This was originally posted on the SGR Blog.
The Fall session of the Court’s 2019-2020 term saw a jurisprudential smorgasbord of decisions relating to the scope and application of civil, criminal, local and administrative statutes, ordinances and regulations.
- Conviction of a physician for homicide for providing controlled substances that resulted in overdose deaths.
- Liability of the State for injuries to an inmate by corrections officers.
- Place of injury and applicable statute of limitations in breach of contract dispute.
- Private right of action for bad-faith reporting of medical misconduct.
- Enforceability of local zoning law precluding music festival on rural property.
People v Stan XuHui Li
2019 NY Slip Op 08544
November 26, 2019
Question: May a physician be convicted of a homicide offense for providing controlled substances that resulted in overdose deaths?
Stan XuHui Li, then a physician board-certified in anesthesiology and pain management, was accused of running a “pill mill” at his Queens pain management clinic. During a lengthy jury trial, the People presented evidence that Li prescribed medically unnecessary high doses of opioids, alprazolam, and other controlled substances as a first resort. Li generally did not verify the source of the pain complained of by the patient for which the patient sought the controlled substances, order diagnostic tests for objective confirmation of the existence of the pain, or consider other pain management treatment options. He conducted little to no physical examination. Li often prescribed heavy doses of whatever medication his patients requested to alleviate their complaints of pain. He required payment in cash and charged extra for higher doses of opioids. Several of his former patients testified at trial that they were opioid addicts. They testified that they used the drugs prescribed to get high, rather than for legitimate pain management. Indeed, Li was advised by other medical practitioners and patients’ family members that several of his patients were addicted to opioids and at risk of dying from opioid abuse.
Two of Li’s patients, Joseph Haeg and Nicholas Rappold, died of overdoses caused by a combination of oxycodone and alprazolam, shortly after filling prescriptions for such drugs. Pills from those prescriptions were found in their possession when their bodies were discovered. Li was charged with two counts of manslaughter in the second degree for the deaths of Haeg and Rappold, along with multiple other crimes related to Haeg, Rappold, and a number of other patients.
Li was ultimately convicted of 2 counts of manslaughter in the second degree, 3 counts of reckless endangerment in the first degree, 3 counts of reckless endangerment in the second degree, 170 counts of criminal sale of a prescription, 1 count of scheme to defraud in the first degree, 2 counts of grand larceny in the third degree, 9 counts of falsifying business records in the first degree, and 8 counts of offering a false instrument for filing in the first degree. The Appellate Division unanimously affirmed.
Prior decisions from the Court of Appeals refuted Li’s assertion that a person who provided dangerous drugs that resulted in death could never, under any circumstances, be prosecuted for homicide. Although in those cases, the defendants injected the victims with drugs, the Court did not state that this was a necessary element, as a matter of law, for homicide charges to be sustained. Rather, the defendants’ injection of the drugs in those cases was one piece of evidence that supported the homicide charges.
There was no basis to conclude that the legislature intended to exclude from the ambit of the homicide statutes the prosecution of a defendant who, with the requisite mens rea, engaged in conduct through the sale or provision of dangerous drugs that directly caused the death of a person. The fact that the legislature has separately criminalized the illegal sale of controlled substances did not require a different conclusion. The Court agreed with the Appellate Division that “all that was needed for the manslaughter charge to be sustained was for the People to satisfy its elements.”
The Court also concluded that Li’s conviction of two counts of second-degree manslaughter was supported by legally sufficient evidence. A verdict is legally sufficient when, viewing the facts in a light most favorable to the People, there is a valid line of reasoning and permissible inferences from which a rational jury could have found the elements of the crime proved beyond a reasonable doubt. A sufficiency inquiry requires a court to marshal competent facts most favorable to the People and determine whether, as a matter of law, a jury could logically conclude that the People sustained its burden of proof. This deferential standard is employed because the courts’ role on legal sufficiency review is simply to determine whether enough evidence has been presented so that the resulting verdict was lawful.
In determining the legal sufficiency of the evidence for a criminal conviction the Court indulges all reasonable inferences in the People’s favor, mindful that a jury faced with conflicting evidence may accept some and reject other items of evidence. It was the province of the jury to assess witness credibility, and the Court therefore assumed on a legal sufficiency review that the jury credited the People’s witnesses.
To convict Li of second-degree manslaughter, the People were required to prove beyond a reasonable doubt that he “recklessly cause[d] the death” of Haeg and Rappold.
A conviction for reckless manslaughter required that there was a substantial and unjustifiable risk that death would occur; that the defendant engaged in some blameworthy conduct contributing to that risk; and that the conduct amounted to a gross deviation from how a reasonable person would act. The conduct must be the kind of seriously blameworthy carelessness whose seriousness would be apparent to anyone who shares the community’s general sense of right and wrong.
The People’s considerable evidence with respect to Li’s prescribing practices on a broader scale, which included testimony from several patients and their family members, was relevant as context to assess his mens rea on the manslaughter charges with respect to Haeg and Rappold. The People presented evidence that patients were not required to make appointments at Li’s clinic and were required to pay in cash.
Unlike the evidence with respect to some of Li’s surviving patients, the People did not present evidence that Li was directly informed that the deceased patients, Haeg and Rappold, were addicts or had previously overdosed on medications he prescribed. Nevertheless, viewing the evidence in the light most favorable to the People and giving the People the benefit of all reasonable inferences, the Court concluded that a rational jury could have found that Li was aware of and consciously disregarded a substantial and unjustifiable risk that his prescription practices would result in the deaths of Haeg and Rappold.
The People also were required to prove that Li’s conduct was a “sufficiently direct cause” of death, and that there was not an obscure or merely probable connection between his conduct and the deaths. The conduct must have set in motion the events which ultimately result in the victim’s death. Nevertheless, Li’s actions need not have been the sole cause of death, and he need not have committed the final, fatal act to be culpable for causing death.
A defendant’s conduct constitutes a sufficiently direct cause of death when the People prove that (1) that defendant’s actions were an actual contributory cause of the death, in the sense that they forged a link in the chain of causes which actually brought about the death; and (2) the fatal result was reasonably foreseeable.
WILSON, J. (dissenting):
The convictions were for Manslaughter in the Second Degree, arising from prescriptions Li issued to Haeg and Rappold, who died when they consumed substantially larger doses of controlled substances than those prescribed by Li.
The fundamental questions were under what circumstances had the legislature authorized manslaughter convictions of physicians when (a) a patient disregarded the prescribed dosage, resulting in death; or, more generally, (b) a physician made a reckless decision and a patient has died.
The legislature expressly provided a circumstance in which physicians may be charged with second-degree manslaughter: assisted suicide. Other instances in which doctors have been charged with manslaughter have been ones in which the doctor knew, or should have known, that the doctor’s actions would likely result in that specific patient’s death.
