author: Meyer, J. Gabrielli, J.

text:
    The People of the State of New York, Appellant, v Mobil Oil Corporation, Respondent.
    Argued September 5, 1979;
    decided October 23, 1979

      POINTS OF COUNSEL

      Samuel S. Yasgur, County Attorney (Lester D. Steinman and Jonathan Lovett of counsel), for appellant.
    I. Defendant’s guilt of violating section 3 of Local Law No. 9 of the Local Laws of 1974 of the County of Westchester was proven beyond a reasonable doubt by legally sufficient evidence. (People v Save Way Northern Blvd., 10 NY2d 727; People v 25 Stas., 3 NY2d 488; People v Carillo, 42 Misc 2d 74; People v Goodman, 31 NY2d 262.) II. Local Law No. 9 of the Local Laws of 1974 of the County of Westchester is constitutional. (Marcus Assoc. v Town of Huntington, 45 NY2d 501; Lighthouse Shores v Town of Islip, 41 NY2d 7; Wiggins v Town of Somers, 4 NY2d 215; People v Pagnotta, 25 NY2d 333; People v Arlen Serv. Stas., 175 Misc 30, 284 NY 340; Bates v State Bar of Ariz., 433 US 350; Linmark Assoc. v Willingboro, 431 US 85; Bigelow v Virginia, 421 US 809; Ohralik v Ohio State Bar Assn., 436 US 447.)

      Frederick J. Martin, Bleakley Schmidt, P. C, and Hugh D. Fyfe for respondent.
    I. Section 3 of Local Law No. 9 of the Local Laws of 1974 of the County of Westchester violates defendant-respondent’s right to due process. (Suffolk Outdoor Adv. Co. v Hulse, 43 NY2d 483; Matter of Original R. Tyson, Inc. v Tyler, 24 NY2d 671; People v Braun, 69 Misc 2d 682; People v Choops, 83 Misc 2d 580; Stubbart v County of Monroe, 58 AD2d 25; People v Arlen Serv. Stas., 284 NY 340.) II. Section 3 of Local Law No. 9 of the Local Laws of 1974 of the County of Westchester abridges defendants-respondent’s First Amendment guarantee of free speech. (Gitlow v New York, 268 US 652; Bigelow v Virginia, 421 US 809; Virginia Pharmacy Bd. v Virginia Consumer Council, 425 US 748; People v Remeny, 40 NY2d 527; Suffolk Outdoor Adv. Co. v Hulse, 43 NY2d 483; Linmark Assoc. v Willingboro, 431 US 85; Bates v State Bar of Ariz., 433 US 350.)
   OPINION OF THE COURT

Meyer, J.

The issue in this case is whether a county may ban all signs on or near service station premises which refer directly or indirectly to the price of gasoline, and thus limit service station price advertising to the uniform price signs atop the gasoline pumps which the ordinance requires. We hold section 3 of the Westchester County law in question when read in the context of the entire law to be unconstitutional because, in violation of the First Amendment to the United States Constitution as made applicable by the Fourteenth Amendment to the States, it makes speech impermissible solely on the basis of content.

The facts are not in dispute. Defendant, Mobil Oil Corporation, was found guilty of violating section 3 of Local Law No. 9 of the Local Laws of 1974 of the County of Westchester because it posted at its gasoline station and car wash in Tuckahoe along the curb side of the station premises, facing in opposite directions, so that the large lettering of the signs could be seen by passing motorists, two signs, approximately four feet by four feet in size and reading "Check Our Low Low Low Prices”. Mobil conceded that the purpose of the signs was "to attract persons to the gas pumps as well as the car wash”. On appeal, the Appellate Term reversed on the law and dismissed, two Judges holding section 3 unconstitutional, and the third being of the opinion that the sign did not violate the ordinance. The matter is here by leave of a Judge of this court.

Local Law No. 9 in its first two sections details specifications as to size, lettering, content, placement and visibility of price signs it requires to be posted on each individual pump from which gasoline or diesel fuel is sold. Sections 3 and 4 of the law then provide:

"Section 3. No sign or placard stating or referring directly or indirectly to the price or prices of gasoline or diesel motor fuel other than such signs or placards as hereinabove provided shall be posted or maintained on, at, near or about the premises on which said gasoline is sold or offered for sale.
"Section 4. Fraudulent Practices. It shall be unlawful for any person, firm or corporation to sell or offer for sale gasoline or diesel motor fuel in any manner so as to deceive or tend to deceive the purchaser as to the price, nature, quality or identify thereof.”

Violation of the law is an offense punishable by fine, each day of noncompliance after a notice of violation constituting a separate offense.

In People v Arlen Serv. Stas. (284 NY 340) we considered a local law of the City of New York which contained essentially the same requirements as to posting signs on individual pumps and which included a provision substantially identical with section 3 of the Westchester law. In Arlen the law was attacked as in violation of the due process and equal protection clauses, but not on free speech grounds, presumably because the then understanding (proven correct some two years later by the Supreme Court’s holding in Valentine v Chrestensen, 316 US 52) was that commercial speech was not protected by the First Amendment. The intervening years have seen Chrestensen first distinguished (Bigelow v Virginia, 421 US 809), then expressly overruled by Virginia Pharmacy Bd. v Virginia Consumer Council (425 US 748, 765), and the law of commercial speech expounded and delimited in a series of decisions, which are considered below. The result with respect to the instant case has been that on this appeal the law in question is attacked on all three grounds. Since we hold it unconstitutional on free speech grounds, we do not reach or consider the due process and equal protection grounds argued by the parties.

Since the Virginia Pharmacy case was decided we have had two occasions to consider regulations of commercial speech (People v Remeny, 40 NY2d 527, and Suffolk Outdoor Adv. Co. v Hulse, 43 NY2d 483) and the Supreme Court has dealt with the question in Linmark Assoc. v Willingboro (431 US 85); Bates v State Bar of Ariz. (433 US 350); Ohralik v Ohio State Bar Assn. (436 447); and Friedman v Rogers (440 US l).

In Remeny (supra), we held invalid a New York City ordinance that absolutely prohibited any street distribution of commercial or business advertising because its absolute prohibition went far beyond the reasonable regulation of time, place and manner of distribution of commercial speech that is constitutionally permissible. In Suffolk Outdoor Adv. Co. (supra), we upheld a Southampton ordinance prohibiting nonaccessory billboards as a proper exercise of the police power to improve the aesthetics of the community, noting with respect to the free speech aspect of the case that the same governmental interest in aesthetics authorized regulation of the place and manner of speech and that the challenged ordinance made no attempt to regulate the content of speech appearing on the billboards. Those two decisions, while strongly suggestive of unconstitutionality of the law in question, are not, however, determinative, in view of the limitation of the First Amendment overbreadth doctrine recognized in the subsequent Supreme Court commercial speech decisions.

The first of those decisions, Linmark, held invalid an ordinance proscribing, in an effort to stem white flight from a racially integrated community, the posting of "for sale” or "sold” signs on all but model homes. The Supreme Court held that the fact that the ordinance restricted only one method of communications (signs) did not save it because, though other alternative methods of selling houses were theoretically available, real estate is not marketed through leaflets or sound trucks and other available media involved greater cost and less autonomy (and consequently less effectiveness) than a sign in front of the house to be sold, and because having prohibited but one type of lawn sign it had not been enacted to protect aesthetic values. Concluding that the township’s interest was in regulating content rather than time, place and manner of posting and was not in preventing deception, the court struck the ordinance down because Willingboro had failed to establish that content regulation was needed to assure that the community remained integrated.

The Bates decision is particularly pertinent because it held that a State disciplinary rule prohibiting attorneys from advertising could not constitutionally be applied to an advertisement of "legal services at very reasonable fees” which listed specific services and fees. The court recognized that misleading advertising can be restrained and that an advertising claim with respect to the' quality of services, because not readily susceptible of verification, might be misleading. With respect to the advertisement in question, however, it found none of the justifications offered for the regulation to be an acceptable reason for suppression of all advertising by attorneys. Holding inapplicable to professional advertising the overbreadth doctrine (which permits free speech attack without a demonstration that the challenger’s specific conduct is constitutionally protected), the court considered the specifics of the advertisement in issue and found neither its reference to "legal clinics” not its offer of services at "very reasonable” prices to be misleading. Ohralik, on the other hand, upheld the prohibition against in-person solicitation by an attorney because of the potential for, and legitimate State interest in preventing those aspects of solicitation involving, fraud, undue influence, intimidation and overreaching. It expressly held that a lawyer can be disciplined for soliciting under circumstances likely to result in such adverse consequences, without a showing that in the particular instance they did result.

