Petition — DeMilia v. New York

Guprame Court, U,

LED

IN THE | i APR 8 1980

Supreme Court of the United States coo. JR, CLERR

Octoser Term, 1979

No. 49-1578

SAMUEL DeMILIA, President of the Patrolmen’s Benevo-

lent Association of the City of New York and all other

Police Officers of the City of New York similarly

situated,

Petitioner,

—against—

THE STATE OF NEW YORK, LOUIS LEFKOWITZ,

Attorney General, HUGH CAREY, Governor of the

State of New York, MAYOR EDWARD KOCH, on

behalf of the City of New York, CHAIRMAN ARVID

ANDERSON, on behalf of the Office of Collective

Bargaining,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE SUPREME COURT OF NEW YORK,

APPELLATE DIVISION, FIRST DEPARTMENT

RicHArRD HARTMAN

Attorney for Petitioner, Samuel DeMilia

100 Church Street, Suite 410

New York, New York 10007

(212) 742-9000

Gary F. Gienn

Of Counsel

Qprnions BELow

JURISDICTION OF THE CouRT

QvuESTION PRESENTED

Statute INVOLVED ...

STATEMENT OF THE CASE

TABLE OF CONTENTS

CERTIORARI SHOULD BE GRANTED FOR THE FOLLOWING

Reasons:

I—The subject Statute is repugnant to the 14th

Amendment of the United States Constitution

CoNncCLUSION a

APPENDICES:

A.

B.

Shelly

US.

Decision of the Court of Appeals of the

State of New York

Opinion of Appellate Division of the State

of New York, First Judicial Department ..._...

. Opinion of the Supreme Court, New York

County

. Section 7 of the New York State Financial

Emergency Act for the City of New York ....

Case Cited

v. Kramer, Mich & MO., 68 S. Ct. 8361, 334

1, 92 L. Ed. 1161 (1948)

ii TABLE OF CONTENTS

PAGE

United States Constitution Cited

Fourteenth Amendment : . 2, 6,7

Statutes Cited

L. 1975, ch. 868, See. 1 .- Sentra 3

subsec. 3 Soi 3

L. 1978, ch. 201, See. 10-40 ........... 3, 4

L. 1978, ch. 201, Sec. 23.3 ... : 2-4, 6

See. 23 4,5

New York State Financial Emergency Act, as

Amended:

See. 7 3

See. 7, subdiv. 3(h) -..~...

28 U.S.C.:

See. 1257 (3) 2

Other Authority Cited

Bill No. 13025 3

IN THE

Supreme Court of the United States

Ocroser Term, 1979

No.

ss

—

SAMUEL DeMILIA, President of the Patrolmen’s Benevo-

lent Association of the City of New York and all other

Police Officers of the City of New York similarly

situated,

Petttioner,

—against—

THE STATE OF NEW YORK, LOUIS LEFKOWITZ,

Attorney General, HUGH CAREY, Governor of the

State of New York, MAYOR EDWARD KOCH, on

behalf of the City of New York, CHAIRMAN ARVID

ANDERSON, on behalf of the Office of Collective

Bargaining,

Respondents.

i

a

Pp PETITION FOR WRIT OF CERTIORARI TO

U THE SUPREME COURT OF NEW YORK,

APPELLATE DIVISION, FIRST DEPARTMENT

2

To the Honorable Justices of the Supreme Courts:

Petitioner, Samuel DeMilia, prays that a writ of cer-

tiorari issue to review the decision of the Court of Ap-

peals of the State of New York entered in this proceed-

ing on January 10, 1980.

Opinions Below

The opinion of the Court of Appeals of the State of

New York, not yet reported, appears in Appendix A an-

nexed hereto. The opinion of the Appellate Division of

the State of New York, First Judicial Department, re-

ported in 421 N.Y.S. 2d 70, appears in appendix B an-

nexed hereto. The opinion of the Supreme Court, New

York County, reported in 96 Mise, 2d 77, 412 N.Y.S. 2d

953, appears in appendix C annexed hereto.

Jurisdiction of the Court

The decree of the Court of Appeals of the State of

New York, was entered on January 8, 1980. This Court’s

jurisdiction is invoked under 28 U.S.C. See. 1257 (3).

Question Presented

Whether Section 23.3, chapter 201 of the Laws of 1978,

is repugnant to the 14th Amendment of the Constitution

of the United States since it places petitioner m a dif-

ferent position than that of any other brother police or-

ganization throughout the State of New York.

os eee,

3

Statute Involved

Chapter 201, Sub Section 23.3, Laws of 1978, Amended

Section 7 of the New York State Financial Emergency

Act for the City of New York, Chapter 868, Laws of 1975,

by adding thereto subsection 3.

Statement of the Case

In 1975, the Legislature of the State of New York,

declared that a financial emergency existed in the City of

New York (L. 1975, Ch. 868§1). Subsequent to the afore-

said declaration of emergency, the Legislature enacted the

New York State Financial Emergency Act for the City of

New York (“F.E.A.”), pursuant to the police and emer-

gency powers of the State Constitution. This followed a

determination that the City of New York was on the

brink on financial bankruptcy threatening the very exist-

ence of the municipal government as an entity and there-

by creating a danger to the safety and welfare of the

citizenry therein.

The Emergency Financial Control Board (“EFCB”),

was the center piece of the FEA. The purpose of the

EFCB was to exercise ultimate supervisory control over

the fiscal affairs of the City, while preserving as far as

possible, traditional aspects of municipal affairs with re-

gard to local programs and expenditures (L. 1975, Ch.