The rule implicitly adopted by the majority is quite different: a reckless doctor is criminally liable for all deaths of patients under his or her care where drugs prescribed by (or errors made by) the doctor contributed to a patient’s death, irrespective of whether the doctor knew or should have known that the deceased patient would abuse the prescription medicine and would die as a result of the abuse (or error).
Li’s prescriptions to Haeg and Rappold were not foreseeably the direct cause of their deaths. Haeg originally came to Li with an MRI showing a central L 5-1 herniation and complaining of chronic back pain that had persisted for 17 years, treated by opioids from his prior doctors. Li prescribed pain medication to Haeg at the same level he said he had been receiving from his prior doctor — a far from fatal dosage if taken as instructed. In sharp contrast to certain other of Li’s patients, Li had received no information to suggest that Haeg would not take his medication as instructed. Haeg’s early visits for medication, alone, did not indicate that his prescriptions would be the immediate and triggering cause of his death, and on the two occasions that Haeg returned early, Li wrote prescriptions for 84 pills instead of the usual 120.
As to Rappold, Li conducted an introductory physical examination of his new patient, who complained of pain from a fall, and prescribed him pain medication within accepted therapeutic bounds. When Rappold returned early, explaining that he had lost his prescription, Li issued him a prescription with a sharply reduced dose. Li did not return Rappold’s prescription to its original dosage until Rappold told Li that the pain medications were no longer working. Again, there was no indication that Rappold would not take his prescriptions as instructed and no evidence to suggest that those prescriptions would foreseeably result in Rappold’s death. Indeed, the evidence at trial suggested that Rappold had ingested drugs from multiple sources on the night he died, further attenuating the claim that Li caused his death. No record evidence indicated that Li had reason to believe Rappold was obtaining drugs from others, likely illegally.
The result here (holding a reckless doctor liable for homicide as a result of a patient’s death) was inconsistent with the way errors — even grossly negligent, fatal errors — by doctors have been historically addressed. The state licenses doctors to make sure they are at least minimally competent, withdraws licensure if a doctor proves incompetent, and subjects all doctors, good and bad, to tort liability under well-established law governing medical malpractice. Doctors can also be found guilty of crimes other than manslaughter, including crimes that the legislature specifically targeted at the criminal sale of prescriptions for which Li has been convicted.
Rivera v State of New York
2019 NY Slip Op 08521
November 25, 2019
Question: Correction officers are tasked with the responsibility of protecting the safety of inmates and coworkers while maintaining order in correctional facilities. When that obligation is breached, the State may be directly liable for injuries suffered by an inmate if it acted negligently, by failing to properly hire, train or supervise its employees, or vicariously liable if a culpable employee intentionally or negligently caused the injuries while acting in the scope of employment. The question before the Court in this assault and battery case was whether it was error to conclude the State met its summary judgment burden, establishing that it could not be liable under the doctrine of respondeat superior for injuries an inmate sustained during a brutal and unprovoked attack initiated by a correction officer.
Answer: No. The officers acted outside the scope of their employment.
In January 2010, Jose Rivera was an inmate at a prison operated by the State Department of Correctional Services. One morning when he entered the prison mess hall, correction officer Michael Wehby mocked his medically-issued protective helmet, which he was required to wear due to a seizure disorder. Rivera asked Wehby not to make fun of his helmet, fearing harassment by other inmates, and walked towards the food serving line. Wehby called Rivera back to the doorway of the mess hall. When Rivera obliged, Wehby grabbed his jacket, pulled him outside the mess hall and began punching him on the face and head. Rivera was forced to his knees while Wehby hit and stomped on him, at which point two other correction officers—Officer Robert Femia and Sergeant Joseph LaTour—pushed him down and applied handcuffs. Wehby removed Rivera’s helmet and continued the assault, yelling expletives and saying, in substance, “I hope you die.” While immobilized on the floor, Rivera was punched, kneed and kicked in the head. At this juncture, Wehby struck Rivera in the head with his radio with such force that the battery became dislodged and hit the wall. Eventually, Rivera lost consciousness. During the prolonged, brutal attack, Rivera did not resist or fight back, sustaining serious injuries. When Rivera was eventually brought to the facility emergency room, medical staff were falsely told that his injuries were the result of a seizure. No mention was made that force had been used on him.
Soon after the incident, the Inspector General’s Office conducted an investigation. Wehby, Femia and LaTour gave statements containing facts contrary to those asserted by Rivera. Their alternative version of events was deemed incredible. Among other disciplinary charges, all three were cited for providing false or misleading statements to the Inspector General; Wehby and LaTour were found to have engaged in the inappropriate use of force. Wehby was subsequently criminally prosecuted for the assault and, after a mistrial, pleaded guilty to official misconduct. All three correction officers lost their jobs, Wehby had sufficient service credit to retire.
Over a year after the attack, Rivera was granted permission from the Court of Claims to file a late notice of claim against the State of New York asserting causes of action for assault and battery. The State answered, denying all allegations for which a response was necessary. Approximately seven months later, Rivera filed a second claim against the State, alleging six causes of action—failure to provide adequate protection, gross negligence, excessive force, failure to properly train and supervise, negligence per se (for assault and battery), and intentional infliction of emotional harm. Shortly thereafter, this claim was voluntarily discontinued by stipulation of the parties.
Several years later, Rivera—represented by new counsel—moved for summary judgment on the second claim, attaching only that claim to the motion. Referencing several of the causes of action in the second, discontinued claim, Rivera contended that dismissal of its employees for use of excessive force and providing false or misleading information to the Inspector General was an admission demonstrating the absence of material issues of fact. With respect to the State’s vicarious liability for the acts of the correction officers, Rivera argued that they acted within the scope of employment because they “were on duty, in uniform, supervising inmates” at the time of the assault. However, addressing the excessive force cause of action, Rivera also asserted that there was “no justification whatsoever” for the attack on him. In support of the motion, he submitted the Inspector General’s report and an affidavit describing the assault.
The State opposed Rivera’s summary judgment motion, noting that the second claim had never been properly served and had been dismissed, leaving only the first claim for assault and battery, and arguing that the failure to attach the proper pleading to the motion required its denial. In its cross motion for summary judgment, the State contended that there was no basis on which it could be held vicariously liable for assault and battery, citing Rivera’s descriptions of the incident, because Wehby’s assault was outside the scope of employment. The State emphasized that the unjustified and unauthorized use of force was a clear departure from policies and procedures governing use of force. Rivera did not oppose the State’s motion for summary judgment.
