1250 Broadway, 27th Floor New York, NY 10001


One of the most controversial quality-of-life initiatives implemented under Mayor Rudolph Giuliani's crime-fighting plan was the highly restrictive limitations placed on the size and location of sex-oriented establishments. In response to a 1994 Department of City Planning report citing "adult businesses"--adult video/book stores, strip clubs, and adult theatres featuring movies or live entertainment--as damaging to communities in which they were located, the City Council adopted a law which passed with considerable fanfare and sparked over a decade of litigation.

Under the 1995 ordinance, a business was considered an "adult establishment" if a "substantial portion" of its business was dedicated to any kind of "adults-only" commercial use. The purpose of the "substantial portion" language was to reach those enterprises with a "predominant, on-going focus on sexually explicit materials or activities" while not encompassing otherwise legitimate businesses with a small adult selection. To clarify what constituted a "substantial portion," the City's Department of Buildings (DOB), the agency responsible for interpreting and enforcing the ordinance, issued guidelines providing that a business was considered an "adult establishment" if 40 percent or more of its publicly accessible floor or cellar space was dedicated to "adults-only" content.

Although owners of these businesses challenged the 1995 ordinance, claiming violations of their rights of free speech protected by the Federal and State Constitutions, the law withstood challenge and took effect in July 1998. In response, adult businesses reconfigured their floor areas and inventories in order to comply with the DOB's 60/40 rule, making sure that less than 40 percent of their space was used for "adults-only" purposes. However, the City claimed that many of these businesses were engaging in ploys to evade the law. For example, in one store, only 24 percent of the inventory consisted of adult videos but the "traditional" videos were only located in a back room. Essentially, patrons seeking "traditional" selections were required to walk through a store-length's worth of sexually explicit materials. When the courts refused to close stores that were in technical compliance with the 60/40 rule, the City Council amended the ordinance to encompass those establishments that were in technical compliance but whose business still centered on sexually explicit materials. The 2001 amendments removed the "substantial portion" language from the "adult establishment" definition, while keeping the standard in place for adult video and bookstores. Accordingly, a business was now considered an "adult establishment" if it dedicated any portion of its business to an "adults-only" use not involving books or videos.

In For the People Theatres of N.Y., Inc. v. City of New York, a recent decision by the New York Court of Appeals, a number of adult establishments brought suit claiming that the Council's 2001 amendments were constitutionally violative. Plaintiffs based their claim on the City's failure to support the 2001 amendments with a study targeted at the secondary effects of the 60/40 rule. The State's highest court was faced with the question of whether the City's reliance on secondary-effects evidence that supported the original ordinance satisfied the City's burden of proving that it had a substantial interest in regulating businesses with less than 40 percent of space dedicated to adult use.

Applying a framework developed in two United States Supreme Court decisions, the Court of Appeals noted that since the City's initial evidentiary hurdle in justifying a secondary-effects rationale for the 2001 amendments was very low, the City had met its burden. However, the Court also concluded that because the establishments furnished evidence disputing the City's findings, the onus had shifted back to the City to provide additional evidence to justify its modifications to the law. Citing various items of evidence submitted by the City, the majority concluded that there was a triable question of fact and remitted the matter to the State Supreme Court for further proceedings.

The New York State Supreme Court now has before it the following question: Are the 60/40 businesses so transformed in character that they no longer resemble the types of adults-only uses found to have adverse community-wide effects? In a strongly worded dissent, Chief Judge Kaye challenged the argument that the City could rely on the 1994 studies to substantiate the 2001 amendments. Recognizing that the businesses targeted by the 2001 amendments were different in character from those targeted by the original ordinance, Chief Judge Kaye opined that the City had the obligation to show a concrete nexus between the 60/40 businesses and adverse social effects, and that burden had not been met. In the dissent's view, the City needed to justify its change of the law--which amended the ordinance to include businesses dedicating any portion of its business to "adults-only" use--with evidence that the then existing 60/40 businesses were having adverse effects on their host communities.

It is unclear whether the City should have been required to jump these additional hoops and engage in this wasteful exercise. Many of our communities are still blighted by these unwanted establishments. Why shouldn't citizens be allowed to swiftly excise such businesses from their communities based on ideas of common sense and common knowledge? While, as lawyers, we can appreciate the constitutional rights that are being safeguarded by this decade-long process, we question the use of taxpayers' funds in requiring exhaustive research to quantify something many of us already know--that such establishments have deleterious effects on our children, communities, and our society.