Friedman, the most recent decision of the Supreme Court on the subject, upheld a Texas act prohibiting the practice of optometry under a trade name. Noting that use of a trade name conveyed no information about price or the nature of the services offered and presented numerous possibilities for deception with which the Texas Legislature was familiar, which had been reviewed in an earlier Texas Supreme Court decision, and some of which had been substantiated as to Rogers, one of the plaintiffs in the Freidman case, by deposition testimony, the Supreme Court stated that "Even if Rogers’ use and advertising of the trade name were not in fact misleading, they were an example of the use of a trade name to facilitate the large-scale commercialization which enhances the opportunity for misleading practices” (440 US 1, 15, supra) and concluded that the statute was a constitutionally permissible regulation for the protection of the public from deceptive use of optometrical trade names.

Against this background we consider the arguments advanced by the parties. Mobil’s position is that Westchester’s law regulates content rather than time, place and manner, that its total prohibition bears no relation to the purpose it purports to serve, and that there are no effective alternate channels of communication. The county contends that Mobil has not borne its burden of overcoming the presumption of constitutionality, that Mobil’s "Check Our Low Low Low Prices” sign is potentially misleading and that Mobil, not having shown that its prices are in fact lower than its competitors’, has not shown that as applied to Mobil the statute is unconstitutional. The difference between them is, thus, that Mobil’s argument is addressed primarily to facial unconstitutionality, while the county’s burden of proof argument essentially addresses unconstitutionality of the law as applied.

In light of the holding in Bates (433 US, at p 380, supra), reiterated in Ohralik (436 US, at p 462, n 20, supra) and Friedman (440 US, at p 10, n 9, supra), that overbreadth analysis is not applicable to commercial speech, it is clear that, considering section 3 alone, unconstitutionality as applied cannot be found on the present record. As the county contends, Mobil has introduced no evidence to establish that its prices are lower than its competitors’ and, absent such evidence of truthfulness, the presumption of constitutionality and the failure to negate the possibility of deception would require that the law be upheld against Mobil’s attack (Friedman v Rogers, supra).

The inquiry does not end there, however, for the law in question must be interpreted under applicable State law principles of statutory construction, and under those principles section 3 must be held to be addressed only to truthful speech. So interpreted the section cannot constitutionally be applied to proscribe defendant Mobil’s signs.

It is a well-settled principle of statutory construction that a statute or ordinance must be construed as a whole and that its various sections must be considered together and with reference to each other (Abood v Hospital Ambulance Serv., 30 NY2d 295, 300; see McKinney’s Cons Laws of NY, Book 1, Statutes, §§ 97, 98, 130). Section 3 cannot, therefore, be considered apart from section 4, which is directed expressly at an "offer for sale [of] gasoline or diesel motor fuel in any manner so as to deceive or tend to deceive the purchaser as to the price, nature, quality or identity thereof’.

When sections 3 and 4 are considered together and together with section 5 (which makes violation of either section 3 or section 4 an offense), section 3 cannot be construed as aimed at deception. What section 3 proscribes is the posting on or near premises where gasoline is sold of a sign referring to the price of gasoline or diesel fuel. What section 4 proscribes is deceit or tendency to deceive as to price, among other things, in offering for sale in any manner gasoline or diesel fuel. The differences in the two sections are only that section 3 is explicit as to the medium (signs) and content (price of gasoline) proscribed while section 4 covers any medium and three other content categories than price, and that section 4 expressly requires deceit or the tendency to deceive whereas section 3 does not. Construing the entire law as a whole and bearing in mind the rule that a general provision of a statute applies only where a particular provision does not (Hoey v Gilroy, 129 NY 132; People ex rel. Davidson v Gilon, 126 NY 147; see McKinney’s Cons Laws of NY, Book 1, Statutes, § 238) and that the statutes enacting regulations malum prohibitum are to be strictly construed (State of New York v Mobil Oil Corp., 38 NY2d 460. 466; Matter of Asheroff v Parking Violations Bur. of Transp. Admin. of City of N. Y. 38 AD2d 474, 477; see McKinney’s Cons Laws of NY, Book 1, Statutes, § 271), we conclude that section 3 is not aimed at the possibility of deception through the posting of a sign referring to the price of gasoline because section 4 is.

With respect to the instant prosecution, therefore, there is no overbreadth problem, for section 3, as it must be construed, ,is being unconstitutionally applied to Mobil to proscribe truthful commercial speech. Unless it can be justified on other grounds, or as a regulation solely of time, place or manner, or unless there are available alternate channels of communication, section 3 is, therefore, under the reasoning of the Supreme Court cases discussed above, unconstitutional as applied to defendant Mobil.

The strong societal and individual interest in the free dissemination of truthful price information as a means of assuring informed and reliable decision making in our free enterprise system was the basis for holding unconstitutional the statute involved in the Virginia Pharmacy case and the disciplinary regulation at issue in Bates, both of which were sought to be applied so as to prevent the advertising of price data. The Supreme Court was, moreover, at pains in Friedman to identify that interest and to differentiate protected advertising of price from proscribable use of a trade name which "conveys no information about the price and nature of the services offered” (440 US, at p 12, supra).

This is not to say that price advertising can never be subjected to regulation. One valid purpose for regulation, as we held in Suffolk Outdoor Adv. Co. v Hulse (43 NY2d 483, supra), would be the improvement of the aesthetics of the community. The county does not argue aesthetics as a ground for sustaining its law, nor would such an argument be upheld in view of the fact that the law prohibits only gasoline price signs and none other, no matter how blatant or bizarre.

What the county does argue is that it is only regulating the place of advertising, its purpose being to centralize the location of price information in the pump top signs by prohibiting all other competing advertising which could divert the consumer’s attention from the actual price, by insuring that the consumer’s decision is based on facts not advertising "puff”, and by eliminating the necessity for the consumer’s driving up to the pump to learn the price. Bearing in mind that by hypothesis, this being a prosecution under section 3, we are concerned with truthful information, we think the answers to that argument are that the county has "not demonstrated that the place * * * of the speech produces a detrimental 'secondary effect’ on society” (Linmark, 431 US, at p 94, supra) and that, as the Supreme Court observed in Virginia Pharmacy (425 US, at p 770, supra) and quoted with approval in Linmark (431 US, at p 97, supra): "There is, of course, an alternative to this highly paternalistic approach. That alternative is to assume that this information is not in itself harmful, that people will perceive their own best interests if only they are well enough informed, and that the best means to that end is to open the channels of communication rather than to close them.”

Finally, the county argues that ample alternatives remain open for gasoline price advertisement through print and electronic media advertising, that no useful consumer information is withheld from the public by virtue of the law and that the advertiser does not lose access to passing motorists as potential customers. Since, as already shown, price information clearly is useful consumer information and not all passing motorists will be able to read the pump top signs from the highway, it is far from clear that useful consumer information is not withheld from the public by the law. Moreover, that serious question exists concerning the adequacy of available alternates is evident from the following paraphrase (omitting citations) of Linmark’s reasoning on this issue (p 93): "Although in theory sellers remain free to employ a number of different alternatives, in practice [gasoline] is not marketed through leaflets, sound trucks, demonstrations, or the like. The options to which sellers realistically are relegated — primarily newspaper advertising and [television] — involve more cost and less autonomy than * * * signs; * * * are less likely to reach persons not deliberately seeking sales information * * * and may be less effective media for communicating the message that is conveyed by a * * * sign in front of the [service station].”

Accordingly, the order of the Appellate Term, as resettled, should be affirmed.

Gabrielli, J.

(dissenting). I respectfully dissent and vote to reverse the order of Appellate Term and reinstate the judgment of Tuckahoe Village Court convicting defendant Mobil Oil Corp. of violating section 3 of Local Law No. 9 of the Local Laws of 1974 of the County of Westchester. At issue in this appeal is whether a local law which imposes reasonable restrictions upon the advertisement of gasoline prices by means of signs posted in service stations violates either the free speech guarantee of the First Amendment to the United States Constitution or the due process clause of the Fourteenth Amendment. I would hold that it does not.

Local Law No. 9 constitutes an attempt to regulate the advertisement of gasoline prices so as to prevent fraudulent or deceptive sales techniques and to ensure that the consumer will receive the basic price data necessary to support an informed decision whether to purchase gasoline at a particular gasoline station. As such, it is entirely constitutional.