The Court of Claims denied Rivera’s motion for summary judgment based on the failure to attach the correct claim but noted that, even if it considered his arguments in relation to the pending assault and battery claim, the result would have been the same. The Court granted the State’s cross motion for summary judgment, holding that Wehby’s attack was, as a matter of law, outside the scope of employment. After describing the elements of assault and battery, the Court determined that, based on the undisputed facts, there was “no reasonable connection” between the assault and the duties normally performed by correction officers, deeming the attack a “substantial departure” from the normal methods of performance. Further, the court reasoned that the “abhorrent” and unprovoked attack was wholly attributable to personal motive, reflected by the lack of any plausible justification for such vicious force. Reasoning that it “could not [have] reasonably anticipate[d] that [Wehby] would act in such a heinous way,” the Court held there was “no viable basis upon which the State of New York may be held liable” for assault and battery. The Appellate Division affirmed.
In the Court of Appeals, Rivera contended that the Court of Claims erred in granting the State’s summary judgment motion because the assault was within the scope of the correction officers’ employment and the State was liable under the doctrine of respondeat superior.
Based on the undisputed facts, consistently presented in the parties’ summary judgment papers, no reasonable fact-finder could have concluded that the assault constituted action taken within the scope of employment. Accordingly, the Court did not err in determining that the State could not be held vicariously liable for the assault and battery.
Although Rivera raised additional theories of recovery in his second claim, the only causes of action that remained pending—and which were the subject of the State’s motion for summary judgment—were the intentional torts of assault and battery pleaded in the first claim. Battery is the unjustified touching of another person, without that person’s consent, with the intent to cause a bodily contact that a reasonable person would find offensive. Assault involves putting a person in fear of a battery. Thus, Rivera sought to hold the State vicariously liable, on the basis of respondeat superior, for the intentional and offensive bodily contact perpetrated by its employees.
Under the common-law doctrine of respondeat superior, an employer—including the State—may be held vicariously liable for torts, including intentional torts, committed by employees acting within the scope of their employment. The employer may be liable when the employee acts negligently or intentionally, so long as the tortious conduct is generally foreseeable and a natural incident of the employment. Liability attaches for the tortious acts of employees only if those acts were committed in furtherance of the employer’s business and within the scope of employment. Thus, if an employee for purposes of their own departs from the line of duty so that for the time being their acts constitute an abandonment of service, the employer is not liable.
In determining whether an employee acted within the scope of employment for purposes of vicarious liability, the Court considered the connection between the time, place and occasion for the act; the history of the relationship between employer and employee as spelled out in actual practice; whether the act was one commonly done by such an employee; the extent of departure from normal methods of performance; and whether the specific act was one that the employer could reasonably have anticipated (i.e., whether it was foreseeable). Whether an employee acted within the scope of employment is a fact-based inquiry. However, the question may be resolved on summary judgment, particularly when the material facts are undisputed.
Accepting the version of events articulated in Rivera’s summary judgment motion papers, which largely mirrored that in the State’s motion, the State met its burden of demonstrating that there was no basis to conclude that the assault constituted conduct within the scope of employment. Although the officers were on duty and the assault occurred at the prison while Wehby supervised inmates in the mess hall—satisfying the time, place and occasion factor — the other factors did not support respondeat superior liability. The brutal beating could not be characterized either as an irregular performance of duty or a mere disregard of instructions. The attack was not in furtherance of any employer-related goal whatsoever.
The Court had long recognized that, in cases involving a use of force, whether an employee was acting within the scope of employment required consideration of whether the employee was authorized to use force to effectuate the goals and duties of the employment. In some cases, particularly those involving occupations for which some physical contact with others is permissible or even expected, it might be difficult to determine whether a challenged action fell far enough outside the boundaries attendant to the employment relationship such that the employee should be solely liable for tortious conduct. In those cases — where the question may be one of degree and not kind—the vicarious liability issue could be appropriately left to the fact-finder. But this was not such a case.
Correction officers are authorized to use physical force against inmates in limited circumstances not present here, such as in self-defense or to suppress a revolt. Regulations require correction officers to exercise “[t]he greatest caution and conservative judgment” in determining whether physical force against an inmate was necessary.
To be sure, correction officers at times use excessive force. Such conduct does not fall outside the scope of employment merely because it violated department rules or policies or crossed the line of sanctioned conduct. Under the multi-factored common-law test for determining respondeat superior liability, an employee’s deviation from directions or governing standards is only one consideration in the analysis. Here, the gratuitous and utterly unauthorized use of force was so egregious as to constitute a significant departure from the normal methods of performance of the duties of a correction officer as a matter of law. This was a malicious attack completely divorced from the employer’s interests.
Further, there was no evidence in the record that such a flagrant and unjustified use of force should or could have been reasonably anticipated. Assisted by other officers who immobilized and handcuffed Rivera, Wehby repeatedly punched and kicked him during a prolonged assault, removing Rivera’s protective helmet in order to facilitate more direct blows to his head. As such, based on the uncontested facts, it was evident that Rivera’s injuries were not caused by actions taken within the scope of employment and thus, there were no triable issues of fact as to the State’s vicarious liability for assault and battery.
Although Rivera was unable to recover based on the narrow theory pursued in the first claim, inmates who are unlawfully assaulted by correction officers are not without legal recourse. Even in the absence of respondeat superior liability for assault and battery, they may seek redress against the State in the Court of Claims on other tort theories, such as negligent hiring, training or supervision. Rivera attempted to bring those causes of action in the Court of Claims when he filed the second claim, which was discontinued by stipulation of the parties. Moreover, correction officers who assault inmates may also be sued directly in Supreme Court (or federal court) under 42 USC § 1983, or on common law tort theories for acts occurring outside the scope of employment.
RIVERA, J. (dissenting):
After first taunting Jose Rivera with jokes about his disabling condition, a correction officer viciously beat him, pummeling his head and body as he lay handcuffed on the floor, yelling and cursing he wished he would die. Two fellow officers responded as the altercation began, but rather than stop the beating, they restrained Rivera, rendering him helpless as the violence intensified.
The State conceded that this assault was indefensible and in clear violation of correctional facility rules. Nonetheless, the State filed for summary judgment to dismiss the claim, seeking to avoid vicarious liability for the permanent physical and emotional injuries proximately caused by its employees’ tortious conduct, on the ground that the officer who struck the blows acted outside the scope of his employment. Effectively eliding tort principles of vicarious liability for injuries proximately caused by the joint activity of the State’s employees, the State argued that Rivera only sought damages for the State’s role as employer of the officer who struck the blows. That theory of the case was belied by the pleading, bill of particulars and the State’s other submissions in support of the motion. Moreover, the State failed to meet its summary judgment burden because there were material triable issues of fact regarding whether the response by the two officers who restrained Rivera fell within the scope of their duty to secure and maintain control at the prison by use of force if necessary.
Almost four years after Rivera filed the suit and his verified bill of particulars, the State moved to amend its verified answer to assert three affirmative defenses, including that the officers acted outside the scope of their official duties or employment. The Court granted the motion over Rivera’s objection.
