author: Jones, J. Jasen, J.

text:
    The People of the State of New York, Respondent, v David Dunlop Shinkle, Appellant.
    Argued November 12, 1980;
    decided December 18, 1980

      POINTS OF COUNSEL

      Carl J. Silverstein and Sol Lesser for appellant.
    I. The District Attorney’s office should in the interest of justice have been precluded from prosecuting David Shinkle and a special prosecutor appointed, because of the transfer of one of his defense attorneys Edward Leopold to a supervisory position in the very office that did in fact prosecute Jiim. (People v De Freese, 71 AD2d 689; Cardinale v Golinello, 43 NY2d 288; People v Fielding, 158 NY 542; People v Causer, 43 AD2d 899; People v Kyser, 52 AD2d 1072; People v Graydon, 59 Misc 2d 330; Matter of Fox v Shapiro, 84 Misc 2d 223; People v Cruz, 55 AD2d 921; Laskey Bros. of W. Va. v Warner Bros. Picture’s, 224 F2d 824; People v Wilkins, 28 NY2d 53.) II. The summation of the Assistant District Attorney, clearly constituted prosecutorial misconduct, in that it belittled the defense, and called upon community pressures and fears and thus prejudiced the jury and produced a wrongful conviction. (Berger v United States, 295 US 78; People v Damon, 24 NY2d 256; People v Adams, 21 NY2d 397; People v Mleczko, 298 NY 153; People v Steinhardt, 9 NY2d 267; People v Lombardi, 20 NY2d 266; People v Brunside, 52 AD2d 626; People v

      Davis, 53 AD2d 870; People v Gioia, 286 App Div 528; People v Garcia, 40 AD2d 983.)

      Joseph Jaffe, District Attorney (Philip E. Conaty of counsel), for respondent.
    I. It was not error for the District Attorney and his staff to prosecute Shinkle. The appointment of a special prosecutor was not required to preserve the integrity of the prosecution. (People v De Freese, 71 AD2d 689; People v Loewinger, 37 AD2d 675, 30 NY2d 587; People v Cruz, 55 AD2d 921; Board of Educ. v Nyquist, 590 F2d 1241; Matter of Fox v Shapiro, 84 Misc 2d 223; Laskey Bros. of West Va. v Warner Bros. Pictures, 224 F2d 824.) II. The prosecution summation was proper and does not constitute prosecutorial misconduct requiring reversal. (People v Carborano, 301 NY 39; People v Garcia, 40 AD2d 983; People v Lombardi, 20 NY2d 266; People v Caruso, 45 NY2d 881; People v Offerman, 63 AD2d 795; People v Mayo, 64 AD2d 783; People v Finch, 57 AD2d 641; People v Patno, 55 AD2d 965; People v Gioia, 286 App Div 528.)
   OPINION OF THE COURT

Jones, J.

Defendant’s conviction must be vacated where the executive director of the Legal Aid Society who represented him in the beginning stages of the criminal action later joined the District Attorney’s office and remained there during the course of prosecution of the action, notwithstanding that means were designed and scrupulously pursued to insulate him from defendant’s case.

On March 8, 1977, the day after the events out of which the charges in this case arose, Sol Lesser, Esq., of the Legal Aid Society of Sullivan County, Inc., was assigned to represent defendant. Edward Leopold, Esq., then executive director of the Legal Aid Society, became actively involved as advisor to Lesser during the early stages of the criminal proceeding. In this capacity Leopold interviewed defendant extensively, was intimately familiar with the contents of his file, and assisted in the formulation of defense strategy. On December 23, 1977 Leopold resigned as executive director of the Legal Aid Society, and on January 12, 1978 he was appointed Chief Assistant District Attorney for Sullivan County and continued in that capacity during the trial of this action.

Conscious of the risks of conflict of interest, Leopold had “conflict” stickers placed on all pending cases in which the defendants were or had been represented by the Legal Aid Society during his tenure of office, the members of the staff of the District Attorney’s office were ordered, to refrain from discussing any of such cases with Leopold, and he was denied access to the files in such cases.

In late January, 1978, a proceeding under CPLR article 78 was instituted on defendant’s behalf to restrain the District Attorney’s office from prosecuting defendant because of conflict of interest and prejudice in consequence of the Leopold appointment. On February 22 the application was denied without prejudice to the right to apply to the Trial Judge for similar relief when the case was reached for trial. On reargument of the application in April the court adhered to its original decision. Defendant thereafter made a similar application to the trial court and that application, too, was denied. At the time of defendant’s trial from June 26 to July 7, 1978 Leopold was still Chief Assistant District Attorney of Sullivan County.

In affirming defendant’s conviction of rape in the first degree, petit larceny, unauthorized use of a motor vehicle and assault in the third degree, the Appellate Division, with two Justices dissenting, rejected defendant’s contention that his convictions should be reversed because of the dual role played by Leopold. This was error, and the convictions must be vacated.

The fact that the attorney who had initially represented defendant and participated actively in the preparation of his defense was chief assistant in the office of the prosecutor in the months preceding and during defendant’s trial inescapably gave both defendant and the public the unmistakable appearance of impropriety and created the continuing opportunity for abuse of confidences entrusted to the attorney during the months of his active representation of defendant. It is no answer that defendant offers no evidentiary proof of actual prejudice. In the circumstances such proof would most likely be out of defendant’s reach. Nor does it serve to protect the interests of defendant that procedures were devised and scrupulously followed to insulate Leopold from the prosecution of this case. The inherent impropriety of the situtaion is further demonstrated in this instance when, in an attempt to show that the insulation was practically effective, the People circuitously resorted to an affirmation from Leopold himself. In defendant’s perception it was his former attorney who was personally championing the People’s cause against him.

Defendant, and indeed the public at large, are entitled to protection against the appearance of impropriety and the risk of prejudice attendant on abuse of confidence, however slight (cf. People v Zimmer, 51 NY2d 390; Greene v Greene, 47 NY2d 447; Cardinale v Golinello, 43 NY2d 288; People v De Freese, 71 AD2d 689, 690 [dissenting opn by Mr. Justice James D. Hopkins] ; ABA Standards Relating to Prosecution Function, § 1.2; subds [a], [b], par [iii]; Code of Professional Responsibility, canon 9). We recognize that the rule applied in this case may impede the transfer of attorneys between offices of Legal Aid or Public Defender and of District Attorney. This circumstance, however, affords no basis to deny defendants the right to both the fact and appearance of unswerving and exclusive loyalty on the part of attorneys who represent them.

For the reasons stated, the order of the Appellate Division should be reversed, defendant’s convictions vacated, and the case remitted to County Court, Sullivan County, for further proceedings on the indictment.

Jasen, J.

(dissenting). Upon the conceded facts and circumstances present in this case, I would not hold, as the majority does, that it was improper for the Sullivan County District Attorney’s office to prosecute defendant Shinkle merely because a member of its staff had at one time acted as defendant’s cocounsel while a member of the Sullivan County Legal Aid staff.

To adopt, as the majority has, a per se disqualification rule effecting the entire staff of the office of the District Attorney, without a showing of prejudice or without requiring that even a question as to the integrity of the office of the District Attorney be raised, is both unnecessary and undesirable as a matter of policy. Mere speculation and innuendo should not be the basis for establishing a per se rule of automatic disqualification. Instead, in each case where a claim of conflict is alleged, the court should consider all the facts and circumstances present and determine, as a question of fact, whether a conflict of interest exists and whether the integrity of the prosecutor’s office has been compromised either in appearance or in actuality.

This is precisely what County Court and the Appellate Division did in this case. After considering all the facts and circumstances, both courts found that the former Legal Aid attorney, Edward Leopold, upon his appointment as Chief Assistant District Attorney, was deliberately isolated from the rest of the District Attorney’s office in all pending cases in which the defendants were represented by Legal Aid. “[0]nce Leopold assumed his position in the prosecutor’s office,” the Appellate Division found, “he took immediate affirmative steps to avoid any prejudice to defendant and any appearance of impropriety which might have resulted from his becoming Chief Assistant District Attorney. Not only did he have ‘conflict’ stickers placed on all cases involving the Legal Aid Society which were pending in the District Attorney’s office, but the staff of the office was ordered to refrain from discussing these cases with him and to deny him access to the files of such cases.” (73 AD2d, p 765.) This court is bound by such affirmed findings of fact unless there is no support in the record for such findings. (NY Const, art VI, § 3.) Yet, notwithstanding these affirmed findings of fact, the majority holds that defendant’s convictions for aggravated rape and other crimes should be reversed because, as a matter of law, there is present in this case an “appearance of impropriety and the risk of prejudice [to the defendant] attendant on abuse of confidence.”

