Opposition Brief — Lenox Hill Hospital v. Manocherian

aioe

——

In The

Supreme Gourt of

QGntled States.

October Term, 1994

—

LENOX HILL HOSPITAL, A NEW YORK

NOT-FOR PROFIT CORPORATION,

ae

Petitioner,

-against-

AMIR MANOCHERIAN, ROSITA MANOCHERIAN, ALAN

MANOCHERIAN, ROBERT MANOCHERIAN, and

BARBARA MANOCHERIAN, d/b/a/ FAME COMPANY, ef ai,

Respondents

On Petition for a Writ of Certiorari

to the New York Court of Appeals

" e ne Ti??

OFFIC: Ct

BRIEF FOR RESPONDENTS IN OPPOSITION TO

PETITIONS FOR WRITS OF CERTIORARI

GARY M. ROSENBERG

(Counsel of Record)

JEFFREY TURKEL

ROSENBERG & ESTIS, P.C.

Attorneys for Respondents

733 Third Avenue

New York, New York 10017

(212) 867-6000

St. Louls & Westerveit, Inc.

NY (212) 684-3117 NJ (201) 863-8133

Printed on Recycled Paper

BEST AVAILABLE COPY

i

Contents

QUESTION PRESENTED FOR REVIEW

If this Court grants the writ of certiorari sought,

the following question will be presented for review:

1. Was the New York Court of Appeals correct

in determining as a matter of New York State law that

L. 1984, ch. 940 failed to substantially advance a

legitimate state interest, and in fact contravened the

primary intent of New York City’s Rent Stabilization Law

(the statute it amended) by encouraging the eviction of

long-term residential occupants?

li

Contents

TABLE OF CONTENTS

Page

Questions Presented for Review ........................ i

Table of Authorities ..................:ccccccseeseeseeeereeees iii

Introductory Statement .............................0ceeeeeees ]

FE cinxisievresessesnieseesnavsocene a a 3

The Judgment in Question is Not Final Under

Be I Oe RE OUIED ca vsvsnasivecsucsdvadscnsescosaencoervonsas 3

Statutes Imvolved.................::::cccscsscessccesssrreseseeeeeees 9)

Counterstatement of the Case ..........................06. 10

Summary of Reasons for Denying the Writs..... 14

The Unique Nature of Both L. 1984, Ch.

940 and the Rent Stabilization Law Makes

This Case Inappropriate for Review by This

ld cosicewsbionieweanetasees 15

The Court of Appeals Applied the Proper

i aon vines ieiénttinchnntoheanednavenss- 17

The Court of Appeals Considered -- and

Rejected -- Lenox Hill’s Claim That Ch. 940

Provided Just Compensation.....................:::60 ; 24

I oc ssnessaneseosecsosnessssenecessesesenrveceonseosseness 25

lil

Contents

Table of Authorities

Cases Cited:

Agins v. Tiburon,

UP UE Be BI ii ceisscccsntedcee

Call v. City of West Jordan,

ee Pir e:! . :. nae mennmnen

Carson Harbor Village Ltd. v. City of Carson,

ST F.3E 465 COn Car 1998) on. ccccccccccscsnecesesess

College Station v. Turtle Rock Corp.,

608 S.W.2d S02 (Tex. 1984) ................ccccccceee

Collis v. Bloomington,

310 Minn. 5, 246 N.W.2d 19 (1976)..............

Cox Broadcasting Corp. v. Cohn,

ek a Bt. | Reerimen pammeren ier mee sree

Dolan v. City of Tigard,

US. _, 114 S.Ct. 2309 (1994).............

Flynt v. Ohio,

Ue 6 ee

Fort Wayne Books, Inc. v. Indiana,

hi ee ea eal

Goodyear Atomic Corp. v. Miller,

Ob GS FS Civics cic as

Hodel v. Irving,

Uk Wee as ce

Page

iv

Contents

Page

Cases Cited; (continued)