Two years later, Rivera moved and the State cross moved for summary judgment. Rivera argued that the Inspector General’s report and the disciplinary action taken against Wehby, LaTour and Femia were effectively concessions that the assault occurred as he alleged and established the State’s liability for the actions of its employees. Although the motion referred to allegations contained in the withdrawn second claim, the motion also referred to the assault and battery cause of action. Rivera argued that the officers “had no justification whatsoever for their use of force against him”; that “Wehby, LaTour and Femia were all found to have falsified records and lied under oath in an effort to mask their conduct”; and that those facts are established “in the form of admissions by the [State],” such that the State had “no defense to those claims, and summary judgment must be granted.” Rivera also observed that the State had cited “use of inappropriate force” as a reason for dismissing both Wehby and LaTour, and “provision of false and/or misleading information regarding the inappropriate use of force” as a reason for dismissing all three officers.
There were material triable issues of fact as to whether LaTour and Femia acted within the scope of their employment. Therefore, the State’s summary judgment motion should have been denied.
Contrary to the State’s argument, because Rivera had consistently maintained that all three officers acted within the scope of their employment, he did not limit his action against the State only to liability for Wehby’s conduct. Rivera’s pleading, as amplified by his verified bill of particulars, was premised on the State’s vicarious liability for tortious acts by Wehby, LaTour and Femia that proximately caused his injuries. The pleading identified the three officers as having assaulted him, and Rivera’s bill of particulars—responding to the State’s questions—also expressly stated that all three correction officers “assaulted him” and that the individual acts of all three officers were “the basis of the alleged negligence of the [State].” The State filed its summary judgment motion with full knowledge of the nature of the claim and the employee actors identified by Rivera and nevertheless the State chose to focus only on Wehby. As such, the State failed to establish the absence of factual questions regarding the scope of employment of the other two officers.
A correctional facility is a dangerous place, and correction officers have to quickly respond to sudden outbursts of violence and inmate disobedience to maintain control. The State authorized violence and a display of force in these types of situations, albeit in a measure appropriate to the circumstances. It is wholly foreseeable that officers would respond to restrain an inmate during a struggle with another correction officer. Indeed, correction officers were specifically authorized to use force against an inmate “to prevent injury to person or property” or “enforce compliance with a lawful direction,” and are even permitted under applicable regulations to use weapons (other than firearms) upon an inmate “to quell a disturbance.”
The majority’s conclusion that all three officers acted outside the scope of their employment because of the heinous nature and unforeseeability of the brutal assault adopted the State’s position that assisting Wehby’s beating of Rivera meant that LaTour and Femia too acted outside of their employment. This view collapsed all the individual acts to focus on Wehby as the correction officer who inflicted the blows, without taking into consideration the State employer’s liability for the separate conduct of the officers who responded to the altercation. It also ignored the extent to which LaTour and Femia’s actions may have constituted an “escalation” from what they perceived to be the proper restraint of an inmate involved in an altercation with an officer.
Deutsche Bank Natl. Trust Co. v Barclays Bank PLC
2019 NY Slip Op 08519
November 25, 2019
Question: Where did plaintiff’s causes of action for breach of contract accrued for purposes of CPLR 202, and which test applied to answer that question. If determined that California was the place of accrual, the second issue was whether plaintiff’s causes of action were timely according to California’s limitations period.
Answer: The Court rejected the multi-factor analysis and applied the general rule that when an economic injury has occurred, the place of injury is usually where the plaintiff resides. And further concluded that plaintiff’s causes of action accrued in California, and that its claims were time-barred.
The appeals stemmed from two residential mortgage-backed securities transactions with Deutsche Bank and Barclays. An RMBS transaction involved the bundling of mortgage loans into a pool that is sold to an affiliated purchaser, which then places the loans into a trust for securitization purposes. The trust then issues certificates that are purchased by investors, or certificateholders. The individual mortgage loans serves as collateral for the certificates, which paid principal and interest to certificateholders from the cash flow generated by the mortgage loan pool; that is, certificateholders made money when the borrowers made payments on their loans. High default rates by borrowers led to the collapse of the subprime housing market, a primary factor in the ensuing precipitous market decline and recession.
Deutsche Bank National Trust Company is the trustee for the RMBS trust. The relevant contracts in each transaction contained the familiar cure-or-repurchase provisions, and the contracts in the Barclays action contained an “accrual clause.”
Defendants moved to dismiss the actions, contending that they were untimely. Defendants argued that, pursuant to CPLR 202, New York’s borrowing statute, plaintiff’s claims must be timely under both the laws of New York and of California, where plaintiff resides. The parties agreed that if New York’s six-year limitations period for breach of contract actions applied, plaintiff’s actions were timely.
California has a four-year limitations period for breach of contract actions. Defendants argued that as a resident of California, plaintiff suffered economic injury in California, and plaintiff’s causes of action accrued in California for the purposes of CPLR 202.
Plaintiff conceded that it was a resident of California. It argued, however, that instead of applying the general rule that an economic injury is suffered where the plaintiff resided to determine where the cause of action accrued, the court should apply a multi-factor analysis. Plaintiff asserted that because it was suing in a representative capacity on behalf of the trusts, it did not suffer real economic loss, and its residence was irrelevant, or at least not the primary consideration, for determining the place of accrual.
Supreme Court denied defendants’ motions to dismiss to the extent those motions sought dismissal on statute of limitations grounds. Considering what it determined to be the relevant factors, the Court observed that the trusts were created pursuant to New York law, and that the parties had chosen New York substantive law to govern their rights. The Court rejected defendants’ arguments that other factors—such as where the mortgage notes were held and where the payment of state taxes was contemplated—pointed to California as the place of economic injury.
The Appellate Division unanimously reversed and granted defendants’ motions to dismiss the complaints. The First Department concluded that it need not decide whether the plaintiff-residence rule or the multi-factor analysis proposed by plaintiff applied because even under a factor analysis, plaintiff’s claims accrued in California. The Court reasoned that the mortgage loans were originated by California lenders and primarily encumbered real property located in California, the relevant agreements contemplated payment of state taxes, if any, in California, and the agreements stated that the mortgage notes may be held in California, but not New York. For these reasons, the Appellate Division concluded that the application of a multi-factor test pointed to California as the place of accrual. The Court further concluded that plaintiff’s actions were untimely under the California statute of limitations.
CPLR 202, New York’s borrowing statute, provides:
An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued, except that where the cause of action accrued in favor of a resident of the state the time limited by the laws of the state shall apply.