What abuse of confidence and what appearance of impropriety has been shown? As I stated before, the record clearly demonstrates that Leopold, upon joining the office of the District Attorney, took affirmative steps to isolate himself, and the office of the District Attorney did in fact isolate him, from not only the defendant’s case, but all pending cases in which the defendants were represented by Legal Aid, thereby effectively avoiding any appearance of impropriety. Are we to imply that a reasonable person would believe that, accepting such undisputed facts, there is nevertheless an “appearance of impropriety” solely because Leopold had represented the defendant at an earlier date? I think not, for to do so, a reasonable person would be required to conclude that lawyers, under any and all circumstances, cannot be trusted to maintain the confidences and secrets of their clients, even where, as here, they attest under oath to no breach of ethics. Implicit also in such reasoning is that most, if not all, government lawyers cannot be trusted to discharge their public responsibilities faithfully. Implications such as these, in my view, are repugnant to the entire concept of the Code of Professional Responsibility adhered to by lawyers and should not be adopted by our court as the basis upon which a new per se rule of disqualification is announced.

I believe the better rule would be that unless there is some evidence presented to indicate actual prejudice to the defendant or there is some support in the record to question the integrity of the office of the District Attorney, no per se disqualification should be invoked. Where, as here, there is abolutely no evidence offered to indicate prejudice to the defendant or to raise even a question as to the integrity of the office of the District Attorney, it simply cannot be said that there is an “appearance of impropriety”.

According to the majority, “[i]t is no answer that defendant offers no evidentiary proof of actual prejudice [or abuse of confidences]” as “[i]n the circumstances such proof would most likely be out of defendant’s reach.” I cannot agree. For example, in this case, where defendant took the stand in his own defense, confidences disclosed by the defendant to Leopold, if any, could be detected during the cross-examination of the defendant. None are alleged or even suggested. Similarly, the disclosure of unfavorable witnesses and other harmful facts, if any, confidentially divulged to Leopold by the defendant could also be ascertained from the proof offered by the prosecution either in its case-in-chief or in rebuttal. Again, none are alleged or even suggested.

As a result of this court’s holding, a special prosecutor must now be appointed in every instance in which a defendant has been previously represented by counsel who is in the employ of the local District Attorney’s office when that defendant’s case comes to trial. Not only do I have grave misgivings as to the severe impact on the administration of justice which will be occasioned by this per se rule of disqualification, but the majority’s view that a special prosecutor will somehow eliminate the “appearance of impropriety” and the “risk of prejudice” which they attribute to defense counsel’s change of employment ignores the reality of the situation. For instance, in the case at bar, the special prosecutor that will be assigned to defendant’s case will have access to the same files prepared by the Sullivan County District Attorney’s office and no doubt will have contact with the attorneys of that office who were involved in the initial stages of defendant’s prosecution. Under these circumstances, it is somewhat anomalous that the majority finds solace in holding that the appointment of a special prosecutor will somehow expel the “appearance of impropriety” which they have found to so pervade the defendant’s case as to require reversal of his convictions merely because of Leopold’s presence in the office of the Sullivan County District Attorney at the time of the prosecution of the defendant.

Inasmuch as there are affirmed findings of fact that Leopold and the office of the District Attorney of Sullivan County took immediate affirmative steps to avoid any prejudice to defendant and to prevent even the appearance of impropriety, and where there was no evidence that the former Legal Aid attorney ever disclosed to the prosecution any information gained as a result of his prior representation of defendant or that the precautionary measures taken in isolating Leopold from the defendant’s case were ineffective, I would hold that it was not error for the office of the District Attorney of Sullivan County to prosecute the defendant and that the appointment of a special prosecutor was not required to preserve the integrity of the prosecution.

Accordingly, I would affirm the order of the Appellate Division.

Judges Gabrielli, Wachtler, Fuchsberg and Meyer concur with Judge Jones; Judge Jasen dissents and votes to affirm in a separate opinion in which Chief Judge Cooke concurs.

Order reversed, etc.


source: Caselaw Access Project

author: Wachtler, J.

license: Public Domain

text:
    In the Matter of Gary Exley et al., Respondents-Appellants, v Village of Endicott et al., Respondents, and New York Telephone Company, Appellant-Respondent.
    Argued November 10, 1980;
    decided December 18, 1980

      POINTS OF COUNSEL

      Leonard Joseph, David B. Howorth, George E. Ashley, John M. Clarke and N. Michael Grove for appellant-respondent.
    I. The provision of PBX telephone service under the two-tier tariff is not a purchase contract under section 103. (Matter of Board of Water Comrs. of Vil. of White Plains, 71 App Div 544, 176 NY 239; Bright Homes v Wright, 8 NY2d 157; Patrolmen’s Benevolent Assn. of City

      of N. Y. v City of New York, 41 NY2d 205; Board of Comrs. v New York Tel. Co., 271 US 23; Matter of Leitner v New York Tel. Co., 277 NY 180; People ex rel. Public Serv. Comm. of State of N. Y. v New York Tel. Co., 262 App Div 440, 287 NY 803; Cardone v Consolidated Edison Co. of N. Y., 197 Misc 188, 276 App Div 1068, 277 App Div 769; Carter v American Tel. & Tel. Co., 365 F2d 486, 385 US 1008; Palmero v Bell Tel. Co. of Pa., 415 F2d 298; Western Contr. Corp. v Commissioner of Internal Revenue, 271 F2d 694.) II. The provision of PBX telephone service under the two-tier tariff is not a contract for public work under section 103. (Blank v Kearny, 44 App Div 592.) III. Regulation of the rates and service of New York Telephone Company renders the construction of section 103 by the court below unnecessary to protect the public interest. (Harlem Gas-Light Co. v City of New York, 33 NY 309; Matter of Marino v Town of Ramapo, 68 Misc 2d 44; Matter of General Tel. Co. of Upstate N. Y. v Lundy, 17 NY2d 373.) IV. Any application of section 103 to the company should be prospective only. (Chevron Oil Co. v Huson, 404 US 97; Phoenix v Kolodziejski, 399 US 204; Cipriano v City of Houma, 395 US 701; Harris v Jex, 55 NY 421; Childs v Childs, 69 AD2d 406; Flushing Nat. Bank v Municipal Assistance Corp. for City of N. Y., 88 Misc 2d 1047; Incorporated Vil. of Northport v Guardian Fed. Sav. & Loan Assoc., 87 Misc 2d 344, 54 AD2d 893.)

      Keith J. Roland for respondents-appellants.
    I. The strong public policy of this State requires that competitive bidding be pursued wherever possible. (Williams v Bryant, 53 AD2d 229; Harlem Gas-Light Co. v City of New York, 33 NY 309; Matter of Tele/Resources v Public Serv. Comm. of State of N. Y., 58 AD2d 406; Matter of Executon/Monroe County v Public Serv. Comm. of State of N. Y., 71 AD2d 138; Matter of Signacon Controls v Mulroy, 32 NY2d 410; Jered Contr. Corp. v New York City Tr. Auth., 22 NY2d 187; Matter of Sweet Assoc. v Gallman, 36 AD2d 95, 29 NY2d 902; Matter of McNutt Co. v Eckert, 257 NY 100; Molloy v City of New Rochelle, 198 NY 402.) II. The provision of telephone terminal eqüipment pursuant to two-tier tariffs is equivalent to a purchase contract for purposes of the competitive bidding statute. (Matter of Tele/Resources v Public Serv. Comm. of State of N. Y., 58 AD2d 406, 43 NY2d 647; Matter of Lefkowitz v Public Serv. Comm., 50 AD2d 338, 40 NY2d 1047; Matter of Consolidated Edison Co. of N. Y. v New York State Public Serv. Comm., 53 AD2d 131, 40 NY2d 803; Matter of Chenango & Unadilla Tel. Corp. v Public Serv. Comm. of State of N. Y., 46 AD2d 601; Matter of City of New York v Public Serv. Comm. of State of N. Y., 17 AD2d 581, 13 NY2d 594; Matter of Brooklyn Union Gas Co. v Public Serv. Comm. of State of N. Y., 34 AD2d 71; Matter of Village of Rockville Centre v Public Serv. Comm. of State of N. Y., 30 AD2d 1013, 23 NY2d 645.) III. The provision of dimension PBX service under two-tier tariffs is a contract for public works. (Williams v Bryant, 53 AD2d 229.) IV. “Pervasive regulation” by the Public Service Commission does not advance the policy underlying the competitive bidding statute. V. The decision of the court below should be given retroactive effect. (Gersof v Sweeney, 22 NY2d 297; Elia Bldg. Co. v New York State Urban Dev. Corp., 54 AD2d 337; Nance v Town of Oyster Bay, 54 Misc 2d 274.)
   OPINION OF THE COURT

Wachtler, J.

The central issue on these cross appeals is whether a municipality violated a competitive bidding statute (General Municipal Law, § 103), when it did not offer competí-• tors of the New York Telephone Company the opportunity to bid for the right to provide the municipality with certain telephone terminal systems. The petitioners, Gary Exley and 753 Harry L. Drive Corp., argue that the modern tariff system under which the equipment was to be provided rendered the transaction the functional equivalent of a sale, and brought it within the strictures of the competitive bidding statute (General Municipal Law, § 103). The Appellate Division agreed, and declared that the agreement to install New York Telephone’s equipment was void.

