In the Matter of Perlbinder Holdings, LLC, Appellant-Respondent,v.Meenakshi Srinivasan,, et al., Respondents-Appellants.BriefN.Y.February 17, 2016 REPRODUCED ON RECYCLED PAPER JANE L. GORDON (15 Minutes Requested) COURT OF APPEALS STATE OF NEW YORK PERLBINDER HOLDINGS, LLC, Appellant-Respondent, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules -against- MEENAKSHI SRINIVASAN, CHAIRPERSON, CHRISTOPHER COLLINS, VICE-CHAIRPERSON, DARA OTTLEY-BROWN, SUSAN M. HINKSON, R.A., and EILEEN MONTANEZ, P.E., COMMISSIONERS, constituting THE BOARD OF STANDARDS AND APPEALS OF THE CITY OF NEW YORK; THE NEW YORK CITY DEPARTMENT OF BUILDINGS; THE NEW YORK CITY ENVIRONMENTAL CONTROL BOARD and THE CITY OF NEW YORK, Respondents-Appellants. APL-2014- 00270 REPLY BRIEF FOR RESPONDENTS- APPELLANTS ZACHARY W. CARTER Corporation Counsel of the City of New York Attorney for Respondents-Appellants 100 Church Street New York, New York 10007 Tel: (212) 356-0846 jgordon@law.nyc.gov RICHARD DEARING JANE L. GORDON of Counsel April 30, 2015 TABLE OF CONTENTS Page TABLE OF AUTHORITIES .................................................................................... ii PRELIMINARY STATEMENT ............................................................................... 1 ARGUMENT ............................................................................................................. 4 PERLBINDER SHOULD BE REQUIRED TO ESTABLISH ITS GOOD-FAITH RELIANCE BEFORE THE BSA. A. The primary jurisdiction issue raises a question of law, not a question of fact.. ....................................... 5 B. The Court should reach the primary jurisdiction issue ........................................................................... 7 CONCLUSION .......................................................................................................... 9 ii TABLE OF AUTHORITIES Cases Pages Parkview Assoc. v. City of New York, 71 N.Y.2d 274 (1988) ........................................................................................... 1 Statutes N.Y.C. Charter § 666(5) ............................................................................................. 2 N.Y.C. Charter § 666(6) ............................................................................................. 9 N.Y.C. Charter § 666(7) .................................................................................... 2, 4, 9 N.Y.C. Charter § 668 .............................................................................................2, 9 N.Y.C. Zoning Resolution § 72-21 ............................................................................2 PRELIMINARY STATEMENT Our opening brief established that the erroneous approval of a permit for Perlbinder’s nonconforming, double-sided advertising sign in midtown Manhattan did not result in a vested right to the permit and that, under Parkview Associates v. City of New York, 71 N.Y.2d 274 (1988), the Appellate Division correctly rejected Perlbinder’s request for an order endowing it with a permanent right to display the sign. We also showed that the Appellate Division erred in remanding this matter for further administrative proceedings under the distinct interpretative appeal process described in New York City Charter § 666(7), rather than dismissing the petition in recognition that the correct step would be for Perlbinder to file an application under the well-settled standards and procedures for the grant of a zoning variance under New York City Charter §§ 666(5) and 668 and Zoning Resolution § 72-21. And we further showed that the Appellate Division erred in resolving the factual question whether Perlbinder relied in good faith on the erroneously issued permit, when it should have left that question to be resolved by the Board of Standards and Appeals (“BSA”) in the first instance as part of the zoning variance review process. 2 Perlbinder’s reply brief recognizes that an erroneously issued permit cannot result in vested rights. That is because equitable estoppel does not apply where, as here, a permit was erroneously issued based on an incorrect application of the law in existence at the time of its approval. The company instead raises a brand-new argument proposing that this Court adopt a new “honest error” standard to determine the validity of the permit. According to Perlbinder, so long as the official had the power to grant the permit but erred in interpreting the relevant zoning law, common law vested rights should be recognized. That new proposal is unpreserved and would gut this Court’s precedent. Indeed, Perlbinder relies on decisional law from other states, which it asks the Court to adopt as a matter of “policy” (Reply Br., at 6-9, 19), rather than precedent from this Court. This appeal would also be a particularly poor case for adopting Perlbinder’s newly raised and mistaken standard, since the cursory three-line permit approval for the advertising billboard (135) did not rest on a reasonable interpretation of the City’s zoning laws, as explained in detail in the BSA’s well-reasoned ratification (361-362).1 Nor has Perlbinder offered any persuasive rebuttal to the points raised 1 Two Google Maps images from 2008 and 2014 that are cited in our main brief (at 15, n.5) show the pivotal differences in size, position, and location of the original single-sided and the replacement double-sided signs. 