Although it is indeed true that commercial speech such as advertising is entitled to First Amendment protection, it is equally true that the degree of protection accorded commercial speech is somewhat more limited than that normally afforded more political or personal expressions (see, e.g., Virginia Pharmacy Bd. v Virginia Consumer Council, 425 US 748, 770-773, esp n 24; Linmark Assoc. v Willingboro, 431 US 85, 98; Ohralik v Ohio State Bar Assn., 436 US 447, 455-456; Friedman v Rogers, 440 US 1, 7-13, 15-16). This is so for several reasons. For one thing, commercial speech is firmly founded upon the profit motive. As such, it is inherently hardier than other forms of speech which require greater protection. As the Supreme Court stated in Virginia Pharmacy Bd. v Virginia Consumer Council (425 US, at p 772, n 24, supra):

"[C]ommercial speech may be more durable than other kinds. Since advertising is the sine qua non of commercial profits, there is little likelihood of its being chilled by proper regulation and forgone entirely.

"Attributes such as these, the greater objectivity and hardiness of commercial speech, may make it less necessary to tolerate inaccurate statements for fear of silencing the speaker. Compare New York Times Co. v. Sullivan, 376 U.S. 254 (1964), with Dun & Bradstreet, Inc. v. Grove, 404 U.S. 898 (1971). They may also make it appropriate to require that a commercial message appear in such a form, or include such additional information, warnings, and disclaimers, as are necessary to prevent its being deceptive. Compare Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241 (1974), with Banzhaf v. FCC, 132 U.S. App. D.C. 14, 405 F.2d 1082 (1968), cert, denied sub nom. Tobacco Institute, Inc. v. FCC, 396 U.S. 842 (1969). Cf. United States v. 95 Barrels of Vinegar, 265 U.S. 438, 443 (1924) ('It is not difficult to choose statements, designs and devices which will not deceive’). They may also make inapplicable the prohibition against prior restraints. Compare New York Times Co. v. United States, 403 U.S. 713 (1971), with Donaldson v Read Magazine, 333 U.S. 178, 189-191 (1948); FTC v Standard Education Society, 302 U.S. 112 (1937); E.F. Drew & Co. v FTC, 235 F.2d 735, 739-740 (CA2 1956), cert, denied, 352 U.S. 969 (1957).”

Moreover, commercial speech is somewhat less directly related to the interests normally protected by the First Amendment, since it has no real connection with either the freedom of individual self-expression or that freedom of political expression which together comprise the foundation of our society and our form of government (see Jackson and Jeffries, Commercial Speech: Economic Due Process and the First Amendment, 65 Va L Rev 1, 9-14).

The first two sections of Local Law No. 9 require any retail seller of gasoline to place upon each gasoline pump a sign which clearly indicates the price of the gasoline. The requisite sign must be placed so as to be visible from each approach curb providing access to the station from the street, and the local law also prescribes a minimum size for the lettering on this sign so as to ensure its visibility to passing motorists. Additionally, the local law requires that certain basic pricing information must be provided on the sign: the gasoline dealer is required to state the basic price per gallon, the amount of Federal, State and local taxes assessed against each gallon, and the total price per gallon to the consumer. Moreover, the sign must also indicate the brand and quality of gasoline sold at each pump. In short, the local law is very carefully tailored to ensure that a passing motorist will be provided with the basic pricing information necessary to support an intelligent decision whether to purchase gasoline at a particular service station.

Section 3 of the local law, the section which defendant was convicted of violating, proscribes any signs concerning gasoline prices other than those prescribed by sections 1 and 2. Section 4 provides additional protection to the consumer by prohibiting any other practice which might "deceive or tend to deceive the purchaser as to the price, nature, quality or identity” of gasoline sold at a particular station. The majority of this court appears to have some difficulty in understanding the way in which these two sections supplement each other. It is actually quite simple: both are aimed at practices perceived by the Westchester County Legislature to be potentially deceptive. Section 3 is intended to prevent a specific evil which the Westchester County Legislature deemed to be especially troublesome: namely, the use of an overabundance of signs so as to prevent the actual reception of the necessary data by the consumer. Section 4, on the other hand, constitutes a more general proscription against deceptive conduct. It is based on legislative recognition of the unfortunate fact that "[ingenuity keeps pace with greed” (People v Kibler, 106 NY 321, 324). Rather than attempting the impossible task of listing every conceivable device which could be utilized by an unscrupulous gasoline dealer to deceive potential customers, the Westchester County Legislature deemed it advisable to enact a general prohibition against deceptive and misleading practices as a supplement to the more specific provisions of section 3. Unlike the majority, I find no inconsistency between a local law which prohibits all deceptive practices and one which addir tionally delineates certain practices which are to be forbidden altogether.

So viewed, it is apparent that section 3 constitutionally prohibited defendant’s action in posting a sign advising passing motorists to "Check Our Low Low Low Prices”. The Supreme Court has clearly noted, time and time again, that commercial speech is entitled to a lesser degree of protection than that afforded other types of speech and may be regulated to ensure accuracy and prevent fraud (see, e.g., Virginia Pharmacy Bd. v Virginia Consumer Council, 425 US 748, 770-773, esp n 24, supra; Linmark Assoc. v Willingboro, 431 US 85, 98, supra; Ohralik v Ohio State Bar Assn., 436 US 447, 455-456, supra; Friedman v Rogers, 440 US 1, 7-13, 15-16, supra). Indeed, in Virginia Pharmacy Bd., the court explicitly declared that the First Amendment "does not prohibit the State from insuring that the stream of commercial information flow cleanly as well as freely” (Virginia Pharmacy Bd. v Virginia Consumer Council, 425 US 748, 772, supra).

It appears evident that the extent of permissible regulation of commercial speech will vary with such factors as the sophistication of the audience at whom the speech is aimed and the nature of the medium by which the speech is transmitted (see Bates v State Bar of Ariz., 433 US 350, 383-384). I note, moreover, that there certainly exists no bar to the reasonable regulation of the time, place and manner of commercial speech.

In reviewing the validity of a First Amendment challenge to a local law which regulates commercial speech, it is necessary first to carefully examine the nature and extent of the protections accorded commercial speech by the First Amendment. Commercial speech has been provided such protection not because it involves any political expression, nor because it is deemed to comprise a mode of self-expression, but rather because of the importance of the free flow of price information to our society. Thus, in every case in which the Supreme Court has found a regulation of commercial speech to be improper, that conclusion was premised on the fact that the regulation deemed to be invalid served to impede the flow of accurate information to the consumer. The local law at issue in this case, however, has the very opposite effect: instead of limiting information, it ensures the availability of such information in an easily understood form. Hence, it in no way impinges upon the First Amendment protections afforded commercial speech.

The nature of the particular marketplace in which an attempt is made to regulate commercial speech will necessarily be significant in assessing the constitutionality of such regulation. In the instant case, the validity of the challenged local law must be considered in light of the somewhat unique conditions which surround the sale of gasoline to the public. The decision to purchase gasoline at one station rather than another is often made rapidly, on the basis of information obtained from signs glimpsed only for the few moments it takes to approach a service station. Hence, there is a considerable need for such signs to simply, concisely, and accurately provide the potential consumer with the data necessary for an informed decision. Due to the limited opportunity a passing motorist has to obtain whatever information is provided on signs posted in a gasoline station, it is appropriate for the State to take reasonable steps to ensure that the requisite pricing information will not be obscured by an assortment of advertising slogans which serve only to lure the consumer into a service station without giving solid information about the price of gasoline at that station (see Friedman v Rogers, 440 US 1, 15-16, supra). This is the precise purpose of Local Law No. 9. By limiting the number and content of signs posted in a gasoline station, the local law seeks to ensure that a consumer will in fact have a realistic opportunity to obtain needed price information, instead of being faced with a potentially deceptive sign saying "Check Our Low Low Low Prices” and devoid of any pricing information.

We have recently had occasion to declare that "a particular mode of advertising which would not well serve the societal interest in informed decision making * * * may constitutionally be banned” (Matter of Consolidated Edison Co. v Public Serv. Comm., 47 NY2d 94, 109). Similar principles are applicable here. Signs such as that posted by defendant, rather than contributing to the free flow of information, serve only to distract the motorist’s attention from the data actually needed for an informed decision. Certainly "the societal interest in informed decision making” is more aptly furthered when the consumer is provided with the actual price of gasoline, than when the motorist is told that Mobil has "Low Low Low” prices for gasoline.

In sum, the section of the local law pursuant to which defendant stands convicted serves as an appropriate and reasonable means of preventing fraudulent and deceptive advertising. As such, it in no way violates the First Amendment. Absent a clear constitutional violation, which is not here present, I refuse to concur in the decision of the majority of this court, for it will have the effect of invalidating a necessary bit of consumer protection legislation in a field which is especially susceptible to deceptive advertising.