There was a time when New York Telephone operated as a regulated enterprise completely outside the competítive pressures of the marketplace. Since 1968, however, the Federal Communications Commission has permitted competition in a significant area of the field, the terminal interconnect industry, by allowing subscribers of telephone services to purchase and install their own phone terminal equipment (Matter of Use of Carterfone Device in Message Toll Tel. Serv., 13 FCC2d 420). This in turn put the regulated telephone companies in the position of facing a probable loss of a significant portion of the terminal equipment market.

New York Telephone sought to counteract this loss by new marketing strategies, but for reasons which need not concern us here, at the time of this bidding it had not yet been permitted by the Public Service Commission (PSC) to sell its equipment to the public. Instead, it participated in the development of an alternate rate system called the “two tier” rate, which has as a basic feature a separation of the rate into two parts, one to cover the cost of equipment actually provided, and the other to cover the recurring charges tied to the operation of the entire phone system.

Under traditional phone rate systems the subscriber pays a single monthly charge, subject to periodic increases, for so long as he enjoys the services. By way of distinction, the two-tier system selected by the municipality here incorporates and “A” rate, which is fixed at the time the equipment is provided, and which is paid in a lump sum or over a definite term of months selected by the subscriber. At the end of the “A” term the customer can continue using the equipment by paying only the “B” rate, and if he returns the equipment he receives a credit for its remaining useful life or salvage value. The customer who accepts the two-tier system agrees to pay the full amount of the “A” rate even if he cancels the service. It is conceded that the title to the equipment remains at all times in New York Telephone.

It is clear that the two-tier system is tailored to the needs of each particular subscriber, and generally it results in a lower rate than the traditional system. However, because it was designed in this way to compete with sellers of terminal equipment, it is not surprising that the two-tier system takes on some of the attributes of a sale. It is for this reason that respondents argue that the agreement of the municipality to use the two-tier system was within the scope of section 103 of the General Municipal Law.

At the time New York Telephone agreed to supply the system in question, that statute read in pertinent part: “1. Except as otherwise expressly provided * * * all contracts for public work involving an expenditure of more than thirty-five hundred dollars and all purchase contracts involving an expenditure of more than fifteen hundred dollars, shall be awarded * * * to the lowest responsible bidder furnishing the required security after advertisement for sealed bids in the manner provided by this section”.

By its own terms, the statute applies only to contracts for public work or purchase contracts, and makes no mention of leases or rental type arrangements. At the outset, we note our agreement with Special Term that the acquisition of the phone system cannot without contextual strain be classified as a public work contract. As Special Term noted, the installation of the system was not a substantial aspect of the contract, and the contract did not otherwise involve performance of services or specialized skills (Opns State Comp No. 79-762). However, the hybrid nature of the two-tier rate at least arguably brings the transaction within the meaning of the term “purchase contracts”.

In Matter of Signacon Controls v Mulroy (32 NY2d 410) this court reaffirmed the importance of competitive bidding statutes to safeguard the public interest, in that they invite competition, and discourage favoritism, improvidence, extravagance, fraud and corruption (10 McQuillin, Municipal Corporations, § 29.29). Nonetheless, although section 103 must be read in conjunction with this underlying purpose (see General Municipal Law, § 100-a) it also must be recognized that competitive bidding statutes constitute a substantial imposition on the activities of municipal governments. It is important, therefore, that we do not extend the coverage of the statute into areas unintended by the Legislature.

It has long been accepted that a municipality may lease equipment without complying with the competitive bidding requirements of section 103 of the General Municipal Law (see, e.g., Opns St Comp Nos. 78-519, 78-443). However, it is equally well recognized that one cannot avoid the effect of section 103 merely by casting an agreement which is truly a sale in terms of a lease (Opns St Comp No. 78-519; 18 Opns St Comp, 1962, p 176). The Appellate Division opined that this is exactly the nature of the transaction in this case. We disagree.

Without doubt neither the term “lease” nor the term “sale” can be absolute in meaning, and in the innumerable variations of contracts either a lease or a sale can possess attributes of one or the other. However, it is the total character of the arrangement which controls, and in making this assessment it is important to note that title for all equipment to be provided under the two-tier tariff always remains in the New York Telephone Company. The Appellate Division deemed this insignificant because in its view the useful life of the equipment was expended at the end of the “A” rate term, and, supposedly, the equipment over which New York Telephone retained ownership would then have been of little value. In support of this view, the Appellate Division employed as a useful life the term of years set forth in the Local Finance Law for telephone systems in general (see Local Finance Law, § 11.00, subd a, par 25). We believe this reliance on the Local Finance Law inappropriate because the useful life to which that statute refers does not necessarily have any close relationship with the equipment actually contemplated by the contract in this case.

It is also significant that the term of the “A” rate need not correspond to the useful life, because that term can be selected from various alternatives by the subscriber. This problem was answered below by noting that a subscriber who returns equipment receives a credit for the remaining useful life or salvage value. However, this credit is a fixed amount for the type of equipment, and does not have any direct relationship to the specific equipment involved.

Finally, we find it significant that New York Telephone, in addition to retaining title to the equipment, also assumes the risk of loss due to events not within the customer’s control, and also the obligation to service and repair the equipment. Moreover, there is not the slightest hint of subterfuge in this arrangement. On the whole, we believe that the two-tier arrangement is in the nature of a true lease (cf. Albion Ind. Center v Town of Albion, 62 AD2d 478) and therefore is not within the ambit of the competitive bidding statute.

In view of the disposition of this appeal, we affirm the denial by the Appellate Division of attorney’s fees to the petitioners. The order of the Appellate Division should be modified, with costs to New York Telephone Company to the extent of dismissing the petition, and, as so modified, affirmed.

Chief Judge Cooke and Judges Jasen, Jones and Meyer concur; Judges Gabrielli and Fuchsberg taking no part.

Order modified, with costs to New York Telephone Company, in accordance with the opinion herein, and, as so modified, affirmed.

       The PSC, however, may alter the rate in narrow circumstances.


author:
      Per Curiam.

      Gabrielli, J.

text:
    Louis J. Lefkowitz, as Attorney-General of the State of New York, Appellant, v Napatco, Inc., Respondent.
    Argued November 11, 1980;
    decided December 18, 1980

      POINTS OF COUNSEL

      Robert Abrams, Attorney-General (Paul S. Shemin and Shirley Adelson Siegel of counsel), for appellant.
    I. The preparation of patent applications constitutes a legal rather than clerical service, and therefore is excluded from the exception to the prohibition against the practice of law by a corporation in subdivision 5 of section 495 of the Judiciary Law. (Matter of Lefkowitz v Peska Assoc., 90 Misc 2d 59; People v O’Brien, 43 Misc 2d 1003; Sperry v Florida, 373 US 379; Duplan Corp. v Deering Milliken, 397 F Supp 1146; Topliff v Topliff, 145 US 156.) II. In the absence of a showing by defendant that attorneys in general practice in fact assume professional responsibility for the patent applications provided by Napatco, subdivision 5 of section 495 does not apply to Napatco’s services. (Lee Organization v Council of Better Business Burs., 74 Misc 2d 363; Five

      Boro Elec. Contrs. Assn. v City of New York, 37 AD2d 807, 33 NY2d 676.) III. As a matter of law, attorneys in general practice cannot accept responsibility for the preparation of patent applications. (Hull v United States, 390 F2d 462; United States v Blasius, 397 F2d 203, 393 US 950, 1008; Arnesen v Lee Organization, 333 F Supp 116.) IV. The decisions of the courts below are inconsistent with this court’s opinion in Matter of Napatco, Inc. v Lefkowitz. (Matter of Napatco, Inc. v Lefkowitz, 42 NY2d 884.) V. Napatco furnishes legal services or counsel in violation of section 495 (subd 1, pars [d], [e]) of the Judiciary Law. (Sperry v Florida, 373 US 379.)

      Charles G. Mills IV and Samuel N. Greenspoon for respondent.
    I. Respondent may prepare legal papers such as patent applications for members of the New York Bar. (Matter of Marino, 20 NY2d 176.) II. All New York attorneys may prepare patent applications. (United States v Blasius, 397 F2d 203, 393 US 950, 1008; Hull v United States, 390 F2d 462; Arnesen v Lee Organization, 333 F Supp 116.) III. This case involves disputes of law only and not of fact and the Attorney-General is not entitled to discovery. (State of New York v Biggane, 48 Misc 2d 33, 24 AD2d 705; People v Volkswagen of Amer., 41 AD2d 827; Wardius v Oregon, 412 US 470; Marcus v Search Warrant, 367 US 717; Hale v Henkel, 201 US 43; Boyd v United States, 116 US 616; Matter of Sussman v New York State Organized Crime Task Force, 39 NY2d 227; Myerson v Lentini Bros. Moving & Stor. Co., 33 NY2d 250; Matter of Napatco, Inc. v Lefkowitz, 43 NY2d 884.) IV. The issue at bar has already been judicially determined between the parties against the Attorney-General. (Matter of Napatco, Inc. v Lefkowitz, 57 AD2d 742, 43 NY2d 884; Matter of American Ins. Co. [Messinger — Aetna Cas. & Sur. Co.], 43 NY2d 184.)
   OPINION OF THE COURT

Per Curiam.