Jordan v. Menomonee Falls,

28 Wis. 2d 608, 137 N.W.2d 442 (1965)........ 20

La Guardia v. Cavanaugh,

Fe Fe Fe OE ince iaisnncsinctestininncenn 15

Manocherian v. Lenox Hill Hospital,

8. tt & Fi. Ree 2

Manocherian, et al. v. State of New York,

Ct. of Claims, Claim No. 91018......................... 24

Matter of 89 Christopher v. Joy,

; 2S Ra Bi Re Et | ee nennneD 15

Nollan vy. California Coastal Comm'n,

ES EE, See SO ilies atest dinisernrccannvesenscs. 10, Passim

Parking Association of Georgia, Inc. v. City

of Atlanta,

264 Ga. 764, 450 S.E.2d 200 (1994)... 20

Penn Central Transp. Co. v. New York City,

RE Fe iii siiiicdintn resister sennicencees 18

Radio Station WOW, Inc. v. Johnson,

Se A Ma Se CIO wrk vice satensencncsesyssvenesensce 6

Rent Stabilization Ass'n v. Higgins,

Be ee EI cies seciestese connor cernnntnartaiones 10, 23

Seawall Assocs. v. City of New York,

Ee I ens sch bid edacbicnteckcsturncinavnccsnees 10, 23

Vv

Contents

Page

Cases Cited: (continued)

Simpson v. North Platte,

206 Neb. 240, 292 N.W.2d 297 (1980)............ 20

Waters Landing Lid. Partnership v. Montgomery

County,

337 Md. 15, 650 A.2d 712 (1994)......0000.. 20

Wilkerson v. Seawall Assocs.,

493 U.S. 976 (1989)...........0..... jnahedaciadese ill 10, 23

Yee v. City of Escondido,

Be Es eR CWE ai cisidaticses sini vibiosechbadenavecbiien 14, 17

Statutes, Laws and Rules Cited:

ee EA. I cniticnintariciscenteneaadb a2

sakietahahaeiniblidciaeipandiiamadiiidmausiaiiaaan 6, 8

i a ME: - SIE iscncl cxhpniestavicpigseint ieandiaelteantelcamessiieaeie 2, 3,4

Nos. 94-1555

94-1560

In The

Supreme Court of the

Gnited States

October Term, 1994

a en

LENOX HILL HOSPITAL, A NEW YORK

NOT-FOR-PROFIT CORPORATION,

Petitioner,

-against-

AMIR MANOCHERIAN. ROSITA MANOCHERIAN, ALAN

MANOCHERIAN ROBERT | MANOCHERIAN. and

BARBARA MANOCHERIAN, d/b/a/ FAME COMPANY, ef ai.,

Respondents.

On Petition for a Writ of Certiorari

to the New York Court of Appeals

BRIEF FOR RESPONDENTS IN OPPOSITION TO

PETITIONS FOR A WRIT OF CERTIORARI

INTRODUCTORY STATEMENT

This brief is submitted in opposition to the

petitions for a writ of certiorari submitted on behalf of

petitioner Lenox Hill Hospital (“Lenox Hill”) and

petitioner The State of New York (the “State”).

The parties on whose behalf this brief is submitted

are respondents Amir Manocherian ef al. (“respondent”).

The matter which is the subject of the petitions and this

brief in opposition is Manocherian v. Lenox Hill

Hospital, 84 N.Y.2d 385 (1994).

The petitions should be denied because the

judgment appealed from is not final within the meaning

of 28 U.S.C. § 1257(a). In addition, the judgment in

question turns on a finding by the New York Court of

Appeals that L. 1984, ch. 940 (hereinafter, “ch. 940”)

failed to substantially advance a legitimate state interest.

The respondent respectfully submits that a determination

by New York State’s highest court regarding the nexus

between the means and ends of a state statute is a

unique state law determination to which, upon a negative

finding, this Court should defer.

Finally, certiorari should be denied because the

petitioners have failed to establish that the factual and

legal issues involved herein merit the extraordinary relief

sought.

JURISDICTION

The Judgment in Question is Not

Final Under 28 U.S.C. § 1257(a)

The petitioners conclusorily allege that the Court

has jurisdiction to review the judgment below under 28

U.S.C. § 1257(a). Petitioner Lenox Hill asserts, under

authority of Cox Broadcasting Corp. v. Cohn, 420 US.

469 (1975), that the underlying “decision is final ... 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 of its rights under the state

law.” Lenox Hill Pet., at pp. 1-2. In fact, Cox

establishes that the judgment of New York Court of

Appeals is not final, and that this Court lacks jurisdiction

under 28 U.S.C. § 1257(a).

The underlying action originally involved two

separate complaints. The first complaint pertained to five

of the six apartments at issue (R 114-36). The complaint

alleged 14 causes of action, as follows:

Cause of Action Relief Sought

First Declaration of unconstitutionality

regarding L. 1984, ch. 940.

