Opposition Brief — Dawson v. Halperin

No. 94-624 ¢/. 2 it. FD |

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IN THE a

| Critus ie to. Ver’? |

Supreme Court of the UniterStates

OCTOBER TERM, 1994

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JOAN DAWSON, PAUL DAWSON and TANDRA DAWSON,

Petitioners,

—against—

DONALD M. HALPERIN, Commissioner of the New York State

Division of Housing and Community Renewal, and THE

CITY OF NEW YORK,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

NEW YORK STATE COURT OF APPEALS

RESPONDENT DONALD M. HALPERIN’S

BRIEF IN OPPOSITION

G. OLIVER KOPPELL

Attorney General of the

State of New York

Attorney for Respondent

Donald M. Halperin

JERRY BOONE 120 Broadway

Solicitor General New York, New York 10271

Counsel of Record (212) 416-8618

CHARLES F. SANDERS

JUNE DUFFY

Assistant Attorneys General

of Counsel

Questions Presented

1. Did the New York State Court of Appeals properly

dismiss petitioners’ appeal on the ground that the issues

presented have become moot.

2. Do the New York rent control provisions which protect

a tenant who has resided in an apartment for twenty years or

longer from eviction by a landlord seeking possession of the

apartment for his personal use violate any right guaranteed

petitioners under the Fifth, Thirteenth or Fourteenth Amend-

ments to the Constitution of the United States.

TABLE OF CONTENTS

PAGE

Connotiamn FOOGGRIDE, o:6o5ciscs0ccacicucdsecabakeuaies: i

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SIP GOCRN isis ccvacicscvsctvinessxussceeaees ]

Senso CHE TRG Cs a cic casts ccaedccdiss sani 2

A. New York’s Protection Of Tenants Who Have

Resided In Rent Controlled Apartments For

Twenty Years Or Lomger.........ccccccccesss 2

i. PURE Ch ns b kes heswcbasdcanddecsa<: 4

REASONS FOR DENYING THE WRIT............... 6

I. The Issues Which Petitioners Raise In This

Proceeding Have Been Rendered Moot By

The Permanent Departure Of The Tenants

SVGHE Peter SG ove beech ctnenccsccs:. 6

II. The Challenged Provisions Do Not, In Any

Event, Effect A Taking Of Petitioners’

PUR kiccqcussadishabenbedinninatbetess~s:s 7

A. There Has Been No Physical Taking ... 9

B. There Has Been No Regulatory Taking. 11

1. Economically Viable Use Of

Conclusion

2. Advancement Of Legitimate State

Nth lees iaaussanienasaw keds

eererereeeeseeeeeeeeeeeeeeeeeseeeeeeeeeeeeseeeeses

PAGE

iV

TABLE OF AUTHORITIES

Cases: PAGE

Agins v. City of Tiburon, 447 U.S. 255 (1980)......... 12

Barbier v. Connolly, 113 U.S. 27 (1884) .............. 7

Benson Realty Corp. v. Beame, 50 N.Y.2d 994 (1980),

appeal dismissed, 449 U.S. 1119 (1981).......... 8

Block v. Mirsck, 56 U.S. 135 (19281)... cccccceses: 13

Bowles v. Willingham, 321 U.S. 503 (1944) ............ 8,13

Braschi v. Stahl Associates Co., 74 N.Y.2d 201

8. , BRERA Ay SN ae Bah nae a a 13

Bucho Holding Co. v. Temporary State Housing Rent

Comm'n, 11 N.Y.2d 464 (1962)................... S)

Chicago, Burlington & Quincy R.R. Co. v. Chicago,

ae ye Seo) pre ree nr err rre 7

Concrete Pipe and Products of California v. Construction

Laborers Pension Trust for Southern California,

RAS DA Bee COE ecb eas vivevedadarwirdcneser. 12

Dolan v. City of Tigard, 114 S.Ct. 2309 (1994) ....... 10, 12

Euclid v. Ambler Realty Co., 272 U.S. 365 (1926) .... 12

First English Evangelical Lutheran Church v.