As to defendant’s due process argument, it suffices to note that this court rejected the same contention in People v Arlen Serv. Stas. (284 NY 340). The argument is no more persuasive today than it was then.

Accordingly I vote to reverse the order appealed from and to reinstate the judgment of Tuckahoe Village Court.

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

Order affirmed.

      . Mindful of the rule that constitutional issues are not to be decided when there exists a nonconstitutional basis of decision, we note our disagreement with the reasoning of the concurring Judge. His concurrence was based on Matter of Great Eastern Liq. Corp. v State Liq. Anth. (25 NY2d 525) which held that a statute prohibiting advertisement of liquor prices was not violated by advertisements referring to percentage savings and "less than wholesale” prices. Great Eastern is distinguishable on at least two grounds: (1) the statute there involved spoke only to advertisement of the price; the law here in issue prohibits any sign "stating or referring directly or indirectly to the price” (emphasis supplied); (2) the liquor authority’s interpretation of the Great Eastern statute was that there was no violation unless the actual price was stated in the advertisement; there is no similar interpretation in this case.

      . These Supreme Court decisions have given rise to a substantial number of scholarly articles and comments. (See, e.g., Rotunda, Commercial Speech Doctrine in the Supreme Court, 1976, U Ill L Forum 1080; Comment, First Amendment Protection for Commercial Advertising: The New Constitutional Doctrine, 44 U Chicago L Rev 205; Comment, Commercial Speech and the First Amendment: An Emerging Doctrine, 5 Hofstra L Rev 655; Comment, Constitutional Law — First Amendment— Commercial Speech, 24 NY L School L Rev 225; Note: Effect of First Amendment Protection of Commercial Speech on Municipal Sign Ordinances, 29 Syracuse L Rev 941.)

      . That, as the county argues, a section 4 prosecution may require proof of intent is perhaps a pragmatic problem for the prosecution but does not indicate a legislative purpose to reach through section 3 deceitful or misleading commercial speech which is expressly proscribed by section 4.


source: Caselaw Access Project

author: Meyer, J. Chief Judge Cooke

license: Public Domain

text:
    The People of the State of New York, Respondent, v Lancysa Harris, Appellant.
    Argued September 10, 1979;
    decided October 25, 1979

      POINTS OF COUNSEL

      Abraham Werfel for appellant.
    I. Appellant’s identification was the result of suggestive police action and should have been suppressed. (People v Logan, 25 NY2d 184; Simmons v United States, 390 US 377; People v Lebron, 46 AD2d 776; Stovall v Denno, 388 US 293; Manson v Braithwaite, 432 US 98; People v Ballott, 20 NY2d 600; People v Coleman, 42 NY2d 500; People v Erwin, 42 NY2d 1064; People v Bryant, 37 NY2d 208.) II. Denial of motion to suppress seizure of two wooden sticks was reversible error. (People v Loria, 10 NY2d 368; People v Cantor, 36 NY2d 106; Terry v Ohio, 392 US 1; People v Sobotoker, 43 NY2d 559; People v Moore, 62 AD2d 155; People v Griffith, 63 AD2d 138; People v Martin, 32 NY2d 123; People v Jose F., 60 AD2d 918; People v Berrios, 28 NY2d 361.) III. Denial of motion to suppress Harris’ statements was reversible error. (Miranda v Arizona, 384 US 436; People v Erwin, 42 NY2d 1064; People v Gruttola, 43 NY2d 116; People v Morales, 42 NY2d 129; People v Iucci, 61 AD2d 1; Rentways, Inc. v O’Neill Milk & Cream Co., 308 NY 342; Terry v Ohio, 392 US 1; Sibron v New York, 392 US 40; People v Pounds, 35 AD2d 969.)

      John J. Santucci, District Attorney (Deborah Carlin Stevens of counsel), for respondent.
    I. The out-of-court identification of appellant by the complaining witness was entirely proper and not the result of suggestive police action. Moreover, it was clearly reliable under the totality of the circumstances. (Manson v Braithwaite, 432 US 98; People v Logan, 25 NY2d 184; Neil v Biggers, 409 US 188.) II. Appellant’s statements to the police were properly admissible. (Miranda v Arizona, 384 US 436; People v Cantor, 36 NY2d 106; People v De Bour, 40 NY2d 210; Matter of Kwok T., 43 NY2d 213; People v Huffman, 41 NY2d 29; People v Shivers, 21 NY2d 118; People v Figueroa, 58 AD2d 655; People v Land, 33 AD2d 798; People v Rodney P. [Anonymous], 21 NY2d 1; People v Pugliese, 26 NY2d 478.) III. The seizure of the sticks was reasonable under the circumstances. Alternatively, the denial of the motion to suppress, if error, was harmless beyond a reasonable doubt. (People v Magnifico, 59 AD2d 914; People v Cantor, 36 NY2d 106; People v De Bour, 40 NY2d 210; Peters v New York, 392 US 40; People v Kreichman, 37 NY2d 693; People v Morales, 42 NY2d 129; People v Leonti, 18 NY2d 384, 389 US 1007; People v Schneider, 58 AD2d 817; People v Merola, 30 AD2d 963; People v Cassone, 20 AD2d 118, 14 NY2d 798, 379 US 892.)
   OPINION OF THE COURT

Meyer, J.

This case involves the unusual twist that by coincidence one of the police officers involved was the son of the victim of the robbery and mother and son have testified somewhat differently concerning identification of defendant Harris.

Having pleaded guilty to second degree robbery, Harris appealed asserting as grounds for reversal: (1) that the court should have ruled out any in-court identification of defendant by the victim, because the identification procedures were suggestive and because the victim was influenced by conversations with her son; (2) that statements he made to the police should have been suppressed as the product of a custodial interrogation conducted without benefit of Miranda warnings; and (3) that two sticks Harris was carrying and which were taken from him by the police should have been suppressed because the seizure was unlawful. The Appellate Division unanimously affirmed (60 AD2d 797). We reverse, vacate the plea and remit for further proceedings because defendant’s statements to the police should have been suppressed, but do not disturb the other suppression rulings.

On December 30, 1974 at about 10:30 p.m. three men, each carrying a stick, came to the front door of the residence of Mrs. Celestine Turner and forced their way inside. One of the men, with the stick raised above his head, ordered her to keep her head down; the other two looked for valuables. Ultimately the three men took $5 and a television set from her home. At the Wade hearing Mrs. Turner testified that the entire incident lasted for about 10 minutes, and that she had observed defendant for that period of time. On cross-examination, however, she conceded that she had defendant’s face in view for only seconds at a time, on only three occasions, a total, so the jury could have found, of less than 30 seconds.

About half an hour later Police Officer Leon Clark (Mrs. Turner’s son) and fellow Officers Carlos Antonino and Anthony Binculli were on motor patrol in Queens County when Clark noticed three men, two of whom were carrying a television set between them while the third carried two gray sticks of about three feet in length. Officer Clark emerged from the patrol car, identified himself as a police officer and approached the three men. The two men carrying the television set immediately put it down and fled. Officer Clark gave chase but the two men eluded him. Clark then returned to the patrol car and observed that defendant Harris was being detained by Officers Antonino and Binculli. Harris was placed in the patrol car and the police took possession of both the television set and the two gray sticks.

Although no Miranda warnings were given, defendant was questioned as to the identity of the two men and where the television set had come from. Defendant stated that he knew only one of the two men, and him only by the first name of "Billy”, and that he did not know where the two men had gotten the television set. Unaware that Clark’s mother had been robbed, the officers, with Harris in the car, cruised the neighborhood for signs of a crime. None being observed, they proceeded to the precinct station, where the television set and sticks were vouchered, a "stop and frisk” form was filled out, and Harris was released.

When Clark arrived home at 4:00 a.m. the next morning and learned that his mother had been robbed, he went directly to her house. She related the details of the crime, and he told her about the three men he had stopped while on duty, and the television set he had taken from them. Mrs. Turner having ventured that, because of its makeshift wire hanger antenna, she would be able to identify the set if it were hers, Clark took her to the precinct where she identified the set as her own.