Second Declaration of non-primary residence

against Lenox Hill.

Third through Seventh Judgment of possession against each

of the five apartments.

4

Eighth Attorneys’ fees and costs under 42

U.S.C. §1988.'

Ninth through Thirteenth Use and occupancy for each of the

five apartments.

Fourteenth Attorneys’ fees.

After issue was joined, the respondent moved for

summary judgment on the first through seventh causes of

action, or, in the alternative, for summary judgment on

the first, second and sixth causes of action (R 31-32)

The second complaint related solely to Apartment

3F (R_ 188-97). The complaint alleged five causes of

action, as follows:

Cause of Action Relief Sought

First Declaration of unconstitutionality

regarding L. 1984, ch. 940.

Second Declaration of non-primary residence

against Lenox Hill.

Third Judgment of possession against

Apartment 3F.

Fourth Use and occupancy for Apartment 3F.

Fifth Attorneys’ fees.

After issue was joined as to the second complaint,

the respondent moved for summary judgment on the first,

second and third causes of action or, in the alternative,

' Pursuant to a December, 1991 stipulation, the parties agreed that the

Eighth cause of action, seeking a § 1988 award against the State, would be

discontinued, without prejudice (R. 158-59).

* The sixth cause of action sought a judgment of possession with respect

to Apartment 16G (R 126).

Aha i gE no

5

for summary judgment on the first and second causes of

action (R 160-161).

The judgment of the New York Court of Appeals,

by declaring ch. 940 to be unconstitutional, granted

summary judgment to the respondent on the first cause of

action in each complaint; all of the other issues remain

undecided. The Court’s October 20, 1994 judgment

remitted the case “to Supreme Court, New York County,

for further proceedings in accordance with the opinion

herein.” App. 44a.° More specifically, the final paragraph

of the majority’s order and decision stated:

“Accordingly, the order of the

Appellate Division __ should be

reversed, with costs, and Chapter

940 of the Laws of 1984 declared

unconstitutional and the case should

be remitted to Supreme Court, New

York County, for such _ further

proceedings as may be necessary and

appropriate to resolve rights and

remedies among the parties to this

litigation affected by the holding of

this case.”

App. 16a.

It is Lenox Hill’s position herein (despite its claim

of finality), and in the remitted proceeding, that the

judgment of the New York Court of Appeals had little

bearing on the underlying issue of which party is entitled

to possession of the six disputed apartments. Lenox Hill

asserts in its petition that ch. 940 was enacted solely “in

an excess of caution,” and that independent of that

3

The petitioners utilize different paginations in their respective appendices.

Unless otherwise indicated, all references to the appendix shall refer to the

pagination in the petition filed by petitioner Lenox Hill.

6

enactment “[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 leases.” Lenox Hill Pet., at pp. 4-5. In

short, Lenox Hill asserts that irrespective of the judgment

herein, it can still prevail in the remitted proceeding on

nonfederal grounds.

It is settled that a judgment will not be deemed

final for purposes of 28 U.S.C. §1257(a) where, as here,

“anything further remains to be determined by a State

court, no matter how dissociated from the only federal

issue that has finally been adjudicated by the highest

court of the State.” Cox Broadcasting Corp. v. Cohn,

420 U.S. 469, 477 (1975), quoting Radio Station WOW,

Inc. v. Johnson, 326 U.S. 120, 124 (1945). In Cox, the

Court identified four exceptions to this rule. /d at 477-

83. Lenox Hill and the State, however, fail to identify

which of the four exceptions allegedly applies to the

instant case. What is apparent is that this case does not

fall under any of the first three exceptions enumerated in

Cox.

Only the fourth exception is arguably implicated

herein. In Cox, the Court described the fourth exception

as follows:

“Lastly, there are those situations

where the federal issue has been

finally decided in the state courts

with further proceedings pending in

which the party seeking review here

might prevail on the merits on

nonfederal grounds, thus _ rendering

unnecessary review of the federal

issue by this Court, and where

reversal of the state court on the

federal issue would be preclusive of

any further litigation on the relevant

cause of action rather than merely

controlling the nature and character

of, or determining the admissibility of

evidence in, the state proceedings

still to come. In these circumstances,

if_a_refusal immediately. to_review

ision might

ol erode federal policy, the

Court has entertained and __ decided

the federal issue, which itself has

been finally determined by the state

courts for purposes of the state

”

Id. at 482-83 (emphasis supplied).