Los Angeles, 482 U.S. 304 (1987) ................ 6

Granat v. Keasler, 663 P.2d 830 (Wash. 1983) ........ 14

Hadacheck v. Sebastian, 239 U.S. 394 (1915)......... 12

1.L.F.Y. Co. v. Temporary State Housing Rent Comm'n,

10 N.Y.2d 263 (1961), appeal dismissed, 369

TR Met rer ren ty or heer Dene coe 9

PAGE

Kennedy v. City of Seattle, 617 P.2d 713 (Wash. 1980). 14

Keystone Bituminous Coal Ass'n v. DeBenedictis,

Ge Wis i oa hie bdo ob Mdncdreedbindes Fe Bhs Be

Lavalle v. Scruggs-Leftwich, 133 A.D.2d 313

ESB gy. RET ey TeV rts Peers Cy eee ee Eee

Loab Estates, Inc. v. Druhe, 300 N.Y. 176 (1949).....

Lopez v. Mirabel, 127 A.D.2d 771 (2d Dep’t 1987) ...

Loretto v. Teleprompter Manhattan CATV Corp.,

Re ee BR OP rr ores reer rere 8,9, 13

McMurray v. DHCR, 135 A.D.2d 235 (1st Dep’t),

Fe Fe Fir Bee BEE CEO es occ ckvcccranscenes

Nollan v. California Coastal Comm'n, 483 U.S.

ee Cs 5a ha SoS CENTAGE Sian pep eRe aetaece ds

Penn Central Transportation Co. v. City of New York,

Se Bes FE i Sic eo i av chart ine nsheb< oi

Pennell v. City of San Jose, 485 U.S. 1 (1988) ........

People ex rel. Durham Realty Corp. v. La Fetra,

ey A ER ae oe ee

Polednak v. Rent Control Board of Cambridge,

494 N.E.2d 1025 (Mass. 1986) ...................

Rent Stabilization Ass'n v. Higgins, 83 N.Y.2d 156

(1993), cert. denied, 114 S.Ct. 2693 (1994).......

Seawall Assoc. v. City of New York, 74 N.Y.2d 92,

cert. denied, 453 U.S. 976 (1989)............. 4-5, 8, 11

Sobei v. Higgins, 188 A.D.2d 286 (1st Dep’t 1992),

appeal dismissed, 81 N.Y.2d 953, leave to appeal

Gonbed, GS .F.BG GSS CAGGS) cnccccicsccnccccecss

vi

PAGE

Sourian v. Higgins, 170 A.D.2d 258 (1st Dep’t 1991). 5

Spring Realty Co. v. New York City Loft Board,

69 N.Y.2d 657 (1986), appeal dismissed,

"i Pg A peer . a

Teeval Co. v. Stern, 301 N.Y. 346, cert. denied,

PS As ee CRE ish acs tes deueudhuccédéusincces 9

Yee v. City of Escondido, 112 S.Ct. 1522

SUC h ed po dwus CiadedcdenGareeeienhecnnd es 5, 8, 10, 12

Statutory and Regulatory Materials

| __RERE SRS ae Cae eee ge Pere Se Se 3, 11

Ns cicvns4vscuenden voeasansnadkishana 2

Pe Is 5 is ccnk ate vevesseceiewenametnn 2

New York City Admin. Code § 26-408 ................ a BS

New York City Admin. Code § 26-408(b)(1).......... 2

I Hiei od. oneinsncsteataehe sabes babans kee’ 4

Miscellaneous

Bill Jacket, 1984 Laws of New York, C.234........... 3

IN THE

Supreme Court of the United States

OCTOBER TERM, 1994

No. 94-624

ee

JOAN DAWSON, PAUL DAWSON and TANDRA DAWSON,

Petitioners,

—against—

DONALD M. HALPERIN, Commissioner of the New York State

Division of Housing and Community Renewal, and THE

CITY OF NEW YORK,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

NEW YORK STATE COURT OF APPEALS

a

RESPONDENT DONALD M. HALPERIN’S

BRIEF IN OPPOSITION

Introduction

Respondent Donald M. Halperin respectfully submits that

the petition for a writ of certiorari should be denied in this

challenge to New York State regulations which protect tenants

who have resided in a rent-controlled apartment for twenty

years or longer from eviction. The issues in this proceeding

have, as the New York Court of Appeals held, become moot.

