November 12, 2014

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

In the U.S. District Court for the Eastern District of New York, Judge David G. Trager granted injunctive relief to a resident of a public housing development who challenged the New York City Housing Authority's blanket denial of her request to conduct post-Sept. 11 "Bible studies/grief counseling" sessions at the development's community center. Judge Thomas C. Platt dealt with res judicata and collateral estoppel issues in the context of a claim that the Town of Southampton, by freezing land-use applications, had "taken" private property without compensation. And Judge I. Leo Glasser found that, under the circumstances, defendants' 14-month delay in reporting a claim against them to their insurer did not violate the policy's "notice" provision.

Viewpoint Discrimination

In Daily v. New York City Housing Authority, 02 CV 1293 (EDNY, Sept. 12, 2002), Judge Trager granted a preliminary injunction prohibiting defendants from completely barring plaintiff's use of the community center at a public housing development to conduct "Bible studies" designed to comfort residents following the events of Sept. 11, 2001.

Plaintiff brought this action against the New York City Housing Authority (NYCHA) and three of its employees, claiming that they violated her rights under the First Amendment as well as the New York Constitution and Civil Rights Law. Specifically, she claimed that defendants had improperly denied her application to conduct "Bible study/grief counseling" sessions at the Woodside Community Center (WCC) at Woodside Houses in Queens, the public housing development where she lives. The complaint sought a preliminary injunction restraining defendants from enforcing NYCHA's denial.

The WCC at Woodside Houses is owned and operated by NYCHA. In requesting permission to use the WCC, plaintiff explained that her purpose was to "study the Scriptures and to aid residents in dealing with their distress over the senseless terrorist killings of September 11." NYCHA, denying the request, cited its regulations that "prohibit the use of any NYCHA property for religious or political activities."

The WCC is used for a variety of regularly scheduled educational programs, such as equivalency diploma classes, a ceramics class for senior citizens, an after-school program for six- to 12-year-olds, and an early evening program for teenagers. The WCC is also used rent-free on a temporary basis by several groups, such as a recognized tenant association, if space is available. NYCHA has guidelines and procedures defining these uses. NYCHA Standard Procedure prohibits several activities at NYCHA-managed community centers - including religious services - unless they are "directly connected to the principal reason for a family oriented event, such as weddings."

After extensively analyzing the relevant guidelines, the testimony at the hearing on the preliminary injunction and the "somewhat confusing" law in this area, Judge Trager found that, while the WCC appears to be a "nonpublic forum" during the hours when it has regularly scheduled educational activities, it is a "limited public forum" at other times. Thus, "the restrictions that were used to deny [plaintiff] access to the WCC must be examined to determine whether they were viewpoint neutral and reasonable in light of the purpose served by the WCC." Slip op. 24-25.

The Standard Procedure, the court observed, appears to discriminate on its face against religion and among religious uses. As Judge Trager also stated:

[I]t is not necessary to precisely define the scope of activities within the genre of [plaintiff's] proposal because defendants acknowledge that they would permit informal discussions among tenants about their feelings about the events of September 11. This alone demonstrates that defendants engaged in viewpoint discrimination in denying [plaintiff's] request. If other tenants would be allowed to use the WCC to discuss their feelings about the events of September 11 from any perspective, it must be discriminatory to bar [plaintiff] from doing so from an explicitly religious point of view.

Similarly, by allowing some religious activity at the WTC in connection with family events, defendants cannot exclude plaintiff's proposed religious-based activity. Slip op. 32-33.

The court also found the restrictions here to be unreasonable in light of the purpose served by the forum. Defendants failed to specify how, in the absence of any conflict with regularly scheduled activities, granting plaintiff's request would interfere with the forum's purposes. Indeed, "the Standard Procedure and NYCHA's resistance to allowing religious groups to use the WCC and other community centers carry an implication of hostility to religion." Slip op. 36.

Granting the preliminary injunction, the court found a sufficient showing of irreparable harm and a likelihood of success on the merits. The injunction required defendants to make the WCC available for plaintiff's requested purpose only at times when the Standard Procedure would allow any other "temporary" use of the facility.

Reservation of Taking Claims

In W.J.F. Realty Corp. v. The Town of Southampton, 00 CV 6071 (EDNY, Sept. 4, 2002), an action alleging a taking without just compensation in violation of the Fifth Amendment, Judge Platt rejected defendants' argument that prior state court litigation barred the claim here under res judicata and collateral estoppel.

Plaintiffs own 275.5 acres of real property in the Town of Southampton. In 1985, plaintiffs applied for a minor subdivision of the property, but the Town of Southampton (Town) put an "administrative hold" on the application. The Town adopted a series of moratoria on approval of land-use applications pending preparation of various Generic Environmental Impact Statements. By the time the moratoria expired in June 1995, the Town had opted into a plan, prepared by the Central Pine Barrens Joint Planning and Policy Commission pursuant to the New York State Long Island Pine Barrens Protection Act of 1993, which imposed a permanent development moratorium on the property. Plaintiffs contend that the administrative hold and moratoria froze their application until subdivision and development of their property were permanently barred.

