Motion to Dismiss or Affirm — Frohman Holland v. Hogan, District Attorney

Supreme Court brief1968

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In‘ | NOV 101967 -

a 8 Court of the Buited] Spatesers cm

‘< OCTOBER TERM, a

_ No. 653

_FROHMAN HOLLAND, IRVING HOLLAND, HARVEY .

MILLER, ROBERT. SAUNDERS, BERT GILBERT, on their

ots ME Sand 0h NORRE <f O Shne peens seanonte esol,

_ Plaintiffs-Appellants, .

"RICHMOND KOTCHER, NORTON KOTCHER,

~ DAVID GIMPEL and JACK SACKS,

5 oe 7 Inttervenor-Plaintiffs-A ppellants; s

ee W.’ CAMMAROSANO and EDWARD BRENNAN

nal Gar officers and — of the Borden Company,

Intervenor-Plaintiffs,

fe \

FRANK _* HOGAN, District Attorney and SAMUEL YASGUR, 4,

_ Assistant, District Aitorm and each ‘and every Assistant District

-Atto - New York ty, and SAMUEL ADLER,

Defendants-Appellees,

QUIS J. LEFKOWITZ, as Attorney General.

“of the State of New York; ;

‘Intervenor-Defendant-Appeliee.

On APPEAL FROM THE UnrtTep STATES Distaict Court.

/ | FoR THE SOUTHERN ‘District oF New nes |

' Ste .

aor TO DISMISS OR AFFIRM By 4 RNEY

GENERAL OF THE STATE OF NEW YORK

Louts J. LEFKowI!1z..

poe Attorney General of - the

renaras Hes = ates State of New York . |

‘hee _ Intervenor-Appellee pro se

| Pairs 80 Centre Street

ee ace ae New York, New York 10013

-Samuet A? HirsHowrtz ~

First Assistant earned General

Brenpa SOLOFF . .

Assistant Attorney . General.

of.Counsel- ©

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: _ * VDABLE OF CONTENTS: |

‘ | PAGE

. Opinion Below .:....:......... or eS Eee UP

. : " >. F ’ ne -e * <

Jurisdiction ghee cdheadc cokegeencedy vegnapeus settee

* Statute NS ee ena de, eal Senos

Questions Presented . se svevssieceeces TU cnet ni wae

Statement fetreetehegtesertneegeetaeemeescraston 5

. eC 20. 20 '

IThere i is no sabetestial basis for disiienaing the’

- disposition by the District Court abstaining

from ss the merits or r appellants’ claim . oa

‘ 1—The instant dase does not BRR a justiciable

controversy within thé. jurisdiction of this Court 9

I1I—The appeal fails to’ raise a substantial federal .

— question ...... 6.0. eee eee eee eng naetecsnes eee ~ 12.

Cases.

Baggett v. Bullitt, 37 U. PR aiiccty cute @

Beilan v. Board of Public. Education, 357 v. Ss: 399.. .13, 14

Caristo Constructiod Corp. v. Rubin, 15 A. D. 2d ae

(2d Dept.), aff'd 10 N. Y. 24.588 2.0.02... 008 15>.

Gardner v. Broderick, 20 N. Y. 2d 227; 229 N. E. 2d

184, app. pending No. 635, Oct. T. 1967 : 6,7, 8,9, 12, 14

Garrity v. New Jersey, 385 U. S. 498 ........... 5, 10,14.

George Campbell Painting Co. v. Reid, 20 N. Y.-2d

- 370, 229 N. E: 2d 602, app.. pending No. 673,

Oct. Bs BPE AS svis sewiice gnats ue Feeseee enee;

In re Gibraltar Amusements Ltd., 291 F. 2d 22 a earags

. Cir.), cert. den, 368 U..S. WEEE cs dade kcnsesiae’ +a. *: !

