"... works of art fall outside the prohibitions of the privacy statute."
The First Department has affirmed a lower court ruling in favor of photographer Arne Svenson, who "surreptitiously" photographed people in their apartments, in the building across from his. The decision is here. The New York Law Journal put it on their front page. Julia Halperin in The Art Newspaper is here. Artnet news is here, and Photo District News here.
It's a straightforward application of the relevant precedents and, as the court notes at the end of the decision, if there is a problem here it's one for the legislature to solve ("Needless to say, as illustrated by the troubling facts here, in these times of heightened threats to privacy posed by new and ever more invasive technologies, we call upon the Legislature to revisit this important issue, as we are constrained to apply the law as it exists").
UPDATE: Some thoughts from Amy Landers at PrawfsBlawg.