The following morning when Clark returned to his mother’s house, she showed him a stick which she had found on her front stoop, which was similar to the sticks defendant Harris had been carrying. They then proceeded to the precinct so she could look at photographs for purposes of identifying any of the three men. Mrs. Turner was given three sets of six photographs to examine, each of which contained a picture of defendant Harris and five pictures of other men. She selected a picture of Harris, but stated that though he looked familiar she could not make a positive identification. At the Wade hearing Mrs. Turner testified that on the way home from the precinct her son told her that she had selected one of the men he had stopped the night before. Officer Clark’s testimony at separate hearings can be understood as saying both that he did not discuss the defendant with his mother before the lineup was held and that he did. The hearing court found that the pretrial identification procedures were "fair, non-suggestive and made independently by the witness; and, that at no time did the police suggest or intimate to the witness that defendant’s photograph was one of the photographs shown to her nor did they influence the complainant during her viewing of the lineup.” In any event, Mrs. Turner related at the Wade hearing that several days after the photo identification she became convinced that defendant was one of the culprits. At the lineup subsequently conducted, Mrs. Turner identified defendant as one of the robbers.

Defendant having moved to suppress the statements to the police, the sticks taken from him and any identification of him by Mrs. Turner, a combined Wade-Mapp-Huntley hearing was held after which the court filed a memorandum, incorporating its findings of fact and conclusions of law, which denied suppression. As to Mrs. Turner’s in-court identification of defendant, the court found, as noted above, that the pretrial identification procedures were not suggestive or unfair. It likewise refused to suppress the two sticks, concluding that they were the fruits of a search incident to a lawful arrest. On suppression of defendant’s statements to the police, the court again ruled in favor of the People, but its reason for doing so is not entirely clear. Perhaps it confused defendant Harris with the other two defendants, for the court stated explicitly at the beginning of the memorandum that "Harris was not advised of his rights while in the patrol car”, but ultimately concluded that "The defendants were read their Miranda warnings by the police prior to their giving any statement to any or either of them, and they acknowledged that they understood what was read to them in each instance”, and denied Harris’ motion to suppress the statements which he made to the police while in the police car.

Mindful that, with rare exception, this court may review only questions of law, we are constrained to accept the conclusion that the identification procedures were not suggestive. There was conflicting testimony as to whether Officer Clark confirmed his mother’s recognition of defendant by telling her that she had selected one of the men he had stopped. That conflict was resolved in favor of the People and we cannot say as a matter of law that so construed, the evidence did not support a conclusion that the pretrial identification procedures were fair (cf. People v McCullers, 33 NY2d 806).

Nevertheless, the defendant must be afforded an opportunity to reconsider his guilty plea, for the statements that he made to the police in the police car should have been suppressed. It is now well settled that unless a police officer administers Miranda warnings to a suspect in his custody, any statement elicited from the suspect cannot be admitted against him in a subsequent criminal trial (Miranda v Arizona, 384 US 436; People v Rodney P. [Anonymous], 21 NY2d 1). Both the testimony and the Trial Judge’s memorandum make clear that Harris was given no Miranda warnings before he made the statement he sought by his motion to suppress. Moreover, there can be no question but that Harris was "in custody” at the time the statement was made. The standard to be applied is whether a reasonable person, innocent of any crime, would have felt free to leave (People v Rodney P. [Anonymous], supra). Any doubt Harris may have held about his freedom to leave was dispelled early on, for when his companions put down the television set and fled, Officer Clark immediately gave chase. Clark testified that when he returned, he noticed that Harris was "being detained by my partner” [emphasis supplied]. Harris was then placed in the car, and the sticks were taken from him. Thus, whether the police formally took defendant into custody or simply detained him pending their investigation, it is clear that the subsequent questioning was a custodial interrogation, and that Miranda warnings should have been given.

The more difficult question is whether this error so prejudiced the defendant as to require that his guilty plea be vacated. In People v Grant (45 NY2d 366, 379) we recognized the inherent difficulty in attempting to decide whether an erroneous pretrial ruling contributed to a defendant’s decision to plead guilty. Indeed, we stated that "when a conviction is based on a plea of guilty an appellate court will rarely, if ever, be able to determine whether an erroneous denial of a motion to suppress contributed to the defendant’s decision, unless at the time of the plea he states or reveals his reason for pleading guilty”. (Id., at pp 379-380.) While Harris’ statement to the police was not particularly damning, a jury could reasonably interpret it as inculpatory since it connected defendant to the other two men carrying the television set. Since it cannot be said with certainty that the erroneous ruling played no part in defendant’s decision to plead guilty, the plea must be vacated and further proceedings had.

Defendant’s final argument for reversal is that the court erred in failing to suppress the sticks taken from him on the night of the crime. The Constitution does not require that there be probable cause to arrest in order for the officers to take possession of the three-foot sticks defendant was carrying (Terry v Ohio, 392 US 1, 27; Dunaway v New York, 442 US 200; Pennsylvania v Mimms, 434 US 106; Adams v Williams, 407 US 143), nor does our statute. CPL 140.50 authorizes temporary detention when a police officer reasonably suspects that a person has committed a felony or a misdemeanor as defined in the Penal Law. Officer Clark had seen defendant Harris beckon to the two men carrying the television set and they had in fact crossed over to where Harris was when Clark accosted them, whereupon the two men carrying the television set put it down and fled. Under the circumstances there was reasonable suspicion that Harris was involved with them in the commission of a felony or misdemeanor. The officers were, therefore, authorized both by statute and under the Constitution to take possession of the sticks Harris carried, and which could pose a danger to them if he became violent, for their own protection while questioning him.

While defendant was entitled under subdivision 3 of the section to return of the sticks upon completion of the officers’ questioning of him, the failure of the officers to return them was a violation of statute, not of a constitutional right. On the facts of this case the exclusionary rule is not implicated and suppression was not warranted.

For the foregoing reasons, the order of the Appellate Division should be reversed, the judgment and plea vacated, the statement should be suppressed and the case remitted to Supreme Court, Queens County, for further proceedings on the indictment in accordance with this opinion.

Chief Judge Cooke

(concurring in part and dissenting in part). I concur in the result arrived at by the majority insofar as the order of the Appellate Division is reversed, the judgment and plea are vacated, the statement is suppressed and the case is remitted to Supreme Court, Queens County, for further proceedings. I dissent from that part of the majority’s determination which fails to suppress certain physical evidence — two sticks defendant was carrying and which were seized from him by the police.

I cannot agree that the two sticks seized from defendant need not be suppressed. In permitting that evidence to be introduced, there is disregard of the clear command of the Legislature that property taken in a "stop and frisk” situation be returned if the suspect is not arrested or possession of the property is not found unlawful (CPL 140.50, subd 3). The flaw in the majority’s rationale, however, is more fundamental than a statutory violation, for it ignores the mandate of the Fourth Amendment. Absent a warrant, a seizure is per se unlawful unless effected under circumstances coming within a generally recognized exception (Coolidge v New Hampshire, 403 US 443). Even under the exceptions, however, a seizure must be supported by probable cause (see, e.g., People v Clements, 37 NY2d 675, 678; People v Alexander, 37 NY2d 202, 203-204). As is tacitly conceded, the seizure was not supported by probable cause and, thus, was constitutionally infirm.

This is not meant to cast doubt on the constitutionality of CPL 140.50. The propriety of an initial seizure in the circumstances contemplated by the statute is well settled (see Terry v Ohio, 392 US 1). However, when the encounter does not give rise to probable cause to believe that the items are fruits, instrumentalities, contraband or evidence of a crime, the statute and Constitution command that the items be returned (see CPL 140.50, subd 3; Terry v Ohio, supra). Under the majority’s reasoning, any article a citizen happens to possess may be confiscated or retained — not on the basis of probable cause to believe that the property is unlawfully possessed or is evidence of a crime — but on the mere whim or caprice of the police officer.

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

Order reversed, etc.

       Since the instant motion is for suppression not for the return of the sticks, it is difficult to understand the reference in the partial dissent to any property being "confiscated or retained”.


author: Meyer, J.

text:
    Hartford Accident and Indemnity Company, Respondent, v Village of Hempstead et al., Appellants, et al., Defendants.
    Argued September 7,1979;
    decided October 25, 1979

      POINTS OF COUNSEL

      Patrick J. Shooltz and Saul Horowitz for appellants.
    Public policy does not prohibit insurance coverage for police officers against punitive damage claims. (Padavan v Clemente, 43 AD2d 729; International Paper Co. v Continental Cas. Co., 35 NY2d 322; Straus & Co. v Canadian Pacific Ry. Co., 254 NY 407; Farrington v Pinckney, 1 NY2d 74; Matter of Steinberg v Steinberg, 18 NY2d 492.)

