Daily Development for Tuesday, February 15, 2005
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
LANDLORD/TENANT; PREMISES; SECURITY: An upscale restaurant lessee may not enjoin landlord from installation of metal detectors for the restaurant’s guests only.
Cipriani Fifth Ave. v. RCPI Landmark Props., 782 N.Y.S.2d 522 (Sup. 2004).
Plaintiff is the owner of the landmark Rainbow Room, at the top of the tallest building in New York’s Rockefeller Center. Plaintiff has a long term lease at $25 million per year and spent millions renovating the premises. Eighty percent of plaintiff’s business is in high end private parties.
Landlord, which of course also operates an office complex, including offices in the tower topped by the Rainbow Room, proposed to install metal detectors as part of a security procedure applicable solely to the plaintiff’s employees and guests. Landlord reasoned that its “normal” security measures included registering every guest upon entrance, but that this process was unworkable when hundreds of party patrons arrived at one time in the evening hours, so it adopted the metal detectors as an alternative course. Rainbow Room patrons and employees apparently arrive through a separate entrance and use an exclusive elevator.
The plaintiff argued that the metal detectors would subject patrons to unreasonable delays, close an entrance to the building, discriminate against Rainbow Room guests and employees and damage its upscale reputation and business. It noted that many of its guest arrive bedecked with jewelry and carrying cell phones, purses and briefcases, and that the process of running them through a metal detector will significantly complicate and delay their entrance, driving those who arrange private parties to seek more accessible venues. It produced testimony of party planners in New York who supported this position.
The court had already granted a temporary restraining order in favor of tenant, but here concluded that the tenant was sufficiently unlikely to prevail on the merits that it would deny a preliminary injunction. It agreed that it was likely that the tenant would suffer irreparable injury from the metal detectors, but it concluded that it was also plausible that the landlord’s interest would suffer significantly if there were an attack that might have been prevented by the detectors, and commented that in “post 9-11 New York,” such devices are a common security measure.
The court cited the lease provision whereby the landlord reserved the right to make changes in the security system in the public portion of the premises, where the metal detectors would be located. This language, it concluded, gave the landlord the necessary rights it required.
Comment 1: The editor has been watching for some time for a case involving a clear dispute between landlord and tenant over intrusive security measures. We all knew that it was coming. At a recent New York Bar CLE meeting, a building security expert for a major downtown tenant indicated that landlords commonly resist, in this case, the tenant’s desires for greater security because of concerns that other tenants will object. But compromises have always been reached. In this case, obviously, both sides were unwilling to compromise at least to the point of spending lots of money on a lawsuit.
Comment 2: It appears from reading the case that the people subjected to the metal detector would not be mingling with any guests of the building other than Rainbow Room patrons. Thus the court might easily have concluded that the right to install security in “public areas” should be less broad when the sole purpose is to protect only the patrons of a tenant who does not want the protection.
Comment 3: One argument that the landlord made was that it might be subjected to liability by Rainbow Room patrons who might be injured in an attack that the metal detectors might have prevented. At the time of its original position, there had been a trial court decision refusing summary judgment to the defendant landlord of the Empire State Building arising from an incident where a guest carried a gun onto an upper level observation area and randomly shot a number of persons before committing suicide. But at the time of the instant decision, that trial court decision had been reversed, with the appeals court finding that there was no duty for the Empire State Building in light of the fact that there had been no prior incidents in the building. (Of course, the Building would not be able in the future to claim “no prior incidents.”) Gross v. Empire State Building Assoc., 773 N.Y.S. 2d 354 (N.Y. App. 2004).
The Rainbow Room also argued that there had been no history of violence in the long history of the restaurant operation there, and the court admitted that patrons of the room “throughout the Rainbow Room’s stellar history, are known for exhibiting only maturity, elegance and grace.” (harrrumph)
Also see Djurkovic v. Goodfellows, Inc., 767 N.Y.S. 2d 388 (2004) (at an early morning “hip hop” club, metal detectors were used, and landlord not unreasonable in failing to detect a box cutter smuggled in by a patron and later used in an attack in the club.)
Comment 4: One would think that the issue of liability could be resolved with insurance and indemnification. Presumably, the Rockefeller Center landlord was more concerned about the impact on the image of the entire premises that might result from a terrorist attack in the Rainbow Room. Still, if the landlord does not have the same concerns for its millions of other visitors, why single out the party patrons at the Room? Certainly no one could argue that the registration procedures used in the rest of the building are really likely to deter determined terrorists from carrying in undetected weapons.
The landlord’s answer, presumably, is, simply: “It’s my call - it’s in my contract.” Is it?
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