$40,000 fine for illegal sign reversed by lower court

The Department of Buildings failed to appeal both relevant ALJ decisions. In 2006, the owner of 882 Sixth Avenue entered into a licensing agreement with Troystar Inc., a registered outdoor advertising company. The agreement allowed Troystar to install a sign on the facade of the owner’s building. Two years later, the Department of Buildings issued the owner eight NOVs, one for failing to register as an “outdoor advertising company” and seven for failing to comply with various advertising sign regulations. The owner challenged the NOVs before an ALJ, who issued two separate decisions that addressed four violations each. In the first decision, dated July 6, 2009, the ALJ found that the owner was not an outdoor advertising company. In the second decision, dated July 10, 2009, the ALJ sustained all four NOVs and ordered the owner to pay $800 per violation.

Buildings appealed the second decision to the Environmental Control Board, arguing that the owner was acting as an OAC and that, as such, the Board should impose the statutory penalty of $10,000 per NOV. The Board agreed with Buildings, reversed the ALJ, and imposed a $40,000 penalty on the owner.

On appeal, Justice Eileen A. Rakower granted the owner’s article 78 petition, finding the Board’s decision arbitrary and capricious. The Board should not have revisited the issue of whether the owner was an OAC; the first ALJ decision, which decided that the owner was not an OAC, was never appealed by Buildings. And because the time to appeal that first decision had passed, the decision was final and binding on the Board.

Rosen v. City of New York, 2011 N.Y. Slip Op. 31683U (N.Y. Cty. Sup. Ct. June 21, 2011) (Rakower, J.) (Attorneys: Phillip L. Billet, for owner; Michael A. Cardozo, for NYC).

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