868§1). Other provisions of the F.E.A., inter alia, regu-

lated the investment of funds by pension and retirement

systems for public employees and imposed a freeze upon

all municipal employees.

In 1978, the Legislature declared that the financial

emergency continued to exist within the City of New York

and enacted Bill No. 13025 as Chapter 201 of the Laws

4

of 1978 (L. 1978, Ch. 201§10-40; A.-122-130) which

amended the F.E.A. The amendments, inter alia, con-

tinue the EFCB originally established pursuant to the

FEA while placing other stringent controls and super-

visory mechanisms over the citie’s fiscal policies for the

purpose of enhancing the future marketability of City

obligations, and restoring the credit worthiness of mu-

nicipal securities. Section 23.3 of Chapter 201 makes

New York City’s financial ability to pay as defined in

Financial Emergency Act, as the financial ability of the

City to pay increased wages or fringe benefits without

increasing the level of city taxes existing at the time of

the commencing of the impasse proceeding.

On June 5, 1978, the Petitioners commenced an action

on behalf of himself and all other police officers of the

City of New York similarly situated, for a Declaratory

Judgment that provisions of Chapter 201 inclusive of

Section 23, et seq, thereof, were invalid and unconstitu-

tional and for injunctive relief relating thereto. The ac-

tion was commenced by service of a Summons and Veri-

fied Complaint. An Order to Show Cause was signed by

the Honorable Justice Edward Greenfield on June 5, 1978,

after denving petitioner’s request for a temporary re-

straining order and striking same from plaintiff’s Order

to Show Cause. Petitioner’s prayer for relief requested:

“that an Order be made and entered herein re-

straining and enjoining the defendants from arbi-

trarily and ecapriciously, in violation of the Con-

stitution of the United States, the 14th Amend-

ment thereof ... from effecting the provisions of

Assembly Bill Number 13025 as enacted on the 2nd

day of June, 1978.”

On December 11, 1978, the Honorable Justice Hortense

W. Gabel, Supreme Court, County of New York, denied

5

petitioner’s Complaint for Declaratory Judgment, Motion

for Injunctive Relief and treating defendaut’s motion as

that for Summary Judgment held, inter alia the provisions

of Chapter 201 of the Laws of 1978, inclusive of Section 23

thereof, valid and constitutional in all respects.

On January 9, 1979, Notice of Entry of the aforesaid

final Order and Judgment, was directed by Judge Gabel.

Petitioners served a Notice of Appeal and Pre-Argument

Statement on or about the same date.

All parties presented oral argument before the Appel-

late Division, First Department, on October 4, 1979. The

Appellate Division, First Department unanimously or-

dered that the judgment of Special Term, Part I, Gabel,

J., be

“modified, on the law, to the extent of reversing

so much thereof as denied the defendant’s motion to

dismiss the complaint granted and the complaint

dismissed, without costs and without disbursements,

and without prejudice to any action or processing

as plaintiffs may be advised”.

Petitioners file a motion for leave to appeal, and on

January 8, 1980, the Court of Appeals of the State of

New York denied petitioner’s motion.

6

CERTIORARI SHOULD BE GRANTED FOR THE

FOLLOWING REASONS

I.

The subject Statute is repugnant to the 14th Amend-

ment of the United States Constitution.

The 14th Amendment of the United States Constitution

provides:

All persons born or naturalized in the United States,

and subject to the jurisdiction thereof, are citizens

of the United States and of the State wherein they

reside. No State shall make or enforce any law

which shall abridge the privileges or immunities of

citizens of the United States; nor shall any State

deprive any person of life, liberty, or property, with-

out due process of law; nor deny to any person

within its jurisdiction the equal protection of the

laws.

Section 23.3, Chapter 201 of the laws of 1978 states as

follows:

“For purposes of this subdivision, financial ability

to pay shall mean the financial ability of the city

or covered organization to pay the cost of any in-

crease in wages or fringe benefits without requir-

ing an increase in the level of city taxes existing

at the time of the commencement of a proceeding

under paragraphs (a) [an impasse panel] (ce) [Of-

fice of Collective Bargaining] (d) [all other unions

not covered by Chapter 54 of the New York City

Administrative Code.] .. .”

The above bill was aimed specifically at New York City

Police Officers to the exclusion of other Police Depart-

7

ments in the State. The above subdivision 3(h) of Sec-

tion 7 of the Financial Emergency Act has as its criteria,

the financial ability of the City to pay the cost of any

increase in wages or fringe benefits granted to the New

York City Police Officers. This subdivision makes the

New York City Police Officers unique in their position to

bargain and arbitrate their contract.

This uniqueness adopted by the Legislature has in es-

sence singled out a specific labor organization, to wit: the

PBA, and placed unconstitutional restrictions upon it that

are not “endured” outside New York City.

The equal protection clause of the United States will

be circumvented when the New York City Police union

reaches impasse and is awarded a similar raise as other

unions. The award could be denied because the afore-

mentioned section forbids the raising of any taxes to pay

said award.

State action within the 14th Amendment refers to exer-

tions of State power in all forms and when the effect of

that action is to deny rights subject to protection, it is

the obligation of the United States Supreme Court to

enforce the constitutional commands. Shelly v. Kramer,

Mich & MO., 1948 68 S. Ct. 8361, 334 U.S. 1, 92 L. Ed.

1161.

The PBA has liabilities imposed upon it which no other

Police Department in the State can likewise boast.

8

CONCLUSION

For the foregoing reasons, the writ of Certiorari,

should be granted.