Moreover, the decision of the Appellate Division upholding

the regulations is not in conflict with decisions of this Court

or at odds with holdings in any other jurisdiction.

Statement Of The Case

A. New York’s Protection Of Tenants Who Have Resided

In Rent-Controlled Apartments For Twenty Years Or

Longer

In order to evict a tenant from a rent-controlled apartment,

a landlord, in most instances, must first obtain a certificate of

no objection to eviction issued by the New York State Divi-

sion of Housing and Community Renewal (“DHCR”). 9

NYCRR § 2204.2.

Under Section 26-408(b)(1) of the New York City Rent

Control Law and Section 2204.5(a) of the City’s Rent Control

Regulations, a certificate of eviction may be issued “where

the landlord seeks in good faith to recover possession of a

housing accommodation because of immediate and com-

pelling necessity for his own person use and occupancy, or for

the personal use and occupancy of his immediate family. . .”

However, the rent control law and regulations prohibit the

landlord from issuing such a certificate where the tenant is

either disabled or over sixty-two years old, or has resided in

the apartment for at least twenty years. § 26-408(b)(1), City

Rent Control Law; 9 NYCRR § 2204.5(a).

The purpose of this prohibition has been stated as follows:

Allowing landlords to evict senior citizens and disabled

persons could result in financial and physical hardship.

These individuals tend to be less mobile, of failing

health, and have limited or fixed incomes. Areas with

rent regulation have opted to have such regulations as a

result of a declared housing shortage. These factors

make it extremely difficult for these tenants to find safe,

decent and affordable housing elsewhere.

Similarly, long-term tenants of two decades are often

elderly, although not 62 years of age, and have limited

incomes. These tenants, by virtue of their longevity, have

become an integral part of their community and have not

violated their obligations to the landlord. In view of this,

these individuals should be afforded protection from

eviction since forcing them out of their housing accom-

modations after 20 years could have a devastating effect

on them and their community.

Bill Jacket, 1984 Laws of New York, c. 234 at 8.

Despite the fact that a tenant who has resided in the same

apartment for twenty years or longer may otherwise qualify

for protection under these provisions, the landlord may nev-

ertheless seek the tenant’s eviction and recover possession for

his own use where (1) the tenant is violating a substantial

obligation of the tenancy, committing or permitting a nui-

sance, damaging the premises, substantially interfering with

the comfort or safety of the landlord or other tenants, refus-

ing the landlord access to make repairs, or refusing to execute

a renewal lease; (2) a subtenant of the tenant is in occupancy

after the expiration of any lease; (3) subject to certain con-

ditions, possession is sought for the purpose of demolishing

or substantially altering the premises; and (4) the landlord

wishes to withdraw the premises from the market on the

ground that its continued operation would impose undue hard-

ship upon the landlord, and the rent regulatory authority finds

that there is no reasonable possibility that the landlord can

make a net annual return of 8 1/2% of the assessed value of

the subject property and the landlord and the landlord’s

immediate predecessor have not intentionally or wilfully man-

aged the property to impair the ability to earn such a return.

N.Y.C. Admin. Code § 26-408; 9 NYCRR § 2204.

B. Prior Proceedings

In August, 1990, petitioners commenced this declaratory

judgment action by filing a verified complaint in the Supreme

Court of the State of New York challenging the constitu-

tionality of the bar to the eviction of twenty-year tenants.

Petitioners had purchased a five-story brownstone in New

York City in November, 1983. They knew, at the time, that the

building contained at least two rent-controlled tenants who

had lived in the building since 1970. (A. 3a).' In 1990, peti-

tioners wished to evict these tenants in order to obtain the

units for their own use and occupancy but believed they were

prevented from doing so by reason of the protections afforded

twenty-year residents by the challenged provisions. In their

lawsuit, petitioners alleged that the enforcement of the pro-

visions subjected them to a compelled tenancy, constituting a

physical and regulatory taking of property and a violation of

due process and the prohibition against involuntary servitude.