Cases expanding upon the underscored language

establish why the fourth exception does not apply to the

instant case. Quite simply, the failure to review the

judgment herein will not “seriously erode federal policy”,

indeed, no “federal policy” is at issue. In Fort Wayne

Books, Inc. v. Indiana, 489 U.S. 46 (1989), the Court

observed that “[a]djudicating the proper scope of First

Amendment protections has often been recognized by this

Court as a ‘federal policy’ that merits application of an

exception to the general finality rule.” /d. at 55. The

Court held that a challenge to the constitutionality of the

use of RICO statutes to criminalize patterns of obscenity

offenses “calls into question the legitimacy of law

enforcement practices of several States, as well as the

Federal Government.” Jd. at 55-56. No First Amendment

or law enforcement issues are implicated herein.

Moreover, the rent stabilization statute at issue is wholly

peculiar to New York State.

Similarly, in Goodyear Atomic Corp. v. Miller, 486

U.S. 174 (1988), the Court held that the failure to

review a decision of the Ohio Supreme Court relating to

workers’ compensation “might seriously erode federal

policy in the area of nuclear production,” which policy

enjoyed federal pre-emption status. Jd. at 179. No such

pre-emptive federal policy is at issue here.

More analogous to the instant case is Flynt v.

Ohio, 551 U.S. 619 (1981), wherein the Court held that

a judgment of the Ohio Supreme Court on the federal

defense of selective enforcement did not implicate a

“federal policy” for purposes of the fourth exception:

“Here there is no identifiable federal

policy that will suffer if the state

criminal proceeding goes forward.

The question presented for review is

whether on this record the decision

to prosecute petitioners was selective

or discriminatory in violation of the

Equal Protection Clause. The

resolution of this question can await

final judgment without any adverse

effect upon important federal

interests. A contrary conclusion

would permit the fourth exception to

swallow the rule.”

Id. at 622.

Clearly, the federal government has no identifiable

policy with respect to the Takings Clause. As such, this

case does not fall within any of the Cox exceptions, and

the judgment from which review is sought is not final

pursuant to 28 U.S.C. §1257(a).

STATUTES INVOLVED

The relevant statutory provisions are set forth at

pp. 75a-83a of the petition filed by the State.

The respondent adds that the Fifth and Fourteenth

Amendments to the United States Constitution provide

that no person shall be deprived of “property ... without

due process of law.”

10

COUNTERSTATEMENT OF THE CASE

This case concerns the narrow issue of whether L.

1984, ch. 940 (“ch. 940”), an amendment to New York

City’s Rent Stabilization Law, substantially advances a

legitimate state interest. The New York Court of

Appeals, inter alia, having duly determined that the

primary purpose of the Rent Stabilization Law was to

protect the occupancy rights of long-term tenants, held

that the enactment in question contravened the Rent

Stabilization Law by encouraging evictions. Because ch.

940 did not substantially advance a legitimate state

interest, the enactment was declared unconstitutional.

For a concise description of the underlying facts

of the case up through the Appellate Division

proceedings, including an analysis of the relevant statutes,

the Court is respectfully referred to Section I of the

Court of Appeals’ October 20, 1994 order and opinion.

App. 5a-7a.

The Court of Appeals, by 5-2 majority, declared

ch. 940 to be unconstitutional. Applying the nexus test

established in Nollan v. California Coastal Comm'n, 483

U.S. 825 (1987), the Court held that ch. 940 failed to

substantially advance a legitimate state interest. The

Court of Appeals had been applying the nexus test in

similar challenges since 1989. See, Seawall Assocs. y.

City of New York, 74 N.Y.2d 92 (1989), cert. denied

sub nom. Wilkerson v. Seawall Assocs., 493 U.S. 976

(1989); Rent Stabilization Ass’n v. Higgins, 83 N.Y.2d

156 (1993), cert. denied _US. , 114 S.Ct. 2693

(1994).

The case turned on the Court of Appeals’

interpretation of the underlying goals of the Rent

11

Stabilization Law, the statute ch. 940 purported to

amend. The majority not only found that ch. 940 failed

to substantially advance these goals, but in fact

contravened them. Ch. 940 only protected Lenox Hill’s

tenancies if the apartment was occupied by an “affiliate”

of the Hospital. This meant that if an affiliate left Lenox

Hill’s employ, i.e, if the affiliate retired, changed

professions or switched employers, Lenox Hill would have

to evict the occupant in order to retain the apartment.

