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Plaintiff Brings a Suit for Declaratory Judgment



Plaintiffs commenced the within declaratory judgment action seeking a declaration that the emergency rule is null and void, ultra vires and unconstitutional, as a taking of property without just compensation. The complaint also alleges that the rule violated Real Property Law § 226-b which regulates the assignment of leases; Real Property Law § 235-f which creates a right of occupancy but not leasehold rights for roommates; Domestic Relations Law § 11 which sets out the requirements and means for the solemnization of a marriage; and the administrative limitations in the Omnibus Housing Act of 1983, and the State Administrative Procedure Act.

By order to Show Cause dated November 13, 1989 plaintiffs moved in Supreme Court, Albany County, for a preliminary injunction enjoining the implementation of the emergency rule. An order to show cause was granted, which restrained the DHCR from “implementing or effectuating said Emergency Rule, or in any other manner promulgating, issuing, implementing or effectuating the terms, conditions or requirements thereof,” but made the motion returnable in Supreme Court, New York County.

On November 15, 1989, counsel for the plaintiffs and the DHCR entered into a stipulation which provided that the November 13, 1989 Order to Show Cause would not be construed to preclude the DHCR from taking ministerial actions necessary to comply with the procedures required for the promulgation of the regulatory amendments, which are the subject of this action, such as the filing of required Regulatory Impact Statements and Regulatory Flexibility Analyses with the Secretary of State. On December 13, 1989, the New York County IAS Court heard argument, and again extended the TRO pending determination of the preliminary injunction motion. During oral argument on the motion, the Court was informed that the DHCR was in the process of promulgating permanent regulations and had already sent out notices that a public hearing was scheduled for January 22, 1990.

On February 7, 1990, the DHCR filed with the Secretary of State for a 60 day extension of the emergency rule, and on March 20, 1990 the DHCR filed permanent regulations with the Secretary of State, identical in substance to the emergency rule. Plaintiffs, by Order to Show Cause, moved for a preliminary injunction enjoining the implementation of the permanent regulations on the same grounds used to attack the emergency regulation, and for leave to file a supplemental complaint to assert causes of action against the permanent regulations. Plaintiffs also served a demand for compliance with CPLR 5104, claiming that the promulgation of the permanent regulations violated the original TRO.

In the interim, on March 19, 1990 the defendant-intervenors moved by Order to Show Cause to vacate the TRO on the ground that this Court’s March 13, 1990 decision established conclusively the lack of plaintiff’s likelihood of success on the merits.

On April 4, 1990, the permanent regulations were published effective immediately. The IAS Court, in an order entered April 10, 1990, provided that the TRO imposed by the Supreme Court, Albany County on November 13, 1989 was extended to cover the permanent regulations, pending the Court’s determination of the plaintiff’s motion for a preliminary injunction. The DHCR appealed. Plaintiffs moved in this Court for an order dismissing the appeal from the April 20, 1990 order on the ground that it was a non-appealable temporary restraining order. Alternatively, plaintiffs sought to vacate the CPLR 5519(a)(1) stay. By order entered May 15, 1990 this Court, sua sponte, deemed the order entered April 20, 1990 as one which granted a preliminary injunction, and provided that the statutory stay would be vacated unless the appeal was perfected for the October 1990 term of this Court. The plaintiffs’ challenge to the regulations is based to a large extent, upon their contentions that the promulgation of the challenged regulations is beyond the scope of the DHCR’s rule making authority, and that the regulations are contrary to the expressed legislative intention and policy, in the areas of lease succession rights, and domestic relations. We disagree.

The primary issue on these appeals, is whether the IAS Court properly enjoined the implementation of the emergency rule and subsequent amendment to the State Division of Housing and Community Renewal’s permanent regulations, adopted in order to conform and/or broaden the administrative regulations governing lease succession rights and anti-eviction protections, under the State and City of New York Rent Control and Rent Stabilization Systems, in accordance with the Court of Appeals’ decision.

For the following reasons, we reverse the order entered April 20, 1990, and vacate the preliminary injunction enjoining the implementation of the permanent regulations, and decline to review the denial of the Order to Show Cause seeking to hold the respondent Commissioner in contempt.

Fundamental to a party’s entitlement to a preliminary injunction is a demonstration that the party has a likelihood of success on the merits. As this Court has recognized in the past, an administrative agency may not, in the exercise of its rule making authority, promulgate a regulation out of harmony with the plain meaning of statutory language. “Similarly, an agency may not, in excess of its lawfully delegated authority, promulgate rules and regulations for applications to situations not within the intendment of the statute.”

This Court has specifically stated that the succession provisions to which the challenged regulations were added are “remedial in nature” and “should be liberally construed to carry out the reform intended and spread its beneficial effects as widely as possible.

The argument that the regulations conflict with Domestic Relations Law § 11 requiring solemnization of a marriage is meritless, as the regulations do not remotely attempt to equate the special relationship defined therein as spousal, and specifically distinguish “husband” and “wife” from that relationship. The regulations do not attempt to confer any other protection or privilege than the protection from eviction upon the death or departure of the tenant of record.

Plaintiffs broadly contend that promulgation of the permanent regulation violates the doctrine of separation of powers, arguing that the DHCR overstepped the boundary of proper Administrative rule making and entered the realm of legislative policy making. The basis for plaintiff’s claim is that since 1986 there have been approximately 27 bills introduced in the State Legislature concerning succession by “family members” and individuals “residing with” the tenant of record to the tenant’s lease rights in rent regulated apartments, none of which were passed. Plaintiffs view the presentation and debate of such bills without the passage of any legislation as a tacit pronouncement of policy by the Legislature on the subject covered by the challenged regulations. Plaintiffs submit no authority for such argument.