In other words, when a nonresident sues on a cause of action accruing outside New York, CPLR 202 requires the cause of action to be timely under the limitation periods of both New York and the jurisdiction where the cause of action accrued. It was undisputed that plaintiff was not a resident of New York and therefore that CPLR 202 applied unless plaintiff’s causes of action accrued in New York. The parties agreed that if plaintiff’s causes of action accrued in New York, then CPLR 202 did not apply, and plaintiff’s actions were timely as to both defendants.
The Court of Appeals first considered what test should apply to determine the place of accrual under CPLR 202. Defendants argued that the Court should apply the plaintiff-residence rule, which states that when an alleged injury is purely economic, the place of injury usually is where the plaintiff resides and sustains the economic impact of the loss. Defendants asserted that this rule provided predictability and uniformity, and that abandoning it in favor of a factor-based analysis would result in confusion and uncertainty.
Plaintiff agreed that its causes of action accrued in the place where the economic injury was sustained, but argued that the plaintiff-residence rule should not apply to determine where the injury occurred where, as here, the plaintiff was suing in merely a representative capacity. Instead, plaintiff argued, the Court should employ a multi-factor analysis to determine where the economic injury was felt. Plaintiff contended that a factor test was a better fit for determining “who became poorer, and where . . . they bec[a]me poorer” when the plaintiff sued in a representative capacity.
In Maiden v. Biehl, the federal district court applied a multi-factor analysis to determine the place of accrual for purposes of CPLR 202 with respect to one of the plaintiffs’ claims. The court reasoned that “[w]here the plaintiff is a trust, the use of the residency of the trustee as the sole factor to determine the place of accrual does not make sense as a practical matter, and is not required legally”. Instead, the court concluded that the economic injury was sustained in New York because that was where the trust was located. The court considered that taxes were paid in New York, the trust’s investment decisions were made in New York, and the securities in the case that formed part of the trust corpus were physically kept in New York.
Plaintiff asked the Court to apply a Maiden-like factor analysis. Plaintiff argued that the Appellate Division erred in the way it applied the Maiden test, and that the Court instead should have applied different factors than those used by the Maiden court to determine the place of injury. Plaintiff asserted that the Maiden court appropriately considered factors relevant to a small investment trust, but that different factors should be considered here because the trusts were large, pass-through RMBS trusts. To that end, plaintiff asked the Court focus on three factors: whether the trust documents contain a substantive choice-of-law provision, where the certificates were physically held, and where major decisions regarding the trusts were made.
The Court declined plaintiff’s request to apply a multi-factor analysis to determine the place of accrual for purposes of CPLR 202. Plaintiff’s proposed rule was similar to the “center of gravity” or “grouping of contacts” approach proposed and rejected in in earlier cases, and it illustrated the difficulty with a multi-factor analysis to determine the place of accrual: it would result in unpredictability and confusion.
Among the goals of CPLR 202 was the prevention of forum shopping and uniformity. As plaintiff acknowledged, a multi-factor test would require courts to apply different factors in different cases, and courts could afford different weight to the same factors based on different circumstances, possibly generating inconsistent outcomes. In addition to the prevention of forum shopping, another important purpose of CPLR 202 was “to add clarity to the law and to provide the certainty of uniform application to litigants”. Just as that goal would not be served by a “center of gravity” analysis, it also would not be served by an amorphous factor analysis.
Plaintiff also asked the Court to consider these factors: the parties’ selection of New York substantive law, the creation of the trusts pursuant to New York common law, the fact that the certificates were primarily held in New York, and that defendants and their affiliates made decisions about which mortgage loans to include in the pool in New York. Those factors may have been relevant to where the contracts were “negotiated, executed, substantially performed and breached”, but they were irrelevant to where the alleged economic injury was sustained.
The Court reaffirmed that “a cause of action accrues at the time and in the place of the injury”. Although courts may, in appropriate cases, conclude that an economic loss was sustained in a place other than where the plaintiff resides, the Court declined to apply the multi-factor analysis that plaintiff proposed.
The Court turned to the issue of where the economic injury was sustained in this particular case.
All parties agreed that the residence of the certificateholders did not provide a “workable basis” for determining the place of economic injury, inasmuch as the certificateholders were geographically scattered. In light of that agreement, the Court did not consider whether the residence of the certificateholders was an appropriate basis for determining the place of economic injury, or whether the residence of trust beneficiaries might be relevant to the place of economic injury in a different case. Although the certificateholders may have suffered concrete economic injury due to defendants’ alleged breaches, plaintiff was suing solely in its capacity as the trustee on behalf of the trusts for alleged breach of contract, and the parties agreed that certificateholders may have their own, separate claims. Plaintiff also did not argue that the location of the trust property should determine the place of economic injury.
For these reasons, the Court concluded that plaintiff’s residence applied to determine the place of injury. As trustee, plaintiff was authorized to enforce, on behalf of the certificateholders, the representations and warranties in the agreements.
Accordingly, it was appropriate to look to plaintiff’s residence as the place where the economic injury was sustained and, consequently, where plaintiff’s causes of action accrued for purposes of CPLR 202. Application of the plaintiff-residence rule supported CPLR 202’s goal of predictability and “certainty of uniform application to litigants”. That was especially true when considering that these were representative actions commenced by a trustee for the benefit of numerous, geographically-dispersed beneficiaries.
Plaintiff is a resident of California. To satisfy CPLR 202, plaintiff’s actions must have been timely under California’s statute of limitations.
As a general rule, when “borrowing” a foreign jurisdiction’s statute of limitations under CPLR 202, the Court imports that jurisdiction’s limitations period, along with the “extensions and tolls applied in the foreign state . . . so that the entire foreign statute of limitations . . . applie[s], and not merely its period.” Put another way, CPLR 202 called for a comparison of New York’s “net” limitations period, integrating all relevant New York extensions and tolls, and the foreign state’s “net” limitations period, with all foreign tolls and extensions integrated. And if the foreign limitations period was shorter, the foreign net period determines the timeliness of the action. California has a four-year limitations period for breach of contract actions.
Plaintiff contended that its actions were timely even if California’s four-year limitations period applied for three reasons, the first two of which relied on the meaning of terms in the parties’ contracts. First, plaintiff argued that California law, unlike New York law, will enforce pre-accrual written agreements to extend the statute of limitations, and that the parties entered into such an agreement in the Barclays action. Second, plaintiff contended that California law did not recognize a distinction between substantive and procedural conditions precedent, and under California law, the limitations period did not begin to run until plaintiff demanded that defendants comply with the cure or repurchase protocol and defendants refused. Third, plaintiff argued that accrual of its claims was delayed by California’s “discovery rule.”
With respect to plaintiff’s first two arguments, to the extent plaintiff relied on certain terms in the contracts to support its arguments that the actions were timely in California, plaintiff asked the Court to apply California common law to interpret the agreements. In the relevant contracts the parties included a New York substantive choice-of-law provision, making it clear that contractual language is to be interpreted pursuant to New York law. The Court was bound to interpret the contract provisions according to New York’s substantive law.