3 in the City’s cross-appeal. Indeed, Perlbinder’s reply brief does not contest, and therefore concedes, our argument that any further administrative proceedings here should occur under the well-settled standards and procedures for the grant of a zoning variance under New York City Charter §§ 666(5) and 668 and Zoning Resolution § 72-21, instead of the remand that the Appellate Division incorrectly ordered under the distinct interpretative appeal process described in New York City Charter § 666(7). Perlbinder also does not dispute that a question of fact exists as to whether it relied in good faith on the erroneously issued permit or contest that the issue of good-faith reliance lies within the primary administrative jurisdiction of the BSA to address in the first instance. Instead, Perlbinder argues that the City has waived any objection to the Appellate Division’s resolution of this factual issue below, and that this Court has little leeway to review that holding because it presents a factual question outside the Court’s jurisdiction. But Perlbinder is mistaken: We have not raised any issue of fact or asked this Court to resolve one. Rather, our main brief raised a pure legal issue regarding whether the Appellate Division lacked jurisdiction to adjudicate the good-faith reliance issue in the first instance, before the Board of Standards and Appeals had even addressed it through the administrative process designated for resolution of such questions. In support 4 of that argument, we merely pointed to fact issues in the record regarding Perlbinder’s asserted good-faith reliance that the BSA should properly resolve at the administrative level prior to any judicial review. Perlbinder’s arguments on reply, as well as the legal issues it concedes by failing to address them, demonstrate that the company cannot show any reversible error in the Appellate Division’s common-law vested rights ruling. Perlbinder also cannot show why the rulings remanding the matter to the BSA under New York City Charter § 666(7), and determining the good-faith reliance issue as a matter of law, should not be reversed. ARGUMENT PERLBINDER SHOULD BE REQUIRED TO ESTABLISH ITS GOOD-FAITH RELIANCE BEFORE THE BSA. Our main brief established two grounds on which the Appellate Division’s decision should be reversed, neither of which is seriously addressed by Perlbinder’s reply brief. First, we showed that, to obtain the relief it seeks, Perlbinder must apply for a zoning variance under the well-established standards and procedures set forth in the City Charter and the Zoning Resolution, and that the Appellate Division therefore improperly remanded the matter for further proceedings under the distinct interpretative review process, which is described in 5 a different provision of the City Charter and serves different purposes from the zoning variance procedures (at 32-39). Perlbinder does not even try to defend that critical prong of the Court’s decision, so the company has now conceded that that the order of remand was erroneous. Second, we showed that the Appellate Division improperly resolved the question whether Perlbinder relied in good faith on the erroneously issued permit, which may bear on Perlbinder’s eligibility for a zoning variance, when it should have left that question to be addressed in the first instance by the BSA as a matter of primary administrative jurisdiction. Perlbinder offers no serious rebuttal to our showing. The company does not contest that the BSA has primary administrative jurisdiction over the question of good-faith reliance. Instead, it argues that the Appellate Division’s good-faith reliance ruling is a factual issue which the City has waived and that is beyond this Court’s jurisdiction to review so long as the lower court’s ruling it is supported by some evidence (Reply Br., at 23). Perlbinder is wrong on both counts. A. The primary jurisdiction issue raises a question of law, not a question of fact. In our main brief, we demonstrated that