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TIROLERLAND, INC. v. LAKE PLACID 1980 OLYMPIC GAME

June 28, 1984

TIROLERLAND, INC., and BARBARA SCSIGULINSKY, Individually and as Executrix of the Estate of FRANK SCSIGULINSKY, Plaintiffs,
v.
LAKE PLACID 1980 OLYMPIC GAMES, INC.; LAKE PLACID OLYMPIC ORGANIZING COMMITTEE, PETER SPURNEY, J. BERNARD FELL, WILLIAM KISSEL, PETER ROLAND, and JAMES BROOKS, all Individually and as Directors, Officers, Agents and/or Members of LAKE PLACID 1980 OLYMPIC GAMES, INC. and/or LAKE PLACID OLYMPIC ORGANIZING COMMITTEE; NEW YORK STATE OLYMPIC ACCOMMODATIONS CONTROL CORP., ROGER TUBBY, and MILLARD J. SMITH, Individually and as Directors, Officers and Agents of New York State Olympic Accommodations Control Corporation; WILLIAM HENNESSY, Individually and As Commissioner OF TRANSPORTATION OF THE STATE OF NEW YORK, Defendants.



The opinion of the court was delivered by: MINER

MEMORANDUM-DECISION and ORDER

ROGER J. MINER, D.J.

 I

 This action arises out of an alleged taking of property without just compensation in violation of the fifth and fourteenth amendments to the United States Constitution. The action is brought pursuant to 42 U.S.C. § 1983 and jurisdiction is predicted upon 28 U.S.C. §§ 1331 and 1343.Before the Court are motions by all defendants for summary judgment, Fed. R. Civ. P. 56(b).

 II

 A. BACKGROUND

 In the winter of 1980, a bonanza befell the small, upstate New York village of Lake Placid, when, after an absence of forty-eight years, the Winter Olympic Games ("Games" or "Olympics") returned. In spite of its name, the community was not merely a quiet or passive beneficiary of random good fortune. In 1954, twenty-two years after hosting the 1932 Winter Olympics, a small group of area residents began to mount a determined effort to bring the Games back to the United States and to Lake Placid. Over the course of the next twenty years, ten bids were presented to both the United States Olympic Committee and the International Olympic Committee. On October 27, 1974, the XIII Olympic Winter Games were awarded to the ambitious village nestled in the scenic surroundings of northern New York.

 The logistics of accommodating the Games presented needs which were themselves of olympic proportions, and appropriate preparations were in order. An integral part of those preparations included ensuring the community's ability to house, in reasonable accommodations, what ultimely turned out to be 60,000 visitors, athletes, and officials. As part of the overall plan to provide facilities, New York State enacted into law Chapter 912 of the Laws of 1977 ("Chapter 912" or "statute"). Titled "AN ACT in relation to the regulation, control and stabilization of hotel, motel and other lodging accommodations available to the public during the XIII -- 1980 Olympic Winter Games at Lake Placid, New York," the statute provided in part, as follows:

 The legislative hereby finds and determines that the conduct of the XIII olympic winter games at Lake Placid and the availability of hotel, motel and other lodging facilities to the general public, as well as to those persons required to be provided with lodging, or determined by the accommodations staff of the Lake Placid 1980 olympic games, inc., to be a matter of state concern and that an appropriate mechanism for the regulation, control and stabilization of rates for such lodging facilities is essential to insure proper conduct of the games.

 To assure that the required facilities are available and ready for required olympic use during the olympic period and to further assure that the rates charged for such facilities are reasonably and properly regulated, controlled and stablized, the legislature hereby finds and declares that there should be created a corporate governmental agency, constituting a public benefit corporation, to be known as the "Olympic Accommodations Control Corporation", which could undertake appropriate measure relating to lodging rates and be vested with a preferential right to provide for the acquisition and allocation of commercial lodging facilities during the olympic period to meet the requirements of the Lake Placid nineteen hundred eighty olympic organizing committee.

 Chapter 912, § 1.