      William F. Larkin for respondent.
    I. There are no grounds that could warrant the disturbing order of the court below as it determines the rights of the parties in the action. (Randall v Bailey, 288 NY 280; Beechey v De Sorbo, 53 AD2d 727; Berger v City of New York, 260 App Div 402, 285 NY 723; State Farm Mut. Auto. Ins. Co. v Westlake, 35 NY2d 587; Phillips v Agway, Inc., 88 Misc 2d 1087.) II. Appellants police officers should not be insured for punitive damages under any circumstances. (Walker v Sheldon, 10 NY2d 401; Garrity v Lyle Stuart, Inc., 40 NY2d 354; Le Mistral v Columbia Broadcasting System, 61 AD2d 491; Padavan v Clemente, 43 AD2d 729; Morgan v Greater N. Y. Taxpayers Mut. Ins. Assn., 305 NY 243; Metropolitan Police Retiring Assn. v Tobriner, 306 F2d 775; Homnyack v Prudential Ins. Co. of Amer., 194 NY 456.)
   OPINION OF THE COURT

Meyer, J.

This appeal arises out of an action brought by plaintiff Hartford Accident and Indemnity Company for declaratory judgment that it is not required either to defend or to pay any award of damages that may be made in an action brought by defendant Lawrence Critelli under the Civil Rights Act (US Code, tit 42, § 1983) against defendants Stephens and Russo, police officer employees of defendant Village of Hempstead. The claim in the Federal action was that Critelli had been injured when struck on the head, face and body by the officers’ nightsticks as they attempted to awaken him from "a drunken stupor” as a result of which Critelli lay sleeping on the grass alongside a public street. Although the Federal complaint alleged that Critelli had permanent scars and had incurred expenses for medical treatment as a result of the beating, its only monetary demand was for punitive damages of $100,000. Hartford disclaimed on the ground that the Critelli action sought only punitive damages which its policy did not cover, and brought this action for judgment so declaring.

On motion and cross motion for summary judgment, Special Term held that the Federal action was not limited to punitive damages, that Hartford’s obligation to defend is broader than its duty to pay and that, therefore, Hartford is required to defend the Federal action. Concerning any damage award that might be made in the Federal action, Special Term, construing the ambiguous wording of the policy against the insurer, held that the policy covered the action, but concluded on public policy grounds that Hartford could not be required to pay any award of punitive damage that might be made in that action. The Appellate Division affirmed unanimously, without opinion (61 AD2d 893). On motion of defendants Stephens, Russo and the village, we granted leave to appeal (45 NY2d 711). We affirm.

Preliminarily we note that Hartford has not sought review by us of that part of Special Term’s order-judgment holding Hartford obligated to defend, that the instant action clearly is a presently justiciable controversy (Prashker v United States Guar. Co., 1 NY2d 584, 591-592), and that, contrary to Hartford’s suggestion, the issues before us turn not on any affirmed findings of fact but solely on public policy and the interpretation of statutes, both of which are matters of law (Farrington v Pinckney, 1 NY2d 74, 82 [public policy]; People v Glubo, 5 NY2d 461, 474 [statute]).

On the merits, defendants Stephens, Russo and the village argue that though public policy may proscribe insurance coverage of punitive damages for private insureds that rule should not be applied to a governmental employee who will be deterred from effective performance of his duty if he must bear the burden of punitive damages individually and who is subject to the sanction of dismissal by his governmental employer for any acts that could result in the imposition of punitive damages. They suggest also that sections 50-j and 52 of the General Municipal Law evidence a contrary legislative policy since those sections mandate that police officers be indemnified for tort liability and authorize the purchase of liability insurance covering such employees. Hartford urges, to the contrary, that the statutes referred to are inapplicable because not enacted until over two years after issuance of its policy and after the incident for which Critelli sued, and, further, that the deterrence purpose of punitive damages would be defeated if liability insurance is held to cover such damages.

Before discussing the issues thus raised, we comment on the significance of the fact that the Federal action was brought under the Civil Rights Act. In the first place, the fact that that action names only Stephens and Russo as defendants must be regarded as historical accident, for Monroe v Pape (365 US 167), which held that a section 1983 action could not be brought against a municipality, and which was the governing authority when Critelli’s action was brought, has now been overruled by Monell v New York City Dept. of Social Servs. (436 US 658). However, the fact that the village is not a party defendant in the action makes it unnecessary for us to decide whether, as some authorities have held or suggested, there is a different public policy concerning insurance coverage for vicarious liability for punitive damages than for direct liability. Secondly, whether punitive damages are allowable in a 1983 action is a matter of Federal, rather than State law. The Supreme Court did not find it necessary to decide that issue on the facts of Carey v Piphus (435 US 247). Without expressing either approval or disapproval, it cited (435 US, at p 257, n 11) a number of Circuit Court decisions holding that in a section 1983 action such damages may be awarded for the purpose of "deterring or punishing violations of constitutional rights”, but also noted that the section has a criminal counterpart (US Code, tit 18, § 242) and that since passage of the Civil Rights Attorney’s Fees Award Act of 1976 (US Code, tit 42, § 1988) a defendant in a section 1983 action has a potential liability for attorney’s fees which "provides additional — and by no means inconsequential — assurance that agents of the State will not deliberately ignore due process rights”. Since punitive damages are claimed in the Critelli action and there is no Federal authority holding that such damages cannot be awarded in a 1983 action, we must conclude, nothwithstanding the absence of a ruling by the Supreme Court, that the punitive damage issue will be presented to the Federal jury before which the Critelli action is finally tried.

Thirdly, while the construction of Hartford’s insurance policy issued in New York is governed by State, rather than Federal, law, it is proper for us in determining what New York’s public policy requires or permits with respect to insurance coverage of punitive damages, to consider the legislative policy behind the Civil Rights Act. In that respect Carey v Piphus (supra) is once again instructive, for it details that the Congress that enacted section 1983 intended to create a tort liability (435 US, at p 253), but did not address the issue of damages (id., at p 255) and that, to the extent Congress intended by enactment of the section to deter the deprivation of constitutional rights, "there is no evidence that it meant to establish a deterrent more formidable than that inherent in the award of compensatory damages” (id., at pp 256-257). Of interest also is the court’s characterization of punitive damages in Electrical Workers v Foust (442 US 42, 48) as " 'not compensation for injury. Instead, they are private fines levied by civil juries to punish reprehensible conduct and to deter its future occurrence’ ” (quoting from Gertz v Robert Welch, Inc., 418 US 323, 350), for that characterization read together with the Piphus decision, and particularly its footnote 11, suggests that if the Supreme Court ultimately holds that punitive damages may be recovered in Civil Rights Act actions, the purpose for doing so will be punishment and deterrence and not compensation.

With that background, we consider, first, the effect on the issues before us of the 1975 and 1976 amendments to the General Municipal Law that became subdivision 1 of section 50-j and section 52 of that law, and then what New York’s public policy is with respect to insurance coverage of punitive damages.

Subdivision 1 of section 50-j requires the village to save harmless "any duly appointed police officer * * * for any negligent act or tort, provided such police officer, at the time of the negligent act or tort complained of, was acting in the performance of his duties and within the scope of his employment” and section 52 authorizes a village to "purchase liability insurance with such limits as it may deem reasonable for the purpose of protecting its officers and employees against liability for claims arising from their acts while exercising or performing or in good faith purporting to exercise or perform their powers and duties.” These statutory provisions do not affect the public policy determination we are required to make. While public policy is generally determined by the Legislature (Messersmith v American Fid. Co., 232 NY 161, 163), and our determination of public policy (as distinct from the interpretation of the insurance policy) is limited by the statutes existing at the time that issue is decided (I. L. F. Y. Co. v Temporary State Housing Rent Comm., 10 NY2d 263, 270, app dsmd 369 US 795), we do not find anything in- the wording of the statutes, and the parties have not pointed to anything in the legislative history of either of them, to indicate with sufficient clarity to govern the insurance question before us the existence of a legislative policy. The issue is not directly addressed by either provision, and if it be assumed, without deciding, that the general indemnification provision of subdivision 1 of section 50-j is broad enough to include indemnity for punitive damages, it is, nonetheless, true that the more specific liability insurance provision of section 52 contains "good faith” language suggesting that the Legislature did riot contemplate insurance against punitive damages. Our conclusion is that the public policy question must be decided without reference to these two statutory provisions.

