Loretto v. Teleprompter Manhattan CATV Corp.

OPINION OF THE COURT

A statute which requires a landlord to allow installa

On June 1, 1970 TelePrompter installed a cable slightly less than one-half inch in diameter and of approximately 30 feet in length along the length of the building about 18 inches above the roof top, and directional taps, approximately 4 inches by 4 inches by 4 inches, on the front and rear of the roof. By June 8, 1970 the cable had been extended another 4 to 6 feet and cable had been run from the directional taps to the adjoining building at 305 West 105th Street. Plaintiff Loretto testified at her deposition that she purchased the building in 1971 and took title on February 28, 1972, that she was on the roof to inspect it prior to the closing of title and a number of times after the closing while a new roof was being installed, but that she never saw the cables until CATV service was provided to one of her tenants about two years after her purchase.

The Wald agreement was unrecorded and, therefore, would not bind plaintiff Loretto unless the installation was sufficiently open and visible to put her to inquiry and charge her with constructive notice of the agreement that inquiry would have revealed (Pallone v New York Tele. Co., 34 AD2d 1091 , affd 30 NY2d 865 ; Historic Estates v United Paper Bd. Co., 260 App Div 344 , affd 285 NY 658 ; see Butterworth v Crawford, 46 NY 349 ; 17 NY Jur, Easements & Licenses, § 187, p 482; Ann., 74 ALR 1250 ). Transfer to plaintiff Loretto would, however, terminate the license, even though TelePrompter had no notice of the transfer (Restatement, Torts 2d, § 171, Comment f), unless Loretto had (or was chargeable with) notice and took no steps to terminate the license (id., Comment g). The factual isues concerning visibility of the TelePrompter equipment and whether the transfer to Loretto (or her bringing of the present action) terminated the Wald agreement bear upon whether Loretto can recover for trespass occurring before the action was begun, but do not affect her right to maintain the cause of action for declaratory judgment concerning the scope, of and constitutionality of section 828, for that section, if applicable and valid, pre

Plaintiff’s argument that crossovers are not within the scope of section 828 is predicated upon the use of the words “landlord” and “tenant” or “tenants” in the section and the reference to “services” in paragraph b of subdivision 1. Ignoring the use of the word “facilities”, she concludes that the entire section deals only with tenant service situations. While there is some support for her view in parts of the legislative history and in dictionary definitions of the words “landlord” and “tenant”, we conclude, in light of the declaration of legislative intent contained in article 28, the language of section 828 considered in its entirety, the use in paragraph a of the section of the word “facilities”, and parts of the legislative history, that the Legislature intended to proscribe interference by any owner of rental property with the installation of CATV facilities on his property whether used to furnish service to the tenant or tenants of the property on which installed or of another property or properties or both, but to permit such an owner to demand payment only from the CATV company making the installation and only for the service extended to tenants of his own property.

As we noted in Matter of City of New York v State of New York Comm. on Cable Tel. ( 47 NY2d 89 , 92-93), the Commission “is invested with broad authority to oversee the burgeoning cable television industry” and is “endowed with broad power to regulate in the public interest,” which should not be inhibited “by unduly emphasizing a particular portion of the enabling act, of somewhat doubtful implication, at the expense of the whole.” The public interests sought to to be furthered by article 28 are identified in section 811, which recites that after “investigation of the public interest associated with cable television” the Legislature has determined that CATV operations involve “vital business and community service” which “must be

A.

What is permissible under the police power varies with economic and social conditions. As the California Supreme Court put it more than half a century ago in Miller v Board of Public Works of City of Los Angeles ( 195 Cal 477 , 484485), the power is “elastic and, in keeping with the growth of knowledge and the belief in the popular mind of the need for its application, capable of expansion to meet existing conditions of modern life and thereby keep pace with the social, economic, moral, and intellectual evolution of the human race.” The flexibility of the power and its availability not only in the interest of public health, safety and morals but also as a means of promoting the moral, intellectual and spiritual needs of our citizens, as well as public convenience and general prosperity, has been recounted in numerous decisions of this court and of the Supreme Court (Salamar Bldrs. Corp. v Tuttle, 29 NY2d 221 , 227; Nettleton Co. v Diamond, 27 NY2d 182 , 192-198, rearg den 28 NY2d 539 , app dsmd 401 US 969 ; Matter of Wulfsohn v Burden, 241 NY 288 , 298-299; People ex rel. Durham Realty Corp. v La Fetra, 230 NY 429 , 446-447, app dsmd 257 US 665 ; Euclid v Ambler Co., 272 US 365 , 387, supra; Block v Hirsh, 256 US 135 , 155).

