Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


September 30, 1993

GAIL S. SHAFFER, Individually and as Secretary of State of the State of New York, Defendant.

The opinion of the court was delivered by: ARTHUR D. SPATT

 SPATT, District Judge.

 The plaintiffs commenced this action to obtain a declaratory judgment to declare that Chapter 696 of the New York State Laws of 1989 (N.Y. Real Prop. Law § 442-h) and the regulations promulgated thereunder to establish or enforce "nonsolicitation zones" are unconstitutional. The plaintiffs move for summary judgment pursuant to Fed. R. Civ. P. 56, invalidating Real Property Law § 442-h(1) and (2) and 19 N.Y.C.R.R.. Part 178 in total, as well as invalidating 19 N.Y.C.R.R. § 175.17(a), as applied by the defendant to truthful and non-misleading communications by real estate licensees which do not make a representation regarding the entry or prospective entry into the neighborhood of persons of a particular race, color, religion, or national origin.

 The defendant moves for summary judgment pursuant to Fed. R. Civ. P. 56 dismissing the action on the ground that she is entitled to dismissal of the action as a matter of law.


 The plaintiff New York State Association of Realtors, Inc., represents real estate licensees throughout the State of New York and the plaintiff Clifford Hall is a real estate broker in Queens, New York. The defendant Gail Shaffer is the Secretary of State of the State of New York. This case centers around nonsolicitation orders issued by the Secretary of State which prevent licensed real estate brokers from soliciting prospective clients directly. The purported reason for these nonsolicitation orders is to prevent the practice of blockbusting. The term blockbusting is defined as a practice whereby individuals "prey[] upon the fears of property owners in racially transitional areas and thereby induce the kind of panic selling which results in community instability" ( Zuch v. Hussey, 394 F. Supp. 1028, 1049 [E.D. Mich. 1975], partially affirmed and remanded, 547 F.2d 1168 [6th Cir. 1977]).

 Blockbusting is prohibited by a federal statute which states that:

"it shall be unlawful . . . for profit, to induce or attempt to induce any person to sell or rent any dwelling by representation regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race, color, religion, sex, handicap, familial status, or national origin" (42 U.S.C. § 3604[e]).

 This statute was "intended by Congress to reach only real estate brokers and their agents" (Michigan Protection & Advocacy Service, Inc. v. Babin, 799 F. Supp. 695, 715 [E.D. Mich. 1992]). The practice of blockbusting is also prohibited pursuant to a New York State statute which provides that:

"it shall be an unlawful discriminatory practice for any real estate broker, real estate salesman or employee or agent thereof . . . to represent that a change has occurred or will or may occur in the composition with respect to race, creed, color, national origin or marital status of the owners or occupants in the block, neighborhood or area in which the real property is located, and to represent, directly or indirectly, that this change will or may result in undesirable consequences in the block, neighborhood or area in which the property is located, including but not limited to the lowering of property values, an increase in criminal or anti-social behavior, or a decline in the quality of schools or other facilities" (N.Y. Exec. Law § 296[3-b]).

 In addition to the above statutes, the New York Secretary of State promulgated a regulation which stated that:

"No broker or salesperson shall induce or attempt to induce in order to sell or lease any residential property or to list same for sale or lease by making any representation regarding the entry or prospective entry into the neighborhood of a person or persons of a particular race, color, religion or national origin" (19 N.Y.C.R.R. § 175.17[a]).

 This regulation was initially enforced by "cease and desist" orders. These orders prohibited brokers from soliciting homeowners who notified the Secretary of State that they did not desire to sell or lease their property and did not want to receive solicitations. In addition to the cease and desist orders, the Secretary of State issued nonsolicitation orders in the early 1970s which prevented licensed real estate brokers from actively soliciting homeowners in designated areas in Kings and Queens County.

