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GOLD v. LOMENZO

September 18, 1969

David C. GOLD, Plaintiff,
v.
John P. LOMENZO, individually and as Secretary of State of the Department of the State of New York, the Department of State of the State of New York and Howard R. Leary, individually and as Police Commissioner of the Police Department of the City of New York, Defendants



The opinion of the court was delivered by: POLLACK

POLLACK, District Judge.

 The plaintiff has moved to enjoin the New York Department of State from enforcing an order dated July 24, 1969 suspending the plaintiff's real estate brokerage license for "demonstrated untrustworthiness" and fining him the sum of $250. The suspension ordered is to continue until plaintiff returns monies obtained from certain customers; deletes a certain clause in his Apartment Rental Agreement and agrees that his charge for renting apartments will not exceed one month's rent. The plaintiff's license was suspended following a departmental hearing duly held at which the plaintiff was represented by counsel. The hearing officer found among other things, that the defendant had charged unconscionably excessive fees to prospective apartment tenants. The findings were concurred in by the Secretary of State and the recommendations of the hearing officer were adopted and constituted the order referred to herein.

 Contending that the licensing statute is unconstitutional the plaintiff invokes the jurisdiction of this Court under the Civil Rights Act, 42 U.S.C. § 1983 and 28 U.S.C. § 1343(3) and (4) and the Declaratory Judgment Act, 28 U.S.C.§ 2201, and in his affidavit in support of the motion for an injunction, plaintiff's counsel requests the convening of a three-judge court pursuant to 28 U.S.C. § 2281.

 Section 441-c of Article 12-A of the Real Property Law of the State of New York, McKinney's Consol. Laws, c. 50, empowers the Department of State to revoke or suspend the license of a real estate broker on various grounds set forth in the statute including "demonstrated untrustworthiness or incompetency to act as a real estate broker or salesman." The constitutionality of this portion of the statute is questioned on the grounds that (i), no standards for determining "untrustworthiness" are set out; (ii), the section is overbroad; (iii), the section is unconstitutionally vague and deprives the plaintiff of due process; (iv), the plaintiff's liberty to contract has been infringed by the order since he must agree henceforth to charge only one month's brokerage commission and to return fees and monies heretofore collected under contracts with various clients.

 Plaintiff further alleges that "by virtue of the unlawful and unbridled activity and conduct of * * * LOMENZO, [Secretary of State] minority groups have been incited unlawfully and improperly against the plaintiff and frenzied demonstrations and of a disorderly and violent nature have been taking place repeatedly in front of and in the area and even inside the plaintiff's place of business with the participants bearing placards branding the plaintiff with every conceivable sort of misdeed, all instigated by the said defendant [LOMENZO], thus effectively destroying the plaintiff's business and property rights, precluding customers and patrons from entering plaintiff's premises and even instilling fear in landlords to deal any further with the plaintiff * * * and these participant members of minority races are now engaging in a warfare against the plaintiff as if the matter were one of racial hatred and violence is imminent, thus, the defendant Police Commissioner of the City of New York has been joined as a defendant in the instant cause of action for the reason that the Police Department of the City of New York and its officers are agreeable to stand by and merely to prevent a racial riot when the underlying cause is the unlawful raging of an irresponsible administrative officer".

 The motion for a Three-Judge Court

 The task of the district judge before whom an application for a three-judge court has been made is "* * * limited to determining whether the constitutional question raised is substantial, whether the complaint at least formally alleges a basis for equitable relief, and whether the case presented otherwise comes within the requirements of the three-judge statute". Idlewild Bon Voyage Liquor Corp. v. Epstein, 370 U.S. 713, 715, 82 S. Ct. 1294, 1296, 8 L. Ed. 2d 794 (1962).

 Section 441-c of the Real Property Law has been administered by the New York courts in a number of instances but so far as can be ascertained has not been tested on the grounds of unconstitutionality raised herein.

 Plaintiff attacks § 441-c as an unconstitutional delegation by the state legislature of its powers to a state agency, there being no legislative standards to guide the Secretary of State in his determination of a broker's "untrustworthiness".

 The doctrine of unconstitutional delegation of legislative authority stems from the provisions in the Constitution mandating a separation of powers as between the legislative and executive branches of government. U.S.Const. art. I, § 1 and art. I, § 8 P18. This doctrine is only applicable to delegation of federal power. There is no federal constitutional principle which prohibits a state legislature from delegating its powers to a state agency.

 
"The separation-of-powers principle, however pervasive it may be in American governments, is not in itself enforceable against the States as a matter of federal constitutional law."
 
Snell v. Wyman, 281 F. Supp. 853, 864 (S.D.N.Y.1968) (three-judge court).
 
"Of course, the Federal Constitution is not violated by a state delegation unless ...

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