Choice-of-law provisions are intended to guarantee a uniform interpretation of contractual language. Reviewing substantially the same contract terms in other RMBS cases, the Court of Appeals had concluded that the provisions on which plaintiff relied did not functionally extend the date upon which the limitations period began to run.
WILSON, J. (dissenting):
The majority offered a lengthy advisory opinion. Whether breaches of contractual obligations made to a trust accrue under the laws of the state where the trust was formed, where the beneficiaries are located, or where the trustee is domiciled, was an interesting, unresolved question. But the case did not present that question, even if the parties had argued it. Deutsche Bank, in its capacity as trustee of the two trusts, was not a party to either of the allegedly breached contracts. Rather, it was subsequently granted the right to recover for those breaches by an assignment. In an assignment, “the assignee acquires a right against the obligor only to the extent that the obligor is under a duty to the assignor.” Assigning the right to pursue a remedy for a breach had no effect on the accrual of the breach itself.
The majority’s opinion answered the question: “What if Barclays and HSBC had made representations directly to trusts of which Deutsche Bank was trustee and breached those representations?” But that “what if” was not present here — not in the complaint and not in the contracts governing the transactions. Barclays and HSBC never made any representations to the trusts, and thus they never breached any representations to the trusts.
In a breach of contract claim, it is imperative to identify what contract has been breached, who made what promises to whom in that contract, and when the contract was breached. The majority elided all of those details and, as a result, failed to recognize that the Court precedents are dispositive.
The dissent concluded that under the Court’s precedents, the relevant breaches in this appeal were contracts between New York parties and therefore the claims accrued in New York. The only relevance of Deutsche Bank was that it was subsequently assigned the right to pursue remedies for those breaches on behalf of the trusts to which the claims were assigned. Holding that the breaches alleged here—in contracts between only New York parties—had a place of accrual based on the domicile of a trustee of a trust that was not a party to those agreements was extraordinarily novel; recent precedents expressly stated that alleged breaches of an agreement occurred the moment the agreements were executed. However, even if accepting the counterfactual proposition that Deutsche Bank’s claims were rooted in breaches of representations made directly to the trusts, the dissent would have held that for accrual purposes, the law under which these trusts were created — not the domicile of the trustee — determined the rule of accrual for breach.
Haar v Nationwide Mut. Fire Ins. Co.
2019 NY Slip Op 8445
November 21, 2019
Court of Appeals
Question: Did New York Public Health Law [§] 230(11)(b) create a private right of action for bad-faith and malicious reporting to the Office of Professional Medical Conduct?
Answer: The legislature did not intend to create a private right of action.
Haar, an orthopedic surgeon licensed to practice medicine in New York, treated four patients who were injured in automobile accidents and insured by Nationwide Mutual Fire Insurance Company. Haar submitted claims to Nationwide in connection with each patient, Nationwide either fully or partially denied each claim. Nationwide thereafter filed complaints with the Office of Professional Medical Conduct alleging insurance fraud. After an investigation, OPMC declined to impose any discipline. Haar then commenced an action, asserting that Nationwide’s complaints to OPMC lacked a good-faith basis in violation of the Public Health Law § 230(11)(b), and interposed a separate cause of action for defamation.
Nationwide removed the action to federal court and moved to dismiss the complaint, arguing that the Public Health Law did not expressly or impliedly provide Haar with a right of action and that the defamation claim was time-barred. The United States District Court for the Southern District of New York granted Nationwide’s motion to the extent of dismissing the cause of action based on the Public Health Law. The District Court opined that, if presented with the issue of whether Public Health Law implied a private right of action, the Court would hold that it did not. The District Court subsequently concluded that Haar’s defamation cause of action was time-barred.
Recognizing an Appellate Division split regarding whether Public Health Law implied a private right of action, the Second Circuit certified the question to the Court of Appeals.
Public Health Law governs professional medical misconduct proceedings. Section 230(11) sets forth the procedures for reporting “information which reasonably appears to show that a licensee is guilty of professional misconduct, as defined by the Education Law.” To that end, the statute requires that certain organizations and licensees report suspected medical misconduct, although the statute also permits “any other person” to submit complaints to OPMC. The provision states that “[a]ny person, organization, institution, insurance company, osteopathic or medical society who reports or provides information to [OPMC] in good faith, and without malice shall not be subject to an action for civil damages or other relief as the result of such report.”
Haar conceded that the Public Health Law did not expressly create a cause of action authorizing licensees to commence civil litigation against a complainant that filed an allegedly bad-faith and/or malicious report with OPMC. Consequently, recovery may be had only if a legislative intent to create such a right of action was fairly implied in the statutory provision and its legislative history.
The Court identified three “essential factors” to be considered in determining whether a private right of action can be fairly implied from the statutory text and legislative history: (1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme. All three factors must be satisfied before an implied private right of action will be recognized. Applying these factors here, the Court concluded that the legislature did not intend to create a private right of action under the Public Health Law.
Beginning with the first factor, Haar failed to demonstrate that he fell within the class the legislature intended to benefit by enacting the Public Health Law. Section 230 was first adopted, without subdivision (11), to facilitate resolution of medical disciplinary proceedings. Subdivision (11) was subsequently added and amended, providing “[a]ny person, organization, institution, insurance company, osteopathic or medical society” with immunity from civil litigation for making good-faith reports to OPMC. On the face of this provision, there was no indication that the legislature intended to benefit medical professionals accused of misconduct, as opposed to persons or entities that report suspected medical misconduct.
Even if there was any ambiguity in the statutory text with respect to who the statute was intended to benefit, the pertinent legislative history made clear that section 230(11)(b) was not added to the Public Health Law to protect physicians accused of misconduct. Rather, that provision was intended to protect the public from medical misconduct by encouraging reporting.
Haar argued that, given the numerous procedural protections afforded to doctors who are accused of misconduct, Public Health Law § 230 was generally intended for their benefit. However, the fact that the legislature had amended the section to provide procedural safeguards did not mean that the section, in particular, was designed to benefit medical professionals accused of misconduct. A degree of procedural due process is afforded in all administrative proceedings. To accept Haar’s argument essentially would be to conclude that, in all administrative law contexts, the very parties or entities being regulated were the intended beneficiaries of the statutes that regulated them. Inasmuch as the text and legislative history of section 230(11)(b) established that, in order to encourage increased reporting of unprofessional conduct, the legislature specifically sought to shield complainants from liability by imparting a limited immunity from civil actions commenced by regulated entities, Haar’s focus on the procedural due process protections generally accorded to licensees subject to medical disciplinary proceedings was misplaced.
There was no indication that physicians accused of misconduct were the intended beneficiaries of section 230(11)(b). Thus, the first prong for determining whether a statute implied a private right of action was not satisfied in this case.