 The issuance of these nonsolicitation orders was challenged in 1979 by a group of realtors. In finding that the implementation of nonsolicitation orders by the Secretary of State was arbitrary and capricious, the New York Court of Appeals stated that:

 Apparently simultaneously with the above nonsolicitation orders, the Secretary of State issued an order for various communities within Bronx County which prevented real estate brokers in that area from soliciting listings from residents in any manner including, letters, postcards, telephone calls, door-to-dooor canvassing, window signs, billboards, advertisement by handbills or news publications, except those of general circulation. It was claimed that nonsolicitation orders restricted speech in an unconstitutional manner and exceeded the authority granted to the Secretary of State for the enactment of this type of regulation.

 In reviewing the Bronx nonsolicitation order, the New York Court of Appeals stated that the order:

"leaps well beyond that legislative articulation and interdicts administratively all broker-initiated solicitation, not just the illegal solicitation as targeted by the Legislature. Thus, the Secretary has gone beyond administering the written law and has, under color of regulatory authority, actually rewritten and extended the law. The agency cannot make unlawful what the Legislature still has on the books as lawful" ( Campagna v. Shaffer, 73 N.Y.2d 237, 245, 536 N.E.2d 368, 538 N.Y.S.2d 933, 934 [1989]).

 Following the Campagna decision in 1989, the New York State Legislature enacted N.Y. Real Property Law Section 442-h which states, in relevant part, that

"if, after a public hearing and a reasonable investigation, the secretary of state determines that the owners of residential real property within a defined geographic area are subject to intense and repeated solicitations by real estate brokers and salespersons to place their property for sale with such real estate brokers and salespersons, and that such solicitations have caused owners to reasonably believe that property values may decrease because persons of different race, ethnic, social, or religious backgrounds are moving or are about to move into the neighborhood or geographic area, the secretary of state may adopt a rule, to be known as a nonsolicitation order, directing all real estate brokers and salespersons to refrain from soliciting residential real estate listings within the subject area " (N.Y. Real Prop. Law § 442-h[2][a] [emphasis added]).

 It is asserted by the plaintiffs that this law "on its face and as applied imposes a content based restriction on permissible communication by real estate licensees" (Plaintiff's Memorandum of Law in Support of Plaintiff's Motion for Summary Judgment, at p. 10).

 It is undisputed that pursuant to this statute, on May 18, 1991 the Secretary of State imposed five-year nonsolicitation orders on communities within Queens, Nassau, Kings, and Bronx counties. According to the applicable regulations promulgated by the Secretary of State, which are similar to those regulations promulgated prior to the enacting of Section 442-h,

"[a] nonsolicitation order is a directive to all real estate brokers and real estate salespersons. The nonsolicitation order directs that all brokers and salespersons must refrain from soliciting listings for the sale of residential property within a designated geographic area. A nonsolicitation order prohibits any and all types of solicitation directed at or toward homeowners in the designated geographic area. The types of solicitation that are prohibited include but are not limited to letters, postcards, telephone calls, door-to-door calls, handbills, and postings in public areas. . . ." (19 N.Y.C.R.R. § 178.1).

 In addition, these regulations prevent realtors from establishing or relocating real estate offices within a nonsolicitation area without prior approval from the Secretary of State (See 19 N.Y.C.R.R. § 178.2).

 Specifically, within Queens County, the Secretary of State imposed restrictions upon the communities of Richmond Hill, Woodhaven, Glen Oaks, Floral Park, Bellerose, Queens Village, Cambria Heights, Laurelton, Springfield Gardens, Brookville, and Rosedale (See 19 N.Y.C.R.R. § 178.8). In Nassau County the nonsolicitation order covers the town of Elmont (See 19 N.Y.C.R.R. § 178.9). In Kings County the restrictions cover the communities of Mill Basin, Canarsie, Flatlands, Georgetown, Bergen Beach, Marine Park, and Mill Island (See 19 N.Y.C.R.R. § 178.7). Finally, in Bronx County the restrictions cover Community District 10 which includes Coop City, Pelham Bay, Spenser Estates, Eastchester Bay, Schuylerville, Edgewater, Locust Point, Throgs Neck, Dover Beach, City Island, and Hart Island (See 19 N.Y.C.R.R. § 178.6).