 The statute created the defendant Olympic Accommodations Control Corporation ("OACC") for substantially two purposes: to regulate hotel and motel room rates during the Olympic period, Chapter 912, § 4(9), and to provide that hotel and motel accommodations were available for persons whose attendance was necessary for the conduct of the Games, Chapter 912, § 5. OACC was empowered to exercise a "preferential right of leasing" hotel and motel rooms in the Olympic region, id., although the statute provided for a release of the preferential right upon the granting by OACC of an application made by a motel owner, id.

 The enactment and implementation of that statute provides the basis for plaintiffs' challenge here, a challenge which underscores, along with recent political events and our memories of the controversial Summer Olympics of 1980, the disheartening fact that the Games have strayed considerably from their ancient and once exalted stature.

 B. The parties

 1. Plaintiffs

 Plaintiff Tirolerland, Inc., was the owner of the Tirolerland Motel and Restaurant located the the town of Jay, New York, eighteen miles from Lake Placid. Plaintiff Barbara Scsigulinsky, individually and as proposed executrix of the estate of Frank Scsigulinsky, was, with her late husband, a principal of Tirolerland, Inc. and a co-owner of the Swissaire Motor Lodge, also located in Jay, New York. Both motels went out of business following the Olympics, allegedly as a result of defendant's actions.

 Plaintiffs' two motels contained a total of fifty-one guest rooms. Traditionally, plaintiffs opened their full fifty-one units only for the peak summer season, keeping only ten Tirolerland units open during the entire year. Swissaire was entirely closed during the winter months. For the month of February in the three years preceding the 1980 Games, plaintiffs had an average gross income of $1,938.00.The peak August figures for the same three year period showed an average gross income of approximately $15,257.00. By contrast, plaintiffs' gross receipts for the three week Olympic period totaled $38,349.04 at Tirolerland, and $32,648.72 at Swissaire. Affidavit of Mark Adler, P16.

 2. Defendants

 Described by plaintiffs as the "Olympic" defendants are the Lake Placid Olympic Organizing Committee ("LPOOC") and its alleged alter ego, Lake Placid 1980 Games, Inc., the entities which bid and undertook to run the 1980 Winter Olympic Games. Defendants Peter Spurney, J. Bernard Fell, William Kissel, Peter Roland, and James Brooks, were officers of the defendant organizations and allegedly played an active role in the acts here complained of. The remaining, or state defendants, include OACC and its officers, Messrs. Roger Tubby and Millard J. Smith. Finally, William Hennessy, New York State's Commissioner of Transportation, is also named as a defendant. *fn1"

 C. The present claims

 In January of 1979, OACC served plaintiffs, as well as other motel owners, with notices of intention to acquire all guest rooms at both Tirolerland and Swissaire.Soon thereafter, plaintiffs entered into various agreements with LPOOC and the Canadian Broadcasting Company ("CBC") consenting to rental of the rooms at a rate of $60.00 a day. The rental period encompassed a twnety-one day span from February 5, 1980 through February 25, 1980. Ultimately, plaintiffs were awarded an additional $5.00 for each guest room day.

 The gravemen of plaintiffs' complaint is that the acts of defendants effected an unconstitutional taking of their property without just compensation. In more specific terms, the amended complaint sets forth four purportedly distinct causes of action. It alleges first that the defendants, acting pursuant to Chapter 912, did

 appropriate, condemn, take, and convert to their own use, the property of the plaintiffs by preventing them from renting the motel rooms owned by plaintiffs to such persons and at such rates as the plaintiffs deemed appropriate and in fact such defendants required that the plaintiffs rent all the motel rooms operated by them, solely to persons selected by the defendants and at rates determined solely by the defendants substantially lower than rates which market conditions would otherwise dictate, without the consent and over the objection of the plaintiffs and without proper and reasonable and just compensation therefor.

 Amended complaint, P39. *fn2"

 As a second cause of action, the amended complaint alleges that the defendants intentionally closed the roads in the vicinity of Lake Placid, "thereby preventing access by the general public and would-be patrons of the plaintiffs' establishments," amended complaint, P51, and resulting in a taking without just compensation. The third and fourth causes of action are essentially reiterations of the first two, and no additional claims are therein raised.

