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AMERICA'S BEST FAMILY SHOWPLACE CORP. v. CITY OF N

March 3, 1982

AMERICA'S BEST FAMILY SHOWPLACE CORP., Plaintiff,
v.
The CITY OF NEW YORK, DEPT. OF BUILDINGS, Irwin Fruchtman, Commissioner, and Dept. of Consumer Affairs, Bruce C. Ratner, Commissioner, Defendants



The opinion of the court was delivered by: MCLAUGHLIN

MEMORANDUM AND ORDER

Plaintiff, America's Best Family Showplace Corp., brings this action to challenge the constitutionality of various New York City zoning and licensing laws that regulate coin operated video games.

 Plaintiff succeeds the operator of a defunct restaurant on Woodhaven Boulevard in Queens. It now seeks to reopen the restaurant, but with a new twist: it wants to install forty dining tables in which are embedded coin operated video game machines. According to the plaintiff, the addition of these games will insure success, while their absence will almost certainly spell financial doom for the restaurant. *fn1"

 Plaintiff brings this action because the City's regulatory scheme effectively precludes it from obtaining a license to operate its restaurant in accord with its video game plan. In fact, the Queens Borough Superintendent has written in bold letters across a letter from plaintiff's architect describing the plan: "No more than 4 devices permitted." Rather than risk criminal and civil penalties, plaintiff seeks a declaration that the City's scheme violates its First and Fourteenth Amendment rights and its civil rights under 42 U.S.C. § 1983. Plaintiff also demands a preliminary and permanent injunction to enable it to open its restaurant without fear of civil liability or criminal prosecution. *fn2"

 The Statutory Scheme

 Several interrelated licensing and zoning laws and regulations governing coin operated video game machines or "common shows" are involved in this action. *fn3" The City prohibits the operation of any common show without a license from the Commissioner of the Department of Consumer Affairs. New York City Admin.Code, Article 5, § B32-41.0.

 The City's "Regulations Relating to Common Shows" ("Regulations") set forth the criteria for issuing the licenses. Section 1 provides that a license will be granted to an operator of one to four games so long as the facility is one of over seventy-five types of retail, service or amusement establishments. *fn4" The City has issued roughly 4,500 such licenses. Defendants' Exhibit 9.

 If the prospective licensee wishes to install more than four video games, the City's Administrative Code provides that the establishment will become an "arcade." Section B32-40.0 of the Code defines an arcade as "any facility which shall have five (5) or more common show games." *fn5" A license to operate an arcade, however, is not simple to obtain. Section 2 of the Regulations provides that an arcade "shall be located in such place as the Commissioner shall, in his sole discretion, approve. It shall be located in premises within zoning areas where such arcades are permitted and where the current certificate of occupancy permits such use." See also Regulation § 4(b).

 Thus, anyone who wishes to install more than four video games must, at the very least, show that the establishment is in a zone which permits arcades as a "use", and that it has a certificate of occupancy for such "use". *fn6" However, the New York City Department of Buildings will not issue a Certificate of Occupancy for establishments with more than four video games in Use Group 6 establishments, such as plaintiff's. Memoranda, Department of Buildings, dated October 7, 1975 and November 16, 1981. In addition, the City's zoning laws provide that arcades may be permitted only in C7, C6, C4-1, M2 and M3 types of zones. Arcades are uses permissible as of right in C7 commercial zoning districts. City Zoning Resolution, § 32-24. There are only a few of these zones, located mainly in Rockaway, Queens, Coney Island, Brooklyn, and portions of the Times Square area of Manhattan. Subject to certain restrictions, special permits may be obtained to operate an arcade in C6, C4-1, M2 and M3 commercial and zoning districts. City Zoning Resolution, §§ 73-35, 74-47. *fn7" These zones are located throughout the city. Despite these restrictions, approximately forty-five special permits were issued in the last two years. Of course, in addition, the possibility of obtaining a variance is available in all zones. *fn8" The City has provided evidence that at least five variances have been issued for arcades.

 The impact of the City's regulatory scheme is clear to anyone who takes a walk down any commercial block. Small establishments with up to four video games are omnipresent, while only a few establishments containing more than four games are to be seen.

 Preliminary Injunction

 To obtain preliminary injunctive relief, plaintiff must demonstrate (1) irreparable injury and (2) either (a) probable success on the merits or (b) sufficiently serious questions going to the merits to make those questions a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief. Jackson Dairy v. H. P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir. 1979); Caulfield v. Board of Education of City of New York, 583 F.2d 605, 610 (2d Cir. 1978). Plaintiff's inability to reopen an economically viable restaurant may be fairly regarded as an irreparable injury. The question thus distils to whether either of the second elements for the injunction may be found.

 Probable Success on the Merits

 A dispositive threshold question is whether video games are speech or expression protected by the First Amendment. *fn9" If they are not, the likelihood of plaintiff's success on the merits at trial is minimal, given the traditionally heavy presumption of constitutionality accorded to a local government's exercise of its zoning powers. See Schad v. ...


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