 The plaintiffs plead six counts in their complaint to support the assertion that the above statute and supporting regulations are unconstitutional, namely: (1) First Amendment, (2) Privileges and Immunities Clause, (3) Equal Protection, (4) Fair Housing Act, (5) 42 U.S.C. §§ 1981-1982, and (6) 42 U.S.C. § 1983.

 Since both the plaintiffs and the defendant move for summary judgment, the Court will address the standards used by the Court in addressing such a motion and then examine the arguments advanced by the parties.


 Summary Judgment Standard:

 A court may grant summary judgment "only if the evidence, viewed in the light most favorable to the party opposing the motion, presents no genuine issue of material fact," Cable Science Corp. v. Rochdale Village, Inc., 920 F.2d 147, 151 (2d Cir. 1990), and the movant is entitled to judgment as a matter of law ( Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 [1986]; see also Fed. R. Civ. P. 56[c]; United National Ins. Co. v. The Tunnel, Inc., 988 F.2d 351, 354 [2d Cir. 1993] [summary judgment standard]). The Court must resolve all ambiguities and draw all reasonable inferences in the light most favorable to the party opposing the motion (see Twin Laboratories, Inc. v. Weider Health & Fitness, 900 F.2d 566, 568 [2d Cir. 1990]; Liscio v. Warren, 901 F.2d 274, 276 [2d Cir. 1990]; Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 [2d Cir. 1986], cert. denied, 480 U.S. 932, 94 L. Ed. 2d 762, 107 S. Ct. 1570 [1987]).

 According to the Second Circuit "summary judgment is a tool to winnow out from the trial calendar those cases whose facts predestine them to result in a directed verdict" ( United National, supra, 988 F.2d at p. 355). Once a party moves for summary judgment, in order to avoid the granting of the motion, the non-movant must come forward with specific facts showing that a genuine issue for trial exists ( Western World Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 [2d Cir. 1990] [quoting Fed. R. Civ. P. 56[e]; see National Union Fire Ins. Co. v. Turtur, 892 F.2d 199, 203 [2d Cir. 1989]). A genuine issue of material fact exists if "a reasonable jury could return a verdict for the nonmoving party" ( Liberty Lobby, Inc., supra, 477 U.S. at p. 248; see Converse v. General Motors Corp., 893 F.2d 513, 514 [2d Cir. 1990]).

 However, mere conclusory allegations, speculation or conjecture will not avail a party resisting summary judgment (see Western World, supra, 922 F.2d at p. 121). If there is evidence in the record as to any material fact from which an inference could be drawn in favor of the non-movant, summary judgment is unavailable (see United National, supra, 988 F.2d at pp. 354-55; Rattner v. Netburn, 930 F.2d 204, 209 [2d Cir. 1991]). Finally, the Court is charged with the function of "issue finding", not "issue resolution" ( Eye Assoc., P.C. v. Incomrx Sys. Ltd. Partnership, 912 F.2d 23, 27 [2d Cir. 1990]).

 It is within this framework that the Court addresses the respective motions for summary judgment.

 First Amendment -- Freedom of Speech:

 The First Amendment, which is applied to the states by the Fourteenth Amendment, protects commercial speech from unwarranted government regulation (See Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 761-62, 48 L. Ed. 2d 346, 96 S. Ct. 1817 [1976]; see also Basiardanes v. Galveston, 682 F.2d 1203, 1218-19 [5th Cir. 1982] [addressing commercial speech protection]). Commercial speech is an expression related to the economic interests of the speaker and is entitled to First Amendment protection because "speech does not lose its First Amendment protection because money is spent to project . . . [or] even though it may involve a solicitation to purchase or otherwise pay or contribute money" ( Virginia Pharmacy, supra, 425 U.S. at p. 761 [citations omitted]).

 The Supreme Court stated that, when examining a situation involving commercial speech, a court must first determine whether the expression is protected by the First Amendment ( Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 65-66, 103 S. Ct. 2875, 77 L. Ed. 2d 469 [1983]). In accomplishing this task, the Supreme Court established a four-part test, as follows:

"For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest" ( Central Hudson Gas & Electric Corp. v. Public Service Comm'n, 447 U.S. 557, 566, 65 L. Ed. 2d 341, 100 S. Ct. 2343 [1980]).

