Petition for Writ of Certiorari — Lenox Hill Hospital v. Manocherian

Supreme Court, U.S.

No. FILED

OFFIGe Ur tire UecKk

IN THE

Supreme Court of the Hnited States

OCTOBER TERM, 1994

a

LENOX HILL HOSPITAL, A NEW YORK

NOT-FOR-PROFIT CORPORATION,

Petitioner,

AMIR MANOCHERIAN, ROSITA MANOCHERIAN, ALAN

MANOCHERIAN, ROBERT MANOCHERIAN, and BARBARA

MANOCHERIAN, d/b/a FAME COMPANY, et al.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE NEW YORK COURT OF APPEALS

PETITION FOR A WRIT OF CERTIORARI

EDWARD S. KORNREICH

Counsel of Record

CHARLES S. SIMS

MARK P. MONACK

Proskauer Rose Goetz &

Mendelsohn LLP

1585 Broadway

New York, New York 10036

(212) 969-3000

Counsel for Petitioner

5

;

QUESTIONS PRESENTED

1. May one who purchases an apartment building while it is

subject to statutory rent stabilization challenge the law that

maintains that regulatory regime under the Takings Clause, years

later, without any showing of economic loss or unjust

compensation?

2. Is economic legislation that does not effect a physical

taking subject to the close causal nexus scrutiny required under

Nollan v. California Coastal Comm’n, 483 U.S. 825 (1987), and

Dolan v. City of Tigard, 114 S. Ct. 2309 (1994), for ad hoc

permit conditions that do effect a physical taking?

3. Does the Takings Clause authorize the invalidation of

economic regulations without any showing of economic loss or

assessment of “just compensation,” upon nothing more than a

Lochner-like determination that the regulatory statute does not

substantially advance a legitimate state interest? If the answer to

that question is no, did the Court of Appeals’ invalidation of a

rent stabilization statute in this case exceed the authority afforded

by the Takings Clause?

ee eo ey |

il

LIST OF PARTIES

In addition to those listed on the cover, respondents include

the State of New York, which appeared in the state courts as an

intervenor to defend the statute whose validity was called into

question and which is filing its own petition for certiorari, and T.

O’Connor, C. Rogers, D. Huczel, K. Moore, N. Kolan and I.

Liebel, the nurses occupying the apartments under the Lenox Hill

leases, who were designated as additional defendants below,

although they did not participate or appear by counsel.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ........------eeee- i

ge Be A ane a a a il

TABLE OF AUTHORITIES .....- 0c eee cceees V

oo 6 8S. A a a ee er a l

EES ee ee ae ee ee ee l

rp uetge > U0. By + 2

STATEMENT OF THE CASE ........---+-e0-- 4

REASONS FOR GRANTING THE WRIT ........-.-.- 12

I. THE NEW YORK DECISION CONFLICTS

WITH DECISIONS HOLDING THAT

PLAINTIFFS WHO CANNOT SHOW

ECONOMIC LOSS MAY NOT CHALLENGE

ECONOMIC REGULATION AS A

REGULATORY TARING ......00 cece eens 12

Il. STATE AND FEDERAL COURTS ARE

CONFLICTED AS TO WHETHER THE “CLOSE

CAUSAL NEXUS” TEST OF DOLAN APPLIES

TO REGULATORY TAKINGS CHALLENGES

TO ECONOMIC LEGISLATION ...........-.- 16

Ill. THE NEW YORK COURT’S INVALIDATION

OF A STATE STATUTE AS A REGULATORY

TAKING FOR NOT “SUBSTANTIALLY

ADVANCING A LEGITIMATE STATE

INTEREST” IS IN CONFLICT WITH

DECISIONS CAREFULLY NARROWING

JUDICIAL POWER TO STRIKE DOWN DULY

ENACTED LEGISLATION AND RESURRECTS

THE DISCREDITED LOCHNER DOCTRINE .... 18

iV

Page

IV. THE NEW YORK COURT’S INVALIDATION

OF A STATE STATUTE AS A REGULATORY

TAKING WITHOUT INQUIRY INTO WHETHER

COMPENSATION AFFORDED THE

LANDOWNER CONSTITUTED JUST COMPEN-

SATION CONFLICTS WITH NUMEROUS

LIER LOGINS CE BREED GADD 6 ee es

hr

to

Ce . 8 + hie eS Oe ORAS bed eae 24

APPENDIX

Orders of Associate Justice Ginsburg ............. la

Opinion of the New York Court of Appeals ......... 3a

Remittitur of the New York Court of Appeals ....... 44a

Decision and Order of the Appellate Division ....... 46a

Decision of Supreme Court, New York County ...... 59a

Emergency Tenant Protection Act, Ch. 403 (1983) .... 7la

Emergency Tenant Protection Act, Ch. 940 (1984) .... 74a

TABLE OF AUTHORITIES

CASES Page(s)

Agins v. City of Tiburon, 447 U.S. 255 (1980) .. 12, 13, 22

Bowles v. Willingham, 321 U.S. 503 (1944) ....----- 23

Cale Dev. Co. v. Conciliation & Appeals Bd., 61

a WY BOGS TIMER) 5 ww cc ccs ereeeees 5

Carson Harbor Village Ltd. v. City of Carson, 37 F.3d

468 (9th Cir. 1994) ...---- errr 13, 17

Connolly v. Pension Benefit Guaranty Corp.., 475 US.

ee cid ae se eee eee ee 14

Cox Broadcasting Corp. V. Cohn. 420 U.S. 469 (1975) . - . 2

Dames & Moore v. Regan, 453 U.S. 654 (1981) ...--- 13

Dolan v. City of Tigard, __ U-S. __. 114 S. Ct.

po) RI De a ace tle passim

Euclid v. Ambler Realty Co., 272 U.S. 365 (1926) ....- 19

F.C.C. v. Beach Communications, Inc., ___ 5. ae

113 S. Cr. ROG (1999) «0 ect’ 21

First English Evangelical Lutheran Church v. County of

Los Angeles, 482 U.S. 304 ‘) Ui eee Z, 12, 2

520 E. 81st Street Assocs. v. Lenox Hill Hosp., 38

at W 98 S25 (197G) . wc et tees 15

Goldblatt v. Hempstead, 369 U.S. 590 (1962) ..-.----: 13

vi

Hawaii Housing Auth. v. Midkiff, 467 U.S. 229

a ee re ere 21, 23

HFH, Ltd. v. Superior Court of Los Angeles County,

542 P.2d 237 (Cal. 1975), cert. denied, 425

ee Ek teh cased eae ee ee ee 13

Hodel v. Indiana, 452 U.S. 314 (1981) ............ 19

Hodel v. Irving, 481 U.S. 704 (1987) ........ 12, 13, 14

Hodel v. Virginia Surface Mining & Reclamation Ass'n,

ee | a ee ree eer ae 23

Keystone Bituminous Coal Ass'n v. DeBenedictis, 480

i Seneee sak sve se 408 dee es 12, 18

Lochner v. New York, 198 U.S. 45 (1905) ........ passim

Lucas v. South Carolina Coastal Council, __ US.