Respectfully submitted,

RicHarp HARTMAN

Attorney for Petitioner, Samuel DeMilia

100 Church Street, Suite 410

New York, New York 10007

(212) 742-9000

Gary F. GLENN

Of Counsel

APPENDIX A

Decision of Court of Appeals of the State of New York

(N.Y. Law Journal, January 10, 1980)

- =

—_

1. Mo. No. 1216

SAMUEL DeMILIA, President of the Patrolmen’s Bene-

volent Association of the City of New York et al.,

Appellants,

vs.

THE STATE OF NEW YORK, et al.,

Respondents.

+

Motion for leave to appeal denied with twenty dollars

costs and necessary reproduction disbursements.

[la]

2a

APPENDIX B

Opinion of the Appellate Division of the State of New York,

First Judicial Depariment

At a term of the Appellate Division of

the Supreme Court held in and for

the First Judicial Department in the

County of New York, on October

30, 1979

Present—

Ion. THEoporE R. Kuprerman, Justice Presiding

Lreonarp H. SanDLer

Myzes J. Lane

ArtHuR MArKEWICH

Vincent A. Lupiano Justices

La

_-

SAMUEL DeMILIA, President of the Patrolmen’s Benevo-

lent Association of the City of New York and all other

Police Officers of the City of New York similarly

situated,

Plaintiffs-Appellants,

—against—

THE STATE OF NEW YORK, LOUIS LEFKOWITZ,

Attorney General, HUGH CAREY, Governor of the

State of New York, MAYOR EDWARD KOCH, on

behalf of the City of New York, CHAIRMAN ARVID

ANDERSON, on behalf of the Office of Collective

Bargaining,

Defendants-Respondents.

+

3a

Appendix B

An appeal having been taken to this Court by the plain-

tiffs-appellants from a judgment of the Supreme Court,

New York County (Gabel, J.) entered on January lI,

1979, inter alia, declaring Chapter 201 of the Laws of 1979

valid and constitutional in all respects, and said appeal

having been argued by Mr. Eugene N. Axelrod of counsel

for the appellants, and by Mr. Robert Hammer, of coun-

sel for the State respondents, by Mr. L. Kevin Sheridan,

of counsel for respondent Koch, and by Mr. Burton C.

Agata, of counsel for respondent Anderson; and due

deliberation having been had thereon, and upon the memo-

randum decision of this Court filed herein,

It is unanimously ordered that the judgment so ap-

pealed from be and the same is hereby modified, on the

law, to the extent of reversing so much thereof as denied

the defendants’ motion to dismiss the complaint and ren-

dered declaratory relief, the defendants’ motion to dis-

miss the complaint granted and the complaint dismissed,

without costs and without disbursements, and without

prejudice to any action or proceeding as plaintiffs may

be advised.

Enter

JoserpxH J. Luccui

Clerk

Judgment, Supreme Court, New York County (Gabel,

J.), entered January 11, 1979, which, inter alia, declared

Chapter 201 of the Laws of 1979 valid and constitutional

in all respects, modified, on the law, to the extent of re-

versing so much thereof as denied the defendants’ motion

to dismiss the complaint and rendered declaratory relief,

the defendants’ motion to dismiss the complaint is granted

and the complaint is dismissed, without costs and dis-

bursements, and without prejudice to any action or pro-

ceeding as plaintiffs may be advised.

4

Appendix B

Chapter 201 (L. 1978) which, enter alia, amends the

Financial Emergency Act of 1975, provides in pertinent

part relevant to impasse procedures in the collective bar-

gaining process, that New York City’s “financial ability to

pay” be considered (See, Section 23 of Chapter 201, Laws

of 1978). The plaintiffs’ present labor contract with the

City terminates on June 30, 1980 and provides in part

that each party has “the right to re-open the economic

provisions of any negotiated successor agreement... if a

court of last resort ... determines that the impasse pro-

visions of . . . Section 23, Paragraph 3, a through h, is

unconstitutional” (Imphasis supplied). Negotiations have

not commenced on a contract for the succeeding two-year

period. There is no pending Board of Collective Bargain-

ing review of an impasse panel proceeding and no pend-

ing judicial review of such proceeding involving the provi-

sions of Section 23.

In the absence of a ripe on-going collective bargaining

process involving the parties, it is clear that at this point

there may never be resort to Section 23 as the parties

may voluntarily enter into a new labor agreement without

exhausting the collective bargaining negotiations and con-

fronting an impasse.

“A genuine dispute—or ‘actual controversy as the

later adopted federal declaratory judgment provi-

sion calls it—is necessary for a declaratory action

as of any other. CPLR 3001 also says that the

controversy must be ‘justiciable,’ ... in this con-

text the word is... used... to confirm that there

must be an actual controversy” (Siegel: New York

Practice Section 436, p. 578).

All coneur.

Order filed.

5a

APPENDIX C

Opinion of the Supreme Court, New York County

SUPREME COURT, NEW YORK COUNTY

Sprecuat Term, Parr I

”s

>

SAMUEL DeMILLIA, President of the Patrolmen’s Benevo-

lent Association of the City of New York and all other

Police Officers of the City of New York similarly

situated,

Plaintiffs,

—against—

THE STATE OF NEW YORK, LOUIS LEFKOWITZ,

Attorney General, HUGH CAREY, Governor of the

State of New York, MAYOR EDWARD KOCH, on

behalf of the City of New York, CHAIRMAN ARVID

ANDERSON, on behalf of the Office of Collective

Bargaining,

Defendants.

*

GaABEL, J.:

Motions 15 and 16 of September 19, 1978 are consoli-

dated for disposition.

