New York Law Review

Tag: Loretto v. Teleprompter

  • Loretto v. Teleprompter Manhattan CATV Corp., 58 N.Y.2d 143 (1983): Determining Compensation for a Permanent Physical Occupation

    Loretto v. Teleprompter Manhattan CATV Corp., 58 N.Y.2d 143 (1983)

    When a state statute authorizes a permanent physical occupation of property, the property owner is entitled to just compensation, and the statute must be construed to provide a mechanism for determining that compensation, even if it was initially intended as a police power regulation.

    Summary

    After the Supreme Court reversed and remanded the case, the New York Court of Appeals addressed the issue of compensation for a permanent physical occupation caused by a cable television wire installed on Loretto’s property under Section 828 of the Executive Law. The court held that the statute must be construed to allow for compensation. While the statute was initially intended as a valid exercise of police power, the Supreme Court’s ruling that it constituted a taking necessitated interpreting the law to include a mechanism for just compensation. The Court of Appeals modified the lower court’s judgment to clarify that the validity of the statute was contingent on the commission’s determination of just compensation.

    Facts

    Loretto purchased an apartment building in 1972. Unbeknownst to her, Teleprompter installed a cable television wire on the building’s roof in 1970, pursuant to a prior agreement with the previous owner. After Loretto bought the building, Teleprompter maintained the installation relying on Section 828 of the Executive Law, which limited the compensation a landlord could demand for permitting cable TV facilities on their property.

    Procedural History

    Loretto sued Teleprompter, arguing trespass. The trial court upheld the constitutionality of Section 828. The Appellate Division affirmed. The New York Court of Appeals initially affirmed, holding that the law was a valid exercise of police power. The Supreme Court reversed, finding a taking had occurred and remanding for determination of just compensation. The New York Court of Appeals then reconsidered the case on remand.

    Issue(s)

    1. Whether Section 828 of the Executive Law provides a mechanism for determining just compensation for a permanent physical occupation, as now required by the Supreme Court’s decision.
    2. Whether Section 828 is unconstitutional because it violates the separation of powers doctrine, fails to provide for compensation in advance of the taking, or violates due process.

    Holding

    1. Yes, because the statute can be construed to empower the commission to fix reasonable compensation, subject to judicial review.
    2. No, because determination of compensation by a commission is permissible, advance payment is not an absolute requirement under the circumstances, and due process concerns are adequately addressed through judicial review and potential amendment of regulations.

    Court’s Reasoning

    The court reasoned that because the Supreme Court had determined that the statute resulted in a taking, it must be construed, if possible, to provide for just compensation. The court found that Section 828, along with Section 816 of the Executive Law, provided the commission with the power to determine reasonable compensation through an adjudicatory process, subject to judicial review. The court dismissed the separation of powers argument, noting that administrative agencies can perform adjudicatory functions subject to judicial review. The court also rejected the argument that advance payment was absolutely required, finding that the circumstances of the case, including the small amount of compensation involved and the potential for judicial review, provided reasonable certainty that just compensation would be received. The Court addressed due process objections, stating that concerns regarding lack of notice could be addressed by modifying existing regulations. The court emphasized the importance of construing the statute to achieve the legislative aim of promoting the rapid development of the cable television industry while respecting constitutional requirements.

  • Loretto v. Teleprompter Manhattan CATV Corp., 458 N.Y.S.2d 129 (1982): Landlord’s Right to Compensation for Cable TV Installation

    Loretto v. Teleprompter Manhattan CATV Corp., 458 N.Y.S.2d 129 (1982)

    A New York statute requiring landlords to permit cable television companies to install facilities on their property for tenants, with compensation determined by the State Commission on Cable Television, is a valid exercise of police power and not an unconstitutional taking.

    Summary

    Loretto, a property owner, sued Teleprompter, alleging trespass and unconstitutional taking due to the installation of cable television facilities on her building. Teleprompter acted under a New York law allowing cable companies access to rental properties. The New York Court of Appeals held that the statute was a valid exercise of the police power, not a taking requiring compensation, because it served a public purpose (promoting cable television access) and did not unduly diminish the property’s value. The court emphasized the minimal physical intrusion and the absence of frustrated investment-backed expectations. The statute aimed to prevent landlords from hindering cable access and ensure tenants’ access to communication services.

    Facts

    Loretto purchased an apartment building in New York City in 1972.
    Prior to Loretto’s purchase, the previous owner had granted TelePrompter permission to install a CATV cable on the building in 1968 for $50.
    In 1970, TelePrompter installed a cable and directional taps on the roof of the building.
    Loretto claimed she did not notice the cables until CATV service was provided to a tenant a couple of years after her purchase.
    Loretto filed a class action lawsuit against TelePrompter in 1976, alleging trespass and unlawful taking under the color of Executive Law § 828.
    Loretto later transferred the property to Hargate Realty Corporation, a company wholly owned by her.

    Procedural History

    Loretto filed suit in Special Term, seeking damages and an injunction.
    TelePrompter moved for summary judgment, arguing the statute’s validity and failure to exhaust administrative remedies.
    Loretto cross-moved for partial summary judgment, challenging the statute’s constitutionality.
    Special Term granted summary judgment to TelePrompter and the City, declaring the statute constitutional.
    The Appellate Division affirmed without opinion.
    Loretto appealed to the New York Court of Appeals.

    Issue(s)

    Whether Executive Law § 828, which requires landlords to permit cable television companies to install facilities on their property for the benefit of tenants (or tenants of other buildings), constitutes an unconstitutional taking of property without just compensation.
    Whether Executive Law § 828 applies to “crossover” situations, where cable facilities on a building serve tenants of other buildings.

    Holding

    No, because the statute is a valid exercise of the state’s police power, designed to promote access to cable television as a vital communications and educational medium, and the physical intrusion on the landlord’s property is minimal and does not significantly diminish the property’s value or interfere with reasonable investment-backed expectations.
    Yes, because the legislative intent of section 828 is to promote the rapid development and maximum penetration of cable television, which includes preventing landlords from interfering with the installation of cable facilities on their property regardless of whether they are used to furnish service to the tenant or tenants of the property on which installed or of another property or properties or both.

    Court’s Reasoning

    The court reasoned that the statute advanced a legitimate public interest: promoting the development and accessibility of cable television, deemed a “vital business and community service.” The court emphasized that the police power’s scope adapts to evolving social and economic conditions.
    The court distinguished this case from traditional takings, noting that the government was acting as an arbiter between landlords and tenants rather than appropriating property for its own use.
    The court highlighted the minimal nature of the physical intrusion (a cable occupying “negligible unoccupied space”) and the absence of significant economic impact on the landlord, who could still receive fair rent.
    Referencing PruneYard Shopping Center v. Robins, the court stated that a physical invasion of property alone is not enough to be considered a taking.
    The court found no evidence that Loretto had made any specific investments anticipating income from cable installations, indicating no interference with reasonable investment-backed expectations. The court observed, “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.”
    The court found that the statute applied to crossover situations as the legislative goal was to ensure maximum cable penetration and to prevent landlords from charging “onerous fees” for cable access, as was testified before the legislative committee. To allow a landlord to obtain onerous fees from the crossover portion of the installation while providing a method of limiting the amount a property owner could demand from a CATV company for allowing tenant service does not align with the legislative plan.
    The court differentiated cable TV companies from telephone companies, noting that unlike cable TV, telephone companies are required to compensate owners for lines placed on their property. This difference is reflective of differing legislative purposes and intents.