 The Central Hudson constitutionality analysis set forth "the general scheme for assessing government restrictions on commercial speech" ( United States v. Edge Broadcasting Co., 113 S. Ct. 2696, 125 L. Ed. 2d 345, slip op. at p. 5 [U.S. 1993] [addressing the advertisement of a lottery]). The Central Hudson commercial speech analysis has been applied to situations involving constitutional challenges to statutes regulating housing solicitations by real estate brokers.

 Housing Solicitations

 In determining whether a government may impose regulations on housing solicitations, the Court starts with an examination of Linmark Assoc., Inc. v. Township of Willingboro, 431 U.S. 85, 86, 52 L. Ed. 2d 155, 97 S. Ct. 1614 (1977), which addressed a local ordinance prohibiting the posting of "For Sale" and "Sold" signs "on all but model homes" ( Linmark, supra, 97 S. Ct. at 1615). The local ordinance was enacted in response to a perception that white homeowners were leaving a racially integrated community. Since the ordinance differentiated the "For Sale" and "Sold" signs from other lawn signs based solely upon the content of the signs, the Supreme Court examined whether the township had an interest in regulating the content of the communication ( Linmark, supra, 431 U.S. at p. 94).

 In determining that the ordinance violated the Constitution in that it improperly regulated speech, the Supreme Court stated that "if dissemination of this information can be restricted, then every locality in the country can suppress any facts that reflect poorly on the locality, so long as a plausible claim can be made that disclosure would cause the recipients of the information to act 'irrationally"' ( Linmark, supra, 431 U.S. at p. 96). The ultimate holding in Linmark was that "the ordinance under review . . . which impairs 'the flow of truthful and legitimate commercial information' is constitutionally infirm" ( Linmark, supra, 431 U.S. at p. 97).

 Content based restrictions on speech have, however, been upheld by the Supreme Court when a governmental entity has a valid concern to prevent a secondary effect of the protected speech. An example of such a situation is where a city treats adult movie theaters differently than other kinds of theaters because of the city's concern about secondary effects (See Renton v. Playtime Theatres, Inc., 475 U.S. 41, 47-48, 89 L. Ed. 2d 29, 106 S. Ct. 925 [1986]). In that situation, the Supreme Court determined that secondary effects of the adult theaters, including increased crime, lowered property values, and decreased quality of life, permitted the city to enact the adult movie ordinance ( Renton, supra, 475 U.S. at p. 48).

 In examining a content based restriction on housing solicitations, the Seventh Circuit recognized that the "regulation of commercial speech based upon content is less problematic [than the regulation of non-commercial speech]. Because of the greater potential for deception or invasions of privacy in the context of some advertising methods, content-based restrictions on commercial speech are more often upheld" ( Curtis v. Thompson, 840 F.2d 1291, 1297-98 [7th Cir. 1988] [citations omitted]). The Curtis decision specifically stated that:

"Our holding today is narrow: once a homeowner gives notice to a person that he or she does not desire to have the home listed for sale and that he or she does not desire to be contacted by real estate brokers who have previously been made aware of the decision, the right of a homeowner to decide what he or she will or will not hear, under the right to privacy, plainly outweighs the right of a real estate broker to continue to contact that person in his or her home. Once actual notice is received by a real estate agent, that agent is barred from contacting the homeowner for the purpose of persuading him or her to list the residence for sale" ( Curtis, supra, 840 F.2d at p. 1304 [emphasis added]).

 The Seventh Circuit stressed the importance of protecting the privacy of individuals in their own homes, especially "once they have expressed their desire to be left alone" (Curtis, supra, 840 F.2d at p. 1305).

