In this long and tortured litigation over New York City’s adult use zoning regulations on First Amendment grounds, which I previewed here, the Court of Appeals was asked to decide whether New York City met its burden to show that the reconfiguration of adult businesses to attempt to avoid regulation under the adult use zoning ordinance was nothing more than sham compliance.
In For the People Theatres of N.Y., Inc. v City of New York (No. 59), the City’s original Adult Use Zoning Ordinance said that if a “substantial portion” of a business was devoted to sex-related merchandise or entertainment, it was subject to the stringent adult use zoning regulations. The City clarified that a substantial portion was 40 percent or more of the business’s floor space. Thus, under the City’s so called “60/40 rule,” a business was not subject to the adult use zoning regulations if less than 40 percent of its floor space was devoted to adult entertainment or products. In response to the 60/40 rule, adult businesses reconfigured their floor space to fall under the 40 percent threshold.
After the first round of this litigation reached the Court of Appeals in 2005 (see For the People Theatres v City of New York, 6 NY3d 63 ), the Court remanded for a trial on a single issue: whether the 60/40 businesses, as the reconfigured adult businesses were called, were so transformed that they no longer presented the same deleterious effects on the surrounding neighborhood and the amendments, therefore, violated the businesses’ free speech rights. If not, the City could prevail on its “sham” reconfiguration argument and the amendments would withstand constitutional scrutiny.
Following the trial, Supreme Court held that the reconfigured businesses were not merely a sham, and that the City’s amended adult use zoning, therefore, violated the businesses’ First Amendment rights. The Appellate Division, First Department affirmed on a split vote, with two Justices dissenting.
The Court of Appeals, however, reversed. First clarifying the standard of review that applies to a First Amendment challenge to a zoning ordinance, the Court held that it applies intermediate scrutiny, that is, “whether the ordinance was narrowly tailored to serve a substantial governmental interest and allowed for reasonable alternative channels of communication” (Opn, at 4). Particularly, applying the United States Supreme Court’s burden shifting framework in Los Angeles v Alameda Books, Inc. (535 US 425 ), the Court noted that it is the municipality’s duty first to come forward with evidence supporting its legislative rationale for regulating adult uses. This is not a heavy burden, the Court noted. The burden then shifts to the plaintiffs to show either that the municipality’s evidence does not support its rationale or providing its own evidence casting doubt on the challenged regulations. Finally, the burden shifts back to the municipality produce more evidence in support of a theory that justifies the zoning ordinance.
In its 2005 decision in For the Peoples Theatres I, the Court held that the first two inquiries had been satisfied, and so only the third prong of the analysis was remanded for trial and is at issue on this appeal. On remand, then, the question was whether the City could come forward with substantial evidence that the 60/40 businesses continued to have an ongoing focus on the sexually explicit, notwithstanding the reconfiguration of their floor spaces and signs.
The Court held that the Appellate Division erred in holding the City to a higher standard of proof than whether substantial evidence exists in the record. There is no conflict between applying intermediate scrutiny as the ultimate standard of review of the First Amendment claims and requiring the City to bring forward substantial evidence to satisfy its burden of proof under the three-prong Alameda Books analysis, the Court held.
Applying the substantial evidence standard, the Court held that the evidence supported only one conclusion: “that the City met its burden of showing continued focus on
sexually explicit activities and materials by the adult
bookstores and adult eating and drinking establishments” (Opn, at 29). Particularly, the Court held:
The 60/40 businesses’ reconfigurations to avoid regulation was nothing but a sham, the Court held. Because the City satisfied its burden to justify its adult use zoning ordinance under the proper substantial evidence standard, the Court rejected the plaintiffs’ First Amendment challenges and declared the ordinance facially constitutional.
The Court of Appeals’ opinion can be found here.