A corporation which at the behest of a general practice attorney and for a fee causes a patent application to be prepared by a patent attorney or agent registered with the United States Patent Office renders legal rather than clerical services within the meaning of subdivisions 1 and 5 of section 495 of the Judiciary Law. In this action by the Attorney-General to enjoin defendant from continuing such a practice Special Term granted defendant’s motion for summary judgment dismissing the complaint and denied the Attorney-General’s cross motion for discovery as academic. The Appellate. Division affirmed, without opinion. We granted leave to appeal and now reverse.

Special Term’s conclusion that subdivision 5 of section 495 of the Judiciary Law explicitly permits a service corporation such as defendant to prepare patent applications for general practice attorneys was in error. What that subdivision allows is the “furnishing to any person, lawfully engaged in the practice of law, such information or such clerical services in and about his professional work as, except for the provisions of this section, may be lawful, provided that at all times the lawyer receiving such information or such services shall maintain full professional and direct responsibility to his clients for the information and services so received.” Lest it be not clear from the phrase “clerical services” that legal services are not within the subdivision the immediately following sentence states: “But no corporation shall be permitted to render any services which cannot lawfully be rendered by a person not admitted to practice law in this state”. This is consistent with subdivision 1 of the same section which provides that a corporation may not “furnish attorneys or counsel” (subd [d]) nor “render legal services of any kind * * * in any * * * way or manner” (subd [e]).

Thus, unless preparation of a patent application is a clerical service it is proscribed by the section. That preparation of a patent application is not clerical is clear from section 33 of title 35 of the United States Code which provides that “Whoever, not being recognized to practice before the Patent Office, holds himself out * * * as being qualified to prepare * * * applications for patent shall be fined not more than $1,000 for each offense.” Whether, as defendant argues, as a matter of Federal criminal law that provision punishes merely the holding out of oneself as qualified or the preparation of the patent application (compare United States v Blasius, 397 F2d 203, cert granted 393 US 950, cert dsmd 393 US 1008, with Hull v United States, 390 F2d 462), it is clear that preparation of a patent application is not a clerical service, but one which can be performed only by a registered and qualified patent attorney or agent, or perhaps by a general practice attorney, and that it is, therefore, a legal service within the meaning of section 495. The fact that defendant may use the services of an attorney or agent admitted to the patent bar in preparing applications for New York general practice attorneys does not save the situation, for defendant would then be furnishing attorneys or counsel within the proscription of subdivision 1 of section 495. The premise on which summary judgment was granted to defendant was, therefore, erroneous.

A further reason why, even if it be assumed that the services are clerical, accelerated judgment should not have been granted to defendant is that the Attorney-General is entitled to disclosure concerning what steps defendant has taken to assure that the attorneys receiving its patent application preparation services do in fact maintain “full professional and direct responsibility” to their clients. That the law imposes upon every attorney responsibility for papers he presents to a client whether or not he drafted them himself (cf. Assurance Co. of Amer. v Pulin, 142 NYS2d 809) is not enough to meet the requirement of subdivision 5, indeed, if accepted as enough would render its requirement wholly meaningless. The structure of defendant’s arrangements with its attorney-clients is, therefore, a proper subject of discovery which the Attorney-General should be permitted to complete before any further summary judgment application is made by defendant (CPLR 3212, subd [f]).

The present record is not, however, sufficiently clear to warrant the granting of summary judgment to the Attorney-General, who made no cross motion for that relief (CPLR 3212, subd [b]), for whether defendant only refers general attorneys to patent agents or attorneys leaving them to carry out further dealings directly, or actively participate in such further dealings, and if so, to what extent, cannot be gleaned from the record. Contrary to the suggestion in the dissent, not every general attorney who obtains his client’s authorization to engage and work directly with a registered patent attorney or agent referred by defendant Napatco is in violation of the United States Code. So much of subdivision 5 of section 495 as requires maintenance of “full professional and direct responsibility” relates to the furnishing of clerical, not legal services, but if it be assumed that the same requirement relates to legal services also, it cannot be said, as the dissent suggests, that a general attorney who has a patent application prepared by a registered patent attorney or agent referred to him by Napatco has necessarily and in all cases failed to “maintain full professional and direct responsibility to his clients” as required by the subdivision. The United States Code provision and the Judiciary Law are aimed at different evils.

Finally, our previous affirmance (Matter of Napatco, Inc. v Lefkowitz, 43 NY2d 884) of the quashing of the Attorney-General’s subpoena is no bar to this action for an injunction, for we recognized in our memorandum on that appeal that, “read as the Attorney-General would read them [defendant’s advertisement and form letter] they can be said to constitute an offer to engage in activities prohibited by subdivision 1 of section 495 of the Judiciary Law” (43 NY2d, at p 885). The evidentiary predicate required to sustain an investigatory subpoena differs from that necessary to sustain a complaint against a summary judgment motion made before disclosure has been had (CPLR 3212, subd [f]).

Accordingly, the order of the Appellate Division should be reversed, with costs, and defendant’s motion for summary judgment denied.

Gabrielli, J.

(dissenting in part). I agree with the majority Per Curiam opinion insofar as it reverses the order of the Appellate Division affirming the grant of summary judgment to defendant Napatco. However, I would grant summary judgment to the Attorney-General for I can see no necessity for further discovery and prolonged litigation (commenced more than four years ago) given the rationale for reversal articulated by the majority.

The majority notes that under subdivision 5 of section 495 of the Judiciary Law a legal services corporation such as defendant may furnish only information and clerical servicés to an attorney concerning his professional work, provided, of course, that “the lawyer receiving such information or services shall maintain full professional and direct responsibility to his clients for the information and services so received”. The majority then concludes from section 33 of title 35 of the United States Code that the preparation of patent applications, a service Napatco accomplishes for its attorney-clients, is clearly a legal service (pp 437-438). Nevertheless, the majority chooses not to grant summary judgment to plaintiff because of a supposed lack of clarity in the record; and the case now must proceed to further time-consuming discovery. Since the majority has concluded that Napatco was performing a legal and not a clerical service, I fail to see what more proof is required in the record in this case to warrant granting judgment to plaintiff. The possibility that Napatco merely refers general practice attorneys to patent agents or patent attorneys should not require further discovery for, as the majority notes (p 438), a corporation is unequivocally prohibited from furnishing attorneys or counsel by subdivision 1 of section 495 of the Judiciary Law. Furthermore, plaintiff’s failure to cross-move for summary judgment is entirely irrelevant, because on a motion for summary judgment the court may search the record and grant summary judgment to the opposing party (CPLR 3212, subd [b] ).

Accordingly, for the foregoing reasons, Napatco’s motion for summary judgment should be denied and summary judgment should be granted to plaintiff.

Judges Jasen, Jones, Wachtler, Fuchsberg and Meyer concur in Per Curiam opinion; Judge Gabrielli dissents in part and votes to reverse, deny defendant’s motion for summary judgment and grant summary judgment in favor of plaintiff in an opinion in which Chief Judge Cooke concurs.

Order reversed, etc.

        . Absence of a cross motion is not, as the dissent suggests, irrelevant, for had the Attorney-General come forward with evidentiary matter on its cross motion, defendant’s answer or failure to answer may have clarified the factual situation. Of course, the fact that summary judgment may be granted to an opposing party without a cross motion does not mean that it must be.

      . The defendant in United States v Blasius (397 F2d 203, supra) was an engineer, not an attorney, and the opinion contains no discussion of what a general attorney may do when co-operating with a registered patent agent or attorney in the filing of an application.

       This section concludes and specifically provides that “[i]f it shall appear that any party other than the moving party is entitled to a summary judgment, the court may grant such judgment without the necessity of a cross-motion”.


author: Chief Judge Cooke.

text:
    Louis J. Lefkowitz, as Attorney-General of the State of New York, Appellant, v Harry Lebensfeld et al., Respondents.
    Argued November 11, 1980;
    decided December 18, 1980

      POINTS OF COUNSEL

      Robert Abrams, Attorney-General (Daniel L. Kurtz, Shirley Adelson Siegel, Irwin M. Strum, Charles Brody and Sharon Slater of counsel), for appellant.
    I. The Attorney-General has standing to bring the present proceeding to prevent United from defrauding or taking unfair advantage of charities. (Dulberg v Mock, 1 NY2d 54; St. Joseph’s Hosp. v Bennett, 281 NY 115; Owens v Missionary Soc. of M. E. Church, 14 NY 380; McCartee v Orphan Asylum Soc. of City of N. Y., 9 Cow 437, 504; Shotwell v Mott, 2 Sandf Ch 50; Miller v Gable, 2 Denio 492; Kniskern v Lutheran Churches of St. John’s & St. Peter’s, 1 Sandf Ch 439; Levy v Levy, 33 NY 97; Sherman v Richmond Hose Co. No. 2, 230 NY 462.) II. The Attorney-General need not make a prior demand before initiating a proceeding to protect ultimate charitable beneficiaries. Even if a demand is ordinarily required, none is necessary under the facts of this case. (Matter of Gebbie, 33 AD2d 1093, 27 NY2d 482; Matter of Notkin, 45 AD2d 849; Matter of Birch, 50 AD2d 475; Matter of Kearns, 38 AD2d 808; Revici v Conference of Jewish Material Claims Against Germany, 11 Misc 2d 354; Balluffi v Montross, 199 Misc 220.)