Essentially, Haar sought to imply a private right of action based on negative implication; he argued that the “good faith” language in Public Health Law § 230(11)(b) implicitly recognized that bad-faith reporting is actionable.
As the parties agreed, common law remedies existed, thereby undercutting Haar’s argument that there was no other method of deterring bad-faith reporting. For example, although the issue was not before the Court, the parties were in agreement that the very same allegations that could support a cause of action under section 230(11)(b), if one existed, might also support a defamation claim when the identity of the claimant was known.
The third and final factor of the analysis—”whether creation of such a right would be consistent with the legislative scheme”—also militated against recognition of an implied right of action.
Public Health Law § 230(11)(b) was not enacted for the benefit of persons similarly situated to Haar, and a private right of action was inconsistent with the legislative purpose and broader statutory scheme. Therefore, the statutory text and legislative history did not imply a legislative intent to create a right of action under section 230(11)(b).
Town of Delaware v Leifer
2019 NY Slip Op 08446
November 21, 2019
Question: Were local zoning laws constitutional that precluded a landowner from holding a three-day music and camping festival on his rural property.
Answer: The challenged provisions did not unconstitutionally restrict the property owner’s First Amendment rights and were not void for vagueness.
Leifer owns a 68-acre property containing a single-family home and undeveloped land within the boundaries of the Town of Delaware. In 2016, he planned to sponsor on the property a three-day event named “The Camping Trip” — which he had hosted twice before in previous years — over the course of an August weekend. The event was advertised online as a celebration of Shabbat, the Jewish Sabbath, during which attendees would camp on the property and view live outdoor music performances before and after Shabbat, which extends from sundown Friday to sundown Saturday. Attendees could either bring their own camping gear or purchase a “Tent-Building Pass,” permitting them to use a tent assembled by the event organizer. Meals would be provided at the site through food truck vendors and a religious nonprofit organization would lead in Jewish religious ceremonies. Indicative of the scale of the 2016 event, preparations included off-site parking at a local school and rental of shuttle buses to transport attendees to the event site, a party tent for inclement weather, security at both the parking lot and event, $2,000,000 event insurance, 16 portable toilets, a 30-cubic-yard dumpster, EMTs on site and an ambulance on standby.
Before the 2016 Camping Trip was scheduled to occur, the Town filed an action in Supreme Court seeking a temporary restraining order, preliminary injunction and permanent injunction against the event, alleging it was prohibited by the Town’s Zoning Law. The Town asserted that the Camping Trip was a land use not permitted in the Rural District where Leifer’s property is located, noting that a “theater” — a land use encompassing the musical performances component of the event — is permitted elsewhere in the Town, but not in a Rural District. The complaint further alleged that the Zoning Law permitted those wishing to use property in a manner not specifically authorized to apply for a zoning variance or amendment but that Leifer had not done so for the Camping Trip. Leifer opposed the Town’s requested relief arguing, in part, that he had a right to hold the event on his property under the First Amendment.
Days before the event was scheduled to begin, the parties resolved the Town’s request for a preliminary injunction by stipulating that the 2016 Camping Trip could go forward on certain conditions, including that it would not exceed 400 guests, that Leifer would provide the Town confirmation that he consulted with the health and fire departments prior to the event, and that the Town would be named as an additional insured on the event insurance policy. The Town reserved the right to pursue its claim that the Zoning Law lawfully prohibited the event in the Rural District. The 2016 Camping Trip ultimately involved music performances by 15 acts.
When Leifer advertised his intent to hold the event again in 2017, the Town moved for summary judgment on its claim for a permanent injunction. The Town argued that uses not specifically authorized for a particular district under the Zoning Law were prohibited and, here, the Camping Trip was not a legal land use because the proposed activities did not constitute “a specified Principal Permitted Use, Special Use or Accessory Use” within a Rural District. Defending against the First Amendment claim, the Town asserted that the relevant Zoning Law provisions were content-neutral and satisfied the “intermediate scrutiny” test applied to such regulations, explaining that the Camping Trip would have secondary effects on the surrounding “rural and residential community” antithetical to the Zoning Law’s stated purpose of preserving the agricultural character of the Rural District.
Leifer opposed the Town’s motion and cross-moved for summary judgment dismissing the complaint, seeking a declaration that the Zoning Law’s definition of a “theater” was unconstitutional on multiple grounds, including that it was unconstitutionally vague under the Due Process Clause. With respect to the First Amendment, he contended that the restriction on theaters in the Rural District was unconstitutional, both as applied and on a facial overbreadth theory, because it banned personal displays of music, drama and film such as singing in one’s home.
Rejecting Leifer’s constitutional arguments, Supreme Court granted the Town’s motion, denied the cross-motion and permanently enjoined Leifer from advertising, selling tickets to, or holding the Camping Trip on his property, and clarifying that the injunction would not prohibit him from using his property in ways consistent with the dwelling located there.
The Appellate Division affirmed, reasoning that the relevant Zoning Law provisions were content-neutral “time, place and manner” restrictions that were compatible with the First Amendment. The Court explained that the relevant provisions were narrowly tailored to effectuate the Town’s substantial interest in “preserving the character of the area” because, while use of property as a “theater” was prohibited, they expressly allowed accessory uses in the Rural District that permitted residents to “worship, watch films, play music, have family and friends visit and engage in other private behavior customarily conducted by homeowners,” which activity was not encompassed by the excluded “theater” land use. The Zoning Law expressly permitted theaters in other, more developed parts of the Town. The Court concluded that the provisions left open ample alternative means for communication. The Appellate Division also rejected Leifer’s First Amendment overbreadth claim, reasoning that the relevant provisions did not “facially prohibit” a real and substantial amount of expression guarded by the First Amendment’ so as to have a chilling effect,” and the vagueness claims, concluding that the provisions invited neither arbitrary enforcement nor misunderstanding by those of ordinary intelligence.
The Court of Appeals “recogni[zed] the broad power of municipalities to implement land use controls to meet the increasing encroachments of urbanization on the quality of life.” Zoning ordinances constituted an exercise of the government’s police power to promote public health, safety and welfare and, as legislative enactments, were entitled to a strong presumption of constitutionality. Thus, a party challenging a zoning ordinance generally carried a burden to prove its unconstitutionality beyond a reasonable doubt.