Jy SE at a ee IPED # a aa see ees eas 10

MacDonald, Sommer & Frates v. County of Yolo, 477

i Lee. s6ess vee 6 oak ae «se ee

Manocherian v. Lenox Hill Hosp., 154 Misc. 2d 982

(Sup. Ct. N.Y. Co. 1992), aff'd, 196 A.D.2d

728 (ist Dep’t 1993), rev'd, 84 N.Y.2d 385

SEE oa so os da he Oe eee es passim

Mountain Water Co. v. Montana Dep’t of Pub. Serv.

Regulation, 919 F.2d 593 (9th Cir. 1990) ...... 21

National R.R. Passenger Corp v. Boston & Maine

Cap. SUS U8. WEF GRE) ccc cee cae 19

Vil

Nollan v. California Coastal Comm’n, 483 U.S. 825

Cakes oa Nee REPRE passim

Nordlinger v. Hahn, ___ U.S. __, 112 S. Ct. 2326

a eee RET eee TEER ERT Oe 21

Parking Ass'n v. City of Atlanta, 450 S.E.2d 200 (Ga.

i Fk. ae eae Fee A ee ee 17

Penn Cent. Transp. Co. V. New York City, 438 U.S

I cee eed eed ke eee ees 12, 13, 23

Pennell v. City of San Jose, 485 U.S. 1 (1988) ..-- - 29, 23

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922) . . 12

Peterman v. Dep't of Natural Resources, 521 N.W.2d

499 (Mich. 1994) ...-----srrccrtt 17

Pruneyard Shopping Ctr. v. Robins, 447 U.S. 74

eek Lae eae eee eee Se YD! 13

Regan v. Wald, 468 U.S. 222 (1984) .------s° st" 20

Ruckelshaus v. Monsanto Co., 467 U.S. 986

De ee ao ae lle 14, 19, 21, 23

San Diego Gas & Elec. Co. v. San Diego, 450 U.S.

Met COUN vc en eee eo eerste ees 22, 23

Schaper v. Wallace, 1994 U.S. App. LEXIS 36186 (7th

Cir, Dac. 21, WOO ow cs ee crete et 13

United States v. Causby, 328 U.S. 256 (1946) ..----- 10

United States v. Darby, 312 U.S. 100 (1941) ...--->-> 22

is

Viil

United States v. Sperry Corp., 493 U.S. 52 (1989) ..... 13

Waters Landing Ltd. Partnership v. Montgomery

County, 1994 Md. LEXIS 157 (Md. Dec. 16,

Ss 66s a Se es be ee 17

West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937) .. 22

Woods v. Cloyd W. Miller Co., 333 U.S. 138 (1948) ... 21

Yee v. City of Escondido, 503 U.S. 519 (1992) ..... 6, 23

STATUTES

[it Se SS 6 a oO ee ee ee passim

ae Beas SPE 0k oe o's hae aN beh ee l

Pee a6. 5. ROG AS ei cease as p i

See sa, Ph oS oe ede ee ee eS passim

New York Court of Claims Act § 9.2 .............. 2

New York Executive Law $71.1... ccc ccc ee 2

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1994

LENOX HILL HOSPITAL, A NEW YORK NOT-FOR-

PROFIT CORPORATION, Petitioner,

—_—_V—

AMIR MANOCHERIAN et al., Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

NEW YORK COURT OF APPEALS

OPINIONS BELOW

The opinion of the New York Court of Appeals is published

at 84 N.Y.2d 385 (1994), and is reprinted in the appendix below

(“Pet. App.”) at 3a. The Order of the Court of Appeals is

reprinted at Pet. App. 44a. The Order of the Supreme Court of

New York. Appellate Division, dismissing the complaint, is

published at 156 A.D.2d 728 (1st Dep’t 1993), and is reprinted

at Pet. App. 46a. The opinion of the Supreme Court of

New York, New York County, on motions and cross-motions for

summary judgment, in favor of defendants, is published at 154

Misc. 2d 982 (Sup. Ct. N.Y. Co. 1992), and is reprinted at Pet.

App. 59a.

JURISDICTION

The New York Court of Appeals issued its opinion on Octo-

ber 20, 1994, and Justice Ginsburg has extended the time for

Lenox Hill to file this petition to March 20, 1995. See Pet. App.

la. 2a. This Court has jurisdiction under 28 U.S.C.

§ 1257(a)(1994). The decision is final within the meaning of

§ 1257(a), since the New York Court of Appeals has conclusively

invalidated a state statute as violative of the Takings Clause of the

United States Constitution and thereby finally deprived petitioner

2

of its rights under the state law. Cox Broadcasting Corp. v.

Cohn, 420 U.S. 469, 477-83 (1975); First English Evangelical

Lutheran Church v. County of Los Angeles, 482 U.S. 304, 309

(1987).'

STATUTES INVOLVED

The Fifth Amendment provides, in pertinent part, “. . . nor

shall private property be taken for public use, without just

compensation.”

Section 41(a) of the Omnibus Housing Act of 1983, 1983 N.Y.

Laws ch. 403, which is reprinted at Pet. App. 72a-74a, provides,

in pertinent part:

[The Rent Stabilization Laws apply to] Class

A multiple dwellings not owned by a co-

operative or as acondominium . . . containing

six Or more dwelling units which:

(1) were completed after February |, nineteen

hundred forty seven, except dwelling

units . . . (f) not occupied by the tenant, not

including sub-tenants or occupants, as his

Unlike eminent domain challenges brought by property owners,

which are not final until the state court addresses both the taking and

just compensation questions, see Cox Broadcasting, 420 U.S. at 477

n.6 (citation omitted), in this case the plaintiff-landlord sued the tenant

seeking only a declaration that tenant had no nght to renewal leases,

asserting that the statute under which tenant claimed those rights

violated the Takings Clause.