      William J. McSherry, Jr., Edward Brodsky and Robert D. Marafioti for respondents.
    I. The Attorney-General lacks standing to bring this suit. (Tilden v Green, 130 NY 29; Holmes v Mead, 52 NY 332; Wetmore v Parker, 52 NY 450; Bird v Merklee, 144 NY 544; St. Joseph’s Hosp. v Bennett, 281 NY 115; Matter of James, 22 Misc 2d 1062; Cadman Mem. Cong. Soc. of Brooklyn v Kenyon, 306 NY 151; Johnston v Hughes, 187 NY 446; Matter of Durand,
      194 NY 477; Matter of Crane, 12 App Div 271.) II. Even if the Attorney-General had standing to bring this suit, he could not do so without making a prior demand on the charities. (Riviera Congress Assoc. v Yassky, 18 NY2d 540; Matter of Notkin, 45 AD2d 849; Matter of Birch, 50 AD2d 475; Matter of Kearns, 38 AD2d 808; Matter of Gebbie, 33 AD2d 1093, 27 NY2d 482.)
   OPINION OF THE COURT

Chief Judge Cooke.

At issue here is whether the State Attorney-General has standing to sue a corporation for a breach of fiduciary duties and for declaration and payment of dividends, on behalf of the ultimate beneficiaries of a charitable organization which received shares in the corporation as an absolute gift. In these particular circumstances, it must be concluded that the Attorney-General lacks standing.

This action was commenced by the Attorney-General against United Industrial Syndicate, Inc., and its directors. In 1968 and 1969 defendant Lebensfeld, one of the directors, donated shares of United’s cumulative first preferred stock to a variety of charities, without placing any restrictions on the use of the gifts. Under United’s certificate of incorporation, holders of such shares are “entitled to receive, but only when and as declared by the Board of Directors out of any funds legally available for the purpose, cash dividends at the rate of $6.00 per share per annum, and no more”. The dividends were to accumulate “whether or not earned” and thus were to be paid or declared in full before any dividend or distribution was made to inferior shares. Since the time when the gifts of stock were made, dividends have been declared but in an amount less than $6 per share.

Several of the charity donees in 1977 brought an action against United and its directors seeking the difference between the dividends actually declared and the $6 per share per annum mentioned in the certificate of incorporation, as well as a declaration that the corporation must pay the full $6 figure in future years. The remaining charities failed to join in the suit or to commence one of their own. After approximately one year passed, the Attorney-General instituted this action, claiming to represent the unascertained beneficiaries of the charities which did not sue. The complaint asserts a cause of action for the alleged underpayment in dividends, and also asserts a cause of action involving another group of charities from which United repurchased first preferred shares in 1975. According to the complaint, the repurchase by United was at less than market value and constituted a breach of fiduciary duties to minority shareholders.

Defendants moved to dismiss the complaint on the ground that the Attorney-General lacked capacity to sue, and upon the further ground that the complaint failed to state a cause of action. Special Term ruled that the lawsuit was derivative in nature and could not be maintained in the absence of a prior demand on the charities. Since the Attorney-General had failed to make a demand, the court dismissed the action, except as to one charity concerning which a demand was deemed futile. The Appellate Division, with a partial dissent, modified to the extent of dismissing the entire action on the ground of lack of standing. On this appeal, the Attorney-General continues to assert that he has standing to represent the ultimate beneficiaries of the charities. The order of the Appellate Division should be affirmed.

Pursuant to EPTL 8-1.1 (subd [f]), the Attorney-General is authorized to represent the beneficiaries of “dispositions for religious, charitable, educational or benevolent purposes and it shall be his duty to enforce the rights of such beneficiaries by appropriate proceedings in the courts.” Originally enacted as part of the “Tilden Act” in 1893, this statutory provision was part of an over-all legislative scheme designed to validate charitable trusts (L 1893, ch 701). For a period prior to the Tilden Act, charitable trusts were deemed invalid in this State (Tilden v Green, 130 NY 29; see Bascom v Albertson, 34 NY 584; Levy v Levy, 33 NY 97; see, generally, Scott, Charitable Trusts in New York, 26 NYU L Rev 251). During that period, the sole method by which a charitable object could be carried out was by making an absolute gift to a charitable corporation (see, e.g., Bird v Merklee, 144 NY 544, 549-552; 9B Rohan, NY Civ Frac [EPTL], par 8-1.1 [1], at p 8-12).

One of the principal reasons a charitable trust could not Jbe enforced was because it lacked “ ‘a certain beneficiary who can claim its enforcement’ ” and “a certain designated beneficiary [was] essential to the creation of a valid trust” (Tilden v Green, 130 NY 29, 45, supra). Thus, when it validated charitable trusts, the Legislature enacted the predecessor to EPTL 8-1.1 (subd [f]), designating the Attorney-General to represent the uncertain beneficiaries and empowering him “to enforce such trusts by proper proceedings in the court” (L 1893, ch 701, §2). The obvious purpose of this provision was to provide a mechanism for enforcement of trusts whose beneficiaries were unascertainable.

With the enactment of EPTL 8-1.1 (subd [f]), the Attorney-General’s enforcement powers were expressly extended to all charitable dispositions, which include absolute gifts. No actual substantive change was effected, however, since case law had recognized the Attorney-General’s power to ensure that charities used absolute gifts in accordance with the purposes stated by the donee (e.g., St. Joseph’s Hosp. v Bennett, 281 NY 115, 119), or where no purposes are stated, in accordance with a legitimate purpose of the charitable corporation (e.g., Sherman v Richmond Hose Co. No. 2, 230 NY 462, 469). If the Attorney-General were suing to obtain actual enforcement of a disposition, or to require that it be applied for a stated or proper charitable purpose, there would thus be little question of his standing.

The problem here, however, is that the Attorney-General does not seek to attain any of these goals. Rather, he is attempting to enforce obligations purportedly owing to charitable organizations by virtue of their ownership of stock. In effect, the Attorney-General is stepping into the shoes of the charity without first making a demand upon the corporation or satisfying the other procedures normally associated with a derivative action. He is endeavoring, not to enforce a gift or a trust, but to enforce rights that arise from the ownership of charitable property originally received as a gift.

No authority has been furnished to this court that would sanction such an expansive reading of EPTL 8-1.1 (subd [f ]). That provision was enacted in response to a particular problem and, although now broader than at its inception, it does not authorize a large scale incursion into the everyday affairs of charitable corporations. Indeed, in these circumstances, to confer standing upon the Attorney-General under EPTL 8-1.1 (subd [f]) would be to grant all but unlimited and uncontrolled power to act as the alter ego of the charitable organization. Since most charitable holdings probably originated as gifts, as did the shares involved here, virtually all obligations owed a charity would be independently enforceable by the Attorney-General. Such a result would require a strained interpretation of EPTL 8-1.1 (subd [f]), a statute designed primarily to ensure that there is a party available to enforce charitable trusts on behalf of the ultimate beneficiaries.

Nor does EPTL 8-1.4 (subd [m]) authorize the Attorney-General to maintain this action. It is true that 8-1.4 grants supervisory power over charities and other entities and allows the Attorney-General to institute proceedings to secure proper administration of such entities. Quite simply, however, the section does not provide for an action against third parties who allegedly are liable to the charitable organization.

Finally, the Attorney-GeneraPs belated attempt to invoke various provisions of the Not-For-Profit Corporation Law must be rejected. The action was commenced solely on the theory that the Attorney-General represented the ultimate beneficiaries under the EPTL. The Attorney-General may not, on appeal, advance a different theory and rely on additional statutory authority, especially here where the record could have been further developed had the contentions been raised at Special Term. Hence, we do not decide whether and in what instances the Attorney-General possesses standing under the Not-For-Profit Corporation Law.

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Meyer concur.

Order affirmed, with costs.

      . In England, charitable uses were expressly recognized in 1601 with the passage of the Statute of Charitable Uses (43 Eliz I, ch 4), although such uses had been regularly enforced in Chancery prior to that time (Vidal v Girad’s Executors, 2 How [43 US] 127, 196). The New York Legislature repudiated the Statute of Charitable Uses in 1788 (L 1788, ch 46). Nonetheless, in Williams v Williams (8 NY 525), the court held that charitable trusts did not depend for their existence on the Statute of Charitable Uses, but rather had an independent existence at common law. Not long after, however, the Williams reasoning was criticized and, ultimately repudiated (Levy v Levy, 33 NY 97, supra; Tilden v Green, 130 NY 29, supra).