 In South-Suburban Housing Center v. Board of Realtors, 935 F.2d 868, 874-75 (7th Cir. 1991), cert. denied, 112 S. Ct. 971 (1992), the Seventh Circuit, three years later, again addressed the constitutionality of anti-solicitation ordinances enacted in various southern suburbs of Chicago, Illinois. These ordinances prevented real estate brokers from soliciting residents "after such owner or occupant has notified the . . . Village Clerk that he does not wish to be so solicited" (Id.). The purpose of these ordinances was to prevent the practice of blockbusting. In addition to the above restriction, four municipalities in the same suburban area enacted limitations on the display of real estate "for sale" signs. This "for sale" sign restriction, however, was repealed by the municipalities prior to the trial of this action apparently due to the advice of counsel (See South-Suburban Housing, supra, 935 F.2d at p. 877).

 The Seventh Circuit examined the applicable law governing the government's right to restrict commercial speech and the requirement that there be a reasonable "fit" between the legislature's goal and the means chosen to accomplish the goal. It was the ultimate conclusion of the Seventh Circuit that the statutory restrictions "'directly advance' the interest in residential privacy and exhibit a reasonable relationship between means and ends that guarantees that the restrictions are not more extensive than necessary to achieve their residential privacy purpose" ( South-Suburban Housing, supra, 935 F.2d at p. 894).

 The Sixth Circuit addressed a situation involving a realtor who "mailed solicitation cards to 40 to 60 residents in a two block area . . . in northeast Cleveland Heights" ( Heights Community Congress v. Hilltop Realty, Inc., 774 F.2d 135, 141 [6th Cir. 1985], cert. denied, 475 U.S. 1019, 89 L. Ed. 2d 318, 106 S. Ct. 1206 [1986]). The District Court determined that in the context of the integrated neighborhood at issue, the solicitation violated the federal blockbusting statute 42 U.S.C. § 3604(e), discussed above. In examining this situation and the application of Section 3604(e), the Sixth Circuit, stated that:

"A racially neutral form of solicitation may very well contain an obvious representation respecting race in a highly charged atmosphere such as that described above. Such an atmosphere was not, however, present in the instant case. Although the solicited neighborhood could fairly be described as transitional, in the sense that residents perceived that blacks were moving into it or adjacent areas, its residents were not in the grip of panic. The neighborhood was not the subject of frenzied real estate activity . . . While we do not suggest that real estate agents are 'entitled to one bite' in transitional neighborhoods before panic has set in, the essence of the District Court's reasoning is that any form of solicitation in any area into which blacks have moved or are moving is a per se violation of § 3604(e). We have serious doubts that such a sweeping restriction on commercial speech would be constitutional, see Linmark Associates, Inc. v. Township of Willingboro, 431 U.S. 85, 52 L. Ed. 2d 155, 97 S. Ct. 1614 . . . (1977), and do not believe that Congress intended the statute to be so applied . . . In the absence of evidence of panic selling or other incidents of a racially charged atmosphere that would impute to any real estate solicitation a racial connotation, or evidence of an actual representation respecting race, whether suggestive or direct, there simply has not been a prohibited representation within the meaning of § 3604(e)" ( Heights Community, supra, 774 F.2d at pp. 143-44).

 It appears that the Sixth Circuit closely examined the circumstances of the communities and the statute at issue in evaluating whether the direct mail solicitations violated section 3604(e) by constituting blockbusting. Likewise, this Court will evaluate the circumstances of the communities and the statute at issue in evaluating whether Section 442-h and the regulations are constitutionally permissible.

 New York Real Property Law Section 442-h

 In examining the background surrounding the enactment of the legislation at issue in this case, the Court notes that the New York State Court of Appeals found the nonsolicitation orders previously enacted by the Secretary of State to be improper because the Secretary of State exceeded the authority delegated by the New York State Legislature. In so finding, the Court of Appeals expressly stated that "if the only way to prevent blockbusting is to ban all broker solicitation in certain areas, that is a policy choice for the Legislature, not for the agency" ( Campagna, supra, 538 N.Y.S.2d at p. 936). It appears to this Court that the Court of Appeals strongly implied that the New York State Legislature could make the policy choice that could enable the Secretary of State to enact nonsolicitation ordinances (See Campagna, supra, 538 N.Y.S.2d at p. 936). Since the statute was validly enacted, the Court will determine whether it satisfies the constitutional analysis by the Supreme Court in Central Hudson.

