The New York Supreme Court upheld the constitutionality of the statute and rendered summary judgment for Manhattan Teleprompter, finding that non-crossover installations constituted a taking for which just compensation is due, but here the law served a legitimate public purpose there is no significant economic impact on expectations of investors, rejecting the theory that physical presence is per se a taking.

The Court held that regardless of whether the action achieves an important public benefit or has only minimal economic impact on the owner, Manhattan Teleprompter's minor but permanent physical occupation of Loretto's property constituted a regulatory taking of property for which just compensation is due under the Fifth and Fourteenth Amendments of the Constitution, reversing the judgment of the lower New York state courts.

Writing for the majority, Justice Marshall argued that Penn Central Transportation Co. v. New York City (1978) held that there is no set formula for finding a taking.

He noted that the Court in Pumpelly v. Green Bay Company (1871) held that a physical presence with the effect of impairing property's usefulness is a taking.

On remand, the New York Court of Appeals upheld the validity of the statutory provisions empowering the Commission on Cable Television to set compensation for the taking at $1.

It would seem the Court's aim was to distinguish a category of per se takings to reduce doctrinal ambiguity following the standard introduced by Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978).