The state court decision striking the statute and granting that relief

is entirely final insofar as petitioner’s rights under the now-invalidated

statute are concerned. No question of compensation was pleaded or

remains to be tried. The complaint did not seek compensation from the

State, the state was not a party (except to defend the constitutionality of

the statute under New York Executive Law § 71), and jurisdiction over

such a claim would have been available only in the New York Court of

Claims. New York Court of Claims Act § 9.2.

a

3

primary residence, as determined by a Court

of competent jurisdiction. . . .

Section 64 of the Omnibus Housing Act of 1983, reprinted at Pet.

App. 73a-75a, states, in relevant part, “[Section] forty-one. .

shall take effect April first, nineteen hundred eighty-four . . .”

Chapter 940, 1984 N.Y. Laws ch. 940, approved August 6,

1984, which is reprinted at Pet. App. 76a-77a, provides in

relevant part:

notwithstanding the provisions of section two

hundred twenty-six-b of the real property law,

a not-for-profit hospital shall have the right to

sublet any housing accommodation leased by

it to its affiliated personnel without requiring

the landlord’s consent to any such sublease

and without being bound by the provisions of

subparagraphs (b), (c) and (f) of this

paragraph. Commencing with the effective

date of this subparagraph, whenever a not-for-

profit hospital executes a renewal lease for a

housing accommodation, the legal regulated

rent shall be increased by a sum equal to

fifteen percent of the previous lease rental for

such housing accommodation, hereinafter

referred to aS a vacancy surcharge, unless the

landlord shall have received within the seven

year period prior to the commencement date of

such renewal lease any vacancy increases OF

vacancy surcharges allocable to the said

housing accommodation.

Section 5 of Chapter 940, Pet. App. 79a, provides in relevant

part that “([t]his act shall take effect immediately and shall apply

to all actions or proceedings pending on the effective date of this

~~. Sears

\

4

STATEMENT OF THE CASE

1. Lenox Hill Hospital (“Lenox Hill” or “the hospital”) is a

not-for-profit acute-care teaching hospital located in the heart of

Manhattan’s Upper East Side, at Park Avenue and East 77th

Street, an area with among the highest rents in the nation.’

Because being able to ensure that medical staff can get to the

hospital at all hours is important to the well-being of iis patients,

the hospital sought moderate-cost employee housing in the

vicinity of the hospital. To this end, Lenox Hill, like many

hospitals in New York City, began renting apartments for use by

its employees in the 1960’s.

Lenox Hill originally leased eighteen apartments in the 108-

unit building at 420 East 79th Street (the “Building”) prior to

1969. It was understood by the parties that the apartments are to

be occupied by nursing personnel employed by Lenox Hill. All

of the apartments became subject to the rent stabilization laws

(“RSL”) on May 6, 1969. When the Manocherians, doing

business as Fame Company (“Landlord”), purchased the Building

in 1976, the leases to Lenox Hill were in effect and subject to the

RSL, and the market price for the Building would have reflected

this fact. From the time Landlord purchased the Building in

1976, through 1983, Landlord and Lenox Hill had no material

disputes as to possession of the apartments.

Under the basic protections of New York’s rent-stabilization

laws as they existed from 1969 to 1983, tenants in most

apartments in multiple dwellings in Manhattan (and specifically

in the building at issue here) were entitled to renewal leases, and

landlords’ ability to increase annual rents was restricted to city-

wide percentage increases set administratively from time to time,

with an additional limited increase available upon the death or

departure of a tenant. A long line of cases in New York had

previously held that a corporation could lease rent-stabilized

apartments for the use of their employees and obtain renewal

> Lenox Hill has no parents or subsidiaries.

5

leases. See, e.g., Cale Dev. Co. v. Conciliation & Appeals Bd.,

61 N.Y.2d 976 (1984).

In 1983, the legislature of the State of New York enacted the

Omnibus Housing Act (“OHA”) to take effect on April 1, 1984.

Among other things, the OHA was intended to correct two

undesired consequences that have arisen from the unfettered

ability of rent-stabilized tenants to sublet their apartments: 1)

some absentee tenants were profiteering by subletting rent-

stabilized apartments at market rates; and 2) some absentee

tenants were “warehousing” their apartments to preserve their

potential right to purchase at “insider” prices should the

apartment become subject to a cooperative or condominium

conversion plan.

To avert these unwelcome events, the OHA imposed several

restrictions on a tenant’s right to sublet rent-stabilized apartments.

Most relevant to this case is the requirement that the tenant of

record on the lease maintain the apartment as the tenant’s

“primary residence.”

As soon appeared after enactment, however, the “primary

residence” language unintentionally made unclear whether a

corporation, which as a fictional person could not occupy any

apartment as a primary residence, could lease rent-stabilized

apartments on behalf of its employees if those individuals were

not specifically named in the lease.

Although Lenox Hill does not believe that the OHA affected

corporate tenancies, in an excess of caution the legislature of the

Staic of New York enacted Chapter 940 of the Laws of 1984

(“Chapter 940”). Only four months and five days after the effec-

tive date of the OHA, in the very next session of the legislature,

the ability of not-for-profit hospitals such as Lenox Hill to rent

apartments for the benefit of nurses was definitively preserved.

Chapter 940 expressly authorized not-for-profit hospitals to lease

rent-stabilized apartments on behalf of “affiliated personnel”

without the owner’s consent and without time limitation. In

return, landlords were allowed an additional fifteen percent rent

6

increase on the first lease entered into after the adoption of

Chapter 940 and an additional fifteen percent rent increase every

seven years thereafter. Chapter 940 thus made it clear that not-

for-profit hospitals such as Lenox Hill retained the rights they

had enjoyed as rent-stabilized tenants from the inception of the

RSL in 1969, subject to the payment of periodic fifteen percent

increases at the request of the landlord over and above the

increases available to all landlords of rent-stabilized apartments.

- On or about September 25, 1991, Landlord brought an

action in the Supreme Court, New York County, with respect to

five of the apartments, seeking, inter alia, a declaration that

Lenox Hill was not entitled to renewal leases for the apartments

on the ground, inter alia, that Chapter 940 violated the Takings

Clause of the Fifth Amendment of the Constitution. Landlord

initiated another action on or about January 3, 1992, with respect

to the sixth apartment. These actions were consolidated by

stipulation of the parties into the present litigation, and the state

intervened to defend the state statute.

