Holly v. Pennysaver Corp.

OPINION OF THE COURT TlTONE, J. P. Our concern on this appeal is with the construction of subdivision 13 of section 296 of the Executive Law, which provides, in pertinent part, that it is an unlawful discriminatory practice “for any person to discriminate against, boycott or blacklist, or to refuse to buy from, sell to or trade with, any person, because of the race, creed, color, national [571] origin or sex of such person”. We hold that a refusal to distribute a free advertising circular in a predominantly black neighborhood is encompassed within the ambit of this statutory prohibition unless it is established that the exclusion was based upon legitimate business concerns unconnected with racial bigotry. Defendant Pennysaver Corporation publishes a weekly commercial shopping circular, commonly known as the Pennysaver, which contains advertisements placed by local merchants and individuals who wish to buy or sell goods or services. Approximately 250,000 of these circulars are distributed weekly, free of charge, to residents of certain areas in Nassau and Queens Counties. Plaintiffs are residents of a predominantly black neighborhood located in the City of Long Beach, in Nassau County. They commenced this action, seeking damages and injunctive relief on behalf of themselves and other residents of their neighborhood, contending that the defendants, Pennysaver Corporation, its president, and its vice-president, have violated their civil rights under State and Federal law by excluding their neighborhood from the Pennysaver delivery area. The complaint contains two causes of action. In the first,plaintiffs allege that the defendants have engaged in a “commercial boycott and blacklisting” interdicted by subdivision 13 of section 296 of the Executive Law. In the second cause of action, it is alleged that the defendants’ determination to exclude their neighborhood also constitutes a violation of Federal law both as a conspiracy to deny plaintiffs their civil rights (US Code, tit 42, § 1985, subd [3]) and to exclude them from public accommodations (US Code, tit 42, § 2000a). Defendant’s motion to dismiss the complaint for failure to state a cause of action (CPLR 3211, subd [a], par 7) was denied by Special Term upon a finding that the first cause of action, at least, was viable. We affirm. At the outset, we note that our scope of review is narrow. Our inquiry is limited to ascertaining whether the pleading states any cause of action, and not whether there is evidentiary support for the complaint (Guggenheimer v Ginzburg, 43 NY2d 268, 275; Rovello v Orofino Realty Co., [572] 40 NY2d 633, 634; Wayne S. v County of Nassau, Dept. of Social Servs., 83 AD2d 628). The complaint must be liberally construed in the light most favorable to the plaintiffs and all factual allegations must be accepted as true (see, e.g., Morone v Morone, 50 NY2d 481, 485; Guggenheimer v Ginzburg, supra, p 275; Schmidt v Magnetic Head Corp., 97 AD2d 151, 159). Moreover, inasmuch as defendants made one omnibus motion to dismiss addressed to the entire complaint, we must sustain the entire complaint if at least one of the causes of action asserted is legally sufficient (Long Is. Region Nat. Assn. for Advancement of Colored People v Town of North Hempstead, 80 AD2d 826, 827, app withdrawn 53 NY2d 940; Kaplan v Simone Bros. Auto Body, 77 AD2d 863, 864; Quinn v Cannabis Haircutters, 72 AD2d 765, 766; 4 Weinstein-Korn-Miller, NY Civ Prac, par 3211.38). Although one of the objectives behind the enactment of subdivision 13 of section 296 of the Executive Law was to curb the discriminatory business practices of corporations which resulted from the pressures of foreign governments, including the Arab boycott of Jewish businesses and individuals (see General Elec. Co. v New York State Assembly Committee on Govt. Operations, 425 F Supp 909; Matter of Antco Shipping Co. v Sidermar, S.p.A., 417 F Supp 207, affd 553 F2d 93; 1976 Opns Atty Gen 69; Bill Jacket L 1975, ch 662), its broad language prohibiting discrimination in a wide range of commercial activity is not confined to boycotts imposed by foreign countries. In fact, as then Governor Carey observed in his memorandum of approval, the legislation was intended to “affirm * * * that no nation or person is welcome to do business in this state, if that business is accompanied by religious or racial bigotry” (NY Legis Ann, 1975, pp 442, 443; emphasis supplied). We cannot accept defendants’ rather technical argument, based upon general definitions of “trade” and “commerce” contained in dictionaries and legal encyclopedias, that there is no business relationship involved when a publication is distributed free of charge. As a remedial civil rights statute, subdivision 13 of section 296 of the Executive Law must be “construed liberally for the accomplishment of [its] purposes” (Executive Law, § 300; see, also, [573] City of Schenectady v State Div. of Human Rights, 37 NY2d 421, 428). In this context, we must consider the distribution of the Pennysaver as a business practice within the statute’s protective ambit (cf. People v Polar Vent of Amer., 10 Misc 2d 378, affd 4 NY2d 954). It is enough that the defendants’ activity is profit motivated (see United States v Real Estate Bds., 339 US 485, 489-492; People v Kaplan, 8 AD2d 163, 164). It may be, as defendants claim in their affidavits submitted to Special Term, that the decision not to distribute the Pennysaver in plaintiffs’ neighborhood was the result of an objective and legitimate business judgment and not the product of discrimination. But, on a preanswer motion to dismiss which has not been converted into a motion for summary judgment, we are precluded from utilizing such affidavits against the plaintiffs who are entitled to stand on the allegations of their complaint (Guggenheimer v Ginzburg, supra, p 275; Rovello v Orofino Realty Co., supra, pp 635-636; Wayne S. v County of Nassau, Dept. of Social Servs., supra; Keller v Barry, 73 AD2d 611).* For these reasons, the order of Special Term should be affirmed insofar as appealed from, with costs. Footnotes [*] Nonetheless, we note, parenthetically, that plaintiffs’ second cause of action is clearly legally deficient. With respect to the claim of conspiracy pursuant to subdivision (3) of section 1985 of title 42 of the United States Code, the complaint lacks sufficient allegations of a “class-based discriminatory motivation on the part of the alleged private conspiracy” (McNally v Pulitzer Pub. Co., 532 F2d 69, 74, cert den 429 US 855; see Herrmann v Moore, 576 F2d 453,457, cert den 439 US 1003; Dombrowski v Dowling, 459 F2d 190, 196; Hops v New York Tel. Co., 456 F Supp 1090, 1095, affd 603 F2d 213). The provisions of section 2000a of title 42 of the United States Code are similarly inapposite as that statute explicitly concerns itself only with discrimination in places of public accommodation which are specifically enumerated (see Atlanta Motel v United States, 379 US 241, 247-250) and the Federal courts have rejected attempts to expand coverage beyond the statutory language (e.g., Miss Greater N. Y. City Scholarship Pageant v Miss N. Y. State Scholarship Pageant, 526 F Supp 806, 808; Bridges v Pittsburgh Community Broadcasting Corp., 491 F Supp 1330, 1333).