In this matter, the Court is called upon to determine

whether Chapter 201 of the Laws of 1978 including See-

tion 23.3(a-h) is unconstitutional on several grounds al-

6a

Appendia C

leged by plaintiff (PBA). Chapter 201 amends the New

York State Financial Emergency Act for the City of New

York (Chapter 865, Laws of 1975; FEA).

Section 23.3 (a-h) imposes a new limitation on the bar-

gaining and arbitration provisions of the New York City

Collective Bargaining Law (Chapter 54, Administrative

Code 1173-71.0[c]) based on the City’s ability to pay wage

increases and other benefits.

The Court must also determine whether §23.3 (a-h), by

allegedly removing “arbitration as an available tool”

(Petition, paragraph 17), has eliminated the ban on pub-

lie employee strikes contained in the Taylor Law (Civil

Service Law §209, 209A, 210).*

CHapTer 201 AND THE LEGISLATIVE FinpDINGs

The FEA was enacted in 1975 and is predicated on legis-

lative findings that a financial emergency existed in The

City and that the emergency constituted a clear and

present danger to the health, safety and welfare of its

inhabitants.

FEA provided for the creation of an Emergency F'i-

nance Control Board to review, control and supervise the

financial managment of the City. Other provisions re-

gulated the investment of funds by pension and retire-

* The matter is before the Court by way of a motion by plain-

tiff for an injunction and an order in the nature of a declaratory

judgment. The defendants move to dismiss on the ground that

plaintiff fails to state a cause of action and for an order declaring

the legislation to be constitutional.

Although plaintiff's motion is supported by what is denoted as

a petition, the Court treats the matter as an action for a declara-

tory judgment (CPLR 103(c) there being no objection to per-

sonal jurisdiction raised by any of the parties.

7a

Appendix C

ment systems for public employees and imposed a wage

freeze on City employees. FEA’s constitutionality has

been sustained.

In Chapter 201, the Legislature found that the financial

emergency continued to exist in the City (41.a) and that

“It is a matter of substantial and imperative state con-

cern that the City not fail to meet its obligations. . .”.

Chapter 201, continued and supplemented the provisions

of FEA in order to obtain federal guarantees of City

obligations and return the City to fiscal responsibility.

The measure, inter alia, repealed the wage freeze (435).

Existence of the facts found by the Legislature is pre-

sumed, although subject to rebuttal (United States v. Caro-

lene Products Co., 304 U.S. 144, 152, Lincoln Building

Associates v. Barr, 1 N Y 2d 413, 415). And these legis-

lative findings as to a “public emergency” are entitled

to “great weight” (East New York Savings Bank v. Hahn,

293 N Y 622, 627, aff’d 326 U.S. 230; see Block v. Hirsh

256 U.S. 135, 154-155.)

Preliminarily, this Court finds that Chapter 201 is in

consonance with the police powers of the State. (Wein

Vv. Beame, 48 NY 2d 326, 331 (1978); Public Interest v.

Steingut, 40 N Y 2d 250, 257 (1976); Montgomery v.

Daniels, 38 N Y 2d 41, 54 (1975).]

Provisions oF §23.3(a-h)

Section 23.3(a-h) enacts new subdivisions 3 through 6

of Section 7 of the FEA. Basically, it provides that any

report or recommendation of an impasse panel established

pursuant to the New York City Collective Bargaining

Law (Admin, Code $1173.07.0[e]) or finding of the Col-

8a

Appendix C

lective Bargaining Board which provides for increases in

wages or fringe benefits to City employees must, in addi-

tion to other specified criteria, “consider and give sub-

stantial weight” to the City’s “financial ability to pay”

such increases. “Financial ability to pay” is defined as

“the financial ability of the City ... to pay the cost of

any increase . . . without requiring an increase in the

level of City taxes existing at the time of the commence-

ment” of impasse proceedings under §23.3 a, ¢ and d.

Section 23.3(a-h) is concerned, of course, with all City

taxes and is not limited to real estate taxes (emphasis

added).

Tue ReEstrIcTION ON Tax INCREASES

The plaintiff PBA argues that §23.3(a-h) violates Arti-

ele VIII, Section 10 of the State Constitution which states

that the City shall not tax real estate in any fiscal year

in an amount exceeding 242% of the average full valua-

tion of taxable real estate of the City.

Thus, according to the plaintiff, if at the time that

impasse proceedings were initiated, the City was taxing

real estate at less than 214%, §23.3(a-h) would preclude

the City from “asserting its constitutionally guaranteed

prerogative” to tax up to 2.5% (plaintiff's memorandum

at p. 7) in order to provide increases.

There is no merit to plaintiff's argument. It ignores

the clear language in the last paragraph of Article VIIT

Section 10 of the Constitution which states:

“Nothing contained in this section shall be deemed

to restrict the powers granted to the legislature by

other provisions of this constitution to further re-

9a

Appendix C

strict the powers of any county, city, town, village

or school district to levy taxes of real estate.” (em-

phasis added).

This language, coupled with the absence of any restric-

tion upon the power of the Legislature to fix a lower limit

of permissible taxation (other than a limitation relating

to debt service), empowered the Legislature to enact Sec-

tion 23.3(a-h).

FEA is also valid under Article VIII, Section 12 of

the New York State Constitution which provides that “it

is the duty of the Legislature to restrict the power of

taxation, assessment, borrowing money, contracting indebt-

edness and loaning the credit of counties, towns, cities

and villages so as to prevent abuses in taxation assess-

ments...” (See Flushing National Bank v. MAC, 40

N Y 2d 731 (1976); Kelly v. Merry, 262 N Y 151, 160

(1933); Bank of Rome v. Village of Rome, 18 N Y 38

(1858).