 In examining the constitutionality of Section 442-h, the Court utilizes the test set forth in Central Hudson, supra. The first requirement is that the speech at issue concerns lawful activity and is not misleading. It is undisputed between the parties that the ability of real estate brokers to solicit homeowners constitutes lawful activity and that housing solicitations are not per se misleading. Accordingly, the first prong of the Central Hudson test is satisfied ( SeeGreater Baltimore Board of Realtors, Inc. v. Baltimore County, 752 F. Supp. 193, 197 [D. Md. 1990]).

 In reviewing the second prong of the test, the Court must consider whether the state's interest in enacting Section 442-h of the Real Property Law is substantial. The basis for enacting Section 442-h was to empower the Secretary of State to impose the nonsolicitation orders which were deemed improper by Campagna based upon the lack of statutory authority for such actions. In fact, the Department of State issued a Memorandum to the Legislature which stated:

"the bill would add a new section 442-h to the Real Property Law to authorize the Secretary of State to adopt such rules as are necessary to administer and enforce the provisions of the licensing law, including rules to ensure that licensed real estate brokers and salespersons do not engage in unlawful blockbusting practices and to, thereby, help stabilize existing neighborhoods and communities" (Memorandum of Department of State, Summary of Provisions of Bill, McKinney's 1989 N.Y. Session Law, 212th Session, at p. 2251 [emphasis added]).

 In addition to this summary of the provisions contained in the bill proposing Section 442-h, the following Statement in Support of the Bill was submitted to the legislature, prior to its passage:

"For the past twenty-eight years nonsolicitation orders have been used to combat the pernicious practice of blockbusting and to prevent the spread of the fear and unrest generated by those practices. Experience has shown that home owners in many urban neighborhoods are subjected to intense and repeated solicitation by real estate brokers to place their homes for sale with such brokers, and that the underlying implication of those solicitations is that property values will be decreasing because persons of different ethnic, social or religious background are moving into the neighborhood. These solicitations plan on the fear and uncertainty attendant with change. Even if the words are not spoken the message is delivered. The result is an artificial churning of the market, panic selling, and flight from established neighborhoods. In such a charged atmosphere, the mention of ethnic, social or religious prejudices is unnecessary. Although real estate brokers may argue that the solicitations are intended only to generate business within the neighborhood, the consequence is that individual homeowners, who have been made insecure by the circulation and recirculation of rumors and speculation, are induced to make precipitous decision concerning the sale of their homes. Often those decisions are illconsidered and result in a loss to the community, as well as to the homeowner. The collective impact of these frenzied activity [sic] is to weaken the economic stability and [sic] the social tranquility of the affected neighborhood" (Memorandum of Department of State, Statement in Support of Bill, McKinney's 1989 N.Y. Session Law, 212th Session, at p. 2251).

 The Governor approved this bill and in a letter to the legislature stated:

"As you know from my own experience as Secretary of State, for the past 28 years nonsolicitation orders have proven to be effective tools in combating blockbusting practices and in preventing the spread of fear and unrest generated by such tactics. This past February, the Court of Appeals ruled in Campagna v. Shaffer, 73 N.Y.2d 237, 538 N.Y.S.2d 933, 536 N.E.2d 368 (1989), that the rules and regulations of the Secretary of State to restrict blockbusting were not within the scope of the Secretary's authority as delegated under the law. This bill specifically authorizes the Secretary to regulate real estate brokers and salespersons in the prevention of blockbusting activities. It is in the interest of the People of the State of New York that the Secretary of State be granted this authority in order to continue preventing such abusive practices" (Letter from Governor Mario M. Cuomo, dated July 22, 1989, McKinney's 1989 N.Y. Session Law, 212th Session, at pp. 2424-25).

 As discussed earlier, the governmental interest in eliminating the practice of blockbusting is a vital goal (see Linmark, supra, 431 U.S. at pp. 94-97). The plaintiffs failed to submit any evidence that the motivation of the New York State Legislature in enacting Section 442-h was anything other than to combat blockbusting by enabling the Secretary of State to issue nonsolicitation orders (See Greater Baltimore, supra, 752 F. Supp. at p. 198). Accordingly, the statute meets the second prong of the Central Hudson analysis, namely New York State had a substantial interest in enacting Section 442-h.

