Warschauer, given the relief that Mr. Sperman insisted upon.
At a subsequent hearing in this court, Mr. Sperman persisted
in his demand that Warschauer be allowed to sell its cemetery
plots at market price. He refused to consider an amendment to
the statute or forms of judicial or administrative relief, by
analogy to the cy-pres doctrine, which would allow Warschauer
to transfer the graves to the use of an organization that
provided free or low cost burial for needy Jews.
The essence of the taking claim is that Section 1513(c)
prohibits a plot owner from selling unless the plot is offered
first to the cemetery at the original purchase price, plus
simple interest at 4%. The statute, it is contended, is
confiscatory because the price of the plot as determined by the
statute is far below the market price.
Section 1513(c) is part of a complex statutory scheme
designed to regulate cemeteries. The statutes are a legislative
response to abuse and neglect of cemetery grounds that
threatened to "thrust them back upon municipalities to become
public charges. . . ." See Report of Attorney General on the
Subject of Cemeteries, 1 N.Y.Legis.Docs., 172d Sess.,
Legis.Doc. No. 7 (1949).
Cemeteries have been regulated since ancient times.
See P. Jackson, The Law of Cadavers and of Burial and Burial
Places 187-94 (2d ed. 1950). Sale and disposition of cemetery
property is a matter of strong public concern in New York and
is subject to the State's police power. See, e.g., Grove Hill
Realty Co. v. Ferncliff Cemetery Ass'n, 7 N.Y.2d 403, 408,
165 N.E.2d 858, 862, 198 N.Y.S.2d 287, 292 (1960); Jewish Center v.
Mt. Eden Cemetery Ass'n, 15 A.D.2d 94, 99, 222 N.Y.S.2d 644,
647 (2d Dep't 1961); Reed v. Knollwood Park Cemetery Inc.,
441 F. Supp. 1144, 1151 (E.D.N.Y. 1977).
Courts have long recognized the right of a state to enact
laws reasonably related to its police power, even though such
laws may interfere with the contractual relations and
commercial freedoms of private parties. See, e.g., Home
Building & Loan v. Blaisdell, 290 U.S. 398, 54 S.Ct. 231, 78
L.Ed. 413 (1934). Statutes that interfere with the sale or
disposition of cemetery property have been upheld by the New
York Court of Appeals as a reasonable exercise of the police
power. See, e.g., Grove Hill Realty Co., 7 N.Y.2d at 408, 165
N.E.2d at 862, 198 N.Y.S.2d at 292 (upholding constitutionality
of section that requires certain percentage from sale of plots
deposited into maintenance funds); Jackson v. Elmont Cemetery
Inc., 300 N.Y. 526, 528, 89 N.E.2d 250, 251 (1949) (upholding
validity of section that limits percentage of proceeds that can
be paid to vendors of cemetery land).
Section 1513(c) is a valid exercise of the State's police
power. The legislature could rationally have believed it
necessary to prevent the commercial exploitation of cemetery
plots intended to be devoted to eleemosynary purposes. It is
sufficient that the method chosen was reasonable. See
Williamson v. Lee Optical Co., 348 U.S. 483, 488, 75 S.Ct. 461,
464, 99 L.Ed. 563 (1955).
Price limitations may ensure that surviving or controlling
members of a fraternal society do not use the proceeds from
plot sales for their private benefit and do not sell-off grave
sites before the burial needs of all possible recipients have
been satisfied. By eliminating excessive profits the chance of
fiduciary abuse is reduced. The fact that in an individual case
such a statute operates in a burdensome manner against persons
acting in good faith is not grounds for its invalidation.
See City of New Orleans v. Dukes, 427 U.S. 297, 96 S.Ct. 2513,
49 L.Ed.2d 511 (1976).
The claim that Section 1513(c) is inconsistent with the first
amendment is without merit. The statute is facially neutral. As
applied, the statute may impact Jewish fraternal organizations
disproportionately, but any lack of proportion does not result
from a discriminatory motive. It occurs, if at all, because
Jewish immigrants were the ones who primarily formed benevolent
societies and purchased cemetery plots. Other ethnic groups,
paid small weekly premiums for burial policies or took up ad
hoc collections after an individual's death. Catholics at one
time were required by the Church to be buried in cemeteries
belonging to the Archdiocese.
Fraternal Benefit Societies are subject to liquidation
proceedings by the State Insurance Department. See N.Y.Ins.Law
§ 4522. The Superintendent of Insurance may seek a judicial
order of liquidation of any financially insolvent or impaired
entity. See N.Y.Ins.Law § 7417. An order of liquidation can be
obtained only on court approval after a full hearing. If the
proposed liquidation is involuntary, the entity has a right to
raise defenses and introduce evidence to establish solvency.
Id. There are no grounds shown for a federal court to interfere
with a possible State instituted liquidation proceeding.
Section 1513(c) cannot be invalidated in order to allow
Warschauer to sell its plots for their market value.
Warschauer's complaint is dismissed with prejudice.
The state shall provide a copy of the transcript of the
hearing to Mr. Sperman. The clerk shall send copies of this
memorandum and judgment to plaintiff and defendant and notify
plaintiff of its right to appeal.
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