# Petition for Writ of Certiorari — Kaufman v. City of New York > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_1186%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1990 - **Citation:** 495 U.S. 957 ## Text No. iF Supreme Court, U.S. EEE D = 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. A-40 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 b [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_1186%3A1. Public record. Not legal advice.