No New York case has dealt directly with the public policy issue in relation to an insurance policy issued to a governmental agency. Two New York cases, Padavan v Clemente (43 AD2d 729) and Teska v Atlantic Nat. Ins. Co. (59 Misc 2d 615), have held that since punitive damages are imposed not as compensation but as punishment and as a deterrent, the policy behind their imposition would be defeated were an individual insured permitted to avoid the burden of such damages by passing it on to an insurance carrier. In a related inquiry, whether an insurance policy covers a willful injury, this court in Messersmith v American Fid. Co. (232 NY 161, 165, supra) has indicated that coverage would be barred by the "fundamental principle that no one shall be permitted to take advantage of his own wrong”. Outside New York, a New Jersey court has applied the Padavan-Teska reasoning to a city and its police officers sued in a section 1983 action for unlawful arrest, assault and battery and malicious prosecution, and concluded, without spelling out its reasoning, that public policy would "not permit a defense or indemnification by the carrier of any claim for punitive damages” (City of Newark v Hartford Acc. & Ind. Co., 134 NJ Super 537, 547; see, also, City Council of City of Elizabeth v Fumero, 143 NJ Super 275). No other case dealing with the governmental aspect of the question has been found.

Most of the case law and legal writing discussing insurance coverage of punitive damages has dealt with nongovernmental insureds, but the considerations they discuss are pertinent to our inquiry. To analyze and discuss all of those cases and articles would unduly extend this opinion. Rather those materials will be listed in the margin and their public policy discussions summarized.

The strongest arguments against coverage are that it defeats the purpose of punitive damages, which is to punish and to deter others from acting similarly, and that allowing coverage serves no useful purpose since such damages are a windfall for the plaintiff who, by hypothesis, has been made whole by the award of compensatory damages. To allow coverage, it is said, passes on to other premium payers the punishment intended for the defendant, creates a conflict of interest between insurer and insured, and a conflict between the rule permitting the jury to consider defendant’s financial standing in fixing the amount of punitive damages and the rule against revealing insurance coverage to the jury. With respect to municipal employee defendants, it is argued further, that the existence of the Civil Rights Act and of the Civil Rights Attorney’s Fees Award Act makes it clear that coverage is not necessary as an incentive to the bringing of an action (cf. Electrical Workers v Foust, 442 US 42, 48, supra).

The arguments for allowing coverage are that the number of instances in which punitive damages are awarded shows that they are not really a deterrent, that coverage does not eliminate deterrence in any event because of the cost of such insurance and of the possibility of added premium loading for any insured for whom a carrier is required to pay punitive damages, that the policy language is broad enough to cover both compensatory and punitive damages and would be so interpreted by the average policyholder, that public policy should not be held partially to void the policy, particularly since small businesses can be wiped out by such an award, and that even those courts which do hold that public policy proscribes coverage do not void coverage of punitive damages payable by defendants held liable only vicariously. With respect to municipal employee defendants, in particular to police officers, the argument runs, not to allow coverage is to deter such employees from taking actions clearly in the interest of the municipality and of society and to affect adversely, at least in the case of large punitive damage awards, the financial stability of already hard-pressed governmental units.

Of importance in determining what public policy dictates in the instant case is the fact that punitive damages are awarded not for the unintended result of an intentional act, but for the conscious disregard of the rights of others or for conduct so reckless as to amount to such disregard (North western Nat. Cas. Co. v McNulty, 307 F2d 432, 442; see 1 NY PJI 2:278 and Comment). Bearing that fact in mind, we conclude that the rule to be applied with respect to a punitive damage award made in a Civil Rights Act action is that coverage is proscribed as a matter of public policy. We reach that conclusion primarily because to allow insurance coverage is totally to defeat the purpose of punitive damages, but a number of other factors are also involved. Not the least of these is that most of the arguments for coverage (e.g., that punitive damages are not a deterrent) essentially address not whether there should be coverage but whether there should be punitive damages at all. As to the premium loading suggestion, it is simply irrelevant since if public policy proscribes coverage it does so whether an additional premium is paid or not. With respect to municipal employee defendants the chilling effect argument cannot be given very much weight in view of the existence of criminal sanctions and the right to recover attorneys’ fees under Federal law, and while those factors may suggest that the additional deterrent of punitive damages is not required (or even desirable) that is a matter of Federal Civil Rights Act law, not State insurance law. The contention that a large punitive damage award may affect the financial stability of the employee or the municipality is, we believe, largely exaggerated since each can show his or its lack of wealth (see Zarcone v Perry, 572 F2d 52, 56; Rupert v Sellers, 48 AD2d 265, 272; Admissibility On Defendant’s Behalf, As Matter in Mitigation of Punitive Damages, Of Evidence As To His Lack of Financial Resources, Ann., 79 ALR3d 1138), each is entitled, notwithstanding suggestions of divided loyalty, to defense of the punitive damage issue by an attorney selected by the employee or the municipality but paid for by the carrier (Prashker v United States Guar. Co., 1 NY2d 584, 593, supra), and since the reasonableness of the amount assessed against each as punitive damages is subject to judicial review (Zarcone v Perry, 572 F2d 52, supra; Walker v Sheldon, 10 NY2d 401, 405; Faulk v Aware, Inc., 19 AD2d 464, affd 14 NY2d 899). The conclusion we reach, it is worthy of noting, accords with the majority view as to nongovernmental insureds and, of course, is subject to legislative revision as to governmental or nongovernmental insureds or both should the Legislature, addressing its attention more specifically to the problem of insurance coverage of punitive damages, conclude that the rule should be otherwise.

For the foregoing reasons, we would affirm the order of the Appellate Division, with costs.

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

Order affirmed.

      . The policy was issued to the village, but Hartford has not questioned that it also covers defendants Stephens and Russo.

      . As Special Term noted, rule 54 (c) of the Federal Rules of Civil Procedure (in US Code, tit 28, Appendix) permits a plaintiff to recover damages pleaded and proved even though not demanded in his prayer for relief.

      . Special Term also held that Hartford was not estopped from denying liability for punitive damages. Since appellants have not briefed or argued that issue we do not consider it (see, however, Northwestern Nat. Cas. Co. v McNulty, 307 F2d 432, 442-443; American Sur. Co. of N. Y. v Gold, 375 F2d 523, 528, both holding that what public policy proscribes estoppel cannot require).

      . Though its decision did not expressly pass upon whether the policy language was broad enough to cover punitive as well as compensatory damages, Special Term impliedly so held for the public policy issue need have been reached only if the policy could be interpreted to cover such damages. Construction of the policy would, in any event, involve no issue of fact, the conclusion turning on whether one emphasizes the words "bodily injury” (and thus excludes punitive damages), or the words "all sums” (and thus includes such damages) in the policy clause requiring the carrier to pay "all sums which the insured shall become legally obligated to pay as damages because of bodily injury” (see Kendrigan, Public Policy’s Prohibition Against Insurance Coverage for Punitive Damages, 36 Ins Counsel J 622; and Gonsoulin, Is An Award of Punitive Damages Covered Under An Automobile or Comprehensive Liability Policy?, 22 Southwestern LJ 433). Thus, the issue would, in any event, be one of law (Hartford Acc. & Ind. Co. v Wesolowski, 33 NY2d 169, 172). We do not reach the question, however, since the parties have argued only questions of public policy and statutory application.

      . Reference is to the section 50-j relating to police officers. The General Municipal Law contains another provision, also designated 50-j, relating to correction employees.

      . (E.g., Northwestern Nat. Cas. Co. v McNulty, 307 F2d 432, supra; Lo Rocco v New Jersey Mfrs. Ind. Ins. Co., 82 NJ Super 323; Esmond v Liscio, 209 Pa Super Ct 200; Ohio Cas. Ins. Co. v Welfare Fin. Co., 75 F2d 58, cert den 295 US 734.)

      . For additional such cases see Annotation: Punitive Damages in Actions for Violations of Federal Civil Rights Act (14 ALR Fed 608).

      . Compare the Annotation cited in footnote 7 (14 ALR Fed 608, 618).

      . Indeed, the California Supreme Court has held, in Williams v Horvath (16 Cal 3d 834), that nothing in section 1983 precludes indemnification by the municipality of the Civil Rights Act liability of its employee.

      . As we have held with respect to a statutory policy (and a fortiori, therefore, as to a negotiated policy) a modification of the statute "may not be imposed on the insurer until there is an opportunity to discontinue coverage” (Char-Mo Investors v Market Ins. Co., 44 NY2d 793, 795). Even if the question of interpretation of the policy were before us, therefore, we would not apply these 1975 and 1976 enactments in determining whether a policy issued June 1, 1972 for a term of three years covered punitive damages with respect to an incident which occurred on November 8, 1972. If the policy as written was not broad enough to encompass punitive damages coverage, these statutory provisions would not change that interpretation.