The Court of Appeals stated:

“Indeed, in significant respects, the

particular statute contradicts two key

goals of the RSL, to wit, occupant

protection and eventual market

redemption. These incongruities flow

out of the transferral of power from

a landlord to the employer of the

actual occupants, and by the removal

of the affected apartments entirely

and permanently from marketplace

availability or potentiality for other

publicly interested or vying occupants

at rent-stabilized rates.

The preservation of this Manhattan

Upper East Side housing enclave for

this privileged entity’s benefit, albeit

one engaged in a _ laudable and

necessary eleemosynary health service

function, cannot masquerade as

general welfare legislation. Purporting

to promote the general public welfare

by enabling not-for-profit hospitals to

continue to provide subsidized

housing benefits to its chosen

Bee cannot sustain the sweep

and manner of the burden and

confiscation effected against the few

owners. Dissenting Justice Joseph P.

12

App. 10a.

Sullivan aptly framed the consequences

as follows:

‘A statutory interpretation which

encourages the deployment of rent

stabilized apartments in perpetuity as

temporary dormitory space for an

ever changing roster of hospital

employees and promotes __ the

displacement of these employees,

some of whom may be _ long-term

tenants, when they leave _ their

employment does a disservice to rent

stabilization’s underlying purpose of

protecting residential tenants from

evictions during an acute housing

shortage (196 A.D.2d 728, 732).’”

The Court also held:

“The central, underlying purpose of

the RSL is to ameliorate’ the

dislocations and risk of widespread

lack of suitable dwellings. Chapter

940 does not contribute to that

desirable altruistic aim. It affects a

tiny number of dwelling units. The

effect of the statute is also quite

ephemeral. These apartments were

subject to rent stabilization prior to

the enactment and will remain so,

irrespective of the outcome of this

long-standing dispute affecting a

dwindling number of apartments, still

in controversy in this litigation, with

respect to the hospital’s prime

tenancy lease renewal entitlements.

Accordingly, Chapter 940 fails to

substantially or functionally prevent

or relate to excessive rents and

profiteering.

Me aang IPL SER eh 2788

The realistic appraisal of Chapter 940

shows that it was sought and

designed essentially to subsidize the

non-profit hospitals [sic] special

fringe benefit to some of its special

health care employees. This common

employer-employee dilemma has no

legally or legitimately cognizable,

causal relationship to the

governmental intrusion on rights and

entitlements due owners in the use

and enjoyment of their properties in

a rental market where demand

intractably exceeds supply _at

affordable levels. Chapter 940 is

really interposed as a special housing

program, privately funded through

those owners who happen to have

previously rented to _ not-for-profit

hospitals, like Lenox Hill Hospital.”

Id. at 1la-12a.

13

4

SUMMARY OF REASONS FOR

DENYING THE WRITS

1. In the judgment in question, the New York

Court of Appeals determined that ch. 940 did not

substantially advance the primary goals of New York

City’s Rent Stabilization Law, the statute ch 940

amended. A determination by New York State’s highest

court regarding the nexus between the means and ends of

the Rent Stabilization Law and ch. 940 is a unique state

law determination to which, upon a negative finding, this

Court should defer. Moreover, the peculiarities of New

York City’s Rent Stabilization Law, as well as_ the

unusual factual setting herein, make this case inappropriate

for review.

2. The Court of Appeals properly invoked the

nexus test in the instant case in full accord with well-

established precedent. See, Nollan v. California Coastal

Comm’n, 483 U.S. 825 (1987); Yee v. City of Escondido,

503 U.S. 519 (1992); Dolan v. City of Tigard,

US. , 114 Ct. 2309 (1994).

3. The Court of Appeals properly considered --

and rejected -- Lenox Hill’s claim that ch. 940 provided

just compensation for the taking of respondent’s property.

Ear dan em eatin ATA cde peRh iit atari og le Latah a

15

REASONS FOR DENYING THE WRITS

I

The Unique Nature of Both L. 1984, Ch. 940

and the Rent Stabilization Law Makes This

Case Inappropriate for Review by This Court

In the judgment below, the New York Court of

Appeals held that ch. 940, which purportedly amended

the Rent Stabilization Law, failed to substantially advance

a legitimate state interest. App. 7a-14a. In so holding,

the Court of Appeals was required to (1) interpret the

Rent Stabilization Law and determine its principal goals;

(2) determine the practical and functional effect of ch.

