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Anderson v. Treadwell: New York's Antisolicitation Statute Declared Constitutional

A New York federal court has ruled on the constitutionality of the state's antisolicitation law.

In 1989, the New York legislature enacted an antisolicitation law ("Law") designed to protect homeowners from unwanted real estate solicitations. The statute created "cease-and-desist zones" throughout the state which prohibited real estate licensees from soliciting any homeowner who has placed his/her name in a registry ("Registry") for homeowners who do not want to be solicited. Patricia Anderson and Michael Hosein, real estate licensees, were prosecuted under Law by the state for sending flyers to homeowners listed in the Registry. A third licensee, Stephen Parker (collectively, the "Challengers"), alleged that his ability to develop business was impaired by the Law. The Challengers filed a lawsuit seeking a ruling that the Law violated the Challengers' First Amendment speech rights. The state also filed a motion for a ruling that the law was constitutional.

The United States District Court, Eastern District of New York, declared the Law unconstitutional. The court first stated, citing United States v. Playboy Entertainment Group., Inc., 529 U.S. 803 (2000), that any law which is not content neutral, that is, that regulates speech based on its content, must pass a heightened review standard used by the court described as the "strict scrutiny" test. This test requires the state to show that the law is narrowly tailored to serve a substantial governmental interest and is the least restrictive form of regulation available to the government. The court ruled that the Law was not "content neutral," as it only prohibited solicitation by real estate licensees and no other forms of solicitation. Thus, the state was required to demonstrate that the law passed the strict scrutiny test.

Applying the first part of the test, the state argued that the statute protected a homeowner's right to privacy and that such a law was necessary because many homeowners feel "harassed" from unwanted real estate solicitations. The court rejected this argument and ruled that the Law was not narrowly tailored to accomplish this goal. The court concluded that the Law was “underinclusive” and thus inadequate to prevent unwanted solicitation since it did not regulate any other form of solicitation, such as those made by stockbrokers or insurance brokers. Therefore, the Law failed to accomplish its desired objective of protecting homeowner privacy and so failed the first step of the strict scrutiny test, making the Law unconstitutional.

The court next examined the Law to see if it met the second step of the strict scrutiny test, whether the Law was the least restrictive form of regulation available. The court ruled that the Law failed this test as well, since there were content-neutral regulations which could better accomplish the Law's intended objective of guarding homeowner privacy. For example, the court cited both federal and state telemarketing regulations as examples of constitutional regulation of solicitations because they limit the method of the solicitation, rather than limiting solicitation based on content. Since the state failed to show how less restrictive types of regulation would not accomplish the goal of protecting homeowners' privacy, the court ruled the Law unconstitutional.

Anderson v. Treadwell, 99-CV-1038 (E.D.N.Y. June 20, 2001), rev'd, 294 F.3d 453 (2d Cir. 2002), see below to read a summary of this case.

 

New York's Antisolicitation Statute Declared Constitutional

In a case previously summarized in The Letter of the Law, a federal appellate court has reversed a lower court's ruling on the constitutionality of New York's statute regulating real estate solicitations in certain parts of the state. See above to read the earlier summary.

To summarize, the New York legislature enacted in 1989 an antisolicitation law ("Law") designed to protect homeowners from unwanted real estate solicitations. The statute allows the New York's Secretary of State to create "cease-and-desist zones" which prohibit real estate licensees from soliciting homeowners who have placed their names in a registry ("Registry") of homeowners who do not want to be solicited. The Secretary creates these zones when the Secretary has determined that homeowners in these areas are subject to "intense and repeated solicitations by real estate brokers."

Patricia Anderson and Michael Hosein, real estate licensees, were prosecuted under Law by the state for sending flyers to homeowners listed in the Registry. A third licensee, Stephen Parker (collectively, the "Challengers"), alleged that his ability to develop business was impaired by the Law. The trial court ruled that the Law regulated the content of speech by favoring other forms of solicitation over real estate solicitations. Since the Law regulated speech by its content, the court applied a heightened standard of review and found the Law unconstitutional. The State of New York appealed this ruling.

The United States Court of Appeals for the Second Circuit reversed the trial court. The court ruled that the lower court had applied the wrong standard in reaching its decision. The court found that the Law regulated commercial speech, and that the constitutionality of commercial speech is evaluated using the Central Hudson test, not the heightened standard of review used by the trial court. Under Central Hudson, the court must consider four factors: first, (1) whether the commercial speech regulated concerns a lawful activity and is not misleading. If so, the court must go on to consider the remaining factors, and the restriction is constitutional only if it (2) is intended to support an interest claimed by the government that is "substantial"; (3) directly advances the claimed governmental interest; and (4) is not more extensive than necessary to serve the interest claimed by the government. Both parties agreed that real estate solicitations in question here were lawful speech and not misleading, and so the Law passed the first step.

Applying the second step of Central Hudson, the court found that the State's interest in protecting the privacy of homeowners was substantial and so the Law passed the second part of the test. Applying the third step, the court first found that homeowner's suffered a loss of privacy from real estate solicitations, and the Law advanced the legislature's goal of alleviating certain homeowners' loss of privacy by prohibiting real estate solicitations in certain areas to those who requested it. The court found that the Law also passed the final step as well, as the court found that the Law required consumer's to request their name be placed in the Registry. Since the Law passed the Central Hudson test, the court ruled that the law was constitutional and so the trial court was reversed.

Anderson v. Treadwell, 294 F.3d 453 (2d Cir. 2002), cert. denied, 123 S. Ct. 1482 (U.S. 2003).