buildings for fireproofing, insulation, soundproofing, decorative
and other purposes. The council further finds that the predomi-
nant cause of asbestos becoming airborne is due to the perform-
ance of building renovation and demolition without adequate
adherence to procedures for safeguarding workers and the
general public, by persons who have not received adequate train-
ing in the handling of materials containing asvestos.
Therefore, it is the purpose of this local law to safeguard the
public health by requiring that renovation or demolition proj-
ects which disturb asbestos be conducted in accordance with
A-49
procedures established pursuant to the provisions of this local
law and that workers who handle materials containing asbestos
receive appropriate training.
§2. Article three of part one of title C of chapter twenty-
six of the administrative code of the city of New York is amend-
ed by adding a new section C26-34.1 to read as follows:
§C26-34.1 Special fees; asbestos. — Whenever application
for a permit is made for work which will involve the perform-
ance of an asbestos project and for which the filing with the
department of an asbestos inspection report, or proof of approval
by the commissioner of environmental protection of an asbestos
removal plan is required, the department shall be entitled to
charge an additional fee as established by the commissioner of
environmental protection in an amount not to exceed eight hun-
dred dollars. For purposes of this section, the terms “asbestos
project,” “asbestos inspection report” and “asbestos removal plan”
shall have the meanings as are ascribed in section 1403.2-9.12
of part two of chapter fifty-seven of the code.
§3. Section C26-108.7 of sub-article 108.0 of article one of
part two of such title of such chapter of such code, as amended
by local law number nineteen for the year nineteen hundred
eighty-three, is amended to read as follows:
§C26-108.7 Approval of application and plans. — Except
as otherwise provided in section C26-111.8 and section C26-118.9,
application and plans complying with the provisions of this code
and other applicable laws and regulations shall be approved by
the commissioner and written notice of approval shall be given
the applicant promptly and no later than 40 calendar days after
the submission thereof, and applications and plans failing to
comply with the provisions of this code and other applicable
laws and regulations shall be rejected and written notice of re-
jection, stating the grounds of rejection, shall be given the ap-
plicant promptly, and not later than 40 calendar days after the
submission thereof, except that on or before the fortieth day,
the commissioner may on good cause shown, and upon notifica-
tion to the applicant, extend such times for an additional twenty
A-50
days. Whenever an application and accompanying plans have
been rejected and are thereafter revised and resubmitted to meet
stated grounds of rejection, the revised application and plans
shall be approved if they meet the stated grounds of rejection,
or shall be rejected if they fail to meet the stated grounds of
rejection; and written notice of approval or written notice of
rejection, stating the ground of rejection shall be given the ap-
plicant promptly and not later than 20 calendar days after the
resubmission thereof.
§4. Section C26-109.4 of sub-article 109.0 of such article of
such part of such title of such chapter of such code, as added
by local law number seventy-six for the year nineteen hundred
sixty-eight, is amended to read as follows:
C26-109.4 Application for permit. All applications for per-
mits shall be submitted on forms furnished by the department,
and shall be accompanied by the required fee. The application
shall contain a general description of the proposed work or
equipment, its location, and such other pertinent information
as required pursuant to section 118.9 or as the commissioner may
require.
§5. Section C26-113.1 of sub-article 113.0 of such article of
such part of such title of such chapter of such code, as amended
by such local law, is amended to read as follows:
§C26-113.1 General requirements. — All applications for
demolition or removal permits shall be subject to the re-
quirements of sub-article 109.0, section C26-11.0, section
C26-118.8 and section C26-118.9.
§6. Sub-article 118.0 of such article of such part of such title
of such chapter of such code is amended by adding a new sec-
tion C26-118.9 to read as follows:
C26-118.9 Approval of plans and permit applications where
an asbestos project is performed.
A-51
a. The commissioner shall not approve any plans pursuant
to sub-article iJ8.0 unless an asbestos investigator has certified
that the work to be performed will not constitute an asbestos
project or the applicant submits with the application for ap-
proval of plans an asbestos inspection report completed in ac-
cordance with the provisions of section 1403.2-9.12 of part two
of chapter fifty-seven of the code.
b. Where the commissioner of environmental protection has
by regulation required that, in connection with other work for
which a permit but not plans is required under this article, that
an asbestos investigator certify that the work to be performed
will not constitute an asbestos project or that an asbestos in-
spection report be completed in accordance with the provisions
of section 1403.02-9.19 of part two of chapter fifty-seven of the
code, the commissioner shall not issue such permit unless such
certification or such report is submitted in connection with the
application for such permit.
c. Where the commissioner of environmental protection has
by regulation required that, in connection with work for which
an alteration permit or demolition permit is required under this
article, that an asbestos investigator certify that the work to be
performed will not constitute an asbestos project or that the ap-
plicant submit with the application for such permit proof that
an asbestos removal plan has been approved by the commissioner
of environmental protection in accordance with the provisions
of section 1403.2-9.12 of part two of chapter fifty-seven of the
code, the commissioner shall not issue such permit unless such
certification or proof of such approval has been submitted in
connection therewith.
d. The commissioner shall not issue any permit under this
article for work which constitutes an asbestos project and for
which an asbestos inspection report is required unless the ap-
plicant at the time of application for such permit certifies on
forms prescribed by the commissioner of environmental protec-
tion that he or she is familiar with federal, state and local laws
and regulations applicable to asbestos related work.
