November 12, 2014

New York Law Journal / Written by: Harvey M. Stone, Peter R. Schlam

This column reports on several recent representative decisions covering issues that included the following: constitutionality of zoning resolutions, unavailability of a witness and choice of law.

Zoning Resolutions

In Infinity Outdoor, Inc. v. City of New York, et al., 01 CV 1521 (EDNY, Oct. 11, 2001), Judge Nina Gershon granted defendants' motion for summary judgment on various claims by plaintiff challenging the constitutionality of zoning laws.

Plaintiff Infinity Outdoor Inc., the largest outdoor advertising company in North America and the owner of numerous sign structures in New York City, brought an action alleging that the Zoning Resolution of the City of New York, as amended in 2001, and companion enforcement legislation, are unconstitutional on their face. Infinity argued that the Zoning Resolution violates the First Amendment and the Equal Protection Clause of the Fourteenth Amendment by banning advertising signs near highways and parks, while permitting certain types of noncommercial signs anywhere in the City. Infinity also challenged the legislation enforcing the Zoning Resolution on the grounds that it operates as an unconstitutional prior restraint, is impermissibly vague, imposes civil penalties without a scienter requirement in violation of the Due Process Clause of the Fourteenth Amendment and imposes excessive fines in violation of the Eighth Amendment.

The crux of Infinity's First Amendment argument revolved around the distinction that the Zoning Resolution draws between commercial and noncommercial speech. After recounting in some detail the history of the City's Zoning Resolution, including various amendments in response to prior rulings on constitutional issues, Judge Gershon found that the Zoning Resolution in its current form passes constitutional muster. Specifically, the court held that the City's asserted interests in improving traffic safety and aesthetic quality, while at the same time allowing businesses to identify their presence on a particular lot and to engage in some off-site advertising, met the constitutional standards set forth by the U.S. Supreme Court in Metromedia v. City of San Diego, 453 U.S. 490 (1981), and related opinions. As Judge Gershon noted, the court in Metromedia explicitly recognized that commercial billboards can be regulated in ways that would be impermissible if applied to noncommercial signs.

Judge Gershon rejected Infinity's claim that the Zoning Resolution violates the Equal Protection Clause of the Fourteenth Amendment in giving preferential treatment to some noncommercial speech over other noncommercial speech by allowing civic, philanthropic, educational and religious groups to display a "flag, pennant, or insignia" in any district without restriction. In the absence of any evidence that this exception, which Judge Gershon characterized as "minimal," has been allowed for a discriminatory purpose or functioned in a discriminatory fashion, Judge Gershon found no constitutional violation.

Infinity's claim that the line between commercial and noncommercial speech in the City's regulations is unconstitutionally vague was also dismissed. Judge Gershon found that the City's sign regulations are not unconstitutionally vague because the line they draw between commercial and noncommercial speech has been repeatedly recognized by the Supreme Court.

Infinity also alleged that the City's permitting system for noncommercial signs is an unconstitutional prior restraint on such signs. While agreeing that the permitting system at issue is subject to prior restraint analysis because it conditions the exercise of expressive activity on official permission in the form of a permit from Department of Buildings officials, Judge Gershon noted that a system of prior restraint is not unconstitutional where, as here, it sufficiently limits the discretion of the licensing authority and provides procedural protections against misapplication.

Finally, Judge Gershon rejected plaintiff's argument that the imposition of civil penalties without a scienter requirement violates the First and Fourteenth Amendments. The penalty here arises from the display of a sign without a permit. Thus, the court found, outdoor advertisers will know whether or not they are in violation of the ordinance because they will know whether or not they have a permit. Judge Gershon dismissed Infinity's Eighth Amendment excessive fine claims as not ripe because no fine has been imposed and no enforcement proceedings have been commenced against Infinity.

Unavailability of Witness

In Tinh Phan v. Greiner, Superintendent, Sing Sing Correctional Facility, 98 CV 0422 (EDNY, Oct. 3, 2001), Judge Edward R. Korman, granting a writ of habeas corpus, held that petitioner was deprived of his right to present a defense where the state trial court had erroneously excluded the grand jury testimony of an unavailable witness. The state judge had found a lack of due diligence by defense counsel in locating the witness. Judge Korman emphasized (among other things) the trial court's failure to consider the "great improbability" that any additional efforts to locate the witness would have been productive.

Following a jury trial, petitioner was convicted of second-degree murder in connection with a 1988 shooting outside of a Bay Ridge pool hall. Defense counsel sought to introduce the grand jury testimony of one Phi Tung Tran, who testified that petitioner was inside the pool hall playing pool when the shooting occurred. Defense counsel claimed that Mr. Tran could not be found to testify at trial despite counsel's good faith efforts to secure his appearance. According to the trial court and Appellate Division, however, these efforts did not meet the "good faith/due diligence standard" necessary for a finding of unavailability.