‘Joint Anti-Fascist' Refugee Coitimittee v. McGrath, . |

(341 U.S, 122 . jin as pre ae cidns ik aoe oN nee ee 11

oe Lagow v.. United States, 159 F, 2d 245 (2d. Cir.) a

Lerne opr Mepmereatle eo |

_ MeGowan v, Maryland, 366 US. 420 g......e- 10°

% McNeese’ v. Deaod of Education, 372 _U. "8. 668 .... “Ss |

_ Monroe v. Pape, 365 U, S..167 .........-. Aen |

Nélson v. County of Los Angeles, 362 U. 8.1 ......13, a

. Noble » C.LR., 368 F. 2d:439. (9th Cir.) ....... co

. Perkins v. Lukens Steel Co., 810 U. 8.118 ........5. 11

Poe v. Ullman, 367 U.S. 497 Neb ev aiAwaeus errr 10

Slochower v. Board of Higher Bducation, 350 U. Ss.

SME encase gee Bar cases siccens ons BA 8:

Spevack Vv. Klein, 385 U. S. 511 cece an wauant 1.5, 8, 14°

Stapleton v. Mitchell, 60 F. ies 51 (D. ‘Kan.). Laie Ss

Thorpe v. Housing Authority, 386 U. S. ee Le

#2. ileston v. Ullman, 318 U.'S. 44 ......5...00eceeees 10 Be

} Uniformed Sanitation.Men et al. v. Commissioner bog capes

. Sanitation, —— F. 2d —— (2d Cir. Sept. 20 roe ;

ra Ohl 1967), Sl: Sh.. Op: p. me nee. | gts oe

+ United: Public Worker v. Mitchell, 330 8 Bas ea

| United States v. Raines,“362 VU. 8. aa. 62 vee eeeeeees - 10 Hg ~

A er i ; — PAGE

United States v. White, 344 U. Sp 694 .....% siete u

United States ex rel. Laino.v. Warden, 246 Supp. - o - iz

"72. (SD.N.Y.), aff'd 355 F. 24 208 (2d Cir.) ..12,18,14 22

TABLE OF CONTENTS’*~~ siti

ees eames a 8 pore ea

- Matter of Zara Contracting Co. Inc., 45 Misc. 2d 497

a Ct. Albany ©o.), aff’d 23 A. D. 2d 718 (3d

— ), Ww. to app. den. 16.N, Y. _ ae: ree .

: > Srarurss

28 U.S.C.: ° : :

| Nene Sere ensayo ene

§ 2284 eT T TT Serer eee hl ae

41 C.F.R. §1-1, 317 (1965) aT Tee Réel caeGs eheb A 13

New York Agriculture and Markets Law § 257 . “ a &

Ne ew York Executive Law § 71 . eae Coie Wess 4.

New York General ‘Municipal Law:

| ee See ey hn er 2 to

‘ § 108-d ei checa eh Pa durk dicueée ee ee agape 13

| New York Public ‘Authorities Law:

EE ieee Oras eed his owed aes soon vee a0 7

i a rey, ee Re ee 3

New York State Finance Law §139-b ...:.0....:.. 8

w York City Charter -§ 1123 eeiionk: i ekes

pan ork City Health Code, Art. 3, § 111 05 ; se oe 10

Rule 16, Revised Rules of Supreme war of aS 1,2

2 _ MISCELLANEODS |

N. - State taneiaiins Annual (1959), Memorandum :

_ of the Governor, P. “431 teeeyreeees ere ee

‘ en oo Be e i | a? ‘

IN THE

Perm art of i Rath es

OCT OBER TERM, 1967

No. 653

+75

-ROHMAN HOLLAND, IRVING HOLLAND, HARVEY

MILLER, ROBERT SAUNDERS, BERT GILBERT, on their

_ own behalf and on behalf of all! other persons similarly situated,

Plaintiffs-A ppellants, |

RICHMOND KOTCHER, NORTON KOTCHER, |

- DAVID GIMPEL and JACK SACKS,

; , Tg hb Intervenor-Plaintiffs-A ppellants,

MICHAEL W. CAMMAROSANO and EDWARD BRENNAN

_ and all other gifficers and. employees of the Borden Company, .