A-52
e. Whenever proof of approval of an asbestos removal plan
is required for plan or permit approval, any requirement for
the submission of an asbestos inspection report shall be deemed
waived.
f. For purposes of this section, the terms “asbestos”, “asbestos
inspection report”, “asbestos investigator”, “asbestos project” and
“asbestos removal plan”, shall have the meanings as are ascribed
in section 1403.2-9.12 of part two of chapter fifty-seven of the
code.
§7. Part two of chapter fifty seven of such code is amended
by adding a new section 1403.2-9.12 to read as follows:
§1403.2-9.12 Asbestos work. — (a) For purposes of this sec-
tion, the following terms shall have the following meanings:
(1) “Asbestos” shall mean any hydrated mineral silicate
separable into commercially usable fibers, including but not
limited to chrysotile (serpentine), arnosite (cumingtonite-
grunerite), crocidolite (riebeckite), tremolite, anthrophyllite and
actinolite.
(2) “Asbestos inspection report” shall mean a report on the
condition of a building or structure in relation to the presence
and condition of asbestos therein.
(3) “Asbestos investigator” shall mean an individual certified
by the commissioner as having satisfactorily demonstrated his
or her ability to identify the presence and evaluate the condi-
tion of asbestos in a building or structure.
(4) “Asbestos containing material” shall mean asbestos or
any material containing more than one percent asbestos by
weight.
(5) “Asbestos removal plan” shall mean a plan which will
be undertaken so as to prevent asbestos from becoming airborne
in the course of the alteration, renovation, modification or
demolition of any building or structure.
A-53
(6) “Asbestos handling certificate” shall mean a certificate
issued to a person who has satisfactorily completed an approved
asbestos safety and health program.
(7) “Approved safety and health program” shall mean a pro-
gram certified by the commissioner providing training in the
handling and use of asbestos containing material, and safety
and health risks inherent in such handling and use, together with
methods for minimizing the exposure of workers and the public
to asbestos fibers and, instruction in all applicable federal, state
and local laws and regulations pertaining to asbestos related
work.
(8) “Asbestos project” shall mean any form of work per-
formed in connection with the alteration, renovation, modifica-
tion or demolition of a building or structure which will disturb
more than two hundred sixty linear feet or more than one hun-
dred sixty square feet of friable asbestos containing material or
such smaller amounts as the commissioner may establish by
regulation.
(9) “Friable asbestos material” shall mean any asbestos or
any asbestos containing material that can be crumbled, pulver-
ized or reduced to powder when dry, by hand pressure.
(b)(1) It shall be unlawful for any individual to handle
friable asbestos material in the course of performing work for
compensation on an asbestos project unless such individual is
a holder of a current, valid asbestos handling certificate.
(2) It shall be unlawful to employ or otherwise permit any
individual to handle friable asbestos material on an asbestos pro-
ject when such person is not a holder of a current, valid asbestos
handling certificate.
(c) The commissioner shall promulgate regulations
establishing procedures for the safeguarding of the health and
safety of the public and all persons who work at or in the vicinity
of an asbestos project.
A-54
(d)(1) The commissioner shall promulgate regulations
establishing criteria for certifying individuals as eligible to
receive an asbestos handling certificate and for certifying
programs as approved safety and health programs. The com-
missioner may restrict the asbestos handling certificate as to cer-
tain supervisory and non-supervisory functions and
responsibilities.
(2) The commissioner shall promulgate regulations
establishing criteria for certifying individuals as asbestos
investigators.
(3) Any certificate issued under this subdivision shall be valid
for a period of two years unless sooner suspended or revoked
and may be renewed upon submission of proof satisfactory to
the commissioner that the individual continues to meet the
criteria established pursuant to this subdivision.
(4) The commissioner, after providing notice and an oppor-
tunity to be heard, may suspend or revoke any certificate issued
under this subdivision where it is found that the holder has failed
to comply with this section or any rules or regulations prom-
ulgated thereunder.
(5) The commissioner shall charge a fee not to exceed one
hundred dollars upon issuing or renewing an asbestos handling
certificate and a fee not to exceed one hundred dollars upon
certifying an individual as an asbestos investigator.
(e)(1) The commissioner shall prescribe forms for and the
content of an asbestos inspection report to be submitted in ac-
cordance with the provisions of subdivision a of section C26-118.9
of title C of chapter twenty-six of the code. Such report shall
require the furnishing of information deemed relevant by the
commissioner for evaluating the scope, complexity and dura-
tion of an asbestos project, and the compliance with the provi-
sions of this section, any regulations promulgated thereunder,
and any applicable federal and or state laws or regulations.