Judge Korman determined, preliminarily, that the prior testimony was sufficiently "reliable" (the prosecutor fully cross-examined Phan) and "material" (the exclusion of the evidence undermined confidence in the verdict). As to Mr. Tran's unavailability, Judge Korman found that petitioner's 18-B trial counsel and an investigator, whose fee was capped at $350, had made serious efforts to locate the witness. They repeatedly tried to contact Mr. Tran's mother, the only potential source of information as to where he was. As Judge Korman observed:

. . . even if the meager resources available to the defense could have been stretched to accommodate a greater effort, it seems unlikely, in light of the failure of Tran's mother to contact defense counsel or appear in response to the subpoena served upon her, that a face-to-face interview would have led to the discovery of Tran's whereabouts. (Slip op. 23).

The record, Judge Korman concluded, supports defense counsel's assertion at trial that: "the family [of Phi Tran] is fully apprised that we're looking for [him], and based on their non-responsiveness I have to assume that they're not going to let us know anytime soon, if at all, where he is."

Significantly, Judge Korman saw "no advantage" to the petitioner in "offer [ing] a transcript of Tran's grand jury testimony rather than having him testify before the jury." Id at 24.

As Judge Korman also noted parenthetically, if the trial court's finding on lack of due diligence is correct, then, given the centrality to the defense of Mr. Tran's grand jury testimony, petitioner was deprived of the effective assistance of counsel. (The petition could not be granted on this ground because it was not argued in the New York courts).

To warrant habeas relief, the state courts' decision had to be contrary to, or involve an "unreasonable" application of, clearly established federal law, as determined by the Supreme Court. 28 U.S.C. 2254(d)(1) (as amended by the Antiterrorism and Effective Death Penalty Act). The term "unreasonably," moreover, encompasses "some increment of incorrectness beyond error." Francis S. v. Stone, 221 F.3d 100 (2d Cir. 2000).

"Ultimately," Judge Korman held, "the 'increment of incorrectness beyond error' necessary to grant the writ is to be found in the failure of the trial judge to assess the likelihood that, even if Tran's mother had been interviewed, it would have led to Tran's appearance at trial." (Slip op. 27). See Ohio v. Roberts, 448 U.S. 56 (1980). In finding it highly unlikely that further efforts here would have been successful, Judge Korman pointed to a number of factors. Perhaps most prominent among them, petitioner's mother had ignored a subpoena that was served on her.

Choice of Law

In Ehrlich v. Diggs, 98 CV 7497 (EDNY, Oct. 12, 2001), Judge Raymond J. Dearie held that an oral management contract between plaintiff and a popular rap artist was enforceable. Resolution of this issue turned on the choice of law to be applied.

Plaintiff, a manager of a musical group and an attorney, resides in California and is admitted to practice in New York. Defendant Robert Diggs, known professionally as RZA and Prince Rakim, resides in New York. In 1993, pursuant to an oral agreement, plaintiff was hired as the manager of the Gravediggaz, defendant's original music group. Plaintiff claims that he was to receive 15 percent of the gross earnings of the Gravediggaz and each of its members for all engagements while he served as manager. The agreement was terminable by either plaintiff or the group at any time.

Contending that New York law applies, defendant argued that the Statute of Frauds bars enforcement of the oral agreement. According to plaintiff, the California Statute of Frauds, which does not bar enforcement, should govern.

Judge Dearie determined, first, that there was an actual conflict between the laws invoked by the parties. The New York and California Statutes of Frauds are nearly identical in invalidating oral agreements that by their terms are "not to be performed within a year from the making thereof." The California courts, however, have interpreted the statute narrowly, holding that employment contacts terminable at the will of either party fall outside the bar because, by their terms, they can be "performed" within one year. (Slip op. 6-8).

New York Law

In New York, by contrast, the key issue is whether the defendant can unilaterally terminate the contract, discharging all promises made. Here, the earnings in which plaintiff has an interest may continue indefinitely, as works sold to third parties will generate earnings far into the future. Thus, defendant has an open-ended obligation to plaintiff that he cannot terminate. As Judge Dearie noted, this would put the agreement within New York's Statute of Frauds.

Applying New York's choice of law rules, Judge Dearie observed that in "finder's fee" contract cases involving the Statute of Frauds, New York courts have applied an "interest analysis." As Judge Dearie explained, the "more significant facts" here support the application of California law:

. . . plaintiff resides in California and negotiated and entered the terms of the oral management agreement in California. Any actions taken by plaintiff in performing this agreement were in California, his sole place of business. ... These facts outweigh defendant's residence in New York as well as plaintiff's New York Bar membership. Moreover, the court is not persuaded that the location of the record company with which defendant signed a contract is significant for choice of law purposes. (Slip op. 12).

Judge Dearie also held that the contract was not void for indefiniteness, especially in light of the practices of the industry. Defendant's motion to dismiss or for summary judgment was therefore denied.

Peter R. Schlam and Harvey M. Stone are partners at Schlam Stone & Dolan. Bennette D. Kramer, a partner of the firm, assisted in the preparation of the article.

[Reproduced with permission from New York Law Journal Volume 226, Friday, December 14, 2001.  Copyright 2001 ALM Properties, Inc.  All rights reserved.]