Landlord moved for summary judgment declaring Chapter 940

to be unconstitutional as both a physical and a regulatory taking.

The Hospital and the State of New York cross-moved for

summary judgment, and their motion was granted. Pet. App.

70a. The trial court rejected Landlord’s contention that Chapter

940 created a physical taking, relying on this Court’s decision in

Yee v. City of Escondido, 503 U.S. 519, (1992), and Landlord

has since abandoned that argument.

The Court also held that Landlord failed to establish that

Chapter 940 constituted a regulatory taking, finding that Chapter

940 substantially advances legitimate state interests and does not

deny Landlord economically viable use of its property:

A principal goal of the rent stabilization law

is to curb oppressive conduct and profiteering

by landlords . . . That goal is advanced by

providing protection to Lenox Hill and its

employees. A Landlord should not be

7

permitted to rent its premises to a non-profit

entity such as Lenox Hill and then be heard to

complain that it had not foreseen the

occupancy of the property by the very persons

intended by the lease to occupy the premises.

Further, Chapter 940 promotes the general

health and welfare of the public that the Rent

Stabilization Law, which addressed the

housing shortage in the city, was designed to

protect. During what is considered to be a

continuing emergency in the residential rental

market, the legislation permits non-profit

hospitals to obtain housing for medical

personnel which might not otherwise be

available. There is no question but that the

apartments are in fact rented to hospital

employees. Thus, it is ultimately residential

tenants who are being protected.

Consequently, I find a sufficiently “close

nexus” between the regulation and the end

sought to be accomplished by the Rent

Stabilization Law.

As previously indicated, the Omnibus

Housing Act of 1983 was enacted, in part, to

prevent tenant profiteering. Lenox Hill is not

using the apartments to make a profit.

Therefore it is reasonable for the legislature to

exempt nonprofit hospitals such as Lenox Hill

from the 1983 restrictions.

Consequently, I find that plaintiffs have

failed to demonstrate that Chapter 940 does

not further the purposes of the Rent

Stabilization Law and that, in fact, the

legislation does substantially promote

legitimate state interests.

Pet. App. 68a-69a (citations omitted).

8

The lower court also held that plaintiffs had failed to show that

they had suffered any economic loss as a result of the enactment

of Chapter 940:

There has been no showing that the value of

any reversionary interest in a rent stabilized

apartment is substantially less when the tenant

is a not-for-profit hospital as opposed to an

individual. * * * Further, plaintiffs did not

invest in this property with the expectation of

selling the units. . . . They are not presently

seeking to sell the apartments, but to rerent

them. Plaintiffs purchased the building with

knowledge of Lenox Hill’s leases and prior to

the enactment of the Omnibus Housing Act of

1983. Chapter 940 was passed shortly after

the 1983 legislation went into effect. The

brief period of time between the enactment of

the 1983 and 1984 laws was insufficient to

give rise to any reasonable expectation of

recovering the apartments.

Pet. App. 69a. (citations omitted)

On Landlord’s appeal, the Appellate Division affirmed the

order and reasoning of the Supreme Court of New York over two

dissents. Pet. App. 46a.

On appeal to New York State Court of Appeals, after

argument, and then reargument with two judges sitting by

designation from the intermediate appeals courts to replace two

judges who had recused themselves, a divided Court of Appeals

held that Chapter 940 was unconstitutional. Pet. App. 4a.

The majority recognized that a statute may be invalid under the

Takings Clause if it denies an owner economically viable use of

his or her property (Pet. App. 7a), but it did not proceed under

that standard. Instead, it proceeded under the purported rule that

a Takings Clause violation is fully made out if a statute “does not

substantially advance legitimate state interests,” without any

;

i

9

inquiry into whether the property owner has suffered economic

loss or has been justly compensated. Pet. App. 7a.

The Court of Appeals invalidated Chapter 940 for “not

substantially advancing a closely and legitimately connected state

interest.” Pet. App. 4a. The Court did not consider whether the

rent increases afforded by Chapter 940 amounted to “just

compensation,” and indeed did not consider whether any property

interest the Landlord ever owned was harmed (i.e., ignoring the

threshold requirement that the plaintiff demonstrate some

economic loss). Pet. App. 8a. In the Court’s view, having

proceeded under the “does not advance substantially legitimate

state interests” standard set forth in Nollan v. California Coastal

Comm’n, 483 U.S. 825 (1987), there was no occasion to inquire

in any way whether the landlord had ever lost anything, and

indeed no occasion to inquire whether, in view of the additional

increases that the legislation afforded to landlords of such

apartments, the landlord had anything taken without Just

compensation. Pet. App. 8a.

The Court applied the “close causal nexus” test of Dolan v.

City of Tigard, _US. __, 114 S. Ct. 2309 (1994), even

though that test was expressly designed for use in the context of

ad hoc permit requirements. By applying that test to a legislative

enactment, the Court was able to engage in a Lochner-like

analysis of whether Chapter 940 sufficiently advanced

“legitimate” state interests for the legislature’s handiwork to be

upheld.

The Court’s analysis of the legitimate state interest advanced

by Chapter 940 is contradictory as well as arbitrary. In defining

the state interest intended to be advanced by the legislation, the

Court first stated that it would look at Chapter 940 in isolation

from the rest of the Rent Stabilization Law: “That law, . . . must

meet the constitutional safeguards on its own merits, not as an

augmentation or complement to some generalized State interest

found elsewhere in organic law or other statutes.” Pet. App.

10a. The Court then rejected the specific interests offered by the

State Attorney General and defendant Lenox Hill Hospital and

10

invalidated the law as not advancing the legitimate state interests

of the Rent Stabilization Laws as a whole:

We conclude that the peripheral and

generalized State interests offered as

justification for the regulatory mandates of

Chapter 940 fail to sustain the legislation, as

constitutionally required for such State action.

They are not closely or legitimately connected

to the long-established and recognized goals of

the RSL and ETPA, which seek to ameliorate

the emergency housing shortage.

Pet. App. 13a.