Here the purpose sought to be achieved, as stated by the Legislature (§ 811), is rapid development of and maxi

Once it has been found that the Legislature has acted on a subject within its powers and in a manner related to the intended end, it is irrelevant either that other or alternative means of achieving the same end are available (PruneYard Shopping Center v Robins, 447 US 74 , 85, n 8; People v Griswold, 213 NY 92 , 97) or that one of the effects of the enactment may be to benefit private as well as public interests (Block v Hirsh, supra, at p 155 ; see Noble State Bank v Haskell, 219 US 104 , 110, 580).

B.

As we have had occasion previously to note, there is no “bright-line standard for differentiating permissible police power measures from overly vigorous and hence unconstitutional impositions” (Spears v Berle, 48 NY2d 254 , 262). Rather “the facts of each case must be evaluated in order to determine the private and social balance of con

1.

The effect of the character in which government acts was articulated in Lutheran Church in Amer. v City of New York ( 35 NY2d 121 ,128-129) and restated in French Investing Co. v City of New York (supra, at p 593) as follows: “[Government interference [with the use of private property] is based on one of two concepts — either the government is acting in its enterprise capacity, where it takes unto itself private resources in use for the common good, or in its arbitral capacity, where it intervenes to straighten out situations in which the citizenry is in conflict over land use or where one person’s use of his land is injurious to others. (Sax, Taking and the Police Power, 74 Yale L. J. 36 , 62, 63.) Where government acts in its enterprise capacity, as where it takes land to widen a road, there is a compensable taking. Where government acts in its arbitral capacity, as where it legislates zoning or provides the machinery to enjoin noxious use, there is simply noncompensable regulation.” Here, the State has acted not in furtherance of any governmental program normally carried on by government (such as the aircraft flights involved in United States v Causby, 328 US 256 ). Rather it seeks in the interest of education and the development of an additional system of communication to adjust “the benefits and burdens of economic life to promote the common good” (Penn Cent. Transp. Co. v New York City, 438 US 104 , 124, reh den 439 US 883 ). It acts as arbiter not as entrepreneur.

But, argues plaintiff, there is here a physical invasion of the property which, whether by government or an entity or person authorized by government, necessarily consti

Additional examples are not wanting. No less an invasion of the right to exclude than that of which plaintiff complains was involved in People ex rel. Durham Realty Corp. v La Fetra ( 230 NY 429 , app dsmd 257 US 665 , supra) and People ex rel. Rayland Realty Co. v Fagan ( 194 App Div 185 , affd 230 NY 653 ), both of which upheld a statute suspending for two years a landlord’s right to oust his tenant upon termination of the lease. Though in La Fetra we recognized that “The free choice of tenants; the unlimited right to bargain; these are property rights which may not be affected unless a public advantage over and beyond such rights justifies legislative interference” (at p 443), we held the taking analogous to the abatement of a nuisance and within the police power because (at p 444) “What is taken is the right to use one’s property oppressively and it is the destruction of that right that is contemplated and not the transfer thereof to the public use.”

Physical invasion closely analogous to that in the present case was involved in Jackman v Rosenbaum Co. ( 263 Pa 158 , affd 260 US 22 ). In that case the Supreme Court of Pennsylvania affirmed entry of judgment for defendant notwithstanding the jury’s $25,000 verdict for plaintiff in a trespass action, where the trespass was in demolishing, in order to build a new party wall between plaintiff’s theatre building and defendant’s, the wall of plaintiff’s building in consequence of which for a substantial period of time plaintiff’s theatre could not be used. It did so on the ground that defendant’s entry on plaintiff’s land was not a trespass because in entering plaintiff’s land defendant “exercised merely a lawful right conferred upon him by valid police

Here plaintiff Loretto makes no claim that she is not receiving a fair return from the property. What she is saying is that an area of the building for which she does not claim to have any other use may not be used for the benefit of her tenants because without the statute she would be able to obtain a fee from the CATV company, payable in last analysis by the tenant, for failing to exercise her common-law right to exclude the CATV company from her property. But, as the Supreme Court held in Andrus v Allard ( 444 US 51 , 65-66, supra), “the denial of one traditional property right does not always amount to a taking. At least where an owner possesses a full ‘bundle’ of property rights, the destruction of one ‘strand’ of the bundle is not a taking, because the aggregate must be viewed in its entirety.” Both judgment and logic dictate the conclusion that viewed

3.