940, and (3) determine whether ch. 940 substantially

advanced those goals.

There are few laws more limited in application or

peculiar than New York City’s Rent Stabilization Law,

which has been described as an “impenetrable thicket,

confusing not only to lawyers but to laymen” La

Guardia v. Cavanaugh, 53 N.Y.2d 67, 70 (1981),

quoting Matter of 89 Christopher v. Joy, 35 N.Y.2d 213,

220 (1974). Even more limited and peculiar is ch. 940,

which applies solely to not-for-profit hospitals which lease

rent stabilized apartments in New York and then sublet

them to their affiliates. As the Court of Appeals

correctly observed below, ch. 940 was enacted at the

request of petitioner Lenox Hill, who was its “primary

and real beneficiary.” App. 6a. Irrespective of its

questionable genesis, ch. 940 reflects little more than the

social, political and housing concerns of a_ particular

locality.

16

The respondent respectfully submits that a

determination by New York State’s highest court

regarding the nexus between the means and ends of a

local statute is a unique state law determination to which,

on a negative finding, this Court should defer. Certainly,

the extraordinary jurisdiction of the Court should not be

invoked to determine whether the Court of Appeals

correctly determined the principal goals of the Rent

Stabilization Law, or whether ch. 940 substantially

advanced those goals. Because this case does not involve

matters of national interest, and implicates no federal

policy, certiorari should be denied.

17

Il

The Court of Appeals Applied

the Proper Standard

In the judgment below, the New York Court of

Appeals declared ch. 940 unconstitutional because it failed

to substantially advance a legitimate state interest. In so

holding, the Court of Appeals invoked the “essential

nexus” test utilized by this court in Nollan v. California

Coastal Comm'n, 483 U.S. 825 (1987) and Dolan vy.

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

App. 7a-14a.

The petitioners assert that the nexus test is

inapplicable where the constitutionality of a statute of

general application is challenged. Instead, the petitioners

claim that the nexus test only applies where the state, in

an individualized zoning determination, exacts an easement

in exchange for granting a permit. On this basis, the

petitioners argue that certiorari is required so that the

Court can “clarify” the limits of Nollan and Dolan. State

Pet., Point I; Lenox Hill Pet., Point I]. For the reasons

set forth below, such clarification is unnecessary.

There can be little question that the nexus test

applies to the instant case, as the Court of Appeals

expressly found. App. 9a-10a. Dispositive of this issue is

Yee v. City of Escondido, 503 U.S. 519, 112 S.Ct. 1522,

118 L.Ed2d 153 (1992). In Yee, the petitioner

challenged a statute of general application which, in

effect, allowed a pre-existing rent regulated tenant to sell

his or her statutory rights to an incoming tenant. The

petitioner alleged that the transfer of wealth from the

landowner to the tenant constituted a physical taking.

The Court rejected this argument, but observed that the

~~ aaa

18

nexus test would apply to a regulatory takings claim

relating to a statute of general application. The Court

stated:

“petitioners contend that the

Escondido ordinance transfers wealth

only to the incumbent mobile home

owner. This effect might have some

bearing on whether the ordinance

causes a regulatory taking, as it may

shed some light on whether there is

a sufficient nexus between the effect

of the ordinance and the objectives it

is supposed to advance. See, Nollan

v. California Coastal Comm'n, supra,

at 834-85.”

118 L.Ed.2d at 167 (emphasis in original).

The applicability of the nexus test to the instant

case is also evident from WNollan itself. In Nollan, the

Court cited Agins v. Tiburon, 447 U.S. 255 (1980) and

Penn Central Transp. Co. v. New York City, 438 US.

104 (1978) as the genesis for the nexus test. 483 U.S. at

834. Both cases involved a challenge to a statute or

ordinance of general application. Novably, the Court

stated in Agins that “[t]he application of a general zoning

law to particular property effects a taking if the

ordinance does not substantially advance legitimate state

interests ...." 447 U.S. at 260 (emphasis supplied).