Judge Levine’s dissent pointed out the various respects in

which the Court of Appeals’ decision contravened this Court’s

takings jurisprudence. Judge Levine noted that in regulatory

takings jurisprudence there has always been a requirement that a

challenger of a statute under the Takings Clause of the

constitution must first show that they have suffered an economic

loss as a result of the statute. Pet. App. 19a-22a. After

analyzing the history of takings jurisprudence from United States

v. Causby, 328 U.S. 256 (1946), to Lucas v. South Carolina

Coastal Council, __ U.S. _, 112 S. Ct. 2886 (1992), Judge

Levine found that plaintiffs had failed to meet their burden in an

as-applied regulatory taking case of showing “with a modicum of

definiteness that they sustained some significant loss of value in

their apartment building as a whole because of the application of

Chapter 940.” Pet. App. 20a (emphasis added).

Additionally, Judge Levine pointed out that the majority had

inappropriately applied to statutory economic legislation the

takings standard crafted for cases where an administrative agency

imposes permit conditions that accomplish what, if undertaken

directly, would have amounted to a physical taking. See Dolan,

114 S. Ct. 2309. Judge Levine pointed out that Dolan expressly

limits its imposition of the “essential nexus” test to cases

1]

involving administrative adjudicatory imposition of suspect

conditions of physical occupation. Pet. App. 29a-32a.

Finally, Judge Levine found that the majority determined that

Chapter 940 did not substantially advance a legitimate state

interest only after improperly rejecting the legitimate purposes

proffered by Lenox Hill and the State of New York:

Even under the heightened judicial scrutiny

standard applied by the majority, a court is not

permitted to pick and choose among the

express purposes of legislation in employing

the test of whether the requisite connection

exists between the particular regulation and the

problems the Legislature sought to ameliorate.

Nor does strict scrutiny require that a

regulation serve all of the legitimate State

interests the Legislature sought to advance by

the statutory scheme.

Pet. App. 25a. Judge Levine would have found that Chapter 940

substantially advanced the legitimate state interest in preventing

unwarranted and abnormal rent increases, in preventing

profiteering and speculation by landlords, in maintaining adequate

nearby nursing staff residences in the face of artificially inflated

market rents, and protecting not-for-profit hospitals from market

dislocation. Pet. App. 26a.

Judge Ciparik’s separate dissent pointed out another legitimate

purpose which Chapter 940 substantially advanced, and which the

majority refused to consider (Pet. App. 40a):

Chapter 940 ensures Lenox Hill will continue

to receive those benefits of the RSI it

currently extends to its employee-subtenants,

who then escape the perils of the rental market

as an incidence of employment.

As demonstrated below, in order to correct the Court of

Appeals’ misinterpretations of the Takings Clause of the

12

Constitution of the United States, to resolve the several conflicts

that misinterpretation created, and to prevent Nollan and Dolan

from being mistakenly interpreted as Lochner reincarnate, the

Supreme Court should grant this petition for a writ of certiorari.

REASONS FOR GRANTING THE WRIT

I.

THE NEW YORK DECISION CONFLICTS WITH

DECISIONS HOLDING THAT PLAINTIFFS WHO

CANNOT SHOW ECONOMIC LOSS MAY NOT

CHALLENGE ECONOMIC REGULATION AS A

REGULATORY TAKING.

To prevent “Government from forcing some people alone to

bear public burdens which, in all fairness and justice, should be

borne by the public as a whole,” Penn Cent. Transp. Co. v.

New York City, 438 U.S 104, 123 (1978), the Fifth Amendment

bars the taking of “private property . . . for public use without

just compensation.” Central to any successful invocation of the

Takings Clause is a showing that property has in fact been taken

— either classically, by a physical taking, or by economic

regulation that “goes too far.” Agins v. City of Tiburon, 447

U.S. 255, 260-61 (1980).?

When assessing whether there has been a regulatory taking,

this Court has repeatedly held that courts should look first to the

> As Justice Stevens observed in First English Evangelical Lutheran

Church v. County of Los Angeles, 482 U.S. 304, 329 (1987) (Stevens,

J., dissenting, citing Agins, Keystone Bituminous Coal Ass'n v.

DeBenedictis, 480 U.S. 470 (1987), and Hodel v. Irving, 481 U.S. 704

(1987)), “While virtually all physical invasions are deemed takings . . .

a regulatory program that adversely affects property values does not

constitute a taking unless it destroys a major portion of the property’s

value.” See also Pennsylvania Coal Co. v. Mahon, 260 U.S. 393

(1922).

13

economic impact of the regulation and whether there has been

any impact on the plaintiff's investment-backed expectations,

since absent a demonstration of some sort of economic loss, there

has been no compensable taking. Penn Cent., 438 U.S. 104;

Hodel v. Irving, 481 U.S. 704 (1987); Agins, 447 U.S. at 262.

For example, Pruneyard Shopping Ctr. v. Robins, 447 U.S. 74,

83 (1980), held that a rule of California constitutional law

restraining owners of a shopping mall from restricting the

public’s exercise of free speech within the mall did not amount

to an unconstitutional taking where “[t]here is nothing to suggest

that preventing appellants from prohibiting this sort of activity

will unreasonably impair the value or use of their property as a

shopping center.”

Similarly, in Goldblatt v. Hempstead, 369 U.S. 590, 594

(1962), this Court upheld mining regulations against a Takings

Clause challenge at the threshold, without applying the full

takings analysis or inquiring into just compensation, because

plaintiffs had presented “no evidence in the present record which

even remotely suggests that prohibition of further mining will

reduce the value of the lot in question.” In several cases, the

Court has found that a property owner who invests in property,

knowing the potential limitations on that property, cannot later

complain when these potential limitations are subsequently

realized. United States v. Sperry Corp., 493 U.S. 52, 60 (1989);

Dames & Moore v. Regan, 453 U.S. 654, 674 n.6 (1981); see

also Schaper v. Wallace, 1994 U.S. App. LEXIS 36186 at *3 n.2

(7th Cir. Dec. 21, 1994); HFH, Ltd. v. Superior Court of Los

Angeles County, 542 P.2d 237, 241 (Cal. 1975), cert. denied,

425 U.S. 904 (1976).

Recently, in Carson Harbor Village Ltd. v. City of Carson, 37

F.3d 468, 476 (9th Cir. 1994), the Ninth Circuit applied this rule

to dismiss a property owner’s takings claims where the owner had

purchased the property after enactment of an allegedly

unconstitutional statute:

A landowner who purchased land after an

alleged taking cannot avail himself of the Just

14

Compensation Clause because he has suffered

no injury. The price paid for the property

presumably reflected the market value of the

property minus the interests taken. Carson

Harbor has no standing to assert facial claims

based on the loss of the premium and the loss

of the right to dispose of property.