(A. 18a-19a).

Following cross-motions for summary judgment, State

Supreme Court dismissed the complaint in its entirety for fail-

ure to state a cause of action and upheld the constitutionality

of the challenged provisions. (A. 16a-2Sa).

In April, 1994 the Appellate Division, First Department,

unanimously affirmed the lower court’s ruling. 197 A.D.2d

127 (1st Dep’t 1994). (A. 2a-15a).* In its decision, the Appel-

late Division rejected petitioners’ claim that the New York

Court of Appeals’ ruling in Seawall Assoc. v. City of New

References preceded by “A” are to pages of the appendix to the

petition.

. After the entry of judgment, petitioners sought a direct appeal

as of right to the New York State Court of Appeals pursuant to CPLR

§ 5601(b)(2). By order entered October 29, 1992, the Court of Appeals

transferred the appeal to the Appellate Division, First Department “upon

the grounds that a direct appeal does not lie when questions other than

the validity of a statutory provision are involved.” (A. 26a).

York, 74 N.Y.2d 92, cert. denied, 453 U.S. 976 (1989), and

this Court’s decision in Yee v. City of Escondido, 112 S.Ct.

1522 (1992), required an invalidation of the challenged reg-

ulations. Rather, the court found that the tenant protections

involved here are predicated on a pre-existing relationship

between the owners and the tenants. Thus, the court con-

cluded that no physical taking was effected since the restric-

tion of the challenged regulations is imposed on existing

tenancies where the landlords had already put their properties

to use for residential housing. The court further concluded

that the leases involved were not perpetual since there were

numerous circumstances which might develop terminating the

tenancy.

As to petitioners’ claim of a regulatory taking, the court

rejected the argument that the challenged regulations frus-

trated their reasonable investment-backed expectations. As

the court pointed out, any reasonable expectations petitioners

had of evicting the two tenants in question must have been a

qualified one since they knowingly purchased a premises that

was highly regulated. Further, the protection of long-term ten-

ants was held to serve a legitimate government purpose.’

Additionally, the Appellate Division held that the regula-

tions protecting twenty-year tenants from eviction do not

compel petitioners to remain landlords against their will. In

fact, the court found petitioners’ claim of involuntary servi-

tude, as well as their due process claim, “frivolous.”

Petitioners’ appeal to the Court of Appeals was thereafter

dismissed as moot on July 7, 1994, after petitioners informed

. In rejecting the petitioners’ takings arguments, the court pointed

out that an identical challenge to these same regulations had recently

been rejected in a previous case. Sobel v. Higgins, 188 A.D.2d 286 (Ist

Dep’t 1992), appeal dismissed, 81 N.Y.2d 953, leave to appeal denied,

82 N.Y.2d 655 (1993). See also Sourian v. Higgins, 170 A.D.2d 258 (lst

Dep’t 1991); McMurray v. DHCR, 135 A.D.2d 235 (1st Dep’t), aff’d, 72

N.Y.2d 1022 (1988); Lopez v. Mirabel, 127 A.D.2d 771 (2d Dep’t 1987);

Lavalle v. Scruggs-Leftwich, 133 A.D.2d 313 (1st Dep’t 1987).

the court that the two twenty-year tenants residing in the peti-

tioners’ building had vacated their respective apartments.

(A. la).

REASONS FOR DENYING THE WRIT

I. The Issues Which Petitioners Raise In This Proceeding

Have Been Rendered Moot By The Permanent

Departure Of The Tenants From Their Apartments

The New York State Court of Appeals dismissed petition-

ers’ appeal on the ground of mootness after being informed by

petitioners’ counsel that the two tenants in their building who

had resided there for more than twenty years had permanently

left the premises. Petitioners now argue that the proceeding is

not moot, even though the tenants have vacated the premises,

because they suffered damages during the period when they

could have evicted the tenants but were barred by New York

regulations from doing so. They maintain that the dismissal of

their appeal deprived them of compensation for a temporary

taking under First English Evangelical Lutheran Church v.