Moreover, plaintiff’s argument is limited to real estate

taxes, yet $23.3 (a-h) is not so limited. The Legislature

has “absolute discretion” to impose, amend or repeal any

kind of local taxes (except for real estate taxes to pay

debt service) [Gautier v. Ditmar, 204 N Y 20, 27 (1912);

Quick v. MAC, 41 N Y 2d 644 (1977).]

It should also be noted that Section 23.3 (a-h) does not

restrict the City from levying taxes up to the permissible

tax limit established by the Constitution. There is noth-

ing in the Act which precludes City officials from volun-

tarily increasing the level of taxation within the constitu-

tional limit if they believe it wise or appropriate to do so,

as long as the City has given consideration to its financial

ability to pay.

10a

Appendix C

As Judge Fuchsberg noted in his concurring opinion in

City of Amsterdam v. Helsby, 37 N Y 2d 19, 41 (1975)

regarding the effect of “panels’ decisions”:

“. . the Cities and Towns ... remain free to

make their own decision as to how they are going

to meet such cost, whether by taxation, cut-backs in

spending or other means.”

Finally, the reasonableness of $23.3 (a-h) in holding

down arbitration awards to amounts the City can afford

within existing revenue resources is manifest (ef. Faturite

Company v. Asbury Park, 318 U.S. 502, 512 (1942).

Equat PROTECTION

Plaintiff argues that $23.3 (a-h) violates the Equal Pro-

tection Clauses of the Federal and State Constitutions

since (Petition, paragraph 5) “it places plaintiff in a dif-

ferent position than that of any other brother police or-

ganization throughout the State of New York” and accord-

ing to plaintiff it may render the bargaining position of

the PBA a nullity.

The Taylor Law in Section 209 specifically provides

that its impasse procedures are inapplicable to the fire and

police organizations of New York City.

Section 212 of the Taylor Law provides that the local

government may adopt its own impasse procedures and

pursuant thereto the New York City Collective Bargain-

ing Law was adopted (Admin. Code §1173.4.0). The effect

of that legislation is that the PBA is classified with other

New York City employee organizations for this purpose.

Since procedures of the NYCCBL are applicable to all

municipal unions, including the PBA, with limited excep-

lla

Appendix C

tions, there is no inequality of treatment among the muni-

cipal unions.

The equal protection clause does not require absolute

symmetry in classification, but all distinctions must be rea-

sonably related to the Legislative objective, (People v.

Aeme Markets, 37 N Y 2d 326 (1975); Gleason v. Gleason,

26 N Y 2d 28 (1970).)

This Court believes that classification distinctions be-

tween New York City and upstate police and firemen and

inclusion of the PBA in the NYCCBL are reasonable, that

there was more than a minimal rational relationship be-

tween the classifications and a legitimate State purpose

and that the Equal Protection Clauses are not violated.

(Employees Union v. Helsby, 439 F. Supp. 1272, 1277

(S.D. N.Y.) 1977; Buonorata v. Commission of Correction,

City of New York, 316 F. Supp. 556, (S.D. N.Y. 1970);

Manes v. Golden, 400 F. Supp. 23 (E.D. N.Y.) aff’d 423

U.S. 1068 (1976); Rosenthal v. Harnett, 36 N Y 2d 269.)

Furthermore, Section 23.3 (a-h) applies to all unions

with which the City bargains. It does not create any new

classification but merely affects the standards which are

to be applied uniformly to impasse proceedings.

Plaintiff PBA also argues that the Equal Protection

Clauses are violated because those unions failing to reach

settlement will find a diminishing share of the municipal

budget available to them. There are safeguards to prevent

this in §23.3(e) and §23(c). Particularly, §23(¢) pro-

vides that voluntary wage and benefit agreements shall

also be subject to the City’s “financial ability to pay”,

thereby insuring equity and equal protection for all mu-

12a

Appendix C

nicipal unions. (Emphasis added). Plaintiff’s argument

that the bargaining position of the PBA may be rendered

a nullity has not merit and does not warrant discussion.

SECTION 23.3(A-H) AND THE STRIKE PROHIBITION

PBA contends that $23.3 (a-h) deprives it of arbitra-

tion as an available tool in contract negotiations in viola-

tion of the Equal Protection Clause and “that by so doing,

the balance created by Article 14 of the Civil Service Law

{The Taylor Law] is upset and the restrictions on strikes

of public employees are similarly removed.” (Petition,

paragraph 16, 17, 18). The New York State Constitution

does not confer upon public employees a constitutional

right to collective bargaining. Their right to bargain col-

lectively is merely statutory (Taylor Law, Article 14,

$200) and strikes by public employees are banned. The

earlier Condon Wadlin Law (Civil Service Law §108, re-

peal 1967) banned strikes and the present Taylor Law

§210 imposes strict penalties for violation of the ban.

In 1974, the Taylor Law ($209.4) provided for binding

arbitration when negotiations reach an impasse. Plain-

tiff’s arguments that these amendments were vitiated by

§23.3(a-h) thereby “reinstating” the right to strike is

meritless. The strike prohibition is not contingent upon

procedures employed in the collective bargaining process.

(Civil Service Forum v. N.Y.C. Transit Authority, 3 Mise.

2d 346 (Sup. Ct., Kings Co., 1950) aff’d 4 A.D. 2d 117

(1957); Erie County Water Authority v. Kramer, 4 A.D.