the Appellate Division’s “as a matter of law” ruling on Perlbinder’s asserted good-faith reliance undermined the 6 doctrine of primary administrative review (at 40-42). Perlbinder never addresses that purely legal issue on reply. Instead, Perlbinder tries to frame the primary jurisdiction argument as a factual dispute in order to argue that the City waived it (Reply Br., at 21). Significantly, Perlbinder has never before argued waiver, even during the multiple reargument and leave motions that followed the Appellate Division’s two rulings on this matter. Moreover, although Perlbinder attaches dispositive significance to the fact that our main brief identified important factual issues raised by the good-faith reliance question (Reply Br., at 21), we discussed those record citations solely in support of our argument that the BSA should, in the first instance, decide them (City’s Br., at 41). We never asked the Court to resolve any factual issues, or to decide the question of good-faith reliance itself.2 Perlbinder’s analysis of whether we pose a question of fact, and whether the Court may review it (Reply Br., at 21- 24), is wholly irrelevant to the purely legal question of primary jurisdiction that we present for the Court’s review. 2 Although we have not asked the Court to address the issue of good-faith reliance but rather to ensure that the issue is left open for the BSA to address, we note that Perlbinder is mistaken in asserting that the Court would lack jurisdiction to review the Appellate Division’s factual findings on good-faith reliance, since CPLR 5501(a) (3) vests the Court with jurisdiction to review findings of fact newly entered by the Appellate Division on appeal. 7 B. Under settled legal principles, the BSA should decide the issue of good-faith reliance in the first instance. Perlbinder also argues that the primary jurisdiction point is waived, but this contention has no merit. The BSA never reached the issue of Perlbinder’s asserted good-faith reliance because the agency expected to address the issue once Perlbinder made an appropriate application for a zoning variance (363). The Supreme Court never addressed the issue of good-faith reliance either (9-13). In the brief we filed in the Appellate Division, we explicitly argued that a determination on Perlbinder’s asserted good-faith reliance was not ripe for review because the BSA had yet to decide it (Brief for Respondent-Respondent at 24, Perlbinder Holdings LLC v. Srinivasan, 114 A.D.3d 494 (1st Dep’t 2014) (No. 14- 10891). There was no good-faith reliance determination until the Appellate Division’s first, subsequently recalled decision in October 2013 (398-399), and the City appropriately challenged the Appellate Division’s ruling promptly via a motion for reargument. There is therefore no barrier to the Court’s consideration of the primary jurisdiction issue on this appeal. Perlbinder presents no reason to depart from usual principles of deference to administrative jurisdiction, particularly where, as here, there are sharp issues of fact to be resolved, including whether Perlbinder acted in good faith and 8 whether it suffered any detriment as a result of the erroneously issued permit, given that it has earned revenues from its years-long display of its double-sided nonconforming sign that may far outstrip any monies it spent to erect and maintain the sign. See also Resps.’ Br. at 40-41 (describing these factual issues at greater length). Because Perlbinder has presented no cogent contrary argument on any of the points raised in our cross-appeal, the Court should hold that the Appellate Division erred, first, in remanding this matter for further proceedings under the interpretative appeal process, rather than dismissing the petition so that Perlbinder may file an appropriate application for a zoning variance, if it so chooses; and second, in deciding the issue of good-faith reliance as a matter of law, rather than leaving that question to be addressed by the BSA in the first instance in appropriate administrative proceedings for a zoning variance. 9 CONCLUSION The Appellate Division’s decision remanding the proceeding to the BSA pursuant to Charter § 666(7) should be reversed, and the proceeding dismissed. Should the Court direct a remand, it should be in accordance with Charter §§ 666(6) and 668 and the Zoning Resolution, with direction that the BSA decide the good-faith issue in the first instance. The decision and order should otherwise be affirmed. Dated: New York, New York April 30, 2015 Respectfully submitted Zachary W. Carter Corporation Counsel of the City of New York Attorney for Respondents-Appellants By: Jane L. Gordon Senior Counsel