Los Angeles, 482 U.S. 304 (1987), which held

that where the government’s activities have already

worked a taking of all use of property, no subsequeni

action by the government can relieve it of the duty to

provide compensation for the period during which the

taking was effective.

Id. at 321. Petitioners are mistaken.

in First English, the plaintiffs brought an inverse con-

demnation suit seeking damages for what they claimed was an

uncompensated taking effected by restrictions which the

County of Los Angeles had placed on the use of their prop-

erty. They did not seek an injunction against the enforcement

of the Los Angeles ordinance in question. This Court merely

held that, should the plaintiffs prevail in establishing that the

ordinance violated their constitutional rights, they would be

entitled to damages which they incurred during the temporary

period when they were legally prevented from using their

property as they wished.

Here, on the other hand, petitioners brought this declaratory

judgment action solely to prohibit the State from imple-

menting its regulations. They never suggested that they were

seeking damages. Rather, they sought only to be able to evict

their two tenants and use their property for their own personal

enjoyment.

The fact that the tenants no longer reside in their building

has rendered the case moot. Petitioners are now entitled to

fully enjoy the use of their entire building. Their attempt to

preserve this case by belatedly raising the possibility that they

are entitled to damages for the period when the tenants

remained in occupancy should be rejected.

II. The Challenged Provisions Do Not, In Any Event,

Effect A Taking Of Petitioners’ Property

Property interests are protected against governmental inter-

ference by two provisions of the United States Constitution:

1) the due process clause of the Fourteenth Amendment and

2) the taking without just compensation clause of the Fifth

Amendment.

Property rights under these constitutional! provisions, how-

ever, are not absolute. Rather, such rights have long been sub-

ject to uncompensated restrictions through a state’s exercise

of its police power in prescribing regulations “to promote the

health, peace, morals, education, and good order of the peo-

ple.” Barbier v. Connolly, 113 U.S. 27, 31-32 (1884). As this

Court explained in Keystone Bituminous Coal Ass'n v.

DeBenedictis, 480 U.S. 470, 491 (1987), “under our system of

government, one of the state’s primary ways of preserving the

: The just compensation clause is applicable to the states through

the Fourteenth Amendment. See Chicago, Burlington & Quincy R.R. Co.

v. Chicago, 166 U.S. 226, 236 (1897).

public weal is restricting the uses individuals can make of

their property . . . . These restrictions are ‘properly treated

as part of the burden of common citizenship’.” (citation

omitted).

With respect to landlords and tenants, this Court has noted

that the “ ‘states have broad power to regulate housing con-

ditions in general and the landlord-tenant relationship in par-

ticular without paying compensation for all economic injuries

that such regulation entails.’ ” Pennell v. City of San Jose, 485

U.S. 1, 12 n.6 (1988) (quoting Loretto v. Teleprompter Man-

hattan CATV Corp., 458 U.S. 419, 440 (1982)). Similarly, in

Seawall Assoc. v. City of New York, 74 N.Y.2d at 112 n.11, the

New York Court of Appeals pointed out that “government has

considerable latitude in regulating landlord tenant relation-

ships to preclude eviction in hardship, emergency and rent-

control cases.”

Through the years, federal, state and local governments

have, in response to significant housing shortages, enacted

legislation declaring the existence of a serious public emer-

gency and restricting the ability of landlords to raise rents and

evict tenants. This Court and the New York Court of Appeals

have consistently upheld these restrictions and rejected claims

that such measures constitute an improper taking without just

compensation.°

See, e.g., Yee v. City of Escondido, 112 S.Ct. at 1522 (rent con-

trol ordinance did not amount to a physical taking); Pennell v. City of San

Jose, 485 U.S. at 1 (rent control ordinance not facially unconstitutional);

Bowles v. Willingham, 321 U.S. 503 (1944) (upholding federal law which

fixed maximum rents that could be charged in defense-rental areas); Rent

Stabilization Ass'n v. Higgins, 83 N.Y.2d 156 (1993), cert. denied, 114

S.Ct. 2693 (1994) (right of family members to succeed to rent stabilized

tenancy did not effect a taking of landlords’ property); Spring Realty Co.

v. New York City Loft Board, 69 N.Y.2d 657 (1986), appeal dismissed,

482 U.S. 911 (1987) (statute providing loft residents with status as rent-

stabilized tenants did not constitute a “taking”); Benson Realty Corp. v.

