City of New York v. Dezer Properties, Inc., 97 N.Y.2d 768 (2002)

A commercial establishment is considered an “adult establishment” subject to zoning regulations only if a “substantial portion” of the establishment is dedicated to specified adult uses, as defined by the New York City Zoning Resolution.

Summary

This case concerns the interpretation of New York City’s Zoning Resolution regarding “adult establishments.” Dezer Properties operated a club where only a part of the premises featured adult activities. The City argued that any adult activity qualified the entire club as an “adult establishment,” while Dezer contended that the “substantial portion” analysis applied. The Court of Appeals held that the “substantial portion” component applies, meaning that the city must prove that a substantial portion of the club’s floor area was devoted to adult activities to regulate it as an adult establishment. Because the City conceded before the Supreme Court that Dezer allocated less than a “substantial portion” of the club’s floor area to adult activities, the Court of Appeals reversed the Appellate Division and reinstated the Supreme Court order.

Facts

Dezer Properties, Inc. operated a club in New York City.
Only a portion of the club was dedicated to adult activities.
The City of New York sought to regulate the club as an “adult establishment” under the New York City Zoning Resolution.
The City Planning Commission Report on Adult Use Zoning Amendments was relevant to interpreting the Zoning Resolution.
Before the Supreme Court, the City conceded that Dezer allocated less than a “substantial portion” of the club’s floor area to adult activities.

Procedural History

The Supreme Court initially ruled in favor of Dezer Properties, finding that the “substantial portion” component applied.
The Appellate Division agreed with the Supreme Court’s interpretation of the Zoning Resolution but disagreed concerning the application of the “substantial portion” component to the facts.
The Court of Appeals reversed the Appellate Division’s order and reinstated the Supreme Court’s order, finding that the issue of whether a “substantial portion” of the floor area was used for adult activities was not properly before the Appellate Division, as the City conceded the point before the Supreme Court. The certified question was deemed unnecessary.

Issue(s)

Whether the “substantial portion” analysis in New York City Zoning Resolution § 12-10 applies to determine if Dezer Properties’ club, with only a part dedicated to adult activities, qualifies as an “adult establishment” subject to municipal regulation.

Holding

Yes, because the “substantial portion” component applies in determining whether Dezer’s club constitutes an “adult establishment” subject to municipal regulation. The City’s concession before the Supreme Court that a “substantial portion” of the floor area was not dedicated to adult uses was binding.

Court’s Reasoning

The Court of Appeals focused on statutory interpretation, specifically New York City Zoning Resolution § 12-10.
The court agreed with the lower courts that the “substantial portion” component of the Zoning Resolution applied to determine whether Dezer’s club was an “adult establishment”.
The Court reasoned that interpreting the ordinance in this way gives meaning to every section of the Zoning Resolution. The City’s interpretation would effectively excise the “substantial portion” component in cases involving eating or drinking establishments.
The Court cited the 1995 City Planning Commission Report on Adult Use Zoning Amendments, highlighting the intent behind the regulations.
The Court emphasized that the City conceded before the Supreme Court that Dezer allocated less than a “substantial portion” of the club’s floor area to adult activities. Therefore, the issue of the “substantial portion” was not properly before the Appellate Division or the Court of Appeals.
The Court effectively held the City to its prior concession, preventing it from arguing the point on appeal.