RAG sae te oar

“RANK S. HOGAN, District Won y SAMUEL YASGUR,

Assistant District Attorn + Coan each and every Assistant District ,

—— of New York County, and- SAMUEL ADLER, — -

: ae _ Defendants-Appellees,

LOUIS J. LEF KOWITZ, as peer General

_ ,of the State of ‘New York, ~ :

-Intervenor-Defendant-Apjelle,

On APPEAL FROM THE Unirep States District Court

FOR THE SOUTHERN District oF New York

IOTION TO DISMISS OR AFFIRM BY ATTORNEY

“GENERAL OF THE STATE OF NEW YORK

Intervenor-appellee, Louis J.. Lefkowitz, Attorney Gen-

ral of the State of New York, moves pursuant to Rule 16

? the Revised Rules of the Supreme Court of the United

“2. |

= ‘Wakis that the lad of the: Unit States District

Court for the Southern Distriét of Ne Em be efirmed

or, in the — that this appeal be

Opinion Below ce

‘The opinion of the Court below is not am aero It

_ is reproduced as ——_ * to sppellants. ety

statement.

Jurisdiction

| higgdienta: invoke the jurisdiction of this. Court under

' 28 U.S.C. § 1253. “8

Statute Involved

— York State General ae Lew, 6 103-b (Ap-

: pellants’ Aypees ahs

~ Questions Presented

1. Did the District Court improperly _abstain-trom’ de-—

'_ciding the constitutional question presented in view of the

_ patent necessity for State construetion of the statute and

appellants’ insistence that the sanction of the statute: was

not available because’ State authorities did not coniply with ee

_ statutel lis , aoe

2. Does the instant aie present a. justiciable contro-.

% versy within the ‘jurisdiction | of: this Court?

3 Does the questjon of the ‘eonstitutionality of the .

statute raise a substantial federal question réquiring’a full

hearing before this spats

o-~——

Statement

3 Appellants appeal diréetly from an order of a three-

’ judge statutory court ‘of the United States District Court .

for the’ Southern District of New York abstaining ‘from . :

_ deciding whether or not New York General Municipal Law .

- . §108-b is consitutional. That statute provides in substance

» that, when a person called-before a Grand Jury to testify

*- concerning any transaction or contract had with the State

or any of its: political subdivisions. ‘‘refuses to sign a

waiver of immunity against subsequent criminal prosecu-

tion or to answer any relevant question -concerning such

transaction or contract’’, he and any corporation. of which

, he is a director or officer shall be ‘disqualified from there-

after selling to or submitting bids to or receiving awards

_ from or entering into any contracts with any municipal

corporation or fire district, or figeno any public department,

. agency or official thereof’: ... for a. period of five years

+ after such refusal or until a disqualifeation shall _be re--

moved . Ded enn

_ | __In thei agains the appellants allegdd that each is

an Officer of a-named milk dealer ‘‘which engages, or may

engage in any transaction or has or may obtain. a contract

or award or has submitted a bid for milk or dairy goods,

work or services with the State of New York, any munici-

pal corporation or fire district therein; any public authority

therein or any public oo ry. —— there- j

of’? (Complt. ¢ 2). ss

~ Each appellant alleged: ‘that he was called: < the Dis- ~

trict Attorney of New York County before the G J ary, }

that he refused to sign a waiver of immunity as ed

_ in the statute sad that, in consequence, the District 1 —

* Although not ; diciy involved 3 in the instant case, New York

Public Authorities Law § 2602 and State Finance Law § 138b

~ contain ‘similar provisions. oe -

4 -

ney was planning to send or had sent “‘a notice. pursuant _

to the applicable statutes to the Superintendent of Public

Works in the State of New York of the. appropriate de-

partments, agencies’ and. officials of the state, political

: subdivisions thereof or public authorities with whom plain- -

tiffs by the corporations and firms of, which they are offi-

‘cers or directors, are kpown to have contracts’? (Complt. . .

44) and that, in fact,*the “City’s Purchase Director has

“refused to recognize bids submitted by Queensboro Farm.

Products, Inc.”? (Complt. 14-2). Appellants did not-al-~

lege that any action-‘had been taken or was threatened |

| — them as gels tg any action had been

taken pursuant to ‘applicable statutes. Indeed, they .

| - ‘alleged,\ as a first cause of action, that the rejection of -

the. bids was not authorized by the applicable statutes

( Complt. q 14A).