The holding below squarely conflicts with those cases and this

fundamental rule. Even though Landlord has been unable to

demonstrate any impairment of its investment-backed expectations

whatsoever, and even though it cannot have sustained economic

loss from impairment of a property right that it never purchased,

the Court of Appeals held that no threshold showing of injury

was necessary under the Takings Clause:

In particular, we are satisfied that even if the

economic impact aspect of this test (see Hodel

v. Irving, 481 U.S. 704, 714) were not to be

satisfied, that feature alone could not defeat

the owner’s interests and claims... .

Pet. App. 8a. This confuses the threshold requirement in the

regulatory takings context of economic impact with the remaining

elements of regulatory takings analysis where such threshold

injury exists. It ignores the fact that the landlord here, like the

plaintiffs in Connolly v. Pension Benefit Guaranty Corp., 475

U.S. 211 (1986), and in Ruckelshaus v. Monsanto Co. , 467 U.S.

986, 1027 (1984), did business in a heavily regulated field and

“cannot properly object if the legislative scheme is buttressed by

subsequent amendments to achieve the legislative end.” 467 U.S.

at 1018. The Takings Clause does not reach a law or regulation

that neither takes property nor results in economic loss of

anything to which the landowner has a reasonable expectation,

and does not empower courts to proceed to strike such a statute

down on substantive due process-like analysis for failing

substantially to advance legitimate state interests.

‘a en

15

The Court should grant the writ in this case to clarify the rule

that, absent a physical taking, in order to seek relief against

economic legislation as a regulatory taking under the Takings

Clause, a person must have sustained some economic loss.*

+ Ajthough a portion of the Court of Appeals’ decision suggests that

Landlord lost its "reversionary” interest in the apartments, Pet. App.

| 1a-12a, the Court of Appeals expressly declined to decide the case on

that ground, and its decision could not be upheld on that basis. First,

no court has ever determined whether this "reversionary" interest held

any economic value, and the trial court held that there was none:

As previously discussed, plaintiffs have not shown

that they have been deprived of their reversionary

interest in the apartments any more so than if the

apartments were rented to individuals. There has

been no showing that the value of any reversionary

interest in a rent-stabilized apartment is

substantially less when the tenant is a not-for-profit

hospital as opposed to an individual.

Pet. App. 68a.

Second. the record makes clear that Landlord has not "lost" anything

it ever had, since when Landlord initially purchased the Building it did

not acquire the rights it now complains were taken. Landlord therefore

cannot demonstrate that enactment of the OHA has altered its

investment-backed expectations. At the time of investment, the

apartments were already subject to the RSL, Lenox Hill already

occupied the apartments, and New York law clearly entitled Lenox Hill

to successive lease renewals. 520 E. 81st Street Assocs. v. Lenox Hill

Hosp., 38 N.Y.2d 525 (1976). That is precisely the position that

Landlord is in now. Nor did the four months during which the OHA

created a legal ambiguity vest Landlord with any new property interest.

As the trial court stated: "The brief period of time between the

enactment of the 1983 and 1984 laws was insufficient to give rise to

any reasonable expectation of recovering the apartments." Pet. App.

68a. In short, Chapter 940 has not altered Landlord’s property rights

or "taken" anything it acquired at the time of purchase.

Third, under Chapter 940, Landlord retains its reversionary interest

in the apartments. When Lenox Hill vacates an apartment, and it has

(continued...)

16

Il.

STATE AND FEDERAL COURTS ARE

CONFLICTED AS TO WHETHER THE “CLOSE

CAUSAL NEXUS” TEST OF DOLAN APPLIES

TO REGULATORY TAKINGS CHALLENGES

TO ECONOMIC LEGISLATION.

Last term, in Dolan v. City of Tigard, _U.S.___, 114S.

Ct. 2309, 2317 (1994), this Court held that, when challenged

under the Takings Clause, administratively imposed permit

conditions that require the dedication of property to public use

should be tested under a heightened level of scrutiny known as

“close causal nexus” review. As part of this test, the Court

shifted the burden onto the state to articulate its reasons for

imposing permit conditions.

The Court expressly restricted application of the test crafted in

Dolan to the important but narrow category of cases involving

development permits that condition development on the quid pro

quo of dedicating a part of their land to the public. Distinguish-

ing the traditional regulatory takings analysis from the heightened

scrutiny of Nollan and Dolan, the Court stated that the former set

of cases “involved essentially legislative determinations

classifying entire areas of the city, whereas here the city made an

adjudicative decision to condition petitioner’s application for a

building permit on an individual parcel.” 114 S. Ct. at 2316.

The Court further noted that Dolan involved a physical taking

that would plainly require compensation if accomplished directly,

and justified application of its standard by the doctrine of

unconstitutional conditions. Its new standard applies where (but

*(...continued)

already vacated three apartments in the Building, Landlord regains

possession. Furthermore, Landlord may regain possession under

several procedures under the New York rent regulatory scheme, and

retains the right to receive reasonable rents.

es

Binacsrh ae ea ARN staked! CU ahi bata ined wis

PE ET Pe ee te ee ee

17

only where) the state was using permit conditions to accomplish

indirectly what could not be directly achieved:

[I]n evaluating most generally applicable

zoning regulations, the burden properly rests

on the party challenging . . . the regulation of

property rights . . . Here, by contrast, the city

made an adjudicative decision to condition

petitioner’s application for a building permit

on an individual parcel.

114 S. Ct. 2320 n.8 (citation omitted); see also id. at 2317.

Despite this Court’s apparent restriction of the new test to

adjudicative imposition of permit conditions effecting physical

takings, the circuit and highest state courts disagree over whether

Dolan should be limited to cases challenging permit conditions.

Compare Waters Landing Ltd. Partnership v. Montgomery

County, 1994 Md. LEXIS 157 (Md. Dec. 16, 1994)(refusing to

apply Dolan to legislative enactment); Parking Ass’n v. City of

Atlanta, 450 S.E.2d¢ 200 (Ga. 1994) (same); and Carson Harbor

Village, 37 F.3d at 473 (applying traditional substantial

advancement test to legislative enactment, without consideration

of the heightened Dolan test) with this case and Peterman v.

Dep’t of Natural Resources, 521 N.W.2d 499 (Mich. 1994)

(applying essential nexus test outside the permit application

context).