      . Compare the correction employee statute (General Municipal Law, § 50-j) which expressly excludes violations of statute (subd 4) and specifically provides that the rights and obligations of an insurer are not impaired, limited or modified by the provision (subd 6). See, also, subdivision 2 of section 50-k of the General Municipal Law which is addressed to Civil Rights Act actions against police department members in cities of over one million population.

      . (See, also, Liability Insurance: Specific Exclusion of Liability for Injury Intentionally Caused by Insured, Ann., 2 ALR3d 1238; Liability Insurance as Covering Accident, Damage, or Injury Due to Wanton or Wilful Misconduct or Gross Negligence, Ann., 20 ALR3d 320.)

      . The fullest exposition against coverage is that in Northwestern Nat. Cas. Co. v McNulty (307 F2d 432), and for coverage, that in Lazenby v Universal Underwriters Ins. Co. (214 Tenn 639), First Nat. Bank v Fidelity & Deposit Co. (283 Md 228) and Harrell v Travelers Indemnity Co. (279 Ore 199). Additional cases are listed in the First Nat. Bank opinion and can be found through the annotation entitled Liability Insurance Coverage as Extending to Liability for Punitive or Exemplary Damages (20 ALR3d 343). A long list of law review articles will be found in footnote 11 to the McNulty decision, to which should be added the Kendrigan and Gonsoulin articles cited in footnote 4 and Hall, The Validity of Insurance Coverage for Punitive Damages — An Unresolved Question? (4 N Mex L Rev 65); Lambert, Does Liability Insurance Cover Punitive Damages, (1966 Ins LJ 75); Lentz, Payment of Punitive Damages by Insurance Companies (15 Clev-Mar L Rev 313); Obler, Insurance For Punitive Damages: A Reevaluation (28 Hastings LJ 431); Zuger, Insurance Coverage of Punitive Damages (53 ND L Rev 239); as well as Comments or Notes (63 Col L Rev 944; 20 SC L Rev 71; 39 Temple LQ 459; 46 Va L Rev 1036).

      . (See n 4 above.)

      . [4] Punitive damages need bear no ratio to compensatory damages (Toomey v Farley, 2 NY2d 71). In Reynolds v Pegler (123 F Supp 36, affd 223 F2d 429, cert den 350 US 846) a verdict of $1 compensatory and $175,000 punitive damages was upheld and in recent times a California jury has returned a punitive damage verdict of $128.5 million against the Ford Motor Co. (Time, Feb. 20, 1978, p 65).

      . While in the main the considerations on which we base that conclusion also apply to actions of other types, we believe the better course, particularly because of the interweaving of Federal and State law involved in the present decision, is to reserve decision in such other cases until a specific case or cases can be dealt with.

      . That is not to say, however, that in considering whether the amount assessed as punitive damages is excessive, the chilling effect should not be considered (see Afro-American Pub. Co. v Jaffe, 366 F2d 649, 662).

      . A Civil Rights Act plaintiff is not automatically entitled to both punitive damages and attorneys’ fees. For the governing criteria see Zarcone v Perry (681 F2d 1039, cert den 439 US 1072).

      . [5] The employee would also be entitled to separate his own financial resources from those of the municipality by requesting a charge that the jury must fix a separate punitive damage verdict as to each defendant (see Raplee v City of Corning, 6 AD2d 230, 233; cf. Zarcone v Perry, 572 F2d 52, 53; and New York Times Co. v Sullivan, 376 US 254).


author: Jones, J.

text:
    The People of the State of New York ex rel. Gilbert S. Rosenthal, on Behalf of Fred Kolman, Respondent, v Leonard Wolfson, as Warden of the New York Detention Facility at Riker’s Island, Appellant.
    Argued October 17, 1979;
    decided November 13, 1979

      POINTS OF COUNSEL

      Robert M. Morgenthau, District Attorney (Jerold L. Neugarten and Robert M. Pitler of counsel), for appellant.
    The writ of habeas corpus should not have been granted. Justice Leff did not abuse his discretion in denying Kolman bail. Justice Lang should, therefore, not have considered new facts during the habeas corpus proceeding; in any event, because those new facts were highly inconsequential, they should not have altered the result. (People ex rel. Rao v Adams, 296 NY 231; People ex rel. Klein v Krueger, 25 NY2d 497; People ex rel. Shapiro v Keeper of City Prison, 290 NY 393; People ex rel. Weisenfeld [Cifone] v Warden, N. Y. Detention Facility at Riker’s Is., 37 NY2d 760; People ex rel. Zinzow v Harkness, 48 AD2d 746; People ex rel. Parone v Phimister, 29 NY2d 580; People ex rel. Llauget v Cyrta, 35 AD2d 724.)

      Gilbert S. Rosenthal and Mark T. Smith for respondent.
    I. The habeas court was justified in considering the entire matter as it was presented at the time of hearing. (People ex rel. Klein v Krueger, 25 NY2d 497; People ex rel. Deliz v Warden of City Prison [Tombs] in City of N. Y., 260 App Div 155; People ex rel. Llauget v Cyrta, 35 AD2d 724.) II. The habeas court, having before it the record in the bail-fixing court, had the right and the duty to analyze it, and decide on all the facets.
   OPINION OF THE COURT

Jones, J.

Except possibly in extraordinary circumstances, review on a writ of habeas corpus of the determination of a court at nisi prius denying or fixing the amount of bail before trial in a criminal action is limited to the record before the nisi prius court.

The relator in this case was charged with grand larceny and remanded without bail. An indictment was filed promptly and arraignment followed. On the People’s application he was remanded without bail on September 25, 1978. He was again denied bail after a hearing on October 4. On October 5 relator sought a writ of habeas corpus on the ground that the bail-denying court had abused its discretion. At the hearing, over the objection of the People, relator offered and the court received evidence which had not been presented to the bail-denying court. On the basis, at least in part, of this additional evidence the habeas corpus court granted the writ and fixed bail at $150,000. On cross appeals the Appellate Division modified to the extent of reducing bail to $100,000 and, as so modified, affirmed the decision of the habeas corpus court. In so doing the Appellate Division explicitly held that it was proper for the habeas corpus court to have considered matters not before the original bail-denying court. We conclude that this was error.

The role and scope and standard of review of an order denying or fixing bail by another court on a writ of habeas corpus was most recently delineated in our court in People ex rel. Klein v Krueger (25 NY2d 497). The action of the bail-fixing court is nonappealable, but may be reviewed in a habeas corpus proceeding "if it appears that the constitutional or statutory standards inhibiting excessive bail or the arbitrary refusal of bail are violated” (id., p 499). Whatever difficulty may be encountered in precisely articulating or in applying the standard of review in a particular case, the function of the habeas corpus court is one of collateral review of the determination of the nisi prius court; it is a second stage re-examination. The habeas corpus court is not to "examine the bail question afresh” or to make a "de novo determination of bail” (id., p 501). The writ of habeas corpus affords an opportunity under constitutional and historical aegis for re-examination of a nonappealable order fixing or denying bail — no more, no less.

Recognition of this focus and objective of the great writ compels the conclusion that in undertaking its at once limited but significant review of the determination of the bail-fixing court the habeas corpus court must of necessity be limited to consideration of the propriety of that determination in the light of the record on which it was made. To receive new evidence would be both to frustrate the integrity of the review function and to undertake a de novo bail determination. This the habeas corpus court may not do.

Changes in relevant facts, of course, may require reconsideration of a bail determination. If there be pertinent evidence which was not submitted to the bail-fixing court in the first instance, principles of orderly process dictate that a renewal of the application for the setting or reduction of bail be made on return to the trial court. (Cf. People ex rel. Llauget v Cyrta, 35 AD2d 724.) That court may not only be familiar with the factual elements of the case but may as well have already weighed pertinent judgmental considerations. Nothing would compel the anticipation that having declined relief on one set of facts, the trial court would automatically or routinely do so on an augmented or supplemented showing. In any event either the initial determination or that made on renewal would.be subject in appropriate instances to scrutiny by writ of habeas corpus, thus preserving for that extraordinary procedural vehicle its traditional review function.

For the reasons stated, the order of the Appellate Division should be reversed, without costs, the granting and reduction of bail vacated, and the petition dismissed, all without prejudice to a renewal, if relator be so advised, of his application for bail before the trial court predicated on such evidence as may then be pertinent, or, again if the relator be so advised, to the institution of a new habeas corpus proceeding to review the denial of bail on the record before the trial court at the time of such denial.

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

Order reversed, without costs, the granting and reduction of bail vacated and the proceeding dismissed, without prejudice to institution of a new proceeding in accordance with the opinion herein.