Appellants, nevertheless, asserted that the statutes were

unconstitutional under the Fifth and Fourteenth: Amend-

if ‘ments to the United States Constitution (Complt. 418).

Because of this assertion the Attorney General, pursuant

to 28 U.S.C. § 2284 and New York Executive Law §71,

intervened asaparty defendant. ° .

Milk contracts are awarded by the Semnituent of Pur-

chase on a month to month basis (id. at 41), and while

’ the defendant Commissioner of Parchase on March 29, _

* 1967 did disregard low bids by Queensboro Farm Products -

and Weissglass Golf Seal Dairy . Corp. on three items, -

_ those two corporations were not declared to be disqualified

.. from doing business with the City of New York. In fact,

they were invited by the City to submit bids on. the next

month’s milk contracts (td. at 40-41).

“The City of New York has moved to set up procedures

' whereby the disqualification provisions of §103-b of the .

General Municipal’ Law will not operate automatically

.with respect to City contracts. The City informed the Dis;

triet Court tat none of the persons or seas listed

5 .

in the notices of refusal which had been recéived as of -the

date the procedure was established was to be’ disqualified

_ from receiving City contracts for five years automatically

- upon’ receipt of such notice of refusal (#d. at 48). All such -

persons listed would be accorded a hearing and given an

. opportunity to explain the refusal to waive immunity or

to answer & question before the Grand ‘Jury investigating

public contracts. In the event that any such persons or

- corporations were low bidders of a City contract, a meeting

of the Board of Responsibility would be convened to‘ ‘pass.

upon the responsibility of the bidder. The Board of Re-

. sponsibility consists of the Comptroller, the Corporation

Counsel and the head of the agenéy? ‘making the award or

- their authorized representatiygs (id..at 47)*

This proceeding was initiated. by appellants suiitg in.

their individual capacities. Their corporations were not

joined. as parties plaintiff.. However, at no time were any

' of the appellants licensed to engage in the ‘milk business, .

norie of- them ‘personally conducted. such a business and’

none of them had any milk contract with the City | or State

of New York (id. at 43-44). :

' The three-judge Court abstained from assuming juris-

dicetion and did not pass on the merits on the constitu-

tional questions presented. The Court, after ‘reviewing

the facts in the complaint and ‘the cdiitentions of the

- parties, concluded that ‘‘the uncertain and shifting factual _

and legal background of the présenf action requires us

to abstain from passing judgment on the merits of plain-

tiffs’ motions’? (id. at 54), finding that this is ‘‘a classic

ease for invoking the doctrine . . .’’: (id. at 58). It con-

cluded that recent. cases particularly Spevack v. Klein,

385 U. S. 511 and Garrity v. State of New Jersey, 385 U. S..

493, had raised ,significant questions with respect to the

constitutionality. of §103-b. The Court viewed the issue

as one of competing interests between the doctrine of self-

incrimination and the ‘‘demonstrated need to protect the

yams fise against theft ee collusive bidding on pub-

Se,

lic contracts and. the’ manifest desirability of awarding

‘ public contracts only to those possessing certain minimal

.- qualifications of: moral worth and responsibility. . ”?

. " (id. at 59-60). The Court held that while significant state.

policies could not by themselves validate the means chosen

to effectuate those policies, it was necessary for. the Court

to know how the statutes in question wére to be construed ed

(id. at 60).. The Court then held that in view of the pending.

eases of Gardner v. Broderick and Matter of Campbell v.

Reid, at that time before the New, Nork Court of Appeals,

_ it was not clear whether or not the statutes would. be auto-

matically applied. Moreover Dx: Court pointed out that

a hearing procedure was bei et up by the City of New

York. The-Court also found that there were ample pro-

cedures. in the state courts to test the élaim being raised —

_ (id, at 63-64). See ee

‘The Court apparently Pejected the contention of ap-

a _ pellees that the appellants had no. standing to Taise' the

question since they were suing as individuals but only their

corporations were affected by the disqualification proce-

; dures (id. at 64-65). The Court in sum held:

“Substantial constitutional questions have been dient

’. eoncerning the validity of presently uncertain state

“law; governmental action. based on’ that state law af-

' fecting the plaintiffs here is far from final; ample and

effective means appear tg be available to challenge that.