Manocherian is a decidedly striking example of the confusion

courts have had applying Dolan, and therefore is particularly

appropriate for review by the Supreme Court. The New York

Court of Appeals expressly relied on Dolan’s “close causal

nexus” test to invalidate Chapter 940, even though Chapter 940

does not involve administrative adjudication, a physical taking, or

any ad hoc administrative imposition of permit conditions.

Furthermore, just as the heightened Dolan scrutiny requires

agencies to explain the purpose behind the conditions they place

on permits, the Court in Manocherian now requires the state

legislature to state its legislative purnose expressly in any

18

enactment that could conceivably be challenged under the Takings

Clause: “Part of the underpinning of the Hospital’s and State’s

claim in this case rests on a belated assertion of a health care

crisis in the City of New York. The Legislature declared no

crisis in enacting this privileged exception.” Pet. App. 13a

(emphasis added). Condemning Chapter 940 for that reason

conflicts not only with the accepted analysis of “legitimate state

interests,” infra, pp. 18-21, but also with the limitations set forth

in Dolan.

The Court should take this opportunity to resolve this conflict

among the nation’s courts and clarify the extent to which the

Dolan test applies in takings cases challenging statutory economic

regulation.

Ill.

THE NEW YORK COURT?’S INVALIDATION OF A

STATE STATUTE AS A REGULATORY TAKING

FOR NOT “SUBSTANTIALLY ADVANCING A

LEGITIMATE STATE INTEREST” IS IN CONFLICT

WITH DECISIONS CAREFULLY NARROWING

JUDICIAL POWER TO STRIKE DOWN DULY

ENACTED LEGISLATION AND RESURRECTS THE

DISCREDITED LOCHNER DOCTRINE

What is a “legitimate state interest” and how courts should

assess whether a statute furthers one are questions on which, as

was noted in Nollan v. California Coastal Comm’n, 483 U.S.

825, 834 (1987), this Court has not previously elaborated.

To the extent that this Court has commented at all on the issue,

its views are squarely opposed to the Court of Appeals’ approach,

and suggest that the judicial role in assessing the legitimacy of

governmental purpose is no greater in the takings context than

when economic legislation is challenged on substantive due

process or equal protection grounds where no suspect class is

involved. As Justice Stevens wrote for the Court in Keystone

Gree os

pith AS MT ae Lie SAS lle ec et, ee

19

Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 487 n.16

(1987):

We do not suggest that courts have “a license

to judge the effectiveness of legislation,”

[quoting Rehnquist, C.J. dissenting, at 511

n.3], or that courts are to undertake “least

restrictive alternative” analysis in deciding

whether a state regulatory scheme is designed

to remedy a public harm or is instead intended

to provide private benefits. That a land use

regulation may be somewhat overinclusive or

underinclusive is, of course, no justification

for rejecting it. See Euclid v. Ambler Realty

Co., 272 U.S. 365, 388-89 (1926).

Similarly, in related contexts, this Court has repeatedly

emphasized the extremely narrow role for courts in deciding

whether legislation serves a legitimate state interest, which places

the Court of Appeals’ approach in substantial doubt. See, €.2.,

Ruckelshaus v. Monsanto Co. , 467 U.S. 986, 1014 (1984) (“[t}he

role of the courts in second-guessing the legislature’s judgment

of what constitutes a public use is extremely narrow”); National

R.R. Passenger Corp v. Boston & Maine Corp., 503 U.S. 407,

(1992) (same).

The Manocherian decision is sharply at odds with these settled

rules, and unless reversed may well launch lower courts on

precisely the Lochnerian enterprise that the Court took pains to

terminate more than fifty years ago, this time under the sail of

the Takings Clause. 7

“A broad range of governmental purposes and regulations”

may constitute a legitimate interest. Nollan, 483 U.S. at 834-35.

Here, however, the Court of Appeals approached its inquiry with

an evident hostility to the legislation, rather than with the

presumption of constitutionality that should have attended its

inquiry. See, e.g., Hodel v. Indiana, 452 U.S. 314, 331-32

(1981). It hastily rejected a host of proffered state interests for

20

Chapter 940, including the need for affordable staff housing

proximate to city hospitals, and the need to protect not-for-profit

hospitals from the same market dysfunctions that affect private

individuals in the market for sparse New York City housing.

Pet. App. 10a.

In fact, as Judge Levine’s dissent carefully showed (Pet. App.

25a-29a), the interests served by Chapter 940 are apparent from

the statutory text and way the statute is designed to operate. The

legislature having decided that it preferred permitting not-for-

profit hospitals to lease rent-stabilized apartments for use by their

employees, rather than to have these apartments surrendered by

the hospitals and made generally available for the population at

large, with the consequent added difficulty for new hospital

employees to find apartments nearby those hospitals, its choice

should have been honored, not condemned. The legitimacy of

that choice under applicable precedent is plain, even if the judges

would have decided differently had they been legislators.

The Court of Appeals also applied the wrong standard in

requiring that Chapter 940 “substantially advance” the interests

of the underlying rent stabilization scheme to which it relates.

Pet. App. 13a. The long-authorized appropriate inquiry is

whether the challenged measure furthered conceivable legitimate

State interests underlying that measure itself, not whether it

served precisely the same goals as the underlying legislation to

which it relates.” The correct approach, repeatedly reflected in

° For example, in Pennell v. City of San Jose, 485 U.S. 1, 12-13

(1988), this Court held that “alleviat[ing] tenant hardship” is a

legitimate state interest sufficient to justify a section of a rent control

ordinance, even if the ordinance as a whole was not designed for that

purpose. See also Regan v. Wald, 468 U.S. 222, 243-44 (1984)

(upholding statutory amendment against due process challenge by

analyzing legislative purpose of the amendment independent of the

Statutory purpose as a whole).

. (continued...)

4

4

z

4

21

this Court’s cases, is the one taken by Judge Levine’s dissent,

which asked what interest the Legislature “could” have been

acting to further (Pet. App. 27a-28a), an approach that could not

be further from that taken by the majority. Pet. App. 9a-12a.°

The Court of Appeals’ incursion into the legislative domain

appeared to result from its perception that Nollan and Dolan had

substantially expanded the role for searching judicial scrutiny in

°(...continued)

Of course, it is hard to see how Chapter 940 could have been found

at odds with the underlying rent stabilization scheme under any

conceivable test, when it simply effected a technical correction to the

OHA, itself an amendment to the RSL, to assure that the OHA did not

inadvertently change fifteen years of prior treatment of those apartments

under the RSL.

