This appeal requires us to decide whether a state’s regulation of residential real estate solicitations by licensed real estate salespersons violates their free speech rights under the First Amendment. Defendant-Appellant Alexander Treadwell, New York’s Secretary of State, appeals from the June 29, 2001, judgment of the United States District Court for the Eastern District of New York (Thomas C. Platt, District Judge), granting summary judgment to Plaintiffs-Appellees Patricia Anderson, Michael A. Hosein, and Stephen E. Parker, real estate sales licensees, who challenged the constitutionality of N.Y. Real Prop. Law § 442-h(3) (McKinney 2001) on its face and as applied, and regulations promulgated under the statute. The District Court ruled unconstitutional subsection 442-h(3) and the regulations establishing “cease-and-desist zones” in which homeowners can elect not to receive at-home real estate solicitations. Judge Platt concluded that the regulatory scheme lacked a “reasonable fit” between the State’s alleged interest in homeowner privacy and the means chosen to serve that
Background
New York Human Rights Law § 296(3-b) outlaws “blockbusting”—the practice of soliciting real estate sales and listings by representing that a change in the racial, ethnic, or religious character of a block, neighborhood, or area is underway.
1
As we have previously recognized, “[i]n its most systematic and crudest form, blockbusting entails the ‘churning’ of a local real estate market, a practice in which real estate brokers engage in frenzied solicitation practices that prey upon the racial and ethnic fears of persons residing in transitional neighborhoods as a means for increasing the volume of residential real estate transactions. While realtors gain the benefit of the commissions generated by the increase in sales, homeowners and communities suffer the detriment of declining property values and neighborhood instability brought on by panic selling, the fanning of racial tensions and promoting of ethnic stereotypes.”
New York State Association of Realtors, Inc. v. Shaffer,
In 1989, in an effort to enforce its ban on blockbusting, the New York State Legislature enacted Real Property Law § 442-h. As enacted, subsection 442—h(2) allows the Secretary of State to find, after public hearing and investigation, that a defined geographic area is subject to blockbusting, and to adopt a “nonsolicitation order” forbidding all solicitations of residential real estate listings or sales from any homeowner within that zone. Subsection 442-h(3) authorizes the Secretary, upon finding a pattern of intense and repeated solicitations within a defined geographic area, to establish “cease-and-desist zones,” within which real estate licensees 2 are forbidden from directing in-home solicitations to homeowners who have registered in advance with the Secretary of State their wish not to receive such solicitations.
In 1991, the New York State Association of Realtors challenged the nonsolicitation orders on First Amendment grounds, and this Court, applying the test for commercial speech, ruled the nonsolicitation regulation promulgated pursuant to .subsection 442-h(2) invalid because the Secretary had failed to provide direct and concrete evidence of the harm that was alleged to justify the restriction.
See NYSAR,
Under subsection 442-h(3), 3 the Secretary can create cease-and-desist zones in those areas where he determines that “owners of residential real estate property ... are subject to intense and repeated solicitations by real estate brokers ... to place their property for sale.” In these zones, real estate licensees are prohibited from soliciting a listing from any owner who has filed a statement with the Secretary of State expressing the wish not to be solicited, and whose name appears on the cease-and-desist list. A rule establishing such a zone is effective for five years, after which the Secretary can re-adopt the rule or it will expire.
Current regulations promulgated pursuant to subsection 442-h(3) establish five cease-and-desist zones, and delineate their boundaries. N.Y. Comp.Codes R. & Regs, tit. 19, § 175.17(c)(2) (2001). The regulations prohibit a real estate licensee from “sohcitfing] the sale, lease or the listing for sale or lease of residential property” from an owner in the cease-and-desist zone who has signed onto the cease-and-desist list.
Id.
§ 175.17(c)(1). “Solicitation” is defined as “an attempt to purchase or rent or an attempt to obtain a listing of property for sale, for rent or for purchase,”
4
and the solicitation ban extends to “use of the telephone, mails, delivery services, personal contact or otherwise causing any solicitation, oral or written,” to be left for the owner or anyone else at the owner’s home address.
Id.
§ 175.17(d)(1). The solicitation ban does not cover classified advertising in non-real estate publications, advertisements placed in public view, or radio or television advertisements.
Id.
§ 175.17(d)(2). The regulations define res
Currently, approximately 20,000 homeowners are on the cease-and-desist list, with more than 14,000 in Queens County. The Secretary determines whether any particular communication is an unlawful solicitation by investigating the content of the communication and the intent of the licensee in sending the communication. The regulation has been applied broadly to prohibit most communications by licensees to residents located at homes on the cease- and-desist list, and licensees have been found to have violated the regulations by distributing business cards, or having promotional advertisements in mass distributed coupon packs that arrive at homes on the cease-and-desist list.