Beame, 50 N.Y.2d 994, 996 (1980), appeal dismissed, 449 U.S. 1119

(1981) (rejecting claim that the continuation of the New York City Rent

yr

Here, too, there has been no unconstitutional taking of a

landlord’s property. The challenged rent control provisions

protect vulnerable persons from eviction where a landlord

seeks their apartments for his own use and occupancy. Pro-

tecting such persons from eviction does not violate the peti-

tioners’ constitutional rights.

A. There Has Been No Physical Taking

In Loretto v. Teleprompter Manhattan CATV Corp., 458

U.S. 419, 434-435 (1982), this Court explained that where the

character of governmental action is a permanent physical

occupation—either by the government itself or by a third

party authorized by the government to do so—a compensable

taking will be found “to the extent of the occupation, without

regard to whether the action achieves an important public

benefit or has only minimal economic impact on the owner.”

Elaborating on this rule, the Court, in Nollan v. California

Coastal Comm’n, 483 U.S. 825, 832 (1987), found that a

physical occupation—per se compensable—has occurred

where the government gives a stranger or a third party “a per-

Control Law effects an unconstitutional taking); Bucho Holding Co. v.

Temporary State Housing Rent Comm'n, 11 N.Y.2d 464 (1962) (finding

that the provision of the Emergency Housing Rent Control Law which

fixed the return to which a landlord is entitled was neither confiscatory

nor unconstitutional on due process grounds); /.L.F.Y. Co. v. Temporary

State Housing Rent Comm'n, 10 N.Y.2d 263, 268 (1961), appeal dis-

missed, 369 U.S. 795 (1962) (upholding rent control law and finding that

“prohibitions against rent increases may in an emergency be constitu-

tional although they reduce the value of the property regulated and

deprive its owner of what otherwise would be considered a fair return”);

Teeval Co. v. Stern, 301 N.Y. 346, 362 cert. denied, 340 U.S. 876 (1950)

(holding that state rent control statute “does not contemplate a taking of

the property of any landlord”); Loab Estates, Inc. v. Druhe, 300 N.Y. 176,

180 (1949) (upholding New York City law restricting the right of land-

lords to evict tenants and, in doing so, noting that “similar restrictions

upon the power of a landlord” had previously been affirmed); People ex

rel. Durham Realty Corp. v. La Fetra, 230 N.Y. 429 (1921) (state rent

control law upheld in face of claim that it constituted an improper taking

without just compensation).

10

manent and continuous right” to pass and repass across pri-

vate property. See also Dolan v. City of Tigard, 114 S.Ct.

2309 (1994).

Applying this standard, the Appellate Division properly

rejected petitioners’ physical taking claim, holding no phys-

ical taking of the landlords’ property existed since there was

hardly a permanent physical occupation by a stranger or third

party given that the tenants were already residing on the

premises when it was purchased by the petitioners.

Petitioners nevertheless argue that this Court’s decision in

Yee v. Escondido, 112 S.Ct. at 1522 requires a contrary result.

Petitioners are mistaken. Yee involved a physical taking chal-

lenge stemming from the interaction of a recently-enacted

local rent control ordinance and the California Mobile Home

Residency Law which provided that renters of mobile home

“pads” could unilaterally transfer their tenancies to unrelated

third parties. Park owners were no longer free to set rents or

decide who their tenants would be, and pad renters could sell

their mobile homes in place at a premium to any outsider of

their choice. The premium was attributable to the corre-

sponding right to occupy the pad on which the home stood at

a below-market rent. This Court rejected the owners’ claim,

holding that where owners voluntarily place their property on

the rental market, the government may limit rents and require

that landlords accept tenants whom they might wish to

exclude. 112 S.Ct. at 1529.

