Judge issues setback to NYC’s enforcement of sex shop zoning law

Monday, August 31, 1998

New York City officials suffered a setback in the enforcement of their sex shop zoning law Friday when a state judge ruled that three stores which sell adult-oriented material do not have to relocate.

Justice Stephen Crane ruled in City of New York v. Show World, Inc. that the three businesses had conformed to the city's 3-year-old sex shop zoning law, which has survived constitutional challenges in both state and federal courts.

City officials brought legal proceedings against Show World, NRS XXX Video and Les Hommes under the city's nuisance law. The city argued that the businesses must close down or relocate because they violated zoning provisions.

However, the businesses argued that they no longer met the criteria of an “adult establishment” because a “substantial portion” of their businesses are not of an adult-oriented nature.

The city's zoning law provides: “An 'adult establishment' is a commercial establishment where a 'substantial portion' of the establishment includes an adult book store, adult eating or drinking establishment, adult theater, or other adult commercial establishment, or any combination thereof.”

The City Planning Commission in one of its reports defined “substantial portion” under a guideline that is referred to as the “40% rule” or the “60:40 rule.” Under the rule, if less than 40% of a business' stock is of an adult nature and less than 40% of its floor space is devoted to adult material, the business is not an “adult establishment” because a “substantial portion” of its business is not adult-oriented.

Owners of Show World, NRS and Les Hommes said they made changes to their businesses by converting at least 60% of their stock and floor plans to a non-adult nature. For example, Show World removed more than 50 peep show booths and made other structural changes in order to comply with the “40% rule.”

However, the city contended the changes were superficial and urged the judge to consider all the factors of the operation, including how much revenue the businesses derived from their adult material.

Crane, who earlier this month rejected the efforts of several other adult businesses to comply with the 40% rule, this time ruled against the city, noting that the three establishments had reduced their stock and floor space to comply with the rule.

A “mechanical application” of the 40% rule could make a “mockery of the legislation” under certain circumstances, Crane wrote. However, the judge ruled that the city's arguments “must be reconciled in the context of [the cities'] burden of proof and in the context of constitutional constraints.”

Crane concluded: “Analysis must embrace the proposition that the amended [zoning law] gave enterprises such as these defendants a choice either to conform or terminate. Thus, the [zoning regulation] contemplates the very efforts that Show World, NRS and Les Hommes are making.”

The city argued that the businesses, even as changed to conform to the Planning Commission's guidelines, still caused the same harmful secondary effects associated with sexually explicit businesses. The alleged effects include a decrease in property values and an increase in criminal activities.

However, Crane responded that if the “legislation, in order to meet constitutional requirements, falls short in some measure of curing all the ills that precipitated its passage, the court is not a super legislature that can make new law to effect the cure.”

Leonard Koerner, chief assistant corporation counsel for the city, said: “We are unhappy with this decision, because Show World's attempt to comply with this 40% rule was a sham.

“Show World is still an adult-use business,” Koerner said. “This isn't Blockbuster. Show World is just trying to stay open with no intent of changing the character of its business. Because it has not changed the character of its business, it still causes the same adverse secondary effects.”

Herald Price Fahringer, the lawyer for the businesses, could not be reached for comment.

Koerner said the city was still “thinking about whether to appeal” Crane's ruling.