NY Appellate Court Upholds NYC Environmental Control Board’s Determination that Petitioners Engaged in Unauthorized Outdoor Advertising

This post was authored by Matthew Loeser, Esq.

The Petitioners in this case were the owners of five buildings that displayed “advertising signs” promoting the “Law Offices of John J. Ciafone, Esq.” on their front facades. Mr. Ciafone purportedly owned each of the petitioner corporations and used the signs, for which he had not obtained permits, to promote his law practice, under an entity known as “Ciafone, P.C.” In this article 78 proceeding, petitioners sought to annul determinations of the New York City Environmental Control Board (ECB), which found that petitioners engaged in unauthorized outdoor advertising and imposed penalties.

Ciafone first contended that that the signs were “accessory” signs since he provided legal services at each building that amounted to an accessory use. Specifically, Ciafone testified that he used various spaces as “satellite offices,” including vacant residential apartments, a space within a storefront, a small office in the back of a barbershop, a basement storage area, and that he also met clients in a restaurant located at one of the buildings. The court noted that in NYC v. Joseph Nativo, (ECB Appeal No. 1000307 [August 19, 2010]), an individual advertised his own closely held corporations on a building he personally owned, and the ECB determined that he could advertise the corporations he solely owned without becoming an outdoor advertising company (“OAC”). In subsequent ECB decisions in which the properties were owned by corporations instead of individuals, however, the corporate owner qualified as an OAC where it allowed for advertisement of a corporation other than the building-owning corporation itself. In determining that Nativo was inapplicable to this case, the court found ECB’s reading of the statute and its application of its own precedent were rational, and not arbitrary or capricious.

Petitioners next alleged that this case was factually unique because the buildings were essentially owned by an individual in corporate form, and the advertisements were for that same individual. The court found that based on the plain language of the applicable statute, all that was required to be an OAC was to engage in the outdoor advertising business: which meant “making space on signs … available to others for advertising purposes.” Furthermore, while conduct such as marketing, soliciting, or large advertising profits would certainly qualify that entity as an OAC, lesser conduct would also suffice under the statute. Thus, it was irrelevant that petitioners did not charge Ciafone for the signs. Accordingly, the determinations of respondent NYC Environmental Control Board, which found that petitioners engaged in unauthorized outdoor advertising, and imposed penalties, were affirmed.

Franklin Street Realty Corp. v NYC Environmental Control Board, 2018 WL 3470618 (NYAD 1 Dept. 7/19/2018)