 The third part of the Court's analysis centers around whether Section 442-h directly advances the asserted governmental interest. It is asserted by the plaintiffs in their motion for summary judgment that the statute does not further the governmental interest because there have been no incidents of blockbusting in New York State, especially the areas at issue, and therefore no need for the statute.

"During my years as a real estate licensee, I have never observed and have never heard any real estate licensee committing illegal blockbusting activity. Indeed, although I have heard that the Department of State claims that such activity has once occurred in the Metropolitan New York area, I have never witnessed such activity and have never heard of any blockbusting conduct which was attributed to the real estate licensee during the past 30 years. I believe that to the extent that there is racial difficulty or harmony in an area, it is a function of the homeowner, rather than real estate licensee conduct" (Affidavit of Clifford Hall, dated January 20, 1993, at P 5).

 In addition, the plaintiffs submitted the affidavit of Charles M. Staro who has been the Executive Vice President of the New York State Association of Realtors since 1970 and stated:

"I am not aware of any case of a real estate licensee committing the pernicious practice of blockbusting during that time. In my years in the New York State Association of REALTORS, I have likewise never seen an adjudication by the Department of State finding a real estate licensee guilty of the pernicious practice of blockbusting, which is prohibited under both federal and state law" (Affidavit of Charles M. Staro, dated February 22, 1993, at P 3).

 In addition to the affidavits, the Court reviewed transcripts of proceedings before the Hon. Gail S. Shaffer, the Secretary of State. These proceedings include the statements of Huxley Mitchell, a resident of Queens who lives within one of the nonsolicitation areas, who is also a real estate broker. He stated at a hearing on January 11, 1989 that:

"During the time I have been licensed to sell real estate in New York, I have never witnessed or ever heard of an incident which a real estate broker committed the offense of block busting. I have checked with both local Board of Realtors, the Long Island Board of Realtors, and the New York State Association of Realtors, and have been advised that the records do not contain any complaints that block busting activity has been committed by a real estate licensee in recent years.
Moreover, it was advised by the New York State Association of Realtors and its director of governmental affairs, Donald Savage, inspected the records of the Department of State on December 14, 1989, and did not find a single case of block busting activity.
Furthermore, Mr. Savage was advised by an official of the Department of State that to the best of his knowledge, there weren't any block busting cases in the Department of State files covering 1986 to date.
In addition . . . in Mr. Savage's presence, the official placed a call to the Department of State in Mineola, Long Island, to double check and was informed that the office, likewise could not identify or recall any block busting offenses" (Transcript of January 11, 1989 Hearing, at pp. 34-35).

 At another hearing, held on February 15, 1993 at Herbert H. Lehman High School in the Bronx, Steven Braunstein, a broker in the Bronx stated:

"The main purpose of this non-solicitation order as it has been presented to us at the Bronx Board [of Realtors] is really on where it is going to stop blockbusting. Well, I believe if it isn't broken don't fix it. In the last six years in the State of New York, there have been no complaints on blockbusting as we know it today. In the twenty years that I have been in the real estate industry, all in Bronx County, I have never once come across blockbusting as we know it today, which is simply the practice of a broker contacting a seller or would-be seller or a potential seller or a homeowner and saying, 'Hey, you better sell your house because there are bad people moving into this area and the value is going to go down.' I have never in twenty years come across this.
Now, to implement a non-solicitation order and say you are doing it because of blockbusting when blockbusting doesn't exist, is just nonsensical. If you want to put a non-solicitation order for other reasons, then state those reasons, but it certainly isn't because of blockbusting when in six years there is not one case in the State of New York of a complaint being made on blockbusting" (Transcript of February 15, 1990 Hearing, at p. 47).

 At the deposition of Gail A. Bates, the Director of Licensing Services for the Department of State, conducted on October 30, 1992, the following transpired:

Q. Is it fair to say that since at least the mid- eighties' period of time, the Department has had no adjudicated case finding of a real estate licensee ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.