The Town of Delaware Zoning Law’s general purpose was to “provide for the orderly and desirable development and use of land” in accordance with Town authority and to “promote the general welfare,” including by “promoting agriculture,” “[m]aintaining, to the maximum degree possible while accepting growth, the rural scenic character of the Town,” and “[p]reventing and eliminating other hazards and nuisances.” Under the Zoning Law, the Town was divided into seven distinct districts, each with a stated purpose, as well as two types of special “overlay” districts imposing additional regulations. Land uses that were permitted in each district were specifically listed. In addition to the “principal” permitted uses identified for a given district, the Zoning Law also authorized specific “accessory” uses, defined as those “incidental and subordinate” to the principal use of a piece of land or a building “located on the same lot,” “accessory use or structure”). Each zoning district contained a list of “special uses” that, subject to approval by the Town Planning Board, may be “permitted in a particular zoning district only on showing that such use in a specified location will comply with all conditions and standards for the location or operation of such use as may be reasonably imposed according to the requirements of [the Zoning Law]. The Zoning Law deemed prohibited any proposed use that “[was] not specifically permitted”; however, it also permitted a landowner seeking to engage in a prohibited use to submit a request for a zoning law amendment or variance.
None of the principal or accessory uses specifically permitted in the Rural District encompassed Leifer’s three-day outdoor music and camping festival. Such an event could not reasonably be characterized as a customary accessory use associated with a single-family residence. To the degree any portion of the event — or the entire event as planned — could be conducted as a special use or under a variance with permission from the Planning Board, Leifer never made any such request. Thus, unless the provisions were unconstitutional, his proposed use was clearly prohibited in the Rural District under the Town of Delaware Zoning Law and the Town was entitled to enjoin the event.
In evaluating constitutionality, the Court revisited the Zoning Law’s entire scheme for the Rural District. Leifer’s constitutional challenges, focused on a single land use defined in the Zoning Law that was prohibited in the Rural District but permitted in other zoning districts: the “theater” land use. His approach was rejected because the Town did not rely exclusively on the theater provision but cited the Zoning Law as a whole to show that certain uses were prohibited in a Rural District but expressive aspects of the event, such as the musical presentations, were permitted in other districts. Considering this context, neither the theater provision, nor the Zoning Law as a whole, violates Leifer’s constitutional rights.
In essence, Leifer’s First Amendment argument was that, because there were expressive aspects to his event, its restriction in a Rural District was unconstitutional and he had an unfettered right to hold a three-day music festival on his property free of regulation by the Town. He was mistaken. “[T]he First Amendment does not guarantee the right to employ every conceivable method of communication at all times and in all places.”
The First Amendment’s protections encompassed entertainment, including film and live musical and dramatic performances, and were implicated to the extent that the Zoning Law restricted non-accessory use of land for a “theater,” thereby precluding Leifer from hosting a music festival on his property. That the Zoning Law restricted certain modes of expression did not necessarily render it unconstitutional. Because various methods of speech, regardless of their content, may frustrate legitimate governmental goals, the government may regulate expression through reasonable “time, place, or manner” restrictions.
Generally, the First Amendment forbids the government to regulate speech in ways that favor some viewpoints or ideas at the expense of others. When the government regulates the content of speech, the usual presumption of constitutionality afforded legislative enactments is reversed: the regulation is presumptively invalid and, under a “strict scrutiny” test, it is enforceable only if it is the least restrictive means for serving a compelling government interest. A content-neutral time, place or manner restriction is enforceable if it satisfies a more lenient, intermediate scrutiny standard: it must be “narrowly tailored to serve a significant government interest and leave open ample alternative channels of communication.”
Alternatively, Leifer argued that, even if the Camping Trip could be lawfully prohibited in the Rural District, the theater restriction must be struck down on facial overbreadth grounds. The overbreadth doctrine permits invalidation of a statute on First Amendment grounds because of a judicial prediction that the statute’s very existence may cause others not before the court to refrain from constitutionally protected speech or expression. A statute is not facially overbroad merely because the Court can conceive of some impermissible applications. Rather, particularly where the statute regulates expressive conduct and not only pure speech, it will not be invalidated on this theory unless it is substantially overbroad. That is, courts must “assess the wording of the statute — without reference to Leifer’s conduct — to decide whether a substantial number of its applications are unconstitutional, judged in relation to the statute’s plainly legitimate sweep.
In this case, to the extent the relevant Town of Delaware Zoning Law provisions restricted expression, they were time, place and manner regulations that were content-neutral and thus subjected to intermediate scrutiny under the First Amendment. They did not ban protected forms of expression entirely — such as by precluding all theaters from the Town — but rather restricted the location within the Town where that type of expression may occur.
The challenged provisions were not substantially broader than necessary to further the government goal. They did not affect personal displays of music, drama or film consistent with residential use, including singing at home or watching a film in one’s living room. The accessory use provisions permitting home occupations and uses customarily accessory to principal uses like dwellings encompassed additional protected music, drama and film-related expression that one may conduct on a residential property. Simply put, the Zoning Law did not restrict the type of musical expression or entertainment typically associated with residential use of property, such as that attendant to a backyard barbeque, birthday party or similar gathering of family and friends (including observance of Shabbat). The only music, drama and film presentations excluded without a variance were those that did not qualify under one of these expressly permitted land uses, including those in the defined category of “theater[s]” requiring the use of a structure or other outdoor supportive facilities. To the degree there existed a subcategory of excluded theaters that would not undermine the government’s goal of preserving agricultural character — for example, presentations too large to qualify as a customary accessory use to a dwelling but nevertheless relatively quiet, small-scale and involving minimal traffic — that demonstrated at most that the relevant provisions may not be the narrowest means of advancing the Town’s aims, which would not invalidate them.
Leifer’s facial and as-applied void for vagueness challenges likewise failed. A statute is unconstitutionally vague if it fails to provide a person of ordinary intelligence with a reasonable opportunity to know what is prohibited, and it is written in a manner that permits or encourages arbitrary or discriminatory enforcement. Statutory language that is imprecise but nevertheless provides sufficiently specific warning when measured by common understanding will survive constitutional scrutiny.
The plain text of the challenged Zoning Law provisions afforded sufficient notice that a music festival such as the Camping Trip was prohibited in the Rural District absent a permit, variance or amendment from the Planning Board and, thus, the provisions were not void for vagueness as applied to Leifer.
Finally, the Court rejected Leifer’s contention that Supreme Court imposed an overly expansive injunction by enjoining the entire Camping Trip event when certain components of that festival fell outside the definition of a “theater.” Leifer’s argument again focused too narrowly on the theater provision. The three-day event that, as advertised, would have included combined use of the property as an outdoor music performance venue and campground did not fall within any of the land uses expressly authorized in the Rural District without a permit, variance or amendment from the Town and, thus, Supreme Court did not err in enjoining it as a whole. Supreme Court expressly excluded from the injunction uses consistent with the single family residence, mirroring the Zoning Law’s allowance of that principal use of Leifer’s property and any customary accessory uses. Moreover, if Leifer desired to use his property to conduct activities qualifying as a special use in the Rural District, the injunction did not prevent him from applying to the Planning Board for such permission as authorized by the Zoning Law, and/or seeking a variance or amendment.