        . Under the EPTL, a disposition is defined as “a transfer of property by a person during his lifetime or by will” (EPTL 1-2.4). This definition is broad enough to encompass, at a minimum, both trusts and absolute gifts (see Hoffman, Practice Commentary, McKinney’s Cons Laws of NY, Book 17B, EPTL 1-2.4, p 11).


text:
    In the Matter of the Society for Ethical Culture in the City of New York, Appellant, v Beverly M. Spatt et al., Constituting the Landmarks Preservation Commission, et al., Respondents.
    Argued November 18, 1980;
    decided December 18, 1980

      POINTS OF COUNSEL

      Louis Haimoff, Joseph Blum, Leo Rosen, Marcia B. Paul and Laurie R. Rockett for appellant.
    I. The commission’s designation of the Meeting House as a landmark is unconstitutional under the test articulated in Lutheran Church. (Lutheran Church in Amer. v City of New York, 35 NY2d 121; Penn Cent. Transp. Co. v City of New York, 42 NY2d 324, 438 US 104; French Investing Co. v City of New York, 39 NY2d 587; Goldblatt v Hempstead, 369 US 590.) II. The commission’s designation of the Meeting House as a landmark was arbitrary and capricious and without rational basis. (Matter of Pell v Board of Educ., 34 NY2d 222; National Labor Relations Bd. v Remington Rand, 94 F2d 862.) III. The landmark designation of the Society’s property is an unconstitutional abridgement of the free exercise of the Ethical Culture religion practiced by the Society. (Washington Ethical Soc. v District of Columbia, 249 F2d 127; Buckley v Valeo, 424 US 1; Smith v Goguen, 415 US 566; Cramp v Board of Public Instruction, 368 US 278; Smith v California, 361 US 147; Matter of Diocese of Rochester v Planning Bd. of Town of Brighton, 1 NY2d 508; Sherbert v Verner, 374 US 398; Wisconsin v Yoder, 406 US 205; Murdock v Pennsylvania, 319 US 105.)

      Allen G. Schwartz, Corporation Counsel (Carolyn E. Demarest and Leonard Koerner of counsel), for respondents.
    I. The designation of appellant’s Meeting House as a landmark was clearly rational based upon the facts before respondent commission. (Lutheran Church in Amer. v City of New York, 35 NY2d 121; Matter of Pell v Board of Educ., 34 NY2d 222.) II. By failing to present for respondents’ approval a concrete proposal for structural modification or replacement of the Meeting House, appellant has attempted to circumvent the administrative process provided by the landmarks law and its action in commencing the instant litigation is premature. (Young Men’s Christian Assn. v Rochester Pure Waters Dist., 37 NY2d 371; Penn Cent. Transp. Co. v City of New York, 42 NY2d 324, 438 US 104; Old Farm Rd. v Town of New Castle, 26 NY2d 462; Watergate II Apts. v Buffalo Sewer Auth., 46 NY2d 52; Lyons Co. v Corsi, 3 NY2d 60; Fusco v New York Prop. Underwriters Assoc., 70 AD2d 895; Janas v Town Bd. of Fleming, 51 AD2d 473.) III. Appellant has failed to demonstrate that the designation of the Meeting House works a hardship upon it or unduly interferes with the accomplishment of its charitable purposes so as to constitute a taking in violation of the Constitutions of the United States or the State of New York. (Goldblatt v Town of Hempstead, 369 US 590; Lutheran Church in Amer. v City of New York, 35 NY2d 121; Matter of Trustees of Sailors’ Snug Harbor v Platt, 29 AD2d 376; Salamar Bldrs. Corp. v Tuttle, 29 NY2d 221; Crusade for Christ v Town of New Lebanon, 36 AD2d 247; People ex rel. Watchtower Bible & Tract Soc. v Haring, 8 NY2d 350; Penn Cent. Transp. Co. v City of New York, 42 NY2d 324; Matter of Diocese of Rochester v Planning Bd. of Town of Brighton, 1 NY2d 508; Matter of Charles v Diamond, 41 NY2d 318.) IV. The designation of the Meeting House as a landmark does not unduly interfere with appellant’s free exercise of religion. (Penn Cent. Transp. Co. v City of New York, 438 US 104; Wisconsin v Yoder, 406 US 205; Murdock v Pennsylvania, 319 US 105; Matter of Westchester Reform Temple v Brown, 22 NY2d 488.)
   OPINION OF THE COURT

Wachtler, J.

At issue in this case is the propriety of the action of New York City’s Landmark Preservation Commission in designating as a landmark the Meeting House of the Society of Ethical Culture of the City of New York (Society). The Society argues that the designation, with its attendant restrictions on the use of the property, is a confiscation without due compensation and an interference with the free exercise of the Society’s religious purpose. The Appellate Division held that this landmark designation was a permissible land use regulation. We affirm.

The Society is a religious, educational and charitable organization founded in 1877 for the purpose of uniting interested persons to further the goal of nonsectarian moral improvement. By the early 1900’s the Society had grown to the extent that a permanent home for the organization was sought. To this end, a valuable parcel of real property with an entire block frontage of 200 feet on Central Park West in the City of New York was purchased.

Two buildings eventually were constructed on the site, but only the second, known as the Meeting House, is involved in the instant controversy. That building, which comprises 40 % of the lot area, was deemed worthy of landmark status due to its exemplification as the first building facade of the art nouveau style pioneered in this country by the noted architect Robert D. Kohn, who was also a president of the Society. It was the architectural distinction of the building, and the architect’s personal involvement in the Society, that led the commission to conclude that the Meeting House is “a tangible symbol of the Society’s permanent social contribution and a rich architectural element of the fabric of our City.”

The proposal of the landmark designation was met by the Society’s immediate opposition; first at the public hearing required under the Administrative Code of the City of New York (Administrative Code, § 207-2.0), and later by way of an article 78 proceeding seeking to annul the commission’s designation. This proceeding was converted into an action for declaratory judgment, and after a non jury trial the trial court agreed with the Society’s contention that there was insufficient evidence that the Meeting House was of historical or architectural significance, and declared that the designation was unreasonable, confiscatory and therefore unconstitutional. The Appellate Division, in a thorough and thoughful opinion by Mr. Justice Joseph P. Sullivan, noted that Trial Term had impermissibly substituted its subjective judgment on the landmark question for that of the Landmark Preservation Commission and unanimously reversed. The Society now appeals.

The Administrative Code of the City of New York defines a landmark as “[a]ny improvement, any part of which is thirty years old or older, which has a special character or special historical or aesthetic interest or value as part of the development, heritage or cultural characteristics of the city, state or nation” (Administrative Code, § 207-1.0, subd n). At the outset we note that if the only question before us were whether there is sufficient evidence in the record to support respondents’ determination that the Meeting House falls within this definition, there would be no question but that the designation would be sustained. Certainly, on this record, the determination of the commission in this regard cannot be deemed irrational (see Matter of Pell v Board of Educ., 34 NY2d 222, 230-231). However, because the landmark designation subjects the Society to substantial restriction in its use of the property without any outright compensation, substantial questions remain concerning the constitutional application of those restrictions to the Society, a religious and charitable organization.

The Society notes, quite rightly, that the landmark designation will prevent the exploitation of the full economic value of the Central Park West property, since that development would require the demolition of the existing structures in violation of the commission’s designation. Furthermore, the Society argues, the designation also effectively prevents the development of the adjacent school building portion of the tract which, although not the subject of landmark designation, is physically and functionally related to the Meeting House through common interior passageways and utility systems. This latter argument appears weaker than the first, because the record indicates that the buildings could be demolished separately, but in any event it is clear that at the present time the designation has the potential of inflicting a substantial economic impact on the Society. Inevitably the reduced development potential of the property will be reflected in its market value. The question, of course, is whether the impact on the Society and its charitable activities is so severe that the restrictions become confiscatory (Lutheran Church in Amer. v City of New York, 35 NY2d 121).

Although the State and Federal Constitutions require that land use regulation not be so unreasonable or extreme that it amounts to an appropriation of property without due compensation (Matter of Spears v Berle, 48 NY2d 254, 262; French Investing Co. v City of New York, 38 NY2d 587, 596), it has nonetheless long been accepted that a government may reasonably restrict an owner in the use of his property for the cultural and aesthetic benefit of the community (Matter of Cromwell v Ferrier, 19 NY2d 263; Matter of Trustees of Sailors’ Snug Harbor v Platt, 29 AD2d 376). To be sure individual landmark designation involves greater problems than general zoning or historical district regulation, because unlike those types of restrictions the individual landmark designations do not involve corresponding restrictions of the surrounding parcels which operates to the benefit of the landmark owner (Penn Cent. Transp. Co. v City of New York, 42 NY2d 324, 330, affd 438 US 104). However, we have recognized that despite this particularized burden on the owner, landmark designations, if not unreasonable, are not an undue imposition under proper circumstances (Penn Cent. Transp. Co. v City of New York, supra, p 333). It must be emphasized, however, that reasonableness when related to commercial property necessarily requires that the owner not be deprived by the regulation of a reasonable return on his property (Matter of Spears v Berle, 48 NY2d 254, supra; French Investing Co. v City of New York, 39 NY2d 587, 596, supra). However, because charitable organizations are not created for financial return in the same sense as private businesses, for them the standard is refined to permit the landmark designation restriction only so long as it does not physically or financially prevent, or seriously interfere with the carrying out of the charitable purpose (Lutheran Church in Amer. v City of New York, 35 NY2d 121, 131, supra; Matter of Trustees of Sailors’ Snug Harbor v Platt, 29 AD2d 376, supra). With this standard now set, and the emphasis properly placed on how the restriction effects the charitable activities of the organization, it is clear that on this record the landmark designation withstands constitutional scrutiny.