More to the point, the Nollan majority held that

the nexus test was appropriate for all challenges under

the Takings Clause, and rejected as inapplicable the

minimal scrutiny, excessive deference standard utilized in

equal protection and substantive due process claims:

“Contrary to Justice Brennan’s claim ...

our opinions do not establish that

EE IEEE IIE SII 0” NRA REDO. a a a Rea

19

these standards are the same as

those applied to due process or

equal-protection claims. To the

contrary, our verbal formulations in

the takings field have generally been

quite different. We have required

that the regulation ‘substantially

advance’ the ‘legitimate state interest’

sought to be achieved, Agins v.

Tiburon, 447 U.S. 255, 260 (1980),

not that ‘the State could rationally

have _decided that the measure

adopted might achieve the State’s

objective’... [T]here is no reason to

believe (and the language of our

cases gives some reason to

disbelieve) that so long as the

regulation of property is at issue the

standards for takings challenges, due

process challenges and equal

protection challenges are identical;

any more than there is any reason to

believe that so long as the regulation

of speech is at issue the standards

for due process challenges, equal

protection challenges, and _ First

Amendment challenges are identical.”

483 U.S. at 834-35, n. 3.

Dolan also rebuts the petitioners’ argument that

the nexus test is limited to individualized zoning

determinations. Dolan further refined the WNollan nexus

test by defining the required degree of connection

between governmental ends and means. In settling on the

“rough proportionality” test, the Court approvingly cited

six state court decisions which had utilized this standard.

114 S.Ct. at 2319. Notably, five of those cases involved

constitutional challenges to statutes or ordinances of

general application. See, Simpson v. North Platte, 206

20

Neb. 240, 292 N.W.2d 297 (1980); Jordan v.

Menomonee Falls, 28 Wis. 2d 608, 137 N.W.2d 442

(1965); Collis v. Bloomington, 310 Minn. 5, 246 N.W.2d

19 (1976); College Station v. Turtle Rock Corp., 608

S.W.2d 802 (Tex. 1984); Call v. City of West Jordan,

606 P.2d 217 (Utah 1979).

The petitioners’ arguments defy common sense as

well as precedent. The petitioners concede that the nexus

test applies where a landowner seeks a governmental

benefit but is required to give an exaction as a quid pro

quo. If this is true, then the nexus test must also apply

where, as here, a condition is imposed by governmental

fiat on a hapless owner who has sought nothing in

return.

The petitioners’ claims regarding the proper

standard for deciding this case are moot because the

Court of Appeals determined that ch. 940 actually

defeated the primary goals of the Rent Stabilization Law.

Thus, ch. 940 cannot possibly satisfy whatever toothless

“rationality” standard the petitioners would prefer. Where

an enactment contravenes a legitimate state interest, even

minimal scrutiny will be sufficient to justify a declaration

of unconstitutionality.

Lenox Hill attempts to shoehorn its petition into

Rule 10.1(b) by claiming that there is a conflict among

state and federal courts as to whether the nexus test can

be applied in cases involving a_ statute of general

application. Lenox Hill Pet., at p. 17. The “conflict,”

however, is more apparent than real. Waters Landing

Lid. Partnership v. Montgomery County, 337 Md. 15,

650 A.2d 712 (1994) concerned the constitutionality of a

tax, and did not implicate the Takings Clause. /d at 18.

In Parking Association of Georgia, Inc. v. City of

Atlanta, 264 Ga. 764, 450 S.E.2d 200 (1994), the

nates eet i Sent a ee

a

21

Supreme Court of Georgia, citing Dolan, ultimately

concluded that “the city demonstrated ‘rough

proportionality’ between the requirements and objectives

of the ordinance.” Id. at 766, n.3. In Carson Harbor

Village Lid, v. City of Carson, 37 F.3d 468 (9th Cir.

1994), the Court mentioned Nollan and Dolan in passing,

primarily in the context of standing. Id. at 476-77.

In Point III of its brief, Lenox Hill invokes the

infamous Lochner doctrine, claiming that the Court of

Appeals improperly second guessed the Legislature’s

judgment relating to the wisdom of ch. 940. In fact, the

Court of Appeals did nothing more than exercise its

proper judicial function of determining whether a statute

had violated the Takings Clause.

Stripped of its rhetoric, Lenox Hill’s primary

complaint is that it disagrees with the Court of Appeals’

assessment of the underlying goals of New York City’s

Rent Stabilization Law, and its ultimate conclusion that

ch. 940 contravened those goals. Lenox Hill’s proposed

remedy for the alleged Lochner violation is to have this

Court second guess the New York Court of Appeals as

to the proper interpretation of the Rent Stabilization Law.