While the line between administrative rule making and legislative policy making has been described as difficult to define in some cases, such is not the case here. The Court in Boreali invalidated a comprehensive Public Health council (PHC) Code regulating tobacco smoking in areas open to the public, finding on the basis of four “coalescing circumstances” that the “difficult-to-define line between administrative rule-making and legislative policy-making has been transgressed” in that the regulations were enacted without legislative guidance in an area, where the Legislature had tried and failed to reach an agreement, and were riddled with exceptions based solely on economic and social concerns. By contrast, the regulations herein were enacted in response to the pronouncements of the Court of Appeals, in an area within the particular expertise of the agency and do not contain any exceptions but, rather, uniformly advance the policies of the regulatory scheme according to the mandate given the agency by the Legislature.

Plaintiffs, for the first time on appeal, argue that the permanent regulations are impermissibly vague because they provide no criteria for determining when a non-traditional relationship commences. The standards for evaluating vagueness were enunciated: Vague laws offend several important values. First, because we assume that man is free to steer between lawful and unlawful conduct, we insist that laws give the person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly. Vague laws may trap the innocent by not providing fair warning. Second, if arbitrary and discriminatory enforcement is to be prevented, laws must provide explicit standards for those who apply them. A vague law impermissibly delegates basic policy matters to policemen, judges, and juries for resolution on an ad hoc and subjective basis, with the attendant dangers of arbitrary and discriminatory applications.

These standards however, are not to be applied mechanically. “The degree of vagueness that the Constitution tolerates–as well as the relative importance of fair notice and fair enforcement–depends in part on the nature of the enactment. Thus, economic regulation is subject to a less strict vagueness test because its subject matter is often more narrow.”

Here, the challenged regulations set out eight specified factors to be employed in determining whether a family relationship exists. These factors are sufficiently definite to give a person of “ordinary intelligence” a “reasonable opportunity” to make that determination. The question of when such a relationship commences is, contrary to plaintiffs’ view, a relatively straight forward factual one, which can be determined in terms of those same eight factors. Aspects of the relationship from the date intermingling and joint ownership of assets began, to when the two individuals began a close relationship with each other’s relatives can be examined to determine when the “family relationship” truly commenced. To the extent that the regulations codify the Braschi decision they draw “a distinction between those individuals who are in fact, genuine family members, and those who are mere roommates or newly discovered relatives hoping to inherit the rent controlled apartment after the existing tenant’s death, and provide definite means with which to draw that distinction.

Plaintiffs advance various constitutional challenges to the regulations all based on the contention that the regulations effect unconstitutional physical and/or regulatory takings which effectively deprive the landlord of the use of the property indefinitely, without just compensation. Plaintiffs argue that the regulations violate the constitutional guarantee against the taking of private property for public use without just compensation by “removing all control from the landlord and placing permanent occupancy, dominion and control over the landlord’s property with the tenant”. This conclusion is based upon the plaintiffs’ view that the regulations permit “permanent and multi-generational occupancy by strangers.”

The New York State Court of Appeals and the United States Supreme Court have upheld rent control and similar regulation of housing conditions and other aspects of the landlord-tenant relationship.

Plaintiffs’ argument that the regulations effect an uncompensated regulatory taking is based upon the contention that the broadening of the definition of those entitled to succession rights denies the landlords the economically viable use of the properties, by effectively extinguishing the landlords’ expectation of a residual or reversionary interest in the apartments. According to the plaintiffs this results because the regulations permit succession to a broad indefinite class of people predicated upon two years of occupancy or even less. As has already been discussed in connection with the “vagueness” argument advanced by the plaintiffs, it is clear that the regulations specifically define a narrow class of individuals who are entitled to succession.

The occupancy herein is necessarily limited by the lifetime of the succeeding “family member”, which is no greater than that of any other traditional relation entitled to succession prior to Braschi, supra. The possession and use of the property in perpetuity is simply not a potential result herein. The landlord is not required to issue renewal leases to an institution with perpetual existence, but rather to natural persons, whose primary residence was already in the landlord’s building. The plaintiffs have not shown that they will be able to demonstrate that the regulations prevent them from obtaining a reasonable return on their property. Moreover, unlike the regulations in 520 East 81st Street Associates, supra, the regulations here at issue advance the intended purposes of the Rent Stabilization and Rent Control succession provisions–to prevent the eviction of individuals with substantial ties to their home-apartment and to the former tenant of record. Thus since the plaintiffs will not be able to demonstrate that the regulations do not substantially advance a legitimate state interest or that they deny landlords economically viable use of their property, plaintiffs’ challenge based upon the theory that the regulations constitute a regulatory taking will also necessarily fail.

Plaintiffs, though they have strenuously and competently argued, have failed to demonstrate that they have likelihood to succeed on the merits, in their challenge to the regulations. They are, therefore, not entitled to the injunctive relief that they were granted below.

Accordingly, the order of Supreme Court, New York County, entered April 20, 1990, and deemed as one granting a preliminary injunction, is reversed, on the law, the facts and in the exercise of discretion, and the injunction vacated, with costs. We decline to reach the plaintiffs’ appeal from the order, entered April 10, 1990, which denied their application for an order holding the defendant Commissioner in contempt for allegedly violating the original temporary restraining order made with respect to the emergency rule, and dismiss that appeal as moot, without costs.

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