In March 1993, plaintiffs had sued the same defendants in New York Supreme Court, Suffolk County, asserting various claims for declaratory judgment that the moratoria and subsequently adopted local laws were confiscatory under the New York State Constitution and violated procedural and substantive due process, Equal Protection and § 1983. In the state case, plaintiffs specifically reserved their federal claim under the Fifth Amendment for the taking of property without just compensation. Though plaintiffs were unsuccessful in state court, the trial court there specifically recognized that plaintiffs had reserved their Fifth Amendment claim.

In their federal complaint, plaintiffs asserted their Fifth Amendment claim that the administrative hold and moratoria constituted a temporary and/or permanent taking of their private property for public use without just compensation. The complaint alleged that the scope of the action was limited because of the related claims previously litigated.

Judge Platt denied defendants' motion to dismiss based upon res judicata and collateral estoppel. As to res judicata, the court first examined Williamson County Reg'l Planning Comm'n v. Hamilton Bank of Johnson City, 473 US 172 (1985), which held that a landowner may not claim a violation of the Fifth Amendment until the landowner has unsuccessfully attempted to obtain just compensation through the procedures provided for by the state. A federal taking claim is not ripe and is subject to dismissal, unless the landowner has been denied just compensation in a state action. Next, Judge Platt turned to England v. Louisiana State Board of Medical Examiners, 375 US 411 (1964), which held that when a federal court abstains and sends an action to state court, litigants may inform the state court that they intend to return to federal court for disposition of federal claims.

Noting that Williamson requires litigants such as plaintiffs asserting taking claims under the Fifth Amendment to bring their claims in state court first, Judge Platt honored plaintiffs' reservation of their federal taking claims. The court determined that (1) plaintiffs were not voluntarily in state court because, under Williamson, they were required to commence litigation there; (2) plaintiffs reserved their federal taking claims for federal court and did not make them in state court; (3) by not objecting to plaintiffs' reservation under England when it was asserted, defendants had waived their right to object; and (4) the state court judge expressly recognized and honored plaintiffs' reservation and did not decide plaintiffs' federal taking questions.

Similarly, Judge Platt rejected defendants' collateral estoppel argument. First, as the court noted, taking claims under federal and New York law carry different burdens of proof. New York requires civil regulatory taking claimants to establish their claims beyond a reasonable doubt. Second, the state court opinion contains no analysis of federal law.

Judge Platt also concluded that the Rooker-Feldman doctrine did not apply. Under that doctrine, inferior federal courts lack subject matter jurisdiction over cases that effectively seek review of state court judgments if claims are "inextricably intertwined" with the state courts' determination. However, claims are not barred if they have not been presented in state court proceedings and the plaintiff did not have an opportunity to present the claims in those proceedings. As Judge Platt found:

[T]he State courts did not consider Plaintiffs' federal taking claims, the State courts honored plaintiffs' England reservation, [the state court judge] expressly stated that Plaintiffs only brought claims under New York law, and finally New York and federal law carry with them different burdens of proof.

Slip op. 23.

Notice to Insurer

In U.S. Liability Insurance Company v. Dehkterman, 00 CV 2273 (EDNY, Oct. 4, 2002), Judge Glasser held that defendants' 14-month delay in reporting an incident to their insurer did not bar coverage under the insurance policy's "notice" provision, where defendants had reasonably believed that they were not liable.

This case arose when the driver of a van transporting children to and from a daycare center forgot a child left in the van, who was later found dead from excessive heat. The parents, as executors of the child's estate, sued the driver, the daycare center and the individuals who operated the center for negligence and wrongful death. The operators of the center did business as "European Child Care Corporation." The company that insured them brought this action for a declaratory judgment that it was not obligated to defend or indemnify the insured defendants.

The policy required the insured to notify the company "as soon as practicable" of an occurrence which might result in a claim. It was undisputed that defendants waited fourteen months before giving such notice.

As Judge Glasser noted, defendants' delay is excusable under New York law if they had a good-faith, reasonable belief that they had no liability. Finding that defendants met this standard, Judge Glasser stated:

... They did not own, operate or supervise the operation of the van, nor was the driver their employee or even a hired independent contractor. Furthermore, they were told by the police and the district attorney that they bore no fault ..., and even their insurance company did not advise them to contact the insurance company.

As Judge Glasser also held, coverage was not precluded by the policy's provision excluding coverage for injury or damage "[a]rising out of the ownership, maintenance, use or entrustment to others of any ... 'auto' ... owned or operated by or rented or loaned to any insured." Here, the insured defendants did not own, operate or borrow the van.

Peter R. Schlam and Harvey M. Stone are partners at Schlam Stone & Dolan.

[This article is reprinted with permission from the December 12, 2002, issue of the New York Law Journal. Copyright © 2007 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited. ]