As noted earlier, a determination by New York State’s

highest court regarding the nexus between the means and

ends of a New York statute is a unique state law

determination to which, upon a negative finding, this

Court should defer.

In Point I of its brief, Lenox Hill apparently

asserts that no regulatory taking could have occurred in

the instant case unless ch. 940 resulted in a_ physical

taking of the respondent’s property, or adversely impacted

on the respondent’s investment-backed expectations. In

fact, as Nollan and Dolan establish, a regulatory taking

will occur where a _ regulation fails to substantially

22

advance a legitimate state interest, or denies an owner

economically viable use of its property. Notably, this

Court found a regulatory taking in Hodel v. Irving, 481

U.S. 704 (1987), despite labelling as “dubious” the

landowners’ claim that the regulation in question had

diminished their investment-backed expectations. Jd. at

715.

Lenox Hill apparently asserts that as long as a

regulation can be classified as “economic” in nature, the

government’s ability to regulate land is_ virtually

unrestricted. This argument, however, was expressly

rejected in Dolan:

“Justice Stevens’ dissent relies upon

a law review article for the

proposition that the city’s conditional

demands for part of petitioner’s

property are ‘a species of business

regulation that heretofore warranted a

strong presumption of constitutional

validity.’ Post, at 2325. But simply

denominating a governmental measure

as a ‘business regulation’ does not

immunize it from __ constitutional

challenges on the ground that it

violates a provision of the Bill of

Rights.

* * *

We see no reason why the Takings

Clause of the Fifth Amendment, as

much a part of the Bill of Rights as

the First Amendment or Fourth

Amendment, should be relegated to

the status of a poor relation in these

comparable circumstances.”

114 S.Ct. at 2320.

AMET

. re ‘ ‘ ™

eae “

PPS SAE SE TIT AIC SI ER ERA aE

i

23

One last point should be made. In two prior

post-Nollan cases, the New York Court of Appeals has

applied the nexus test to constitutional challenges of a

statute or regulation of general application. See, Seawall

Assocs. v. City of New York, 74 N.Y.2d 92 (1989) and

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

(1993). In both instances, this Court refused to grant

certiorari relief. Wilkerson v. Seawall Assocs., 493 US.

976 (1989); Rent Stabilization Ass'n v. Higgins,

US. , 114 S.Ct. 2693 (1994).

24

ill

The Court of Appeals Considered -- and

Rejected -- Lenox Hill’s Claim That

Ch. 940 Provided Just Compensation

In Point IV of its petition, Lenox Hill asserts that

the Court of Appeals erred as a matter of law by failing

to determine whether ch. 940 provided the respondent

with just compensation. Lenox Hill then asserts that

certiorari is required to determine “[w]hether a statute

can be invalidated as a _ regulatory taking without

consideration of the just compensation issue.” Lenox Hill

Pet., at p. 24. Petitioner the State raises no similar claim.

Lenox Hill’s contrived argument should be rejected

out of hand. Lenox Hill concedes that it “asserted below

that even assuming arguendo that Chapter 940 constituted

a sufficient impairment of the landlord’s interest to

warrant consideration of the just compensation issue ... the

legislation nevertheless afforded the landlord just

compensation.” Id. at pp. 23-24. The fact that the Court

of Appeals considered this argument, and rejected it sub

silentio, is not a basis for granting certiorari. It was not

incumbent upon the Court of Appeals to explicitly reject

every claim made by Lenox Hill below.

The Court of Appeals remitted the case for “such

further proceedings as may be necessary and appropriate

to resolve rights and remedies among the parties to this

litigation affected by the holding of this case.” App. 16a.

Among the issues to be decided is the just compensation

due the respondent. In this respect, State court

proceedings have already commenced. See, Manocherian

et al. v. State of New York, Ct. of Claims, Claim No.

91018.

CONCLUSION

For all of the foregoing reasons, the petitions for

a writ of certiorari should be denied.

Dated: New York, New York

April 17, 1994

Respectfully submitted,

GARY M. ROSENBERG

(Counsel of Record)

JEFFREY TURKEL

Attorneys for Respondents

733 Third Avenue

New York, New York 10017

(212) 867-6000

ROSENBERG & ESTIS, P.C.

Futon! a? SE

2 LERMAN DI MA DBE MGS