 All defendants have moved for summary judgment against the amended complaint based on a variety of legal theories. Because the Court finds that the challenged actions did not amount to an unconstitutional taking, it is unnecessary to reach defendants' other arguments. *fn3"

 III

 On motions for summary judgment, it is well established that the Court's function "is not to resolve issues of fact but to determine whether any material factual issues are raised after resolving all questionable inferences in favor of the party against whom the judgment is sought. Only if no material factual issues exist may summary judgment be granted." United States v. Matheson, 532 F.2d 809 (2d Cir.), cert. denied, 429 U.S. 823, 50 L. Ed. 2d 85, 97 S. Ct. 75 (1976); see also Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 444-45 (2d Cir. 1980); Heyman v. Commerce & Industry Insurance Co., 524 F.2d 1317, 1319 (2d Cir. 1975). Although the moving party bears the burden of clearly establishing the non-existence of any issue of fact that is material to a judgment in his favor, Adickes v. S.H. Kress & Co., 398 U.S. 144, 157-61, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970), the party opposing summary judgment "may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him." Fed. R. Civ. P. 56(e); In re B.D. International Discount Corp. v. Chase Manhattan Bank, N.S., 701 F.2d 1071, 1077 n.11 (2d Cir. 1983), cert. denied, 464 U.S. 830, 104 S. Ct. 108, 78 L. Ed. 2d 110, 52 U.S.L.W. 5263 (U.S. Oct. 3, 1983) (No. 82-2159).

 As will be evident from the discussion which follows, there are no disputed factual questions which preclude this Court from finding that no unconstitutional taking has occurred. Moreover, certain undisputed facts make it abundantly clear that the present action would, in any event, be barred by the applicable statute of limitations.

 IV

 A. The takings analysis

 The fifth amendment, made applicable to the states through the fourteenth amendment, proscribes the taking of private property for public use without just compensation. There is no longer any question that in certain circumstances, government action short of an actual physical invasion will nonetheless constitute a taking. See, e.g., Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 98 S. Ct 2646. 57 L. Ed. 2d 631 (1978) ("Penn Central "). Since "not every destruction or injury to property by governmental action has been held to be a "taking" in the constitutional sense," Armstrong v. United States, 364 U.S. 40, 48, 4 L. Ed. 2d 1554, 80 S. Ct. 1563 (1960), however, the question of whether a taking has occurred "requires an examination of whether the restriction on private property "forc[es] some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." Pruneyard Shopping Center v. Robins, 447 U.S. 74, 83, 64 L. Ed. 2d 741, 100 S. Ct. 2035 (1980) (quoting Armstrong v. United States, 364 U.S. 40, 49, 4 L. Ed. 2d 1554, 80 S. Ct. 1563 (1960)); see also Penn Central, 438 U.S. at 123. This in turn, entails an "inquiry into such factors as the character of the governmental action, its economic impact, and its interference with reasonable investment-backed expectations." Pruneyard Shopping Center, 447 U.S. at 83; Penn Central, 438 U.S. at 124. Only when government "regulation goes too far [will it] be recognized as a taking," Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415, 67 L. Ed. 322, 43 S. Ct. 158 (1922), since "[g]overnment hardly could go on if, to some extent, values incident to property could not be diminished without paying for every such change in the general law. . . ." Id. at 413.

 A taking does not occur merely because governmental action burdens or restricts some particular right of interest in property. Before a taking transcends constitutional limitations, the government must deny the owner all or an essential use of his property. See United States v. General Motors Corp., 323 U.S. 373, 378, 89 L. Ed. 311, 65 S. Ct. 357 (1945). In essence, plaintiffs claim here that because they were compelled to comply with the regulations effected pursuant to Chapter 912, they were denied the entire use of their property and suffered a taking by these defendants. In more particular terms, plaintiffs contend that the acts of defendants in their "occupation and use" of plaintiffs' motels was so complete as to leave plaintiffs with only "the right to make the beds and pay the bills." Affidavit of Michael W. Kessler, P22.

 In reality, plaintiffs' true dissatisfaction stems from their disappointment in not being able to price-gouge Olympic patrons who sought motel accommodations.This Court is persuaded,however, that under the relevant analysis, plaintiffs were in no sense subjected to an unconstitutional taking of their property without ...


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