The situation is no different when we consider interference with reasonable investment-backed expectations. The meaning of the that somewhat esoteric phrase becomes clear if we contrast Kaiser Aetna v United States (supra), in which the Supreme Court found such interference, with PruneYard Shopping Center v Robins (supra), in which it did not. Kaiser Aetna leased a 6,000-acre area on the island of Oahu for subdivision development. The area included Kuapa Pond, a 523-acre private pond extending approximately two miles inland from the Pacific Ocean and separated from it by a barrier beach. Having created a marina-style community of some 22,000 persons around Kuapa Pond, including approximately 1,500 marina waterfront lot lessees who paid a regular annual fee of $72 for maintenance of the pond, Kaiser Aetna with the acquiescence of the United States Corps of Engineers dredged a deeper channel and increased the clearance under a highway bridge only to be told that by so doing they had subjected the pond to a navigational servitude and were precluded from denying the public access to it. Noting that Kaiser Aetna had invested substantial amounts of money in making improvements, the Supreme Court held that the right to exclude others from the pond had been physically invaded by the government’s imposition of a navigational servitude and that that could be done only by invoking the power of eminent domain. In PruneYard, on the other hand, the Supreme Court upheld a State constitutional provision which entitled citizens to exercise petition rights on the property of a shopping center notwithstanding the center’s efforts to exclude the persons soliciting signatures. Referring to the substantial sums that had been invested by the developer in Kaiser Aetna, the Supreme Court held (447 US, at p 84) that in PruneYard “appellants have failed to demonstrate that the ‘right to exclude others’ is so essential to the use or economic value of their property that the state-authorized limitation of it amounted to a ‘taking’.”

From those cases it is fair to conclude that the phrase

What creates the need for installation of CATV facilities on rental properties is the desire for such facilities by the inhabitants of the properties. As part of its regulation of the rights of tenants and landlords and in furtherance of the development of CATV as a communications and educational medium, the Legislature may proscribe the landlord’s exaction of any charge over the regular rent for CATV service, whether that charge be imposed directly against the tenant or indirectly by requiring payment of it by the CATV company which will in turn impose it upon the tenant. Neither the physical invasion of the landlord’s property by the attachment of such facilities nor the fact that at the time the facilities are attached to a building no tenant of that building is a CATV subscriber invalidate the

In sum, this simply is not, as the dissent would have it, a “traditional public appropriation case.” Accordingly, the order of the Appellate Division should be affirmed, with costs.

(concurring). I agree with the analysis of the taking issue expressed in the dissenting opinion insofar as it concludes that the State-authorized appropriation of a landlord’s property for the benefit of cable television companies is a taking requiring compensation, but I nevertheless concur in the result reached by the majority since I believe that the current legislative framework provides an adequate system to ensure that just compensation will be afforded for any taking which actually occurs.

Section 828 (subd 1, par b) of the Executive Law provides that a landlord may not accept payment from any cable television company in exchange for permitting cable television service on or within his property in excess of any amount which the State Commission on Cable Television shall, by regulation, determine to be reasonable. The regulations of the Commission then provide that a landlord shall be entitled to the payment of a reasonable fee, pursuant to this section, upon Commission approval of an application for such a fee (9 NYCRR 598.2). While the Commission has decided, as a matter of policy, that the compensation due to a landlord who complains of the mere placement of a cable across his rooftop, without more, shall be limited to the nominal sum of $1, it is obvious that a landlord who actually incurs damage to his property or is restricted in the use to which he might put that property will receive compensation commensurate with the greater injury. Thus, if the installation of a cable substantially interferes with the owner’s present or future use of the building, we must presume that the Commission would award reasonable compensation for the taking pursuant to its regulations.

Accordingly, I would affirm the order of the Appellate Division, but I would do so upon the ground that legislation has supplied a mechanism for providing just compensation for any taking which actually occurs.