6 The state court also erred in refusing to consider the state interest

advanced by the State in the course of the litigation (protecting not-for-

profit hospitals, like individuals, from the “speculative” and

“disruptive” rents resulting from a market imbalance), an interest which

was equally apparent from the face of the legislation (as well as from

the official legislative history properly relied on under state law). In so

doing, the Court contravened the longstanding rule that a legitimate

state interest need not be asserted within the statute. E.g., F.C.C. v.

Beach Communications, Inc., ___ U.S. ___, 113 S. Ct. 2096, 2102

(1993)("we never require a legislature to articulate its reasons for

enacting a statute"); Nordlinger v. Hahn, __'-U.S. __, 112 S. Ct.

2326, 2332-34 (1992)(same); Ruckelshaus, 467 U.S. at 1014 (same);

Woods v. Cloyd W. Miller Co., 333 U.S. 138, 144 (1948)(same).

Indeed, the state may advance an interest at any time in the litigation.

E.g., Beach Communications, Inc., 113 S. Ct. at 2102; Nordlinger, 113

S. Ct. at 2334; Hawaii Housing Auth. v. Midkiff, 467 U.S. 229, 233

(1984). See also Mountain Water Co. v. Montana Dep't of Pub. Serv.

Regulation, 919 F.2d 593, 597 (9th Cir. 1990)("[i]n our review of

governmental purposes . . . we need not rely only upon those purposes

the legislature, litigants or district court have espoused, but may also

consider any other rational purposes possibly motivating enactment of

the challenged statute.").

22

all takings cases, including when economic legislation is

challenged as a regulatory taking. That likelihood, and the

invalidation of rent regulation legislation on nothing more than

Lochner-like findings of illegitimacy based on _ simple

disagreement with the legislature’s constitutionally protected

choice, suggest an important need for review here. The Court

should take this opportunity to answer the question it left

unanswered in Nollan and make clear that “legitimate state

interest” analysis does not license the courts to declare

unconstitutional laws they dislike.

IV.

THE NEW YORK COURT’S INVALIDATION OF A

STATE STATUTE AS A REGULATORY TAKING

WITHOUT INQUIRY INTO WHETHER

COMPENSATION AFFORDED THE LANDOWNER

CONSTITUTED JUST COMPENSATION CONFLICTS

WITH NUMEROUS DECISIONS OF THIS COURT.

This Court has repeatedly held that no takings case can be

decided without addressing both the precise nature of what has

been taken (the “taking” part of the inquiry) and the further issue

of whether the government has afforded just compensation for

what was in fact taken (the “just compensation” inquiry). First

English Evangelical Lutheran Church v. County of Los Angeles,

482 U.S. 304, 314 (1987); MacDonald, Sommer & Frates v.

County of Yolo, 477 U.S. 340 (1986); San Diego Gas & Elec.

Co. v. San Diego, 450 U.S. 621 (1981); Agins v. City of

Tiburon, 447 U.S. 255, 263 (1980). By finding its work done

after addressing the “taking” issue without inquiring whether the

property owner had been vouchsafed ”just compensation” by the

enhanced rent increased provided by Chapter 940, the New York

Court of Appeals failed to follow those decisions. In so doing,

its decision replaces Takings Clause jurisprudence with the broad-

ranging substantive due process review that has been prohibited

since the Lochner era closed in 1937. E.g., West Coast Hotel

Co. v. Parrish, 300 U.S. 379 (1937); United States v. Darby,

312 U.S. 100 (1941).

23

This Court has repeatedly refused to strike down rent

regulation under the Takings Clause.’ Yet here, the state court

invalidated a specialized rent control statute as not substantially

advancing a legitimate purpose without the slightest inquiry into

whether the additional rent increases that measure afforded the

landlord (over and above available rents had the leases been held

by the nurses residing in the apartments, rather than by Lenox

Hill) amounted to just compensation.* By stopping at that point,

the court ensured that its inquiry would be essentially

indistinguishable from the substantive due process analysis of

Lochner.

Except in the theoretical (but largely empty) category of

takings cases where legislation may be struck down as not having

any public purpose (and the Court of Appeals’ decision did not

rest on such a finding),’ there is no violation under the Takings

Clause if the landowner whose property is “taken” is afforded

just compensation. See, e.g., MacDonald, Sommer & Frates,

477 U.S. at 350; San Diego Gas & Elec., 450 U.S. at 632.

Lenox Hill asserted below that even assuming arguendo that

Chapter 940 constituted a sufficient impairment of the landjord’s

interest to warrant consideration of the just compensation issue —

as the statutes at issue in Penn Cent., 438 U.S. at 124,

Ruckelshaus, 467 U.S. at 986, 1006, and Hedel v. Virginia

See, e.g., Yee v. City of Escondido, 503 U.S. 519 (1992); Pennell

v. City of San Jose, 485 U.S. 1, 12 n.6 (1988); Bowles v. Willingham,

321 U.S. 503 (1944).

8

See pp. 8-9, supra.

4

The Fifth Amendment provides that “private property may not be

taken for public use without just compensation.” (emphasis added).

Enforcement of that standard is broadly deferential: “where the exercise

of the eminent domain power is rationally related to a conceivable

public purpose, the Court has never held a compensated taking to be

proscribed by the Public Use Clause.” Hawaii Housing Auth. , 467 U.S.

at 241.

24

Surface Mining & Reclamation Ass’n, 452 U.S. 264, 296-97

(1981), did not — the legislation nevertheless afforded the

landlord just compensation. The Court of Appeals’ invalidation

of the statute under the Takings Clause without even considering

that issue sharply conflicts with Agins and its progeny. Whether

a Statute can be invalidated as a regulatory taking without

consideration of the just compensation issue is a question fully

warranting this Court’s review.

CONCLUSION

For all the foregoing reasons, the petition for a writ of

certiorari should be granted.

Respectfully submitted,

EDWARD S. KORNREICH, ESQ.

Counsel of Record

CHARLES S. SIMS, ESQ.

MARK P. MONACK, Esq.

Proskauer Rose Goetz &

Mendelsohn LLP

1585 Broadway

New York, New York 10036

(212) 969-3000

New York, New York

March 17, 1995