It is true, as petitioners point out, that the Court in Yee sug-

gested that laws which compel a landowner to refrain in per-

petuity from terminating a tenancy might produce a different

legal result. 112 S.Ct. at 1529. However, the rent control pro-

visions challenged here do not require a landlord to remain in

the rental market in perpetuity. Rather, they apply only to spe-

cific tenants. As the Appellate Division noted,

the occurrence of a number of events would allow the

landlord to recover [a twenty-year] tenant’s housing

accommodation. For instance, the landlord might recover

1]

the unit upon the tenant’s death or upon the tenant’s vio-

lation of a substantial obligation of the tenancy, or in

instances where the tenant is committing acts constitut-

ing a nuisance or permitting the same or permitting the

accommodation to be used for immoral or illegal pur-

poses; or upon the landlord’s decision to demolish or

substantially alter the premises or to withdraw the

premises from the rental market where there is no rea-

sonable possibility [of] realizing a net annual return of

8'/,% of the property’s assessed value. (See, New York

City Administrative Code § 26-408; 9 NYCRR § 2204.)

Plaintiffs have failed to make a showing that these con-

tingencies canne? occur.

(A. 9a-10a).

Since the owners here voluntarily purchased property

already used for residential housing and were only tem-

porarily limited from withdrawing two units from the rental

market, their takings claim is not supported by Yee. Their

argument is thus without merit.

B. There Has Been No Regulatory Taking

Governmental action affecting private property may con-

stitute a taking even if it does not result in the physical inva-

sion of such property. However, since government could

hardly function if it had to pay for every action that adversely

affects economic value, courts have never found a taking

merely because a regulation prevents the most profitable or

beneficial use of particular property. Rather, regulatory tak-

ings have been found only when challenged actions do not

substantially advance legitimate state interests or deny own-

ers economically viable use of their property. See, e.g., Nol-

lan v. California Coastal Comm’n, 483 U.S. at 834; Keystone

Bituminous Coal Ass'n v. DeBenedictus, 480 U.S. at 485;

Seawall, 74 N.Y.2d at 107. Petitioners have failed to make

such a showing.

12

1. Economically Viable Use Of Property

To deprive an owner of the economically viable use of his

land, a regulation must make it “impossible” or “commer-

cially impracticable” for the owner to profitably engage in his

business, or unduly interfere with the owner’s reasonable

“investment-backed expectations.” Keystone, 480 U.S. at 485,

495-96; Agins v. City of Tiburon, 447 U.S. 255, 262 (1980);

Penn Central Transportation Co. v. City of New York, 438

U.S. 104, 124, 127, 136 (1978).

New York’s rent control law was first enacted forty-two

years ago. Any subsequent purchaser of rent-controlled hous-

ing was on notice that he was investing in a heavily regulated

market with significant constraints on profit, eviction and dis-

posal of property. Petitioners, therefore, cannot reasonably

complain that the provisions unfairly interfered with their use

of their property.

In any event, as this Court noted in a recent takings deci-

sion, Concrete Pipe and Products of California v. Construc-

tion Laborers Pension Trust for Southern California, 113

S.Ct. 2264, 2291 (1993):

. . our cases have long established that mere diminu-

tion in the value of property, however serious, is insuf-

ficient to demonstrate a taking. See, e.g., Euclid v.

Ambler Realty Co., 272 U.S. 365, 384, 47 S. Ct. 114,

117, 71 L.Ed. 303 (1926) (approximately 75% diminu-

tion in value); Hadacheck v. Sebastian, 239 U.S.

394, 405, 36 S.Ct. 143, 60 L.Ed. 348 (1915) (92.5%

diminution).

See also Yee v. City of Escondido, 112 S.Ct. at 1529; Dolan v.

City of Tigard, 114 S.Ct. 2309. Since petitioners have not

demonstrated that they are suffering complete economic hard-

ship,® they have failed to satisfy this prong of a regulatory tak-

ings claim.

6

Indeed, petitioners do not disagree and admit that they cannot

demonstrate economic hardship. Pet. at 13 n.7.