The Plaintiffs are real estate professionals licensed by the Department of State, offering services in New York, including areas that have been designated cease- and-desist zones by the Defendant. They contend that, in order to obtain real estate listings, they rely upon direct, in-home solicitations, including in-home visits, telephone calls, and literature delivered directly to homeowners. Plaintiff Parker brings the suit as a sales agent reasonably fearing prosecution and risking sanction for violation of subsection 442-h(3). He alleges that he has had particular difficulty developing his business due to this restriction. The Plaintiffs allege that the solicitation of listings is critical to the success of a real estate licensee, and that there is no cost-effective alternative to communicating truthful, non-deceptive information about the real estate market, the licensee, the licensee’s company, and the nature of their services.
Plaintiffs Hosein and Anderson were charged by the Defendant with a disciplinary violation due to Hosein’s mailing a flier to an addressee on the cease-and-desist list for Queens County. The flier introduced Hosein to potential clients, and detailed some of the services provided by his company, Coldwell Banker Halmike Realty. The flier concluded with the following sentence, which the Secretary of State deemed to be a solicitation for a listing: “If you have considered selling or buying a home now or in the near future, or simply want to find out what your home is worth in today’s market, don’t hesitate to call.” Hosein and Anderson pled no contest to the charge of violating section 175.17 by soliciting a listing for the sale of residential property, and entered into a consent order with the Department of State, pursuant to which each paid a $300 fine.
The Plaintiffs commenced this action pursuant to the Constitution and 42 U.S.C. § 1983 in the United States District Court for the Eastern District of New York in February 1999. On cross-motions for summary judgment, the District Court granted the Plaintiffs’ motion for summary judgment, concluding that subsection 442-h(3) and the regulations promulgated thereunder were unconstitutional. The District Court applied the test for content-based regulations of speech,
see United States v. Playboy Entertainment Group, Inc.,
Discussion
I. Level of First Amendment Protection
One important determinant of the degree of protection afforded by the First Amendment is whether the activity sought to be regulated constitutes commercial or noncommercial speech.
Bolger v. Youngs Drug Products Corp.,
The Plaintiffs acknowledge that their communications include “truthful, non-deceptive information about themselves, the real estate market, the nature of their services, and those of their company.” Brief for Appellees at 22. They claim that the regulations prevent them from providing “invaluable information regarding market conditions, financing and refinancing alternatives, and purchase/sale opportunities which would not otherwise come to the attention of area residents, their families, neighbors and friends.”
Id.
at 22-23. In making the “common-sense” distinction between commercial and noncommercial speech,
Bolger,
Somewhat side-stepping the commercial speech category, the Plaintiffs contend, in agreement with the District Court, that because the statute and regulation target only real estate solicitations, their constitutionality should be evaluated under the rigorous test applicable to content-based regulations of speech. Although some members of the Supreme Court have questioned whether the
Central Hudson
analysis should be applied in particular commercial speech cases,
see Greater New Orleans Broadcasting Association, Inc. v. United States,
II. The Central Hudson Test
Central Hudson
sets forth a four-part framework for considering whether com
A. Substantial State Interest
In this case, the Secretary does not dispute the District Court’s conclusion that the prohibited solicitations contain speech that is lawful and not misleading. To meet the second step of the analysis, the Secretary identifies two governmental interests promoted by subsection 442-h(3): (1) the State’s interest in protecting neighborhoods from blockbusting, and (2) the State’s interest in protecting the privacy of homeowners from harassing in-home real estate solicitations. 5 Because the State’s regulatory scheme is sustainable solely on the homeowners’ privacy interest, we need not consider the interest in avoiding blockbusting.
The homeowners’ privacy interest is “substantial” within the meaning of
Central Hudson.
The Supreme Court has declared that protecting the “well-being, tranquility, and privacy of the home is certainly of the highest order in a free and civilized society.”
Florida Bar v. Went For It, Inc.,
B. “Reasonable Fit”
The third and fourth steps coalesce to require “a reasonable fit between the legislature’s ends and the means chosen to accomplish those ends.”
Lorillard Tobacco,
The record adequately demonstrates that the harm to homeowners’ privacy from real estate solicitations is real, and that the cease-and-desist zones advance that interest directly and to a material degree. The popularity of the program, statements at the public hearings in support of the cease-and-desist zones, and complaints of violations of the registry all support the contention that homeowners feel harassed by the amount and the intensity of the solicitations, and that the cease- and-desist zones have alleviated that harm. Although a prohibition that makes only a minute contribution to the advancement of the state interest is not considered to have advanced the interest “to a material degree,”
see Edenfield,
As to reasonable fit, the regulation can hardly be accused of being “more extensive than necessary”; it is precisely coextensive with those who are experiencing the particular harm that it is designed to alleviate. This is the kind of resident-activated restriction that was endorsed by the Supreme Court in
Rowan v. United States Post Office Department,
The District Court, however, concluded that because the regulation covered only real estate solicitations, it was not a reasonable fit with the interest in homeowners’ privacy. The Court deemed the regulation fatally underinclusive for not proscribing solicitation by other categories of solicitors. However, in the commercial speech context, the Supreme Court has made clear that underinclusiveness will not necessarily defeat a claim that a state interest has been materially advanced,
see Posadas,
In
Florida Bar,
for example, where the Florida Bar asserted substantial interests in protecting the privacy of victims against intrusive contact by lawyers and in protecting the reputation of Florida lawyers,
see
Supreme Court decisions that have invalidated commercial speech restrictions for lack of a reasonable “fit” reflect concerns not implicated by the cease-and-desist zones. In
Rubin v. Coors Brewing Co.,
In distinguishing between real estate solicitation and other kinds of commercial solicitation, the challenged scheme is more analogous to
Metromedia
than to
Discovery Network.
