Adult businesses challenged constitutionality of 2001  amendments to City’s  zoning resolution. A Department of City Planning study concluded in 1994 that the  City’s adult entertainment businesses caused certain negative secondary effects, such as increased crime and decreased property values. In response to this study, the City amended the zoning resolution in 1995 to bar “adult establishments” from all residential zones and most commercial and manufacturing districts. Adult establishments were defined as commercial businesses whereby a substantial portion (40 percent or more of accessible floor area) included adult uses. Thereafter, adult businesses altered their character to ensure they would not qualify as adult establishments. Believing the altered businesses were in sham compliance with the amendment, the City amended the zoning resolution again in 2001 to clarify “non- adult” material for purposes of the 40 percent calculation.

Various adult businesses challenged the First Amendment constitutionality of the 2001 amendments, and the case eventually reached the Court of Appeals. The Court ruled that the City was not required to produce empirical studies connecting altered 60/40 businesses to negative secondary effects.  The Court, however, ordered a trial to determine whether the 60/40 businesses had changed so much in character that their  main, ongoing focus was no longer sexually explicit material. If their  focus had not changed, the City would be constitutionally justified in strengthening the 1995 ordinance with the 2001 amendments.

At the trial, Justice Louis B. York ruled that the  2001 amendments were  constitutional as applied to adult bookstores and video stores, as well as to topless night clubs and bars;  however, the  amendments were  ruled unconstitutional as applied to adult movie theaters. 7 CityLand 48 (April 15, 2010). The adult businesses appealed Justice York’s decision to the First Department.

The First Department reversed and sent the case back to the lower court, characterizing Justice York’s decision as “manifestly inadequate” and  in violation of State  procedural law. The First Department scolded the lower court for merely detailing the City’s evidence with respect to 60/40  “sham” establishments, and for stating unexplained legal conclusions. The  lower court failed  to set out the ultimate or essential facts underlying its decision and provided no direction for review, analysis, or understanding of its ruling. The lower court also erred by refusing to give any weight to the adult businesses’ evidence offered to support that the character of their businesses had significantly changed. On remand, the First Department advised the lower court to use the proper, more heightened standard of review to assess the City’s evidence.

For the  People  Theatres  of NY,  Inc . v . City, Index No. 121080/02 (1st  Dep’t April 7, 2011) (Attorneys: Herald Price Fahringer, Edward S. Rudofsky, for adult businesses; Michael A. Cardozo, Elizabeth S. Natrella, for NYC).