Natural Resources Defense Council, Inc. v. City of New York

No. 81-7868 (2d Cir. January 6, 1982)

The Second Circuit orders the district court to issue a preliminary injunction against the demolition of the Helen Hayes and Morosco Theaters in New York City pending final disposition of appellants' claims based on state and federal historic preservation law. The court rules that appellants have met the test for a preliminary injunction. Their allegations of undue influence exerted by White House officials on the Advisory Council on Historic Preservation, although denied by appellees, raise "sufficiently serious questions going to the merits to make them a fair ground for litigation." In addition, the balance of hardships favor appellants since they will suffer a total loss if the theaters' demolition is not enjoined.

[Appended to the opinion of the court was the following statement: "N.B. Since this statement does not constitute a formal opinion of this court and is not uniformly available to all parties, it shall not be reported, cited or otherwise used in unrelated cases before this or any other court." — Ed.]

Counsel for Appellants
Joel Silber
Fried, Frank, Harris, Shriver & Jacobson
1 NY Plaza, New York NY 10004
(212) 820-8000

Burce J. Terris
Terris & Sunderland
1526 18th St. NW, Washington 20036
(202) 332-1882

Counsel for Appellees
Lorna Bade Goodman, Ass't Corp. Counsel
100 Church St., New York NY 10007
(212) 566-3929

[12 ELR 20182]

WATERMAN, MOORE, and GRAAFEILAND, JJ.:

On October 6 and 7, 1981, The Natural Resources Defense Council, Inc. and the other appellants herein brought suit in the New York State Supreme Court, County of New York, on various State law claims and in the Southern District of New York on [12 ELR 20183] federal law claims, seeking to prevent the demolishment of the Helen Hayes and Morosco theaters in preparation for the construction of the Times Square Hotel Project. On October 14, 1981, appellees removed the two State court actions to the federal court. On October 16th, appellants' motion for remand was denied.

Thereafter, appellants moved before District Judge Duffy for partial summary judgment on the federal complaint, for remand of the State law actions and for a temporary restraining order and preliminary injunction to prevent destruction of the theaters pending a decision on the merits. Appellees moved to dismiss the complaint. Treating appellees' motion as one for summary judgment, Judge Duffy dismissed all but one of appellants' federal claims. He held that certain allegations of undue influence by the executive branch presented a genuine issue of fact. Nevertheless he denied appellants' motion for a temporary restraining order and preliminary injunction. The State claims were remanded to the New York courts. A conference to work out a discovery schedule for appellants' remaining federal claim was set for December 14, 1981. After the denial of the motions for preliminary injunctive relief, appellants moved for an injunction pending appeal to this Court. That motion was denied.

Appellants then moved this Court for a stay pending appeal of Judge Duffy's decision. On December 8, 1981, with the consent of counsel for each party, this Court proceeded immediately to the merits of the appeal. Because final judgment on the undue influence claim has not been rendered and Judge Duffy has not directed the entry of final judgment on the other claims, Rule 54(b), FED. R. CIV. P., the dismissal of the substantive claims is not appealable at this time. This Court's appellate jurisdiction is limited to the lower court's denial of appellants' motions for injunctive relief.

A preliminary injunction should issue upon a showing of either "(1) probable success on the merits and possible irreparable injury, or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief." Sonesta International Hotels Corp. v. Wellington Associates, 483 F.2d 247, 250 (2d Cir. 1973). Because the requirements of the second prong of this test have been met in the instant case, preliminary relief should have been granted.

Appellants allege that the Advisory Council on Historic Preservation (ACHP) was pressured by White House officials into issuing a recommendation by 5 p.m. on November 20, 1981. Appellants claim that this pressure for a speedy resolution was designed to preclude the ACHP from considering the feasibility of alternative plans for development. Allegations have been made that a staff member of the ACHP was aware that the White House wanted the recommendation to provide for demolition. Appellants claim that this undue influence deprived the ACHP of its ability to perform its delegated duties as an independent advocate for the preservation of the nation's historic and cultural heritage. Although these allegations have been denied, they raise "sufficiently serious questions going to the merits to make them a fair ground for litigation."

Although appellees undoubtedly will suffer harm from further delay of the Times Square Project, the balance of hardships tips decidedly toward appellants. Appellees claim that any delay will entail considerable expense and that the existence of the project may be at stake because the financial "package" may collapse. On the other hand, if demolition is not enjoined, appellants will suffer a total loss. Any further litigation will be futile after the theaters have been destroyed. Appellants will be deprived of all meaningful opportunity to litigate their remaining claim.

For the foregoing reasons, we remand the action to the district court for issuance of a preliminary injunction precluding demolition pending the complete disposition of appellants' claims in that court. Because appellees will be harmed by the issuance of an injunction, we urge the district court to expedite final disposition of appellants' claims.

Reversed and remanded for action consistent herewith.