Shake Shack sued landlord to keep popular sidewalk café after landlord failed to re-approve permit. Downtown Brooklyn’s Shake Shack opened in 2010 at 409 Fulton Street. Shake Shack leased the location for a 20-year term with two 5-year renewal options from landlord Allied Property Group. In February 2011, Allied executed the required landowners’ consent to allow Shake Shack to obtain a Department of Consumer Affairs permit to operate a sidewalk cafe adjacent to the restaurant. Shake Shack’s sidewalk cafe became a neighborhood favorite and helped Shake Shack differentiate itself from other restaurants in the area.
Sidewalk café licenses are valid for up to two years and must be renewed at least 15 days before the license expires. In May 2015, Shake Shack petitioned Consumer Affairs for consent to continue to use the sidewalk cafe. Shake Shack, however, missed the deadline and therefore, Consumer Affairs required that Allied submit a new landowner’s consent for license renewal. Allied refused to consent to the renewal.
Shake Shack sued Allied claiming that under the lease Allied was obligated to consent to the sidewalk cafe. Shake Shack also sought to enjoin Allied from demolishing or removing the sidewalk cafe and from withholding consent to permit continued operation.
The Supreme Court, King’s County, agreed with Shake Shack and granted a preliminary injunction ordering Allied to consent to a sidewalk café permit and refrain from demolishing and/or removing the sidewalk café. Allied appealed.
The Appellate Division, Second Department, reversed the order requiring Allied to consent to the permit. The Appellate Division ruled that granting such relief altered the status quo and that there were no extraordinary circumstances that justified the order. The Appellate Division, however, upheld the order enjoining Allied from demolishing or removing the sidewalk café in order to preserve the status quo.
Shake Shack Fulton St. Brooklyn, LLC v. Allied Prop. Group, LLC, 177 A.D.3d 924 (2nd Dep’t, 2019).
By: Shelby Arenson (Shelby is a New York Law School student, Class of 2021.)