2d 545 (1957) aff’d 5 N.Y. 2d 954 (1959).). There can

be no tradeoff or “balance” since it is the State’s long

standing and independent policy to prohibit strikes by

public employees.

13a

Appendix C

Home Rute

Plaintiff urges that Chapter 201 contravenes the con-

stitutional home rule provision of Article IX, §2(b)2 of

the State Constitution, since it is an act “in relation to

the property, affairs or government” of a local govern-

ment and, therefore, required a request by two-thirds of

the members of the Legislature.

The court rejects this argument. A home rule request

was not required since Chapter 201 treats matters of

substantial and imperative state concern as set forth in the

Legislative findings of the 1975 and 1978 Legislation (Adler

v. Deegan, 251 N Y 467 (1929). This is true even though

as Chief Judge Cardozo said in his conenrrence at p. 489,

this is a situation “where State and City Concerns over-

lap and intermingle”. (Wambat Realty Corp. v. State,

41 N Y 2d 490 (1977), Board of Education v. City of

New York, 41 N Y 2d 535 (1977). Amsterdam v. Helsby,

supra).

Actually, in Chapter 201, the Legislature has treated

matters of far wider scope than the “property, affairs and

government” of local government. Chapter 201, there-

fore, does not contravene Article IX, Section 2(b)2 of the

Constitution.

ConcLUSION

The motions by defendants are granted to the extent

of declaring the challenged legislation to be constitutional.

In a declaratory judgment action, the complaint may not

be dismissed even though plaintiff is not entitled to the

declaration it seeks. (Sweeney v. Cannon, 30 N Y 2d 633,

Lanza v. Wagner, 11 N Y 2d 317).

14a,

Appendia C

The motion for an injunction is denied.

Settle judgment.

Dated: December 11, 1978

J.S.C.

lia

APPENDIX D

Section 7 of the New York City—Financial Emergency Act

1. In carrying out the purposes of this act,’ the board

shall perform the following functions:

a. In accordance with the provisions of section eight

of this act,? the board shall (i) consult with the city and

the covered organizations in the preparation of the finan-

cial plan, and certify to the city the revenue estimates

approved therein, (ii) prescribed the form of the financial

plan and the supporting information required in connec-

tion therewith, and (iii) exercise the rights of approval,

disapproval and modification with respect to the financial

plan, including but not limited to the revenue estimates

contained therein.

b. The board, to the extent it deems it necessary or

appropriate in order to accomplish the purposes of this

act,’ shall establish and adopt procedures with respect to

the (i) proper maintenance of the board fund, (ii) the

deposit and investment of revenues in such fund and (iii)

disbursement of monies from such fund.

e. The board shall, from time to time and to the extent

it deems necessary or appropriate in order to accomplish

the purposes of this act,’ (i) review the operations, man-

agement, efficiency and productivity of such city operations

and of such covered organizations or portions thereof as

the board may determine, and make reports thereon; (ii)

audit compliance with the financial plan in such areas as

the board may determine (iii) recommend to the city and

the covered organizations such measures relating to their

operations, management, efficiency and productivity as it

deems appropriate to reduce costs and improve services

l6a

Appendix D

so as to advance the purposes of this act;’ and (iv) ob-

tain information of the financial condition and needs of

the city and the covered organizations. Nothing herein

shall diminish the powers of the comptroller otherwise

provided by law and the board may request the assistance

of the comptroller in performing the above functions.

d. The board (i) shall receive from the city and review

the report or reports to be prepared on behalf of the

city pursuant to section seven-a;® (ii) shall receive from

the city and the covered organizations and from the special

deputy comptroller, and shall review such financial state-

ments and projections, budgetary data and information,

and management reports and materials as the board deems

necessary or desirable to accomplish the purposes of this

act; and (iii) shall inspect, copy and audit such books

and records of the city and the covered organizations as

the board deems necessary or desirable to accomplish the

purposes of this act.’

e. All contracts entered into by the city or any covered

organization must be consistent with the provisions of this

act! and must comply with the requirements of the fi-

nancial plan as approved by the board. With respect to

all contracts or other obligations to be entered into by

the city or any covered organization after October fif-

teenth, nineteen hundred seventy-five, requiring the pay-

ment of funds or the incurring of costs by the city or any

covered organization:

(i) Within twenty days from the effective date of this

act the mayor shall present to the board proposed regu-

lations respecting the categories and types of contracts

and other obligations required to be reviewed by the board

17a

Appendix D

pursuant to this subdivision e. Within thirty days from

the effective date of this act, the board shall approve or

modify and approve such proposed regulations or promul-

gate its own in the event that such proposed regulations

are not submitted to it within the twenty days as pro-

vided for herein. Such regulations may thereafter be

modified by the board from time to time on not less than

thirty days notice to the mayor and the mayor may from

time to time propose modifications to the board. Unless

expressly disapproved or modified by the board within

thirty days from the date of submission by the mayor,

any such proposed regulations or modifications shall be

deemed approved by the board;

(ii) Prior to entering into any contract or other obli-

gations subject to review of the board under its regula-

tions, the city or any covered organization shall submit

a copy of such contract or other obligation to the board

accompanied by an analysis of the projected costs of such

contract or other obligation and a certification that per-

formance thereof will be in accordance with the financial

plan, all in such form and with such additional informa-

tion as the board may prescribe. The board shall promptly

review the terms of such contract or other obligation

and the supporting information in order to determine

compliance with the financial plan;

(iii) During a control period the board shall, by order,

disapprove any contract or other obligation reviewed by

it only upon a determination that, in its judgment, the

performance of such contract or other obligation would

be inconsistent with the financial plan and the city or

covered organization shall not enter into such contract or

other obligation;

18a

Appendia D

(iv) During a control period if the board approves

the terms of a reviewed contract or other obligation, the

city or covered organization may enter into such contract

or other obligation upon the terms submitted to the board.