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(2) The commissioner may by regulation also require for any
work which is not subject to the provisions of subdivision a of
section C26-118.9 of title C of chapter twenty-six of the code
and for which a permit is required under sub-article 109.0 of
such tide that an asbestos investigator certify that the work to
be performed will not constitute an asbestos project or that an
asbestos inspection report be completed and submitted to the
department of building in conjunction with an application for
such permit. The commissioner may exclude from any regula-
tion promulgated pursuant to this paragraph certain types of
work within a permit category.
(f)(1) The commissioner shall promulgate regulations
establishing the requirements of an asbestos removal plan to be
submitted in accordance with the provisions of subdivision c
of section C26-118.9 of title C of chapter twenty-six of the code
and shall specify the type or types of demolition and alteration
work for which such submission shall be required. Plans sub-
mitted shall be approved by the commissioner only upon a
satisfactory showing that such plan will effect compliance with
all applicable provisions of this section, regulations promulgated
thereunder, all applicable federal or state laws or regulations,
and, in addition, that to the extent feasible, the removal of
asbestos will be completed prior to the commencement of any
demolition work. No plan shall be considered for approval unless
accompanied by the payment of a fee established by the com-
missioner not to exceed one thousand dollars.
(2) The commissioner shall act within a reasonable time not
to exceed sixty days on an application for approval of an asbestos
removal plan, and shall notify the applicant in writing of his
or her approval or disapproval of the application. If an applica-
tion is disapproved, the commissioner shall set forth his objec-
tions in the notice of disapproval. Within sixty days after ser-
vice on the applicant of the notice of disapproval, the appli-
cant may request the commissioner to reconsider the applica-
tion by responding in writing to the stated objections. The com-
missioner shall consider the applicant’s responses to his objec-
tions, and shall notify the applicant in writing within a
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reasonable time, not to exceed sixty days, of his approval or denial
of the application. Failure to respond to the stated objections
or request an extension of time within sixty days after service
of the notice of disapproval shall be deemed-a denial of the
application.
(g) The commissioner may promulgate any regulations he
or she deems necessary to protect the health and safety of workers
and the public in connection with work not constituting an
asbestos project in which asbestos is or is likely to be disturbed.
(h) A notice or order to stop work may be issued by the com-
missioner, or his authorized representative, at any time when
it is found that work is being performed in violation of the pro-
visions of this section, or any rules or regulations promulgated
thereunder and which poses a threat to human safety. Such
notice or order may be given orally or in writing to the owner,
lessee or occupant of the property involved, or to the agent of
any of them, or to the person or persons performing the work
and may require all persons in or about the building or premises
to vacate the same forthwith, and also require such work to be
done as, in the opinion of the commissioner, may be necessary
to remove any danger therefrom. Such notice or order shall be
valid for a period of time not to exceed seventy-two hours and
may be extended only upon application to the board in accord-
ance with the provisions of section 1403.2-15.01 of this code.
(i) The commissioner may promulgate any additional
regulations he or she deems necessary to effectuate the purposes
of this section.
§8. The table of civil penalties contained in subparagraph
A of paragraph five of subdivision b of section 1403.2-15.01 of
such part of such chapter of such code, as added by loca! law
number seventy-five for the year nineteen hundred eighty-two,
is amended by inserting between the penalty prescribed for a
violation of section 1403.2-9.11(f) and the penalty prescribed for
a violation of section 1403.2-9.13 the following penalties:
=
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Civil Penalties
Maximum Minimum
1403.2-9.12; provided that such
$1,000-$10,000 penalty 10,000.00 1,000.00
shall not apply to violations
of 1403.2-9.12 (b)(1)
1403-2-9.12 (b)(1) 1,000.00 250.00
§9. Within eighteen months of the enactment of this local
law, the commissioner of environmental protection shall sub-
mit to the council a report identifying and evaluating the poten-
tial risks, if any, which may be posed to workers and the general
public from asbestos which is not disturbed by renovation, altera-
tion or demolition work and recommending action deemed ap-
propriate to ameliorate such risks as may be identified.
§10. This local law shall take effect sixty days after its enact-
ment into law except that section C26-118.9 of article one of part
two of the administrative code of the city of New York as added
by section six of this local law and paragraphs one and two of
subdivision b of section 1403.2-9.12 of part two of chapter fifty-
seven of the administrative code of the city of New York as added
by section seven of this local law shall take effect one year after
its enactment.
THE Crry oF New York, OFFICE OF THE Crry CLERK, S:.s.:
I hereby certify that the foregoing is a true copy of a loca!
law of The City of New York, passed by the Council on
November 19, 1985, and approved by the Mayor on December
2, 1985.
DAVID N. DINKINS, City Clerk, Clerk of the Council.
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Oo”
at
CERTIFICATION PURSUANT TO MUNICIPAL HOME RULE Law §
Pursuant to the provisions of Municipal Home Rule Law § 27,
I hereby certify that the enclosed local law (Local Law 76 of
1985, Council Int. No. 891-B) contains the correct text and,
received the following vote at the meeting of the New York City
Council on November 19, 1985: 35 for, 0 against.
Was approved by the Mayor on December 2, 1985
Was returned to the City Clerk on December 3, 1985.
HADLEY W. GOLD, Acting Corporation Counsel
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.