‘action in the state: courts when it becomes final and

perhaps earlier; and, lastly, the ‘claimed ‘violations of

_ * federal constitutional rights can be raised in the state

| a court proceedings or, if necessary, upon ultimate re-

view by the United States aes Court.’’- 02 at

REASONS FOR GRANTING THE MQTION

| _ TO screamed OR AFFIRM

-* =

Os ae

~ There is no substantial basis for challenging the dis-

_ pomtion by the District Court abstaining from decid-

ing the merits of appellants’ claim. | .

‘Wppel lants claim that the decision of the District Court,

has been rendered inappropriate by the “subsequent deci-

sions of the New York Court of Appeals in Gardner v.

Broderick, 20 N. Y. 2d 227, 229 N. EB. .d 184, appeal pend-

ing No. 635, Oct. T. 1967, and George Campbell Painting

‘Co. v. Reid, 20 N. Y. 2d 370, 229 N. E. 2d°602, appeal

pending No. 673, Oct. T. 1967. Gardner v. Broderick, ss

supra, arising ander: ‘§ 1123 of the New York City Charter,

4 involves the case-of a New. York City, policeman who —

refused to sign a waiver df immunity to testify before

the Grand Jury and.was dismissed after an administrative

. hearing. The Court of Appeals held that it was not un-

“. constitutional to require the waiver of immunity and, to

discharge a public employee who refused to sign such a

waiver.

In George Campbell Painting Co. v. Reid, supra, arising

under Public Authorities Law § 2601, the appellant cor-..

' poration was disqualified from bidding on contracts to be

- awarded by the New York City Housing Authority because

the person who was president of the corporation at the time

certain contracts under investigation by the Grand Ar ury.

had been negotiated-refused' to sign a waiver of immunity ,

when called before the Grand Jury. The Court, relying on -

Gardner v: Broderick, Supra, held the ‘iocenicenea to be ..

valid. The Court said, however, tha’: |

“There may be times when the statute will enenite to

penalize a. corporation which has severed its .connec-

tion with the recalcitrant officer and which has other-

‘wise been cooperative. The legislature has, however,

= |

| 8

nenia this nections and has specified a seeeshine }

_. by which the disqualification-can pe removed act such

- circumstances (Public Authorities Law § 2603). The .

appellants’ exclusive ‘remedy is the ‘peeentare ~ Ss

~ lined in that statu

The. Gardner and Campbell anciahent construe -statutes

which are virtually the same as General Municipal Law

' §103-b. The United. States Court of Appeals for the Sec-

ond Circuit has held that, in view of those two decisions,

there i is no basis for federal abstention on the i issue of dis-

inissal for refusal to sign a waiver of immunity. Uni-

formed Sanitation Men Association, Inc., et al. v. Commis- — -

sioner of Sanitation, et al., —— F. a —— ac Cir.: ‘Sept.

20, 1967), ‘Sl: Sh. Op. p. OL;

In spite of these three decisions, sinsblina was ‘not. - .

proper in the instant case. As the District Court pointed

_ out, got only the legal but the factual situation was.unelear

_(Op{ of the District Ct.; Jurisd, Statement p. 54). While

the Court of Appeals may be read to have construed the.

statutes under attack as operating automatically, the af-

. ° firmance by that Court of the Gardner case indicates that -

te not improper to hold an administrative hearing.

e City has undertaken to hold: such hearings to deter- :

‘mine whether the’ disqualification provisions should be in-

_. volved. Unless « one accepts appellants’ astounding argn-

ment that, even as public contactors, they may-never be

required. to answer questions’ with respect to those con-

‘tracts (See Juris.. Statement, pp. 24-25), then it is ‘clear —

that the nature of any .constitutidnal questions would be

different after a beg oe than before one. See Thorpe v.

Housing ‘Authority, 386'U.-S. 670; Slochower v. Board of

Higher Education, 350 U..S. 551; Spevack v. Klein, 385

_ sU. S. 511. For that reason, the. decision of the District.

Court to abstain was proper. Baggett v. Bullitt, 377 U. S.