In Lutheran Church (supra), we found an undue interference with the church’s charitable activity where the landmark structure had become so hopelessly inadequate to the church needs, that had the landmark restrictions been enforced, there was no alternative but to cause the charitable activity at that location to cease. Particularly significant in the Lutheran Church case was the fact that the church had tried unsuccessfully to modify the structure to suit its needs, and that no further accommodation, short of demolition and rebuilding, would have alleviated the serious space problems which had arisen. In view of these facts, the landmark restrictions were so debilitating, the impediment to the charitable use so complete, that sustaining the landmark designation without compensation was, in reality, a “naked taking” (35 NY2d 121, 132). The Society has shown no such compelling circumstances here.

Although the Society does argue that the physical structure of the Meeting House is ill-adapted to its present needs, by no means are we assured that the only feasible solution to this problem would entail the demolition of the now protected building facade. Instead, petitioners’ arguments seem to emphasize aggrievement with respect to the prohibition against high-rise development. There is no genuine complaint that eleemosynary activities within the landmark are wrongfully disrupted, but rather the complaint is instead ■ that the landmark stands as an effective bar against putting "me property to its most lucrative use. But there simply is no constitutional requirement that a landowner always be allowed his property’s most beneficial use (Goldblatt v Town of Hempstead, 369 US 590, 592).

It is noteworthy that the designation we are here concerned with applies only to the building facade, and it is possible that studies would reveal that without disturbing this protected portion, feasible modifications could be employed to allow the Society to continue its charitable activities in the building, as it has for over 60 years. This, of course, would be a matter for consideration at the appropriate time by the commission. In fact, the Society concedes that even minor modifications and a certain amount of normal maintenance have been held in abeyance while the questions of demolition and redevelopment were being explored. It therefore remains unclear whether both the interest of the Society and the interest of the public may yet be accommodated.

The Society also contends that the existence of the designation interferes with the free exercise of its religious activities; however, rather than argue its desire to modify the structure to accommodate these religious activities, the Society has suggested that it is improper to restrict its ability to develop the property to permit rental to nonreligious tenants. For this reason the Society’s reliance on our decision Matter of Westchester Reform Temple v Brown (22 NY2d 488), which dealt with restrictions actually impairing religious activities, is clearly misplaced. Although the Society is concededly entitled to First Amendment protection as a religious organization, this does not entitle it to immunity from reasonable government regulation when it acts in purely secular matters (cf. Wisconsin v Yoder, 406 US 205, 215).

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Fuchsberg and Meyer concur.

Order affirmed, with costs.

       Although we note that the challenge here is not to the facial validity of the statute, such a challenge would be to no avail because of the ameliorative provisions of section 207-8.0 which contains a number of alternative methods by which the commission may seek to devise a scheme so that the impediments to the owner’s earning a reasonable return, created by landmark designation, may be offset by other pecuniary benefits. Failing this, the commission may recommend that the city seek to acquire an interest in the property (Administrative Code, § 207-8.0, subd i; see Penn Cent. Trans. Co. v New York City, 438 US 104, 110-113, n 13).


author:
Wachtler, J.
      Meyer, J.

text:
    The People of the State of New York, Respondent, v Bertie Otis Whidden, Jr., Appellant.
    Argued October 8, 1980;
    decided December 18, 1980

      POINTS OF COUNSEL

      John S. Hall for appellant.
    I. The statutes in question are gender based and violate defendant’s Fourteenth Amendment rights to equal protection under the laws. (Meloon v Helgemoe, 564 F2d 602.) II. The case at bar is on all four’s with Meloon.

      Thomas E. Mercure, District Attorney (Gordon M. Hemmett, Jr., of counsel), for respondent.
    I. The statutes in question are presumed constitutional, and defendant-appellant has not met his burden of overcoming said presumption. (Matter of Pratt v Tofany, 37 AD2d 854; Matter of Van Berkel v Power, 16 NY2d 37; Defiance Milk Prods. Co. v Du Mond, 309 NY 537; Borden’s Co. v Baldwin, 293 US 194; United States v Caroline Prods. Co., 304 US 144; Olsen v Nebraska, 313 US 236; Matter of Ahern v South Buffalo Ry Co., 303 NY 545, 344 US 367; Lindsley v Natural Carbonic Gas Co., 220 US 61; Matter of Fay, 291 NY 198; McGowan v Maryland, 366 US 420.) II. The statutes in question serve at least one important government objective and are substantially related to the achievement of that objective. (Meloon v Helgemoe, 564 F2d 602, 436 US 950; People v Smith, 97 Misc 2d 115; People v Marks, 146 App Div 11; People v Gibson, 232 NY 458; People v Prainito, 97 Misc 2d 66.) III. Gender-based rape statutes have overwhelming court approval of their constitutionality. (People v Wheeler, 50 AD2d 1089; People v Reilly, 85 Misc 2d 702; People v Da

      voli, 95 Misc 2d 402; People v Mndange-Pfupfu, 97 Misc 2d 496; People v Prainito, 97 Misc 2d 66; People v Smith, 97 Misc 2d 115.)

      Robert Abrams, Attorney-General (Peter J. Dooley and Shirley Adelson Siegel of counsel), in his statutory capacity under section 71 of the Executive Law.
    New York’s statutory rape laws are not unconstitutional as being sexually discriminatory, or as employing arbitrary age classifications, or as not requiring a mens rea. (Shapiro v Thompson, 394 US 618; Skinner v Oklahoma, 316 US 535; McGowan v Maryland, 366 US 420; Craig v Boren, 429 US 190; Frontiero v Richardson, 411 US 677; Reed v Reed, 404 US 711; Meloon v Helgemoe, 564 F2d 602; 436 US 950; Rundlett v Oliver, 607 F2d 495.)
   OPINION OF THE COURT

Wachtler, J.

The defendant pleaded guilty to two counts of rape in the third degree (Penal Law, § 130.25) in full satisfaction of a seven-count indictment. Prior to his plea he reserved his right, on this appeal, to challenge the constitutionality of the so-called statutory rape laws claiming them to be gender based and violative of equal protection in that they unlawfully discriminate against males.

There is no dispute as to the underlying facts and the language of the statute being challenged is clear. Section 130.30 of the Penal Law provides that “[a] male is guilty of rape in the second degree when, being eighteen years old or more, he engages in sexual intercourse with a female less than fourteen years old.” Subdivision 2 of section 130.25 of the Penal Law provides that “[a] male is guilty of rape in the third degree when * * * 2. Being twenty-one years old or more, he engages in sexual intercourse with a female less than seventeen years old.”

The defendant argues that because only males can be convicted of these crimes, the statutes are violative of the equal protection clauses of the State and Federal Constitutions. It is contended that this distinction based on gender is not supported by sufficient justification to withstand equal protection analysis and that, therefore, the statutes are unconstitutional.

Recognizing the fact that it is statutory rape for an 18- or 21-year-old male to have sexual intercourse with a consenting female under the ages of 14 or 17, respectively, while it would be no more than the lesser crime of sexual abuse for an adult female to have normal sexual intercourse with a male less than 16 years of age, we conclude that a gender classification does exist. Only a male can be convicted as a principal actor under statutory rape laws. Indeed, it was because of this gender-based classification that the United States Court of Appeals for the First Circuit struck down as unconstitutional the statutory rape statute then in effect in New Hampshire (Meloon v Helgemoe, 564 F2d 602, cert den 436 US 950). In that case, the New Hampshire Federal District Court noted (436 F Supp 528, 532) that “there is no valid reason for singling out the male for criminal treatment where the act is consensual.” But the mere existence of gender classification does not, standing alone, render a statute unconstitutional.

In evaluating whether a statute violates the equal protection clause a court normally applies a “rational basis” test to determine whether the varied treatment of separate classifications of citizens “rests on grounds wholly irrelevant to the achievement of the State’s objective” (McGowan v Maryland, 366 US 420, 425). Where a statute’s application differentiates on the basis of race, alienage or nationality, however, the classification is deemed suspect and a strict scrutiny test must be applied to determine whether the challenged law is “necessary to promote a compelling governmental interest” (Shapiro v Thompson, 394 US 618, 634).

Between those two tests, a third has developed to evaluate a constitutional challenge to a gender-based statute which “must serve important governmental objectives and must be substantially related to achievement of those objectives” (Craig v Boren, 429 US 190, 197; see Califano v Webster, 430 US 313, 316-317). It is this test which becomes the focal point of our inquiry.