<page Eee SHENG ine RIabeR Pete pT Ye

13

2. Advancement Of Legitimate State Interests

The purposes served by the provisions—the control of

rental costs and the preservation of affordable housing and

moderate income neighborhoods—are valid governmental

concerns. See, e.g., Pennell v. City of San Jose, 485 U.S. at 13

(“a legitimate and rational goal. . . is the protection of con-

sumer welfare”); Loretto v. Teleprompter Manhattan CATV

Corp., 458 U.S. at 440 (“The States have broad power to reg-

ulate housing conditions”); Bowles v. Willingham, 321 U.S. at

503 (upholding statute whose aim was “the effective protec-

tion of our price structure”); Block v. Hirsch, 256 U.S. 135

(1921) (approving rent control in Washington, D.C. on the

basis of Congress’ finding that housing in the city was

“monopolized”). In Pennell, the Court identified the “pre-

ven[tion of] excessive and unreasonable rent increases,” the

“protection of consumer welfare” by limiting rents, and

“reducing the costs of dislocation” as legitimate public pur-

poses. 485 U.S. at 14 n.8.

The prevention of egregious evictions has long been con-

sidered a legitimate state interest, especially in the context of

housing shortages. In fact, recent New York decisions have

emphasized the proprietary of governmental action to reduce

dislocation of residents from their apartments and commu-

nities. Thus, in Braschi v. Stahl Assoc. Co., 74 N.Y.3d 201,

213 (1989), the Court of Appeals recognized one of the pur-

poses of the rent control laws to be “the protection of indi-

viduals from sudden dislocation,” (plurality opinion) or, as

Stated in the concurring opinion (Bellacosa, J.), “protection

against one of the harshest decrees known to the law—evic-

tion from one’s home.” /d. at 215; see also Rent Stabilization

Ass'n v. Higgins, 83 N.Y.2d at 156 (1993) (family members

residing in rent-controlled unit allowed to continue to do so

upon named tenant’s death).

Thus, the challenged provisions, which prevent the eviction

of the most vulnerable members of the tenant population, sub-

14

stantially advance legitimate governmental purposes in a

manner sufficient to survive constitutional scrutiny.’

’ Petitioners argue that the decision of the Appellate Division con-

flicts with the decisions of two other state courts. See Pet. at 16-17 (cit-

ing Granat v. Keasler, 663 P.2d 830 [Wash. 1983]; Kennedy v. City of

Seattle, 617 P.2d 713 [Wash. 1980] and Polednak v. Rent Control Board

of Cambridge, 494 N.E.2d 1025 [Mass. 1986]). These cases, however, do

not provide any such conflict or “split”. To be sure, in each case, the

court struck down a law which placed restrictions on an owner’s ability

to take his property off the rental market and occupy it for his own enjoy-

ment. Nevertheless, in none of these cases did the court even suggest that

under reasonable circumstances, such as where the tenants are elderly or

otherwise long-standing occupants, the government could not prevent the

eviction of tenants by an owner seeking to occupy the premises. Rather,

in each of the cases cited by petitioners, the law was struck down becausc

of a unique factor which placed unreasonable limits on the owner. See

Granat, 663 P.2d 830 (landlord prohibited from the intended use of the

property, but not the tenant); Kennedy, 617 P.2d at 713 (landlord required

to locate a nonexistent moorage for a houseboat owner in order to evict

the owner and occupy the site himself); Polednak, 494 N.E.2d 1025

(retroactive application of ordinance prevented resident tenant who later

purchased apartment to continue to occupy unit).

15

CONCLUSION

BY REASON OF THE FOREGOING, THE PETITION

FOR WRIT OF CERTIORARI SHOULD BE DENIED

Dated: New York, New York

November 9, 1994

Respectfully submitted,

G. OLIVER KOPPELL

Attorney General of the

State of New York

Attorney for Respondent

Donald M. Halperin

120 Broadway

New York, New York 1027!

(212) 416-8618

JERRY BOONE

Solicitor General

Counsel of Record

CHARLES F. SANDERS

JUNE DUFFY

Assistant Attorneys General

of Counsel