~> Furthermore, appellants persist in their claim raised

id ,

before the District Court that the District Attorney im- -

‘

. te

properly applied § 103-b when. he Poenin TD a iced, <

rather than a limited, waiver of immunity and that, in con-.

‘ — the sanction of such statute is.not available. This

eshold question of state law which, if tesolved in -

. rb of appellants, would obviously remove -the occasion

. for any question of the congtitutionality of “§ 103-b since

- any action taken would not be pursuant to the stattrte...

Appellants’ argnment that ‘civil rights claims aré never

' subject to the abstention doctrine is obviously incorrect.

Monroe v. Pape, 365 U. S.°167, relied on by appellants,

_ holds that exhaustion of state- remedies is not required in

civil rights actions, -It does not deal with the’ question of

abstention. TImapposite for the same reason are McNeese

“vy. Board of Education, 372 U..S. 668 and a a

Mitchell, 60 F. Supp,.51 (D. Kan.).

, Appellants’ claim of isteparable ix injury tnds 3 no iy <<

in the record. , The claim thaf ‘‘presumptively’’ the corpo«

rations with which they of associated are precluded from -..

: entering. iato any contract. and that they have lost chances

to bid on ‘‘the multifudes of contracts’’ available must be

considered ' in light of the facts that if such | ‘corporations — |

were low bidders ‘on any of those contracts, such corpora-

tions have had available to them the Board of Responsi- .

bility procedure indicated by the City i in the District Cotrt. -

Moreover, the appellants did not return to the District

‘ Court*after the decisions by the New York Court of Ap-

peals in Campbell and Gardner or make any other puticiet

application available to them.

oe é ; . -§ co e.

a ; “| * ll . : : wie

“The Seaton enae "don. set gripe 0 Ketlable cn ;

troversy within the jurisdiction of this Court.

; . She’ appellants in this case sued As individuals and not

on behalf of the corporations*of which ey are officers. bos

nat alleged that their — ai es ee self. -«

: >:

— ¥

;

'¢

incrimination was violated by thé-threat that corporations |

with which they were associated would be disqualified from ~

obtaining milk contracts if. they did not sign waivers of |

immunity.” It is clear that if appellants “vere to present an

‘aiguable claim that their privilege against self-incrimina-

_tion has been violated, it would be requisite for them to

establish either that improperly obtained testinfony was

used against them in, criminal proceedings or that they, as.

_ individuals, have suffered a civil sanction solely because of:

_ theit invocation of the privilege. In the instant case, can-.

cededly, not one of the’ appellants waived immunity, not-one

Of them testified, and not one of them was indicted as: a

Tesult. of. any such testimony being used against him. Con-

trast Garrity v. N ew Jersey, 385 U. S. 493.

Nor is there. ae arguable claim that they age: suffered> —

the imposition of a sanction ds a result of their claim of -

such privilege. First, none of the appellants, as individu- :

als, or as milk dealers, were’ licensed to sell milk as res

and New York Cit

quired by New styditalth Code, and Matkefs Law, § 257 ca

Ith Code, Article 3, § 11405.- -It is

axiomatic that one who is‘not directly aggrieved by the

operation of the statute may not challenge its: validity in a

federal court. ‘McGowan v. Maryland, 366 .U. S. 420, 429-

_ 30; United Btates v. Raines, 362 U. S. 17, 20-24; Tileston —

‘ vy, Ullman, 318 US. 44. Here the only possible conse-

quencgs of the refusal of. appellants to sign the requested

waivers of immunity are the civil sanctions to the corpora-

tions. Since there are no sanctions, against the. individual

on plaintiffs, it is untenable‘for stich appellants as individuals

_to daim thd standing to challenge the operation of the

statute. Poe v. Ullman, 367- U. 'S: 497, 503-505.

Appellants’ novel claim cto, meet this indispensable - re-

quirement is that ey are substantial stockholders of-the ;

corporate licensees’ and may suffer some consdyuences of

any possible disqualification of those corporate. licensees.

- However, the allegation ¢ of speculatively cries economic

ces

detriment does not justify the action ae the ‘individual

stockholders. Perkins v. Lukens Steel Co., 310 U. S. 113; .