The State has advanced three distinct legislative justifications for penalizing males for the commission of acts which would not be criminal if committed by a similarly situated woman: preventing psychological injury to emotionally immature girls, preventing physical damage and, finally, preventing the deleterious consequences of pregnancy in minors. The first of these claimed justifications, protecting young females from psychological harm, must be rejected as a suitable ground for the gender-based classification embodied in subdivision 2 of section 130.25 of the Penal Law, since it is rooted in the unfounded assumption that underage women are more vulnerable to emotional harm than are their male counterparts. Such an “ ‘archaic and overbroad’ generalization” (Craig v Boren, 429 US 190, 198, supra, quoting Schlesinger v Ballard, 419 US 498, 508), which is evidently grounded in long-standing stereotypical notions of the differences between the sexes, simply cannot serve as a legitimate rationale for a penal provision that is addressed only to adult males.

On the other hand, the problem of early pregnancy provides an ample justification for the Legislature’s decision to deter sexual contact between older males and teenage girls by imposing criminal sanctions. The unique vulnerability of young women in this area requires no empirical support, and a statute tailored to discourage sexual contact between fertile, underaged females and older men certainly can be viewed as one substantially related to the “important governmental objective” of preventing the deleterious economic social and psychological consequences of premature parenthood. Of course, it may be argued that subdivision 2 of section 130.25 of the Penal Law is underinclusive in that it does not penalize sexual contact between young females and teen-age boys, although such contact is just as likely to lead to unwanted pregnancy as is the prohibited conduct. This obvious underinclusiveness, however, is not objectionable in the present case, since it may be justified as a societal decision not to impose penal sanction upon those who are not yet capable of exercising mature judgment.

There remains to be discussed the required degree of proof that the justifications for these laws were actually on the mind of the Legislature when the statutes in question were enacted or consciously retained in the law. The First Circuit case of Meloon v Helgemoe (supra) came perilously close to requiring that New Hampshire support its statute by production of actual legislative history indicating the purposes for its enactment (564 F2d 602, 607, supra). This approach is ill-advised, and perhaps dangerous, for two reasons.

First, a policy of sole reliance on a search for legislative history when determining whether to void a statute, is at best a hazardous business. To be sure, legislative history is extremely valuable to sound decision-making when the issue is merely statutory construction. But, it is another matter entirely to place undue reliance on legislative history in determining whether to strike down legislation which, on its face, indicates that it was enacted for a valid purpose. There is little question that what motivates one legislator to propose or make a speech urging the passage of a statute is not necessarily what motivates scores of others to enact it (United States v O’Brien, 391 US 367, 383-384). Furthermore, it would be anomalous to strike down statutes on a rationale which implicitly admits that the very same legislation could be immediately re-enacted on the basis of an explanation more perceptive than that which was originally offered.

Secondly, it is certainly illogical to require the production of legislative history documenting the underlying purpose for enactment or retention of a statute where, perhaps due to the statute’s immutably sound basis, no such legislative history exists. To impose such an unreasonable burden on the respondents in this case would risk invalidation of prudent legislation whenever a litigant-challenger suggests a conceivable legislative objective which might possibly run afoul of some constitutional provision (see McCray v United States, 195 US 27, 56). Therefore, where, as here, the legislation is supported by unrefuted, plausible and constitutionally sufficient justifications, a healthy recognition of the limits of judicial power compels the conclusion that the challenge to that legislation must be rejected (see McCray, supra, at pp 54-56).

Accordingly, the order of the Appellate Division should be affirmed.

Meyer, J.

(dissenting). Respectfully, I dissent. My disagreement is not with the presence or absence of explicit legislative history supporting what is concluded to have been the motivation for enactment of subdivision 2 of section 130.25 and section 130.30 of the Penal Law, for I tend to agree with Judge Campbell, concurring in Rundlett v Oliver (607 F2d 495, 504), that the issue is whether there is now a proper relationship between the enactment and its objective rather than whether there necessarily was when it first came into our law, and with Judge Bownes, dissenting in the same case (607 F2d, at p 505), that much that passes for legislative history in equal protection analysis is simply a derivation, or as he put it an “attribution”, of what the writer concludes must have been the motivation in light of the mores at the times the provision was enacted and amended. Nor do I disagree with the use of the Craig v Boren (429 US 190, 197) and Califano v Webster (430 US 313, 316-317) “intermediate scrutiny” test which requires that statutory classifications be substantially related to an important governmental objective rather than the lesser rational relationship to a permissible objective test or the more stringent strict scrutiny test which turns constitutionally on whether there is a necessary relationship to a compelling State interest. My point of departure is that without supporting data (whether in the form of legislative history or of a Brandéis brief), I do not find a substantial relationship.

What we deal with here are penal statutes that make felons out of males 21 or older who have consensual sexual intercourse with females 14 to 16 years old (Penal Law, § 130.25, subd 2) and males 18 or older who have consensual sexual intercourse with females 11 to 13 years old (Penal Law, § 130.30), but make it only a misdemeanor for a female 21 or older to have consensual sexual intercourse with a male 14 to 16 years old (Penal Law, § 130.55) or for a female 18 or older to have .consensual sexual intercourse with a male 11 to 13 years old (Penal Law, § 130.60). The bases for doing so are said to be, first, that a significant number of females less than 17 years old suffer inordinate physical and psychological harm as a result of consensual sexual intercourse with older persons of the opposite sex, and, second, the need to protect young females, as well as society from the burdens of unwanted pregnancy.

It may be that the physical and psychological harm suffered by females under 17 years of age is greater than the corresponding harm suffered by their male counterparts. But the aberrational desire of adults to have sexual relations with children (known as pedaphilia) is not peculiar to males or directed solely at females (Eidson, Constitutionality of Statutory Rape Laws, 27 UCLA L Rev 757, 774), and with an upper limit of 16 years there is substantially less likelihood of physical danger to the victim than were the age limit lower (Ploscowe, Sex and the Law, p 184; Eidson, at pp 774-775). Absent statistical support, I cannot conclude that relationship to either psychological or physical injury has been demonstrated to be sufficiently substantial to uphold the classification. To do so is, in effect, to embrace the moral viewpoint that girls, but not boys, need to be protected from their own inclination to enter into consensual sexual relationships with adults of the opposite sex. Yet this very day we have declared, “[I]t is not the function of the Penal Law in our governmental polity to provide either a medium for the articulation or the apparatus for the intended enforcement of moral or theological values” (People v Onofre, 51 NY2d 476, 488, n 3).

The same result follows when the question is examined in terms of protection from unwanted pregnancy. Though section 130.20 of the Penal Law makes it only a misdemeanor for a male age 16 to 20 to have consensual sexual intercourse with a female 14 to 16 years old and for a male age 16 and 17 to have consensual sexual intercourse with a female 11 to 13 years old, it is under sections 130.25 and 130.30 a felony for a male 21 or over to have consensual intercourse with a female 14 to 16 years old and for a male 18 or over to have consensual intercourse with a female 11 to 13 years old. In the absence of any data indicating that teen-age pregnancy results to a significant extent from sexual liaisons between young girls and older men, rather than between young girls and their teen-age contemporaries, it cannot be maintained that the imposition of felony punishment upon a limited class of older males meets the “substantial relationship” requirement. The majority’s assumption that such a demonstration is unnecessary in effect, once again, expresses a moral point of view.

Concededly there are decisions in a number of other States upholding statutory rape statutes against equal protection attack, one o£ which, Michael M. v Superior Ct. of Sonoma County (25 Cal 3d 608), has just been argued before the United States Supreme Court as this is written, but in my view logic does not support the gender-based differentiation made by the sections of the Penal Law in question. Moreover, so to hold breaks no new ground (see Meloon v Helgemoe, 564 F2d 602, cert den 436 US 950 [striking down New Hampshire statutory rape provisions as violative of equal protection]; see, also, Commonwealth v MacKenzie, 368 Mass 613 [striking down as violative of equal protection law holding father but not mother criminally responsible for birth of illegitimate child] ; Commonwealth v Staub, 461 Pa 486 [striking down as violative of equal protection law making father liable for larger fine than mother upon conviction of fornication resulting in birth of child]). I would, therefore, reverse defendant’s conviction, grant the motion to dismiss the counts of the indictment charging rape in the second and third degrees, and remand the case for further proceedings on the indictment.

Chief Judge Cooke and Judges Jasen, Gabrielli and Jones concur with Judge Wachtler; Judge Meyer dissents and votes to reverse in a separate opinion in which Judge Fuchsberg concurs.

Order affirmed.

        . The conclusion is supported by the fact that the 1950 census showed that 6% of the females in the United States were married by age 16 (United States Census 1950, Special Reports: Marital Status, table 5, p 42, cited in Myers, Reasonable Mistake of Age: A Needed Defense to Statutory Rape, 64 Mich L Rev 105, 121, n 112).

      . At least 39 States have so concluded, enacting gender neutral statutory rape laws (see Eidson, op. cit., at p 765, n 50).