JUNK DOUGHNUTS INC v. DEPARTMENT OF CONSUMER AFFAIRS OF CITY OF NEW YORK (2008)

Order, Supreme Court, New York County (Eileen A. Rakower, J.), entered March 16, 2007, which denied defendant's motion to dismiss the complaint, unanimously reversed, on the law, without costs, and the motion granted.   The Clerk is directed to enter judgment in favor of defendant dismissing the complaint.

Plaintiff seeks a declaratory judgment setting aside as unconstitutional the New York City statute governing the licensing of dealers in second-hand articles (Administrative Code of the City of N.Y., title 20, chapter 2, subchapter 11).   After plaintiff received a Notice of Violation (NOV) from defendant alleging that it was operating as an unlicensed second-hand dealer in violation of Administrative Code § 20-265 and failed to appear for a scheduled hearing on the NOV, defendant issued a default order finding plaintiff guilty of the violation.   Plaintiff moved unsuccessfully to vacate the default.   It then commenced a CPLR article 78 proceeding to challenge defendant's determination to deny its motion. In the petition, plaintiff stated that it was not submitting the constitutionality of the statute to the court but arguing that the constitutional infirmity of a statute constituted a meritorious defense in the administrative proceeding.   Because the constitutional challenges plaintiff raises in the instant action arose out of the same transaction from which his article 78 claims arose, and plaintiff could have raised them in the article 78 proceeding, the constitutional challenges are barred by the doctrine of res judicata (see O'Brien v. City of Syracuse, 54 N.Y.2d 353, 357, 445 N.Y.S.2d 687, 429 N.E.2d 1158 [1981] ).

In any event, the statute does not impose unconstitutional restrictions on plaintiff's First Amendment rights but merely requires a license for dealing in second-hand articles (see Matter of Irreplaceable Artifacts v. City of N.Y. Dept. of Consumer Affairs, 22 A.D.3d 410, 411-412, 802 N.Y.S.2d 450 [2005] ).   Nor does it impose an excessive burden on interstate commerce (see Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 25 L.Ed.2d 174 [1970] ) or disadvantage a suspect class or interfere with a fundamental right (see San Antonio Ind. School Dist. v. Rodriguez, 411 U.S. 1, 17, 93 S.Ct. 1278, 36 L.Ed.2d 16 [1973] ).   Plaintiff was not prevented from practicing its chosen profession by the licensing scheme (see New York State Trawlers Assoc. v. Jorling, 16 F.3d 1303, 1311 [2d Cir.1994] ).   The inspection of its property did not violate its Fourth Amendment rights (see Matter of Glenwood TV v. Ratner, 103 A.D.2d 322, 480 N.Y.S.2d 98 [1984], affd. 65 N.Y.2d 642, 491 N.Y.S.2d 620, 481 N.E.2d 252 [1985];  see also Donovan v. Dewey, 452 U.S. 594, 598-599, 101 S.Ct. 2534, 69 L.Ed.2d 262 [1981] ).

We have considered plaintiff's remaining contentions and find them without merit.