Joint Anti-Fascist Refugee Committee v. McGrath, 341

U.S. 422, 151. Even if each appellant owned all. of .the

stock of the corporation, -by electing to do business as a

corporation he éstablished a separate entity with its own

rights, duties and liabilities. The corporation is neither

_ responsible for its officers’ of stockholders’. individual li- .

abilities, nor is it the beneficiary of their individual rights.

Noble v. C.LR., 368 F. 2d 439, 445 (9th Cir. ); In re .

Gibraltar Amusements Litd., 291 F. 2d 22 aie cert.

den. 368 U. 8. 925; Lagow v. United States, 15 2c 245

(2d Cirs. Appellants? claim that they are virtually un-—

emplogable certainly is not a result of the statute. The.

stitute is directed: only at officers or directors of corpora-

— tions, it does not even apply to stockholders, let alone mere |

unemployed. ’ : :

Peculiarly, the licensed milk dealer ieimastionin were:

-. not made parties in this case. The complaint did not | ge.

that it was a violation ef due process of law to-di ify ~

such corporations fram obtaining city contracts because of -

any officers’ refusal to sign a waiver of immunity. More-

over, appellants still insist that they are not seeking "to

raise any claifn on behalf:-of the corporations. It is obvi-.:

ous, indeed, that the coxporations could not assert a claim

of violation of the privilege against self-incrimination

. since they do not have a privilege-of their own and since

- they cannot assert that privilege on behalf of anyone else.

United States v. White, 344.U. 8. 694. -

The individual. appellants” cannot claim a violation of |

their privilege against self-incrimination by virtue of the

‘ imposition of a sanction on another entity, . thdt is, the

<corporation. They cannot circumvent the fact that any

impact results on the corporation by claiming théWerivative

impact: of that sanction. Any claim of violation of the . -

. . ‘ J

“9

ae. P ; /

P ° A

privilege depends on there being an identity between the

person with the privilege and the person on whom any

penalty is imposed. Absent such ers no veeren

, — be asserted.

dates I a ees

___ The appeal fails to raise a substantial federal question.

Even if, arguéndo;- appellants could assert that their

privilege -against self-incrimination is violated by their

refysal to waive immunity, it is clear that any disqualifica-

tion results only from a-lack of candor on their part..

_ The position of appellants basically, i is that they may never

_ under..any circumstances, in any form, be called upon to

give an account of: themselves with respect to public con-

tracts.- The Second Circuit i in Uniformed Sanitation Men,

et al. v. Commissioner, of Sanitation, supra, has accurately

analyzed the situation :

**It was surely proper for a City official hinted with

' a duty to.do so to investigate charges of misfeasance in

the operation of the Sanitation Department and in

connection with such an investigation to question em-

ployees about their participation in activity which re-

+ flected the possibility of bribery and embezzlement.

Can there be any reasonable doubt that, an employee,

especially one who has been warned of the consequence

_ of his refusal to answer, can be ( and, indeed, should be)

discharged for such refusal!” :

* The District ae itself strongly stated the interest of

the’State (Jurisd. Statement pp. 59-60). The New-York

Court of Appeals in Gardner v. Broderick, supra and Camp-.

bell v.. Reid,’ supra has reached the same conclusion. Sée

also United States ex rel. Laino v. Warden, 246 F. — 72

(S.D.N.Y.), affd 355 F: 2d 208 (2d Cir.).

_ The State ‘has affirmatively dictated that it is of the at

highest. importance that there be no collusive bidding or

nie oy ee

bid rigging in any transactions involving public contracts.

This the State has done by stipulating that in every public

contract proper assurances be incorporated by the private .

contracting: party to that effect (See e.g. General Municipal

Law §103-d). .The New York statute is substantially

identical with federal requirements. Sed 41 C.F.R. § 1-1,

317 (1965) (Federal Procurment Regulations).

In approving Section. 103-b, Governor Rockefeller pointed

out that: ee

‘‘Unlike a private person who may contract with whom —

-he wishes, a public agency usually lets contracts by

public auction and is required to accept the lowest bid.

qualify the bids of persons who are unwilling to dis-

~ « close to a grand jury facts relating to some prior con-_

tract. with the public. Likewise, it would seem ap-

_ propriate that public contracts should provide that the |

__ benefit accruing under them be available only so long

as the beneficiary is willing, when required by a grand

jury to disclose any information he may have as to a.

public contract.’? Memorandum of the Governor, N. Y.