Failure of the board to notify the city or covered organi-

zation within thirty days (or such additional time not

exceeding thirty days as the board shall have notified the

city or covered organization, that it requires to complete

its review and analysis) after submission to it of a con-

tract or other obligation that such contract or other obli-

gation has been disapproved shall be deemed to consti-

tute board approval thereof.

f. Upon submission thereof by the city, the board shall

review the terms of each proposed long-term and short-

term borrowing by the city and any covered organization

to be affected during a control period but after October

fifteenth, nineteen hundred seventy-five, and no such bor-

rowing shall be made unless approved by the board. Each

such proposed borrowing by a covered organization shall

be submitted to the city by the covered organization be-

fore it may be considered by the board. Not more than

thirty days after any such submission by a covered or-

ganization the city shall transmit any such proposed terms

of borrowing to the board together with the certification

of the city as to whether such proposed terms of borrow-

ing are in accordance with the financial plan and are

consistent with the objectives and purposes of this Act.

Any such submission to the city shall be accompanied by

a certification of the covered organization that the terms

thereof are in accordance with the financial plan and are

consistent with the objectives or purposes of this act.

The transmittal by the city to the board shall include a

recommendation by the city for the approval or disap-

19a,

Appendix D

proval of such proposed terms of borrowing pursuant to

the terms of this paragraph. In the event the city does

not make such transmittal within such thirty day period,

such covered organization may submit such proposed bor-

rowing directly to the board. The board shall disapprove

any borrowing if it determines that such borrowing is

inconsistent with the financial plan or the objectives or

purposes of this act... The board shall consult and co-

ordinate with the municipal assistance corporation for

the city of New York with respect to borrowings of the

city and any covered organization and shall receive reports

from the municipal assistance corporation for the city of

New York on its review of borrowings by the city. No

covered organizations shall be prohibited from issuing

bonds or notes to pay outstanding bonds or notes.

g. The board and the comptroller shall receive quar-

terly reports from the city comptroller setting forth the

debt service requirements on all bonds and notes of the

city and the covered organizations for the following quar-

ter, which reports shall be in such form and contain such

information as the board shall determine. Such reports

shall be issued nv later than sixty days prior to the start

of the quarter to which they pertain and shall be updated

immediately upon each issuance of bonds or notes after

the date of such report to reflect any change in debt serv-

ice requirements as a result of such issuance. The board

also shall receive from the city monthly and quarterly

financial reports, which reports shall be in such form

and contain such information as the board shall determine

and shall be made available by the city to the public.

In order to avoid duplicative reports and reporting re-

quirements, to the extent that the city is required to sub-

mit monthly or quarterly financial reports to the depart-

20a

Appendix D

ment of the treasury pursuant to any agreement or ar-

rangement made in connection with federal guarantees of

notes or bonds issued by the city or a state financing

agency, copies of such reports shall be submitted to the

board in satisfaction of the monthly and quarterly re-

porting requirements set forth above, together with such

additional information as the board may require. Each

monthly and quarterly report herein required to be sub-

mitted to the board must indicate any variance between

actual and budgeted revenues, expenses or cash for the

period covered by such report.

h. The board shall issue, to the appropriate officials of

the city and the covered organizations, such orders as it

deems necessary to accomplish the purposes of this act’,

including but not limited to timely and satisfactory im-

plementation of an approved financial plan. Any order

so issued shall be binding upon the official to whom it

was issued and failure to comply with such order shall

subject the official to the penalties described in section

eleven or this act.*

i. The board shall coordinate with the municipal as-

sistance corporation for the City of New York and the

special deputy comptroller with respect to the perform-

ance of its review and monitoring of the revenues and

expenditures of the city and the covered organizations.

2. In the event of any default by the city on its out-

standing bonds or notes, and so long as such default has

not been cured, the board may, any provisions of this act*

notwithstanding, take any action that it is authorized to

take pursuant to title six-A of article two of the local

finance law, and may direct the city to take any action

that the city is authorized to take under such law.

2la

Appendix D

3. (a) Notwithstanding any provision of the New York

City Collective Bargaining Law, codified as chaper fifty-

four of the New York city administrative pode, or any

general or special law to the contrary, any report or

recommendation of an impasse panel constituted pursuant

to such chapter which provides for an increase in wages

or fringe benefits of any employee of the city or covered

organization, in addition to considering any standard or

factor required to be considered by applicable law, in-

cluding the standards enumerated in section 1173-7.0(c)

(3)(b) of such chapter, shall also take into consideration

and accord substantial weight to the financial ability of

the city and or covered organization to pay the cost of

such increase in wages or fringe benefits.

(b) The board of collective bargaining constituted pur-

suant to such chapter, when reviewing such report or

recommendation before proceeding to other issues, shall

make a threshold determination as to whether such re-

port or recommendation for an increase in wages or fringe

benefits is within the city’s and or covered organization’s

financial ability to pay. If the threshold determination

is in the negative, the matter shall be remitted to the im-

passe panel for further consideration. If the threshold

determination is in the affirmative, the further review of

the report or recommendaiton with respect to other issues,

if any, shall proceed as provided by law. Unless the

parties stipulate otherwise, the threshold determination

shall be made within thirty days after submission of the

report or recommendation to the board of collective bar-

gaining.