In
Metromedia^
the Court found the distinction between onsite and offsite commercial advertising on the same property justifiable, although the two might be equally distracting and unattractive, because “the city may believe that offsite advertising ... presents a more acute problem than does onsite advertising.”
To the extent that some commercial speech restrictions are vulnerable out of concerns about paternalism, 6 the challenged restriction entirely avoids such concerns because it applies only where homeowners elect to seek its protection.
Construing the evidence in the light most favorable to the Plaintiffs, we conclude that there is no genuine issue of material fact. The Secretary has produced evidence of harassing residential real estate solicitations, and the only issue raised by the Plaintiffs is whether this record is sufficient to sustain the regulation. We consider the record sufficient, and conclude that on their face subsection 442-h(3) and the regulations promulgated pursuant to that statute do not violate the First Amendment rights of the Plaintiffs.
The statute also does not violate the Equal Protection Clause. “Insofar as the [statute] does not violate the First Amendment, its definitions and distinctions need only be rationally related to legitimate governmental interests.”
General Media Communications, Inc. v. Co
Conclusion
Accordingly, the statute on its face and as applied is constitutional, and the regulations promulgated thereunder do not violate the First Amendment rights of the Plaintiffs. The judgment of the District Court is therefore reversed, and the case is remanded with directions to enter judgment for the Secretary.
Notes
. N.Y. Exec. Law § 296(3-b) (McKinney 2001) states:
It shall be an unlawful discriminatory practice for any real estate broker, ... for the purpose of inducing a real estate transaction ... to represent that a change has occurred or will or may occur in the composition with respect to race, creed, color, national origin, sex, disability, marital status, or familial status of the owners or occupants in the block, neighborhood or area in which the real property is located, and to represent, directly or indirectly, that this change will or may result in undesirable consequences in the block, neighborhood or area in which the real property is located....
. The prohibition extends not only to real estate brokers and salespersons licensed by the Department of State, referred to collectively as “real estate licensees,” but also to real estate speculators, who are "regularly engaged in the trade or business of buying and selling real estate.” N.Y. Real Prop. Law § 442-h(3) (McKinney 2001).
. N.Y. Real Prop. Law § 442-h(3)(a) (McKinney 2001) provides:
If the secretary of state determines that some owners of residential real property within a defined geographic area are subject to intense and repeated solicitation by real estate brokers and salespersons to place their property for sale with such real estate brokers or salespersons, or are subject to intense and repeated solicitation by other persons regularly engaged in the trade or business of buying and selling real estate to sell their real estate, the secretary of state may adopt a rule establishing a cease and desist zone, which zone shall be bounded or otherwise specifically defined in the rule. After the secretary of state has established a cease and desist zone, the owners of residential real property located within the zone may file an owner's statement with the secretary of state expressing their wish not to be solicited by real estate brokers, salespersons or other persons regularly engaged in the trade or business of buying and selling real estate. The form and content of the statement shall be prescribed by the secretary of state. After a cease and desist zone has been established by the secretary of state, no real estate broker, salesperson or other person regularly engaged in the trade or business of buying and selling real estate shall solicit a listing from any owner who has filed a statement with the secretary of state if such owner's name appears on the current cease and desist list prepared by the secretary of state. The prohibition on solicitation shall apply to direct forms of solicitation such as the use of the telephone, the mail, personal contact and other forms of direct solicitation as may be specified by the secretary of state.
. The two uses of the word “purchase'' in the definition of "solicitation” are unclear. The first use, covering "an attempt to purchase,” apparently refers to a speculator's attempt to purchase a homeowner’s home for resale. The second use, covering "an attempt to obtain a listing of property for . .. purchase,” is less clear; normally a "listing” refers to a property offered for sale. We need not pursue this aspect of the definition because none of the parties has attached any significance to the definition of "solicitation” or mentioned the uncertainty as to the meaning of "purchase.”
. The Plaintiffs complain that the Secretary has belatedly sought to rely on privacy as the asserted state interest, and that privacy is not mentioned in the statute, regulation, or legislative findings. However, the Secretary need not rely on the justifications offered by the State when the statute was enacted, since any insufficiency in the original motivation "does not diminish other interests that the restriction may now serve.”
See Bolger,
. See, e.g., Western States Medical Center,
- U.S. at -,