- Stave Lecisuative ANNUAL (1959), p. 431.

‘The provisions here challenged are in no respect arbi-

trary.- They do no-more than seek to ‘insure candor on

_\ the part of public contractors and the protection of the

public from persons ‘or corporations that feel they cannot

be candid in their public dealings. There ‘can be no ques- «

but that public bodies. are entitled to such candor

ey abet a statutory provision. United States ex rel.

‘Ta v. Warden, supra, at 93. This has repeat®dly been

7 held to he the case with public employees. Nelson v. County . Ed

of Los Angeles, 362 U. S. 1; Betilan v. Board, of - Public

Edweation, 357 U. S. 399; Lerner v.. Casey, 357 US. 468;

Sloc v. Board of Higher Education, 350 U. S. 551.

The rationale which requires candor on the part of public

14.

employees applies equally at least to public contractors.

United States ex rel. Laino v. Warden, supra, at 94,

No decision of this Court has undermined the validity

‘of the state procedures for insuring non-collusive bidding -

and honest performance of duties and contracts. As the

_ Second Circuit pointed out, Garrity v. New Jersey is in-

apposite because no testimony was used in a criminal pro-- _

ceeding. See also Gardner v. Broderick, supra. This Court

has already held that testimony obtained from a witness

under threat of loss of emi] yment is inadmissible in. a

criminal proceeding. “There is no basis for finding. +that™

' the ye job (or coritract) loss must be an empty

one. The only way the state can protect itself: against

contractors who will not be frank about their. business

with the state or its — is not to do business with

them. .

Nor can appellants find any support in Spevack \ v..Klein,

385 U. S. 511. Their reliance upon it is overbroad, That

case involved neither a public employee nor public con- |

tractor but a licensed attorney whom the majority appear

to have found had a property right in the license. See

concurring opinion of Mr. Justice Fortas (id. at 519-20). ~

Accordingly it did- not even suggest an overruling of such

casés as Nelson v. Los Angeles, supra; Beilan v. Board

* of Public Education, supra and Slochower v.. Board of

Higher Education, supra. The principle enumerated in or

of United Public Workers v. Mitchell, 330 U. S. 75. It

decided only that the right to exercise the privilege against —

. self-inerimination could not be withheld from the licensed

attorney. _ It did not preclude the requirement. of candor °

the State to any specific information. But the rights and

privileges of licensees of business or ‘professions dealing

with the public are a far cry from the exercise of ‘the

established function of. any governmental body, state or

federal, to protect. itself from the —— of collusive

—

iy ; . ©

_ bidding which have proved a cancer to. the body public -

where tolerated. Accordingly, there is no property right -<.

to a public contract in New York. Matter of Caristo Con-

struction Corp. v. Rubin, 15 A. D. 2d 561 (2d Dept.), aff’d

10.N. Y. 2d 538; Matter of Zara Contracting Co.p Inc., 45- |

Misc. 497 (Sup. Ct. Albany Co.), aff’d 23 A. D. 2d 718. (3rd » ace ie

°Dept.), lv. to app. den. 16 N.Y. 2d 482. The necessity, So

. for candor required by the statute is, of course, far more

a compelling with respect to a public contractor who stands

-in-a special relation to the government. The provision

assailed by appellants is unquestionably an indispensible

safeguard for the public against any venal conspiracy ea ae

defraud the state. eh | a

“

CONCLUSION -

*F or the foregoing reasons the within section to dis- .

miss or affirm should be granted.

‘Dated: N ew York, New York, hla 8, 1967.

Respectfully submitted,

.. Louis J. LEFKowITz 3

Attorney General.of.the

‘State of New York. ,;

Intervenor-Appellee

pro sé. .

O-%

SamuEL A. HirsHow1t1z

- First Assistant Attorney General

BRENDA SoOLOFF _

Assistant Attorney General

' Of Counsel |

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.