(dissenting). The legislation involved here is not a valid exercise of the police power. Rather, it authorizes an unconstitutional taking of plaintiff’s property without just compensation. Although the concepts of a “taking” and the exercise of the State’s police power are related and sometimes intertwined, they are distinguishable. By its decision today, the court unnecessarily muddies the distinction between the two concepts and eliminates an important protection against unfair invasions of private property. A dissent therefore is in order.

Plaintiff, who owned an apartment building, alleges that TelePrompter ran a television cable across the roof of the building, placed other equipment on the roof and dropped another cable down the front of the five-story brownstone to provide service to a first floor tenant. In 1972, the Legislature enacted section 828 of the Executive Law, barring any lordlord from interfering with the installation of cable television facilities on their premises and from demanding any compensation for permitting installation and service other than that set by the State Commission on Cable Television. The Commission has established $1 as the general fee to which all landlords will be entitled.

The majority concludes that the imposition upon landlords constitutes a valid exercise of the State’s police power because it furthers development of cable television “as a communications and educational medium” and regulates the tenant-landlord relationship. In addition, the majority cites the “minimal nature” of the physical invasion of the landlord’s properties (at p 155). If this case involved merely a limitation of the uses to which a landlord could put a building, the majority’s analysis might be appropriate. What is involved here, however, is a State-authorized physical appropriation of a portion of the landlord’s property for the use of the cable television corporation. Such appropriations have long been considered clear cases of compensable takings, and courts have not resorted to the various balancing tests applied to State regulation under the police power. As will be shown, this court in the past has recognized the distinction between the two concepts — a distinction the majority now blurs.

During the same period there arose the separate concept of the State’s police power imposing restraints upon the use of property, when that use might conflict with the health, safety, or other important interests of society. This power, as articulated in 1851 by Chief Justice Shaw of Massachusetts, was based on the principle that “every holder of property, however absolute and unqualified may be his title, holds it under the implied liability that his use of it may be so regulated, that it shall not be injurious * * * to the rights of the community” (Commonwealth v Alger, 7 Cush [61 Mass] 53, 84-85). But Shaw was careful to note that this regulation under the police power, which did not require compensation, “is very different from the right of eminent domain, the right of a government to take and appropriate private property to public use, whenever the public exigency- requires it” (Commonwealth v Alger, 7 Cush [61 Mass] 53, 85, supra).

Although this distinction was theoretically tidy, it became apparent with the growth of government regulation that private property could be so heavily regulated as to lose all practical value to its owner. The Supreme Court, applying the Fifth Amendment “taking clause” to the States through the Fourteenth Amendment, recognized that “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking” (Pennsylvania Coal Co. v Mahon, 260 US 393 , 415,

The majority in effect reasons that because excessive and improper regulation under the police power is sometimes termed a de facto taking, police power analysis can therefore be applied to all takings, even those clearly falling into the traditional public appropriation category. This turns the de facto taking concept, originally an expansion of the traditional protection of the right to compensation, into a tool to sharply curtail that right.

Here the cable television company has run its cables across the roof and down the front of the building and into the building, without the owner’s authorization. It seeks to assert what is, in effect, an easement in gross (see Antono

The requirement of just compensation where private property is appropriated for a public use has long been recognized by this and other courts. It is a concept distinct from that of a de facto taking, which provides a limit to uncompensated police power regulation, not a cutback on the requirement for compensation for physical appropriation. The majority simply fails to recognize this distinction. In treating the clear physical appropriation of the landlord’s property as an exercise of the police power, the majority wipes out an important protection against improper government encroachment on private property rights.

This case involves a clear instance of a taking requiring just compensation, yet the payments here fall far short of what is required both by constitutional standards and by fundamental principles of condemnation law. The regulations of the Commission provide that a landlord may apply for a reasonable fee for allowing installation of cable television equipment, and the Commission will pass upon the landlord’s application (9 NYCRR 598.2, 598.7). That same Commission, however, has already declared that the reasonable fee, “absent a special showing of greater damages attributable to the taking, is a payment of a one-time, $1.00 fee” (State Commission on Cable Television, Clarification of General Policy, Aug. 27, 1976, p 4). Thus, what constitutes a reasonable fee is established by administrative fiat rather than by judicial hearing. This blanket declaration cannot realistically be seen as providing a fair assessment of the damage that an apartment building owner has suffered through the installation of cables and transmission