(c) Any determination pursuant to article eight of the

labor law or any agreement or stipulation entered into in

22a

Appendix D

lieu thereof which provides for an increase in wages or

fringe benefits of any employee of the city or covered

organization shall, in addition to considering any stand-

ard or factor required to be considered by applicable law,

also take into consideration and accord substantial weight

to the financial ability of the city and or covered organiza-

tion to pay the cost of such increase.

(d) Any report or recommendation of a fact finding or

similar type panel or any interest arbitration award which

provides for an increase in wages or fringe benefits of

any employee of the city or covered organization not sub-

ject to the provisions of the New York City Collective

Bargaining Law, codified as chapter fifty-four of the New

York city administrative code, shall, in addition to con-

sidering any standard or factor required to be considered

by applicable law, also take into consideration and accord

substantial weight to the financial ability of the city and

or covered organization to pay the cost of such increase.

(e) Any party to a proceeding before the board of col-

lective bargaining as described in paragraph (b) or other

body as described in paragraphs (c) or (d) hereof may

commence a special proceeding in the appellate division,

first department, supreme court, state of New York, to

review the threshold determination as to the city and or

covered organization’s financial ability to pay. Such pro-

ceeding shall be commenced not later than thirty days

after the final determination has been made by the board

of collective bargaining in the case of paragraph (b) or

other body in the case of paragraphs (c) or (d). Such

proceeding shall have preference over all other causes in

such appellate division, other than causes relating to the

election law.

23a

Appendix D

(f) The court shall make a de novo review of the record

solely for the purpose of determining whether an award

of an increase in wages or fringe benefits was within the

city’s and or covered organization’s financial ability to

pay. The court’s findings as to such issue shall be based

upon a preponderance of all the evidence set forth in the

record. Unless the parties stipulate otherwise, arguments

or submission shall be had within fifteen days after com-

mencement of the special proceeding and the court shall

render its decision within fifteen days thereafter. All

questions, other than the question relating to the thres-

hold determination, shall be reviewed by the appellate

division in the same proceeding in the manner provided

by article seventy-five or seventy-eight of the civil prac-

tice law and rules as may be appropriate, notwithstanding

that the issue would otherwise have been cognizable in the

first instance before a special or trial term of the supreme

court. If an appeal shall otherwise lie from such deter-

mination of the appellate division to the court of appeals,

notice of such appeal shall be filed within thirty days after

the entry of the final order or judgment of the appellate

division if such appeal is of right or within ten days after

the entry of an order granting leave to appeal and such

appeal shall have preference over all other appeals other

than appeals relating to the election law.

(g) At any stage of any proceeding under paragraphs

(a), (b), (ce), (d) and (e) hereof or any appeal from an

order or judgment therefrom, the board may intervene

as a party on the issue of the financial ability of the city

and or covered organization to pay the cost of an increase

in wages or fringe benefits.

(h) For the purposes of this subdvision, financial ability

to pay shall mean the financial ability of the city and or

24a

Appendix D

covered organization to pay the cost of any increase in

wages or fringe benefits without requiring an increase

in the level of city taxes existing at the time of the com-

mencement of a proceeding under paragraph (a), (¢) or

(d) hereof.

(i) The provisions of this subdivision shall terminate on

December thirty-first, nineteen hundred eighty-two.

4. During a control period, except upon approval by the

board in accordance with the provisions of paragraph e

or f of subdivision one of this section, as the board shall

determine, neither the city nor a covered organization

shall enter any agreement or other arrangement, whether

or not it creates a debt of the city or a covered organiza-

tion, pursuant to which the revenues or credit of the city

may be directly or indirectly pledged, encumbered, com-

mitted or promised, contingently or otherwise, for the

payment of obligations of a public benefit corporation.

Nothing in this subdivision shall limit the right of the

city to comply with the provisions of any existing agree-

ment or other arrangement in respect of the obligations of

a public benefit corporation.

5. The board may employ such consultants as it may

deem necessary to assist it in performing its functions

required under this act.

6. The board shall have the authority to make and exe-

cute agreements and all other instruments which the board

deems necessary for the exercise of its powers and func-

tions including, in connection with any agreement by the

federal government or any agency or instrumentality

thereof to guarantee the payment of the principal of or

Pe pee Tee

25a

Appendix D

interest on bonds or notes issued by the city or by a state

financing agency, to enter into one or more agreements

containing terms and conditions required by the secretary

of the treasury pursuant to the New York City Loan

‘Guarantee Act of 1978, Publie Law 95-3395 with the fed-

eral government or any agency or instrumentality thereof

with respect to such guarantee or any matters related

thereto and to comply with such terms and conditions.

7. The board may appoint qualified individuals to par-

ticipate as members of such audit, productivity or similar

committees or councils as the city may from time to time

establish in consultation with the board. Such individuals,

however, shall not be deemed to be officers, employees or

agents of the board. The board shall review and report

on, not less than annually, the development and implemen-

tation of methods for enhancing the productivity of the

city’s labor force proposed by any such commmittee or

council.

L.1975, ce. 868, § 2 [§ 7]; amended L.1975, e. 870, §§ 3, 4;

L.1978, ec. 201, $§ 18-23; L.1978, ¢. 777, $§ 14-19.

1 Sections 5401 to 5420.

2 Section 5410.

3 Section 5409.

* Section 5416.

5 Pub.L. 95-339, Aug. 8, 1978, 92 Stat. 460. See 31 U.S.C.A.

§ 1521 et seq.